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Panuelo bares rampant bribery; several FSM officials in cahoots with China

By Mar-Vic Cagurangan

(Second of a series)

Shortly after Sen. Alen Palik took office as vice president of the Federated States of Micronesia following the death of Yosiwo George in September last year, he was invited to the Chinese Embassy for a dinner with other members of the FSM Congress. Chinese Ambassador Huang Zheng asked Palik to sit up front with other senators and accept an envelope filled with money. “Vice President Palik refused, telling the ambassador to never offer him a bribe again, and upon doing so was advised by Ambassador Huang something close to the effect of ‘You could be president someday’ as the rationale for the special treatment,” outgoing President David Panuelo said in a March 9 letter to members of the FSM Congress. “This isn't rare. This happens all the time, and to most of us, not just some of us.” Offering bribes to FSM officials is China’s typical modus operandi and several FSM officials have succumbed to seductions, Panuelo said. “Senior officials and elected officials across the whole of our national and state governments receive offers of gifts as a means to curry favor. The practical impact of this is that some senior officials and elected officials take actions that are contrary to the FSM's national interest, but are consistent with the PRC's national interest,” Panuelo said.


“One of the reasons that China's political warfare is successful in so many arenas is that we are bribed to be complicit, and bribed to be silent. That's a heavy word, but it is an accurate description regardless,” Panuelo said in a long farewell letter to the FSM Congress. “What else do you call it when an elected official is given an envelope filled with money after a meal at the PRC Embassy or after an inauguration? What else do you call it when a senior official is discretely given a smartphone after visiting Beijing? “What else do you call it when a senior official explicitly asks Chinese diplomats for televisions and other ‘gifts’? What else do you call it when an elected official receives a container filled with plants and other items? What else do you call it when an elected official receives a check for a public project that our National Treasury has no record of and no means of accounting for?” Panuelo asked, rhetorically.

China’s under-the-table routine is not exclusive to the FSM, Panuelo said, “It is at this point that I relay, simply as a point of information, that 39 out of 50 members of parliament in the Solomon Islands received payments from China prior to their vote on postponing elections that were otherwise scheduled for this year,” he said.


In the FSM, Panuelo said officials who declined China’s bribery formed the minority.

“That is why I am submitting proposed legislation on money laundering, disclosure, and integrity requirements for Congress' review, and also why I encourage passage of many floating legislation including the Freedom of Information Act,” Panuelo said.

In October 2022, Panuelo said Palik visited Kosrae, where he was received by representatives from China’s Da Yang Seafoods.

“Our friends at Da Yang have a private plane, and they arrived in Kosrae (along with several senior FSM government officials) on that private plane. Our friends told the vice president that they can provide him private and personal transportation to anywhere he likes at any time, even Hawaii, for example; he need only ask,” Panuelo said.

Aren Palik

The president said he was aware that the offer made to Palik was not an isolated case.

I will refuse to name names, but it is not out of courtesy; it is to keep the emphasis on the problem, and what the problem is, and how the problem festers, instead of naming or shaming any particular person or group of people,” he said.

Panuelo, who will turn over the leadership baton to his successor in May, gave a warning to the incoming administration.

“I want to be clear that I am professing to you— those who will succeed my administration, and likely continue to remain in political power at the national or state level— that if your administration is like mine, you will have cabinet who record bilateral meetings and transmit those recordings to China," he said.

“You will have cabinet and/or senior officials tell the Chinese ambassador ‘I will help you if you help me’ behind your back. You will have Cabinet accept gifts, such as envelopes filled with money, and alcohol. You will have Cabinet attend meetings with foreign officials-sometimes officials from countries the FSM doesn't recognize or doesn't recognize yet without your knowledge,” he added.

Panuelo said Chinese officials' anomalous transactions are done behind the curtains.

“It isn't going to be just one of them, and what one will tell you in public versus what they will tell you in private, or behind your back, may prove to be very different things,” he said. “It is here that I wish to emphasize that not all of the political appointees I have been recently removing from office have engaged in these activities.”

Prior to giving his state of the nation address in January, Panuelo recalled two Cabinet members recommending against rejection of China’s Common Development Vision, touted as a game-changing agreement with the Pacific island region.

“The reason they recommended against this was simple: 'We are asking for money from China.' I am tempted to say that if our national interest, if our sovereignty, and if our principles can be traded away for temporary amounts of silver and gold-then we have failed in our duty to our people,” Panuelo said “But it does raise a good point, an essential point in fact in our world of politics and governance: isn't money all that really matters?”

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