Professional Documents
Culture Documents
Nest of Spies
The Startling Truth About Foreign Agents At Work Within Canada’s Borders
By: Fabrice de Pierrebourg and Michel Juneau-Katsuya
“Nest Of Spies” provides an intriguing window into the booming business of espionage, the
goals and techniques of foreign agencies, and who is doing what to whom. In doing so it
paints a disturbing picture of Canada’s failure to protect itself from predatory foreign powers,
to the detriment of both our national interests and our citizens’ safety and well-being. This
book is of special interest to whistleblowers because it validates former diplomat Brian
McAdam’s warnings (dating back to 1993) that Canada has been infiltrated by Chinese
agents and organized crime.
The craft of espionage is as old as human conflict, but the collapse of the USSR and the end
of the ‘Cold War’ seemed to promise the beginning of a new, more peaceful era, with perhaps
less need for espionage.
This proved to be a false hope. As the threat of military conflict between superpowers ebbed,
the battle for commercial supremacy intensified. Hence the considerable resources and
expertise that countries like Russia previously devoted to military espionage were simply
redirected into areas such as industrial espionage, in an attempt to modernize outdated
industries. Stealing new technology is so much quicker and cheaper than developing it.
Many developed countries – such as the USA, Britain and France – quickly responded, both
to defend themselves and to counter-attack, and without a clearly-defined enemy soon
everyone was spying on everyone else: stealing technology from friends is just as profitable
as stealing from enemies.
The agents of foreign powers pursue multiple goals: industrial espionage, to enhance their
trade and commerce; military espionage to enhance their weapons and military capabilities;
propaganda and political interference, to protect their interests by ‘peaceful’ means; and the
monitoring and control of immigrant populations abroad. The latter is particularly important to
despotic regimes which seek to silence all critics – including those who have escaped and
sought refuge in other countries.
Canada is a tempting target because we are a rich country – a substantial market – with
much leading-edge technology and close connections (economic, military and political) to the
USA and other developed countries. Our accepting, multicultural society makes it easy for
foreign agents to blend in and go undetected. Our large immigrant population also represents
a threat to certain foreign powers – harbouring escaped dissenters who must be monitored
and neutralized – as well as an opportunity to recruit as agents immigrants who either remain
loyal to their home country or can be coerced.
In addition, the risks to foreign agents operating in Canada are virtually non-existent because
we have weak laws and weak (arguably non-existent) enforcement – agents are rarely
caught, rarely expelled or put out of business, and almost never punished. All in all, foreign
agents operating in Canada may consider that they have died and gone to heaven. Small
wonder that by some estimates Canada’s losses to industrial espionage run at about $10-12
billion/year – five times worse than the USA on a per capita basis.
Who is taking the most advantage of Canada’s weakness? – many countries (the book
names them) but above all China, which has a massive presence here and aggressive goals.
China has been given permission to maintain 120 ‘diplomats’ on Canadian soil – double that
of our neighbour, ally and largest trading partner the USA. It is estimated that more than 200
Canadian companies are fronts for Chinese industrial espionage. In 2006 Prime Minister
Harper claimed that there are more than 1,000 Chinese agents operating in Canada. In 2007
the head of CSIS testified to a Senate committee that China is the most dangerous of more
than 15 countries operating espionage agents here. It seems evident that CSIS does not have
the resources to cope with this tsunami of foreign snooping, theft and interference – it is
swamped.
Besides industrial espionage, one of the main goals of Chinese agents is to control the
Chinese population in Canada, and above all to attack a perceived enemy: the Falun Gong. A
Chinese agent who defected in Australia revealed that within Chinese missions around the
world this attack is assigned more resources than any other single program. Falun Gong is a
peaceful spiritual movement that used to be officially encouraged in China until 1999, when its
popularity spooked the Communist leaders and it was swiftly outlawed and denounced as an
“evil cult”.
Within China, Falun Gong practitioners face persecution worse than any other religious or
ethnic group, suffering mass confinement in labour camps and, it is believed, summary
execution to obtain organs for transplants. Canadians who belong to this movement are
subject to constant harassment right here in our own cities, ranging from physical threats and
violence to political manoeuvres designed to discredit, silence and marginalize them – while
Canadian authorities turn a blind eye or even provide cover by parroting the Chinese
mission’s crude propaganda.
