Ex-president calls for investigation into Marshall Islands ‘mini-state conspiracy’

A former president of the Marshall Islands has called for an investigation into an alleged plot by a Chinese couple to establish a mini-state within its borders and turn it into a lucrative tax haven.

The pair were charged by US prosecutors with bribery and money laundering offenses as part of a ‘multi-year plan’ that included setting up a non-governmental organization, allegedly bribing five Republic of Marshall Islands (RMI) and attempted to bribe a sixth. One of the five allegedly received money to bribe others to support the carving out of a Hong Kong-style territory.

Hilda Heine, who is now an MP, said the identities of the six lawmakers were not specified in the indictment, but that “there are estimates on the identity of those responsible”. She added: “People deserve to know who took the bribes and the accountability measures taken as appropriate by our laws. I hope the identities will be forthcoming.

Cary Yan, 50, and Gina Zhou, 34, are accused of trying to manipulate RMI lawmakers into establishing an exclusive economic zone on Rongelap Atoll, with the name ‘Special Administrative Region of the Atoll’. de Rongelap (Rasar)” – a designation similar to those given by China to Hong Kong and Macau.

The charges were laid out in an unsealed indictment last Friday after the couple were extradited to the United States from Thailand, where they were arrested nearly two years ago. US attorney Damian Williams said the two men “flagrantly flouted the sovereignty of the Republic of the Marshall Islands and its legislature”.

The indictment stated: “Yan planned to use Rasar to, among other things, attract investors and customers to businesses he would operate in Rasar, in whole or in part through the NGO.” He also said that Yan and Zhou participated in drafting the legislation.

They pleaded not guilty to the charges, which carry penalties of up to five years in prison for bribery and 20 years for money laundering.

Among the corruption allegations is a claim that Zhou paid an interest-free $22,000 (£19,000) ‘loan’ to an RMI official who officially sponsored the Rasar Bill and took other measures to try to have it adopted.

Another official reportedly received $7,000 through a family member “to induce or influence other RMI lawmakers to support [the legislation]”.

The indictment also says that Yan and Zhou paid the flight, hotel and entertainment expenses of RMI officials – at least two of whom had the power to vote on the bill – to travel to New York and Hong Kong in April 2018 to launch the program at AsiaWorld. -Expo.

According to the filing, an official promoted the atoll as a “promising place to do business,” accepted Yan’s investment in their private company, and appointed Yan as the atoll’s special adviser.

Rongelap was the site of extensive US nuclear testing in the 1940s and 1950s, causing havoc for the population, whose descendants are reluctant to return.

At the height of the program, Rasar was touted as a haven for foreign investment that would offer relaxed immigration laws and low or no taxes, to attract foreign investment and improve the struggling Pacific nation’s place in the world. ‘Mondial economy. Instead, it caused chaos within the RMI government.

In November 2018, Heine narrowly survived a no-confidence motion, which she said at the time was about her opposition to the scheme. On Thursday, the former president said she did not support the legislation because it was “unconstitutional” and set aside RMI laws in “critical areas”.

Heine added: “Economic development is and should be encouraged, but not at the expense of money laundering and other similar activities which are generally part of money laundering, as was evident in the Rasar legislation. The people of Rongelap deserved better living standards and economic development.

The Rasar bill was never tabled in parliament due to constitutional issues raised by opponents.

The indictment contained a reference to an email from an anonymous RMI official to Yan and Zhou swearing “revenge” against Heine for his successful opposition to the bill. After his election in January 2020, Yan and Zhou reportedly emailed the official and promised that their family would be “one of the most powerful” in RMI if a resolution endorsing the bill passed. It was adopted in March of the same year.

Nothing in the documents indicates that the alleged scheme was linked to the Chinese Communist Party (CCP), but Rasar’s proposal nonetheless raised concerns about Beijing’s growing influence across the Pacific.

At the time of the no-confidence motion against Heine, she said the proposal was “an effort by certain foreign interests to take over one of our atolls and make it a country within our own country.”

The Marshall Islands is a former US territory and one of the few nations to recognize Taiwan. Pacific neighbors including Kiribati and the Solomon Islands have shifted recognition to China in recent years, with the Solomon Islands raising Western concerns over a security deal with the CCP.

Ex-president calls for investigation into Marshall Islands ‘mini-state conspiracy’

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