U.S. Lawmakers Lash Out at Wall Street 'Whitewashing' in Hong Kong

Questions are mounting as to why Wall Street’s best and brightest will be gathering in Hong Kong next week to participate in a finance summit alongside Hong Kong’s leader, who has been sanctioned by the U.S. government. The active sanctions put him in the company of U.S.-identified terrorists and the leadership in places such as Iran, Myanmar, Syria and Venezuela.

Two U.S. lawmakers have now added their voices to the criticism of the whitewashing that the top brass at companies such as Apollo Global Management (APO) , Blackstone (BX) , the Carlyle Group (CG) , KKR (KKR) and J.P. Morgan Chase (JPM) are enabling by attending the event.

Senator Jeff Merkley and Representative Jim McGovern issued a statement asking the heads of U.S. companies such as BlackRock (BLK) , Citigroup (C) , Goldman Sachs (GS) and Morgan Stanley (MS) to “reconsider” their participation in the Global Financial Leaders’ Investment Summit, which runs November 1-3.

“Their presence only serves to legitimize the swift dismantling of Hong Kong’s autonomy, free press, and the rule of law by Hong Kong authorities acting along with the Chinese Communist Party,” the U.S. lawmakers say.

Separately, the Hong Kong Democracy Council published a report Business Not As Usual: International Companies in the New Authoritarian Hong Kong. The Washington, D.C.-based group’s Web site was promptly blocked in Hong Kong, where I get an error message “This site can’t be reached,” telling me “Check if there is a typo in www.hkdc.us.”

I checked. There isn’t a typo. You can only access the site from another country or a VPN, just like banned sites in mainland China. But Hong Kong in theory supposedly still has freedom of speech, assembly, political dissent… only, obviously, in theory.

The report says it is “unacceptable corporate behavior” to participate in the Hong Kong summit, since attendance supports the Hong Kong government “in whitewashing its human-rights atrocities.”

You can find a link to that report here, supplemented by the International Corporate Bad Actors Database, which you can find here. The report cites 42 instances of corporate misconduct in Hong Kong, and outlines unacceptable company behavior in enabling police violence, amplifying propaganda, acting against dissents, aiding authoritarian governance, and endorsing the Hong Kong regime.

McGovern also took to Twitter (which is banned in mainland China but for the time being visible in Hong Kong) to call on “big-bank leaders” from Goldman, BlackRock, Citi and Morgan Stanley “to cancel their visit to Hong Kong, where they plan to meet with the same people who have been dismantling freedom and democracy in Hong Kong.” He said “billionaire corporations need to be called out.”

Merkley and McGovern lead the U.S. Congressional-Executive Commission on China. The attendance of the Wall Street execs “has the effect of whitewashing the human-rights violations of the Hong Kong government,” while giving “political cover” to Hong Kong Chief Executive John Lee Ka-chiu.

“Business as usual in Hong Kong is the wrong choice for these companies,” Merkley and McGovern warn. They promise the matter will be “a pertinent congressional concern” if the Wall Street leaders aid and abet human-rights abuses in Hong Kong and the Chinese government’s efforts to “export an illiberal model of international order.” So they hint Congress will take a closer look “if expanded investments in authoritarian governments undermine U.S. national interests and accelerate efforts to crush Hong Kong’s autonomy and the freedoms of its residents.”

Lee is due to give the keynote address at the conference, put on by Hong Kong’s central-bank equivalent, the Hong Kong Monetary Authority, to show it’s “business as usual” in Hong Kong. The city, desperate to re-establish its place as a global financial center, removed compulsory Covid-19 hotel quarantine partly to enable the event.

Lee, a former police officer and secret-security chief in Hong Kong, was sanctioned in August 2020 by the U.S. Treasury Department for his participation in efforts to undermine Hong Kong’s autonomy, and restrict the civic freedoms of Hong Kongers.

Apollo co-president Jim Zelter, BlackRock President Rob Kapito, Blackstone President and COO Jonathan Gray, Carlyle co-founder William Conway Jr., Citigroup CEO Jane Fraser, Goldman Sachs Chairman and CEO David Solomon, J.P. Morgan Chase President and COO Daniel Pinto, co-CEO at KKR Joseph Bae, Morgan Stanley Chairman and CEO James Gorman, and the State Street Global Advisors President and CEO Cyrus Taraporevala will all be headline acts up on stage for events at the summit.

The two U.S. congressman also note that Lee has “refused to fully cooperate with U.S. sanctions on Russian assets in Hong Kong.” We have this month had an oligarch’s megayacht in town, the 465-foot vessel Nord. Lee refused to seize it, although it is owned by sanctioned oligarch Alexey Mordashov, because there is “no legal basis” to do so.

Lee insists no “unilateral” sanctions will be recognized by Hong Kong, and says the city should abide only by United Nations sanctions. Lee has called the “so-called” sanctions against him “barbaric,” adding “So we will just laugh off the so-called sanctions.”

Other people on the U.S. sanctions list of “Specially Designed Nationals and Blocked Persons” include Ayman al-Zawahiri, the al-Qaeda leader killed in August in a drone strike in Afghanistan. There’s also Abd Al Aziz Awda, the chief ideologist behind the terrorist group Palestinian Islamic Jihad. Russian President Vladimir Putin is also sanctioned alongside numerous oligarch supporters, and the two largest Russian banks.