Let’s return to the whistleblower connection and Brian McAdam, because this illustrates in a
nutshell our leaders’ chronic ineptitude and refusal to face reality on security matters. In
Canada, the Sidewinder report, which addressed many of the concerns about China
described in Nest of Spies, has been systematically suppressed and every effort made by
officialdom to discredit it. The report itself was ordered destroyed and thousands of pages of
evidence shredded, including all of McAdam’s files on the infiltration of the Canadian mission
in Hong Kong.
Fortunately a similar investigation was conducted in the USA around the same time by a
House Select Committee. This produced the Cox report which arrived at virtually identical
conclusions. However, unlike Sidewinder, the Cox report is publicly available, courtesy of the
US bureaucracy. It even be purchased (in summary form) as a paperback from Amazon.
I recommend "Nest of Spies" as an antidote
to complacency about Canada’s safety and security in a dangerous world.
David Hutton
Executive Director, Federal Accountability Initiative for Reform (FAIR)
February 11th, 2010
In some of the secert police memos obtained by The Asian Pacific Post there are signs that
Canadian officials did not want to pursue the Hong Kong probe.
In one of the memos, a RCMP liaison officer in the former British colony warned Ottawa that
the Canadian High Commissioner in Hong Kong would view any investigation by the RCMP
into the allegations of gift giving by wealthy Chinese families as a 'witch hunt.'
"No cooperation can be expected from the Pong family," wrote RCMP liaison officer, R.G.
Lagimodiere, referring to a wealthy Chinese steel dynasty who had given gambling money to
several Canadian diplomatic staff at their private suite in the Happy Valley race track.
Cautioning that his urgent memo was not an attempt to whitewash or stop the investigation,
Lagimodiere wrote;
"I can guarantee he (the ambassador) will be screaming (at) the highest political levels," the
memo stated.
Another RCMP liaison office letter marked 'secret' and addressed to the Director of Foreign
Services states that in addition to 'an evening at the racetrack' function hosted by the Pong
family, the Pongs also splurged on a 'going' away dinner and dance at the Aberdeen Marina
Club for a number of Immigration officers who were transferred during summer rotations.
"From general discussions with Mission personnel, other events have been hosted over the
years," the memo said.
"In Hong Kong, it is a way of life for the legitimate Hong Kong society and the Triads to
ingratiate themselves with charitable organizations, foreign missions and government
officials." The memo pointed out that Macau casino king Stanley Ho and Hong Kong tycoon
Cheng Yu Tung, both of whom have extensive business and property holdings in Vancouver,
are often guests of the Canadian diplomatic mission.
"These subjects are known to be associated to many documented triads however, one has to
be objectively cautious in that guilt by association is not a crime and in addition, they have
been major Canadian investors."
"It could be argued that these incidents have some potential for embarrassment especially in
light of recent Government policies aimed at stopping 'triad migration'."
The letter ends by stating: "As you can appreciate, many of the points raised could place this
office in a difficult position with other program personnel should the contents of this report
resurface in this (Hong Kong) Mission."
In another case, an immigration consultant with Imperial Consultants was charged by Hong
Kong police for fraud but Ottawa refused to send one of its officers to testify in the case.
Pleading for help to get this case going as a deterrent to stop other similar scams,
exasperated mission officials in a telex to Ottawa wrote: "This is turning into an embarrassing
situation for this office as it was us who asked for RHKPs (Royal Hong Kong Police)
assistance and requested an investigation.
"RHKP are now refusing to continue with their case until we confirm that, we the complainant
will provide evidence.
"Surely if we are serious about receiving assistance in cases involving our missions than so to
are we prepared to cooperate with the investigating agency," read the telex.
Ottawa did not provide an officer and the case against the consultant died.
Ironically, the same consultant would later be photographed in a private meeting with Jean
Chretien while discussing Asian investment into a hotel in the prime minister's riding, be
investigated and charged for attempting to bribe two Canadian Immigration officers with
C$40,000 and looked as key suspects in investor immigration fund scams.
In all the cases against the consultant, the RCMP never got their man.
The whole Hong Kong investigation came to a grinding halt after Corp. Robert Read who was
handling the file felt his superiors were trying to cover-up the issue by not allowing him to
proceed with certain aspects of the investigation.
After he went public in 1999 and was removed from the file, the RCMP did another
investigation with a new set of officers.
