Ministry of shady dealings

PUBLISHED : Wednesday, 14 August, 1996, 12:00am
UPDATED : Wednesday, 14 August, 1996, 12:00am

Monday was a field day for spook watchers and allied spy freaks. For the first time, the super-secretive Ministry of State Security (MSS) held a lengthy press conference that shed light on some of the workings of what is commonly known as China's KGB.

In the briefing, which was open only to selected mainland media, a spokesman admitted to large numbers of crimes committed by crooks passing themselves off as MSS employees.

Most of these were economic cases such as financial fraud, illegal trading, fake investments, and even blackmailing foreign businessmen.

For example, Hebei province native Liu Daqun , who controlled two joint-ventures, posed as the head of a research and investigation institute that he claimed to be MSS-related. Liu made a killing through scams including selling bogus overseas employment contracts.

Other confidence tricksters raked in big bucks through posing as recruiters of police and security personnel; selling passports and police and army licence plates; and helping farmers secure residence permits in cities.

The ministry called on government departments and citizens to raise their guard. A hotline was established for the public to blow the whistle on imposters.

'If the public boosts its sense of caution and ability to discriminate, it is not difficult to expose the fakes,' the MSS said in a circular.

The crux of the matter, however, is not gullibility on the people's part but lack of supervision over MSS operations.

Since the late 1980s, the ministry and its branches in provinces and cities have opened thousand upon thousand of commercial establishments. These businesses include imports and exports, hotels and karaoke bars, security services, and business consultancy and intelligence.

Even the official media has reported numerous instances of MSS offshoots implicated in activities ranging from smuggling to running prostitution rings.

Partly because the MSS is one nudge higher in the state hierarchy than the Ministry of Public Security (MPS), the police have been less than forthcoming in cracking down on the monkey businesses of MSS-owned companies.

At the same time, particularly in cowboy cities such as Shenzhen, Huizhou, Haikou and Beihai, the MSS, the MPS, the People's Liberation Army (PLA) and the People's Armed Police (PAP) - which all boast fast-expanding business empires - have often clashed over turf. Because of the nature of their work, MSS agents, even more so than the police, the PLA or the PAP, are outside the purview of watchdog units such as the Ministry of Supervision, the procuratorates, the Central Commission for Disciplinary Inspection and the National People's Congress.

Only the shadowy Central Commission on Political and Legal Affairs of the Party Central Committee, headed by hardliner Ren Jianxin , has authority over senior MSS cadres.

'Crooks in different fields find it convenient to pose as MSS agents because the ministry runs businesses in myriad sectors,' a Chinese source said. 'More important, MSS agents and businessmen seem to operate outside the law.' And it is because of the ministry's special status that MSS imposters fingered in Monday's press conference could go about their wrongdoing unchallenged for many years.

Most disturbing for Hong Kong residents, however, is that the MSS, like the police and PLA units, have extended their tentacles into the territory.

Western intelligence experts claim that the ministry has already planted more than 3,000 agents in the territory.

This statistic does not include agents sent to Hong Kong by provincial and municipal branches of the MSS.

Nor does the figure take into account staff from the intelligence wings of PLA units such as the General Staff Department and the General Political Department, or those of the Communist party Central Committee units such as the International Liaison Department.

Partly as a cover, the MSS and allied intelligence outfits have opened scores of companies in Hong Kong.

Since many of these are subsidiaries of or joint-venture partners with the first generation of wholly-owned MSS corporations set up in the late 1980s and early 1990s, the bulk of the MSS-related concerns are not even registered with the ministry headquarters. It is not surprising that quite a few of the fake spooks decried at the MSS press conference are Hong Kong citizens. For example, an unnamed Hong Kong resident who claimed to be an MSS cadre had made contact with - and swindled huge sums out of - a foreign organisation.

It's obvious such Hong Kong-based charlatans would be much less credible if the MSS intelligence and business network in the territory were not so extensive. The concern of the Hong Kong public, however, is not about the handful of imposters but the everyday activities of Hong Kong-based intelligence agents and MSS 'businessmen'.

According to Western diplomats, they keep tabs on the activities of not only the consulates, the Hong Kong Government, and 'anti-Chinese elements' but pro-Beijing figures including members of the Preparatory Committee.

Since most of their operations will be classified as 'acts of state' after July 1997, it seems that intelligence professionals will not be under the jurisdiction of Special Administrative Region (SAR) courts. There are increasing worries, however, whether they will abide by Chinese laws. To facilitate operations, MSS agents are known to have established ties with the Hong Kong underworld.

Diplomats claim a few Hong Kong residents detained by mainland police for criminal activities had been let off after they had proven themselves to be MSS employees in the territory.

There are also fears of turf wars between the MSS and other security and para-military units moving from Shenzhen and Huizhou to the SAR.

An informed source said as the handover draws nearer, MSS units in Hong Kong are getting bigger budgets, recruiting more staff and upgrading their already sophisticated equipment.