New documents reveal that the ex-Texas governor had dinner with Chinese officials seeking to park their money abroad
Originally published on Al Jazeera America – Oct. 15, 2015
***This is a final follow-up to the series ‘China’s Texas Hold ’em,’ which was a finalist for the 2015 EPPY business news award against The Wall Street Journal and Canada’s leading newspaper, Globe and Mail. To see the original series, click here or contact Massoud.
Former Texas Gov. Rick Perry traveled to Beijing in September 2014 and met with a pair of controversial Chinese politician-entrepreneurs behind a massive methanol plant in Texas City, a document obtained in a public information request shows.
During an Al Jazeera investigation into the business deal over the plant earlier this year, former Perry administration officials declined to acknowledge that Perry had any role in the deal that allowed Communist Party officials Song Zhiping and Zhang Jun to park billions of their dollars in the United States after coming under fire in Chinese media for alleged illegal activity.
Texas local media had reported that the Perry administration had handed over coordination of the bid to build the plant to the Galveston County Economic Alliance, indicating that his administration might have played some early role in the plan.
In September 2014, less than two months after the land for the $4.5 billion methanol plant — located near an underserved, historical black neighborhood — was leased and the deal appeared to be moving ahead, Perry flew to China, where he met Vice Premier Zhang Gaoli and penned a pledge to ramp up business partnerships between Texas and five Chinese local governments. Just two years earlier, Perry had predicted that the Chinese government would end up on the “ash heap of history.”
Perry’s China trip schedule, obtained through a Texas public information request, shows that Song hosted a dinner at Perry’s downtown Beijing hotel on Sept. 9, 2014. Zhang Jun, Song’s partner in the methanol plant deal, was also there, according to the schedule.
Also in attendance was Jeff Miller, who would become Perry’s campaign manager in the then-governor’s failed bid for the 2016 Republican presidential nomination.
The dinner offers insight into the ways in which similar deals involving Chinese politicians and U.S. officials are made.
“There are formal and informal mechanisms by which businesses strike deals in China, and often times it’s the informal in which big business is conducted. Through meetings and handshakes, what precedes the signing of agreements is a casual and informal conversation of the terms of an opportunity,” said Arthur T. Dong, a business professor at Georgetown University whose work focuses on U.S.-Chinese commerce.
On the trip, Perry signed a memorandum of cooperation with five local Chinese governments, including that of Shandong province, where Song is a government official. While not legally binding, the document establishes a working group to promote trade and a local government-sanctioned exchange of industrial expertise.
An Al Jazeera investigation linked the methanol plant bid to a Houston-based nonprofit organization called the Chinese Association of Professionals in Science and Technology (CAPST), which bills itself as a nonpolitical organization but which — according to a 2013 book titled “Chinese Industrial Espionage” — includes powerful members of China’s leadership and facilitates the transmission of industrial intelligence from the United States to China.
The book, written by three China scholars and published by multinational house Routledge, says the Chinese consul in Houston presides over CAPST’s annual functions. The group’s members were also involved in facilitating another methanol plant bid involving Louisiana Gov. Bobby Jindal and Yuhuang Chemical CEO Wang Jinshu, the Communist Party secretary for the northeastern Chinese village of Yuhuang and a delegate to the National People’s Congress.
The plan to build the Louisiana plant went through even though Wang’s company Shandong Yuhuang misreported energy efficiency measures, illegally obtaining nearly a million yuan (about $160,000) in energy credit, according to a June 2013 report from state-run Chinese newspaper People’s Daily.
One of the Chinese politician-entrepreneurs behind the Texas deal, Zhang Jun, the founder and chief shareholder of Funde Sino Life Insurance, has held a Communist Party post in the southern Chinese business hub of Shenzhen. He rose to prominence in mid-2013 on social media after his daughter Zhang Jiale’s lavish spending habits sparked a firestorm, at a time when the new administration of President Xi Jinping stepped up an anti-corruption campaign that targets signs of ostentatious wealth as a potential indicator of ill-gotten gains.
State media coverage around that time suddenly started portraying Zhang Jun, who had previously been lauded as a savvy businessman, as a “mysterious” and “suspicious” tycoon whose source of wealth remains unclear and who engages in “predatory” business practices.
In early 2013, Xi intensified his anti-corruption campaign targeting Communist Party officials. Many wealthy Chinese hurried to put their assets in more stable places, where their money might be safe from seizure by China’s anti-corruption watchdog. Canada and the United States in particular saw influxes of property purchases and investor immigration applications from Chinese nationals, immigration lawyers told Al Jazeera in 2013.
In June 2014, just as Zhang decided to move forward with the Texas project, China’s Insurance Regulatory Commission told state media that Zhang’s company would suffer “heavy penalties” for misleading sales promotions in the company’s insurance policies and financial products — including exaggerating policy benefits and concealing investment risks — at the company’s Shanghai branch.
The other of the two Communist Party entrepreneurs, Song — in addition to being the CEO of energy giant Jilin Connell Chemical Industry Co. — is a delegate to China’s National People’s Congress and a local official in her native province of Jilin. In 2009, before Xi came to power, Song came under fire in the Chinese press when hundreds of people living near her Jilin-based plant — which produced the highly toxic chemical aniline — started complaining of crippling illness, including what The New York Times described as “convulsions, breathing difficulties, vomiting and temporary paralysis.”
Chinese business publication Caijing reported in an English-language article on May 14, 2009, that 450 people in the area were hospitalized with gas poisoning. As with many sensitive online news articles about China’s ruling elite, the Chinese-language version of that article has been taken down. Public health authorities have since ruled that there had been no environmental malfeasance, saying that mass hysteria had taken its toll on locals.
Song, Zhang and former Perry administration staffers were not immediately available for interviews.