This time they again stated that there was no evidence to lay charges but recommended that
action be taken against some 30 Canadian embassy officials for accepting cash and gifts
from wealth Chinese families.
None of the 30 were charged.
Other than minor reprimands many have been promoted within Immigration Canada and the
Department of Foreign Affairs.
At least one of the officials is now an ambassador.
The Hong Kong file which now has come into the spotlight again has sparked calls for the
Canadian government to hold a public inquiry, tough whistleblower legislation and the
reinstatement of Robert Read as a RCMP officer.
Cpl. Robert Reads reward for going public with his concerns was "a pink slip along with
harassment," Gurmant Grewal, Canadian Alliance MP said.
Brian McAdam, the embassy's former immigration control officer, praised Robert Read as a
classic whistleblower, who was "someone doing his job and telling the truth, and that is a
threat."
McAdam, whose reports sparked the Hong Kong probe, said investigators lost opportunities
to deal with corruption issues at the mission. "There could have been arrests made, a major
cleanup."
Alliance MP Darrel Stinson called for whistleblower protection while his colleague Kevin
Sorenson said: "This is a very serious allegation of Liberal political interference."
Wayne Easter, Canada's Solicitor-General, denied the RCMP was pressured or there was
any government cover-up. In Parliament, he called for patience while the RCMPs chief
Giuliano Zaccardelli reviews the latest report on the Canadian scandal that was made in Hong
Kong.
Donna Jacobs Citizen Special
Monday, August 18, 2008
It's 3 a.m. and Brian McAdam is wide awake: No sense for this insomniac to lie in bed, mind
racing along an old and disturbing track.
He brews the first of several strong mugs of Earl Grey tea -- to be followed by black coffees
through the day. And, once again, from his Ottawa home office, he grapples with his own
China Syndrome.
The 1979 box-office thriller The China Syndrome portrayed a U.S. nuclear reactor meltdown
powerful enough to burn through the centre of the Earth to China.
Mr. McAdam did, indeed, have a meltdown -- though rather in reverse.
A seasoned, 30-year career Canadian diplomat, Mr. McAdam's assignments included
London, Copenhagen, Barbados, Amman, Bangkok, Bogota, Dublin, Helsinki, Glasgow,
Tokyo and, twice, Hong Kong.
His second Hong Kong posting, 1989 to 1993, as immigration control officer, included
responsibility for southern China. He was tasked with protecting Canada from international
people-smuggling rings, murderers and drug-smuggling, organized criminals from China,
Japan, Korea, Taiwan, Macau and Hong Kong.
It was his last posting.
He discovered and painstakingly documented in more than 100 separate reports to his
bosses in the Department of External Affairs infiltration and corruption at the Canadian
consulate. And he investigated individual members of the Triads -- China's powerful,
Communist Party-connected organized crime gangs -- to buy visas and smuggle its members
and spies into Canada.
He worked closely with RCMP liaison officer Sgt. Garry Clement to identify Triad hitmen,
violent refugee claimants, drug smugglers, money launderers, collectors on gambling debts
and extortion money and their innocent-looking front companies.
Mr. McAdam says his first three reports paid off: He says he was the catalyst behind the law
that enables Canada to prevent organized criminals from getting into the country, and that
permits others to be deported.
It kept out 5,000 organized criminals, according to Immigration Canada's assessments, he
says. "In addition, I stopped 2,000 illegal immigrants from getting to Canada, saving Canadian
taxpayers at least $25,000 for each refugee claim -- or $50 million" during the busy days
before China took over Hong Kong from the British in 1997.
In his many assignments, he had also trained airport personnel to use ultraviolet lights to
reveal doctored passports and other documents. And, pre-Internet, he set up a highly-
sophisticated electronic system for them to transmit images of questionable specimens.
When Canada's Department of External Affairs staff read his first report, he says, "I was told
people sucked in wind, shocked because they probably recognized some of the names they'd
thought were upstanding Hong Kong businessmen.
"My first report was immediately leaked to media in Hong Kong and to someone in The Globe
and Mail -- most likely leaked by people in the consulate."
The fallout was two-fold.
It made his confidential sources nervous. "I had phenomenal contacts in Hong Kong. I can't
tell you who they were. I was bombarded with information by people wondering what Canada
was doing -- being absolute fools allowing these people into their country."