Kim Jong-un, the North Korean leader, makes the list alongside officials connected with its nuclear program and state-owned entities, including airplanes owned by the North Korean government.

Lee was Hong Kong Secretary for Security at the time he was sanctioned, alongside then-Chief Executive Carrie Lam, Hong Kong’s chief of police and eight others. Lee was sanctioned for “coercing, arresting, detaining, or imprisoning individuals under the authority of the National Security Law, as well as being involved in its development, adoption, or implementation.”

That much-hated National Security Law, imposed directly by the Beijing government on Hong Kong with no input at all from Hong Kongers, is very much still in effect. In fact, Lee as the city’s leader is now even more responsible for ensuring it is enforced.

Because the street protests in Hong Kong have ceased, those of you living overseas may think life is back to normal in Hong Kong. But it is not. All political dissent is eliminated now in Hong Kong, which faces a Kafka-esque rule by “patriot’s only,” meaning officials who are hand-picked by Beijing. Those officials still insist that the city is free and fair.

But it is anything but. Even trying to get elected to the government is considered seditious or a national-security risk if you plan on blocking the administration’s plans. Numerous opposition politicians are on trial for organizing an ad-hoc primary. So getting elected, if you are the opposition, is illegal.

This week, activist Chow Hang-tung has been barred by the magistrate hearing her national-security case from using the phrase “Tiananmen Square massacre” in her trial. She was the vice-chair of the group that organized the vigils remembering the Tiananmen Square massacre in 1989, and is charged with not complying with a request from the secret-security police for information in relation to that role.

Magistrate Peter Law sided with prosecutor Ivan Cheung when Cheung objected to her use of the phrase. Cheung suggested she refer only to the “June 4 incident,” and the magistrate agreed she should not be allowed to say “Tiananmen massacre,” and should use “proper terminology in neutral form.” The prosecution also objected to her making any mention of any “killing” on that day.

Chow, who said she wasn’t sure what she could then say happened that day, is charged with failing to provide information after the national-security police demanded it. She was issued a notice in August 2021 to hand over information about her work with the vigil group as a “foreign agent,” representing a foreign force.

But Chow is not allowed to know which foreign power she was supposedly representing. The prosecution has said disclosing this information would “harm public interest,” and is concealing that information.

It makes it sound as though Chow was working with the CIA, Mossad, Russian FSB or some other shadowy spy service. But the prosecution has refused to confirm that they claim she was serving as a foreign agent for the Japan branch of the Federation for a Democratic China, a Canadian group that champions democracy in China. The federation was set up, like Chow’s Hong Kong Alliance in Support of Patriotic Democratic Movements of China, after the Chinese army opened fire on pro-democracy demonstrators in Tiananmen Square in 1989.

Far from being a foreign spy, then, it appears Chow was simply cooperating with an overseas organization working toward the same end as her group, pushing the cause of democracy in China, and remembering June 4. When the prosecution opposed a bail application by Chow, it submitted a screenshot of the Federation for a Democratic China’s Web site in support of the move to deny her bail. Despite that apparent mistake, the magistrate told the prosecution that it did not have to answer questions about the identity of the organization. During the trial, it has emerged that Chow’s group allegedly received HK$20,000 (US$2,548) from “Organisation 4,” thought to be that Japanese group.

Chow says she has “great difficulty” presenting her case, since the court and prosecution are “playing hide and seek,” refusing to allow her to describe the purpose of her now-disbanded group in Hong Kong, refusing to allow her to describe what the group in Japan does, and refusing to confirm what “foreign force” she was supposedly representing.

You have to sympathize with her. The Hong Kong puppet government, police force and prosecutors have alleged in multiple cases that pro-democracy advocates were agents of “foreign forces,” but have never stipulated what the foreign forces are. Like Chow, prosecutors have made it sound like they’ve been working as spies, but the organization can be an innocuous one that’s simply based overseas, or as in Chow’s case one serving a similar purpose that is legal but contrary to Beijing’s wishes.

The police arrested 10,279 people during the pro-democracy protests in Hong Kong in 2019. They have prosecuted 2,893 of them, including 517 minors under the age of 18. They have often held others without bail and for extended periods.

The U.S. government issued a business advisory in July 2021 cautioning companies doing business in Hong Kong to heed sanctions, as well as a new law in mainland China promising to punish companies that do enforce sanctions. “A failure to comply with U.S. sanctions can result in civil and criminal penalties under U.S. law,” the U.S. Departments of State, the Treasury, Commerce and Homeland Security warned.

It noted that U.S. individuals and entities are prohibited in engaging in certain transactions with blocked “persons,” unless they get a license expressly to do so. The U.S. Treasury’s Office of Foreign Assets Control, which would grant that license, “strongly encourages organizations subject to U.S. jurisdiction, as well as foreign entities, including foreign financial institutions,” if they do business with U.S. companies or individuals, to use a “risk-based approach to sanctions compliance” with an official sanctions program.

The ongoing crackdown in Hong Kong continues, often in ridiculous fashion. On Thursday, two people were convicted of sedition and jailed for clapping in court, and criticizing a judge during a previous hearing involving a leader of the Tiananmen Square massacre memorial event. One had reportedly accused the judge of deciding the case according to a political agenda, while pastor Rev. Garry Pang Moon-yuen reportedly told the judge “You have lost your conscience.” Both were charged with sedition, rather than contempt of court, with Pang imprisoned for one year.

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