U.S. ties Israeli billionaire with Chinese intelligence


The Admiralty complex is one of the trademarks of Hong Kong’s urban landscape. Overlooking the port, the complex used to house the soldiers of the British army and the headquarters of the Royal Navy in the region. Today it is part of the city’s business center. One building there houses a group of companies nicknamed the 88 Queensway Group (the address of the building), which the U.S. administration suspects is nothing more than a cover for activity conducted by the People’s Republic of China’s foreign intelligence. Wu Yang, one of the group’s senior directors, provided the Registrar of Companies in Hong Kong with an address that matches the address of Chinese foreign intelligence.

The suspicions were spelled out in a report recently compiled by the U.S.-China Economic and Security Review Commission, which was established by Congress in 2000 in order to “monitor, investigate and submit to Congress an annual report on the national security implications of the bilateral trade and economic relationship between the United States and the People’s Republic of China, and to provide recommendations, where appropriate, to Congress for legislative and administrative action.” The report noted, among other things, that the group of Chinese corporations has business ties with Israeli businessman and diamond magnate Lev Leviev.

Using the group, Chinese intelligence acquires oil and energy companies and other important assets in countries in Africa, Latin American, Southeast Asia, as well as in the United States. In this way it promotes Chinese national interests, increases its influence and guarantees the supply of raw materials – first and foremost oil – necessary for its economy.

China is already an important economic-diplomatic and security factor in Africa, and the day is not far off when it will become the major power on that continent – surpassing the United States, France and Great Britain in importance. It has large investments in Congo-Brazzaville, Guinea, Zambia, Nigeria and Angola. Some of these countries are oil producers and some are subject to U.S. and EU boycotts due to their human rights situations. For China, however, the absence of human rights is not an obstacle. Trade between China and African nations has increased tenfold in the past nine years – from $10 billion in 2000 to $107 billion in 2009.

China also aims to penetrate the economies of Argentina and Venezuela. By means of liaisons, the directors of the Chinese companies have succeeded in forging personal ties with Venezuelan President Hugo Chavez, and Nestor Kirchner, the former president of Argentina who is married to the current president.

The three businessmen

The Chinese companies are assisted in some of their international activities by the Angolan government, a rising economic power in Africa, and particularly its national oil company Sonangol. The report mentions three international businessmen connected to the Angolan-Chinese cooperation, with the help of a company called China-Sonangol, which is registered in Hong Kong. China-Sonangol is part of the 88 Queensway Group.

One is Helder Battaglia, a Portuguese businessman with close ties to Angolan President Jose Eduardo Dos Santos, as well as Chavez and Kirchner. Battaglia has varied investments in Angola, Congo and Latin America. The second is Pierre Falcone, a French businessman who was Arcadi Gaydamak’s partner, and together with Gaydamak was involved in supplying arms to the tune of about $800 million to Angola in the 1990s. Falcone, Gaydamak and others were recently convicted in a French court for illegal arms trade conducted in the ’90s. In recent years, Falcone moved the main center of his business to Beijing, and has become the person who opens Angola’s doors to China (for huge fees). Gaydamak is not mentioned at all in the report; it is known that he is at odds with Falcone and the two are embroiled in legal proceedings over the profits of the arms deal.

The third businessman mentioned in the American report is Lev Leviev, who was Gaydamak’s partner and who according to the report continues to have a strong standing in Angola, where he has mines, diamond polishing plants and a diamond trade company.

The report does not note whether there are business connections among the three – or in fact any acquaintance whatsoever. It does mention that Leviev is considered a close friend of Isabel Dos Santos, the president’s daughter. There have been newspaper reports and investigations in the past, which claim she is a partner in several of Leviev’s diamond businesses in Angola.

According to the new American report, due to his standing in Angola Leviev came to know the Chinese companies and began to form business ties with them. These ties produced several huge deals involving the prestigious Manhattan real estate owned by Leviev and the companies owned by Africa Israel and Memorand. China Sonangol purchased the JP Morgan building on 23rd Street opposite the New York Stock Exchange for $150 million; for another $150 million it purchased 49 percent of the Met Life clock tower apartment building on Madison Avenue; and for about $400 million (including the purchase of the building’s debts) acquired the old New York Times building, the jewel in the crown of Leviev’s real estate empire.

Sources in Africa Israel claimed in response that the findings are not correct, and that these are public companies which report to the U.S. Securities and Exchange Commission and whose activity is transparent. According to these sources, only one transaction actually took place: the purchase of the JP Morgan building.

The report casts no aspersions on Leviev or the transactions, nor does it claim they were improper or not kosher. But its authors emphasize that the 88 Queensway Group falsely represents itself as a “private” business when it actually is not.

“The lack of transparency and public accountability surrounding the 88 Queensway Group is a major concern for the United States,” the report notes. “The 88 Queensway Group’s purchase of high-profile real estate assets in the United States underscores the importance of identifying the extent of the group’s connections to the Chinese intelligence community.”