And he started to get death threats.
"The first time quite shocked me. I was sitting in my office one night on the 24th floor of a
modern office building. The phone rang. I thought it was going to be my wife.
"Instead, the person described what colour tie I was wearing, what colour suit I was wearing.
He could read what was on my desk. He had to have had binoculars or a telescope. I was
hoping the telescope wasn't attached to a gun."
Over the years, he says, "I was constantly intimidated and the more it happened, the more I
knew I was doing the right thing. So I just kept going."
The corrupt courting of immigration officers had started early: "In the first two weeks after I
arrived in Hong Kong, my wife and I were invited to the Happy Valley Race Track by a well-
known businessman. He gave us little red packets. We opened them when we got home;
each one had about $250.
"I was very disturbed by that and told my boss that I was going to return the money."
He was told to keep it, he says, not to offend the giver and gave it to charity.
When the RCMP later investigated, he says, they found at least 30 consular staff receiving
these packets. "I was told it was in cash amounts of $1,000 -- and up -- for a staff member
and for his or her spouse."
How many envelopes and how often?
He laughs: "That's the question -- that was just openers to see who was going to take bait."
The consulate had about 120 staff -- some local and some from Canada's Department of
External Affairs (now Foreign Affairs and International Trade).
"I made it known I was not prepared to accept any money," he says, "and I was very quickly
ostracized."
He and RCMP Sgt. Clement kept writing reports on infiltration and corruption. By the end of
Mr. McAdam's four-year posting, he says, "maybe three or four people among the Canadian
staff would speak to me."
The 32 reports he sent Foreign Affairs in Canada, entitled Triads Entering Canada, "were
received in Ottawa by total silence."
One day, "out of the blue," he says, the External Affairs Department personnel director invited
him to return to Canada to start an organized crime unit.
"I was excited -- it was a continuation of the work I'd done with the Immigration department."
He returned in the summer of 1993, ill with pneumonia, to start up the new job. However, two
days after arriving back to Canada, a longtime colleague paid him a nighttime visit in his hotel.
He carried a warning.
He said Mr. McAdam was "very hated" by Foreign Affairs and Immigration for his work in
exposing corruption. "He said my career was toast."
Shocked, Mr. McAdam went to his office early the next day to see what was going on.
The personnel manager there told him bluntly: "No one wants to work with you." She urged
him to take a retirement package.
"I argued that they should be upset because a number of people were very incompetent and
a number of people were obviously corrupted within the Canadian foreign service."
He says he asked to work for CSIS or the RCMP. She told him it was impossible and
seconded him to Immigration where he worked on the Investment Program, which essentially
sold visas to any business person who invested $150,000 in Canada.
"It was the worst program --so many flaws and so much corruption going on," he says. "I'd
already discovered a lot of Canadian immigration investor programs were being exploited by
members of Triads living in Canada. They made tens of millions of dollars from them.
"Many of Triads gained entry that way because $150,000 is a joke to them," he laughs.
"That's what they give as a tip."
Immigration gave Mr. McAdam another task. One day, he went to see an acquaintance who,
incredulous, informed him that that project had been finished weeks before.
That very day, in October 1993, it struck him like a lightning bolt: "I realized my career was
over.
"I went home that night with an incredible weird feeling in my head. I could actually feel the
chemical change in my brain." The next day he went to the doctor who told him to stop work
immediately and warned him recuperation could take "maybe years."
Mr. McAdam says he knew nothing about depression. He could hardly believe
neurotransmitters could shut down his muscle co-ordination and produce relentless
headaches.
He harnessed his willpower expecting to heal fast with a crash course of therapy with
psychologists and a psychiatrist -- paying some of the high hourly fees himself.
But it didn't work fast. "The depression had built up over four years. I defy anybody to work in
an environment where your life is being threatened regularly, where you know everybody
you're working with hates you."
One incident, he says, particularly disturbed him.
Among more than six of his reports that were leaked to the Chinese Triads was one about a
major Triad figure who'd visited Canada 20 times.
"One day, my contact in the Hong Kong police department phoned me. He'd intercepted a
phone call from Mr. X (a Triad kingpin) talking to someone in the Immigration Department in
Ottawa.
"That person said to Mr. X: 'Don't worry about McAdam and what he's doing. We'll take care
of him'."