The strange saga of Meng Wanzhou
Until she was detained by the Royal Canadian Mounted Police while transiting Vancouver International Airport, the world had not heard of Meng Wanzhou. Now everybody knows that Meng, 48, is the chief financial officer of Huawei and the daughter of Ren Zhengfei, chief executive officer and founder of China’s leading technology giant.
The RCMP arrested Meng in respond to a warrant from the US
District Court in Brooklyn, New York. The warrant was actually drafted on
August 22, 2018, but not delivered to the Canadians until November 30, urging
immediate action because Meng was expected to transit Vancouver on December 1
en route to Mexico City.
The message from US officials implied that if she was not
arrested this time, the next opportunity might not come again for an indeterminate
period. Unfortunately for the Canadians, they fell for the story.
The Americans had been monitoring Meng’s movements for some
time. Between August 22 and December 1, 2018, they noted that she had visited
six other countries with extradition treaties with the US, namely Britain,
Ireland, Japan, France, Poland and Belgium. Had she been allowed to leave
Vancouver, she would have visited Mexico, Costa Rica and Argentina. They too
have extradition treaties with the US.
Canada the designated patsy
With 10 countries to choose from, then US deputy attorney
general Rod Rosenstein, directing this operation, concluded that Canada would
be the easiest patsy and most willing to act as a vassal state to run this
errand for Uncle Sam.
Selecting a willing collaborator was important because
extradition hearings are almost always complicated, subject to challenges and
appeals, and can consume a lot of time. Most countries would prefer not to get
involved with such proceedings, since as a disinterested third parties, they
have no skin in the game.
Indeed, Meng has languished under house arrest at the home
she owns in Vancouver since her arrest nearly two years ago. Her next hearing
is scheduled for this Monday, October 26. Lawyers familiar with extradition
cases have opined that this case could drag on for another five years before
all the issues and challenges can be resolved.
Much has already been reported about this cause célèbre, but
I have seen very few discussions that examine the rotten underpinnings of the
case, which I now propose to do in this article.
The origin of this case was probably more than 10 years ago
as Washington watched the growth and development of Huawei with increasing
dismay. Huawei had grown into a major supplier of telecommunication technology,
and then threatened to become the world’s leader in that sector.
By the time Donald Trump became US president, Huawei had
indeed become the leader in 5G, the fifth-generation wireless communication
protocol and a leading maker of telecommunication hardware and mobile phones.
The Trump administration decided that the way to deal with
the rise of Huawei was to use brute force – suppression, harassment and active
campaigns with other nations not to buy from Huawei. Two news articles in 2012
and 2013 gave the ad hoc task force the idea to consider accusing the company
of violating the US sanctions on Iran.
On further reflection, they must have concluded that
charging a company in China with violating a US sanction on doing business with
another country, in this case Iran, had a low probability of sticking.
But another article in 2013 reported that Meng had given
HSBC a PowerPoint presentation about Huawei and Skycom. Meng was quoted as
saying, “Huawei’s engagement with Skycom is normal and controllable business
operation,” and that “as a business partner of Huawei, Skycom works with Huawei
in sales and service in Iran.”
The “aha” moment for the Trump team was the fact that Skycom
had attempted to sell Hewlett-Packard (HP) personal computers to Iran. The sale
was never consummated but the intent to sell US technology to Iran was
evidently sufficient to charge Skycom with violating the sanctions.
So far in the story, it seems to be a slam-dunk for the
Trump team. All they did was read some old news articles and found a way to
link the printed evidence to the CFO of Huawei.
Now bear with me, dear readers, and you will see that the
story starts to smell fishy.
The most damaging “evidence” offered as part of the charges
filed by the US Justice Department with the Canadian courts was the
aforementioned PowerPoint Meng had prepared for HSBC. The US prosecutors
claimed that the presentation showed Meng had lied to the bank and cause it to
violate the sanctions against Iran unknowingly.
So it would seem that HSBC had turned state’s evidence to
help the US federal court. However, the bank did not necessarily have clean
hands in this matter. It issued a press release in 2012 that read in part:
“HSBC has reached agreement with United States authorities in relation to
investigations regarding inadequate compliance with anti-money-laundering and
sanctions laws.
“Under these agreements, HSBC will make payments totaling
US$1.921 billion, continue to cooperate fully with regulatory and
law-enforcement authorities, and take further action to strengthen its
compliance policies and procedures.”
Even for a major international bank, $1.9 billion is not
chump change. But the interesting question not answered is whether “cooperate
fully” included giving the PowerPoint slides to the Justice Department. Did the
US government agree to deduct some amount from the fine as quid pro quo?
US prosecutors not playing with a full deck
The legal counsel for Meng were quick to point out to the
presiding judge that the PowerPoint deck presented by the US prosecutors was
incomplete. Slides that would have portrayed a different position for Meng in
this decade-old affair and indicate that she had been transparent with HSBC
were left out.
As The Globe and Mail observed, it’s highly unusual to go
after individual executives carrying out company business rather than indicting
the corporation for illegal offenses; indeed, one such example was the case
against HSBC. Obviously, the special circumstance for going after Meng was that
she was the daughter of the founder of Huawei.
The age of this case in the Canadian court is nearing two
years. The original hare-brained idea was to hold Meng hostage to put pressure
on her father, Ren Zhengfei. It didn’t work. Huawei has grown stronger and
increased worldwide sales in the interim.
The latest Trump-team move was to deny Huawei access to
critical semiconductor technology, which will temporarily set the company back,
but at great cost to American high-tech industries – read David Goldman’s
forecasts in Asia Times here and here.
With the current attention on denying American technology to
Huawei, the US may have lost interest in Meng’s incarceration, but Canada is
left holding the bag of a stinky mess not of its making. The Big Brother south
of the border has skillfully set up Canada to take the fall, and there is no
nice way to put the gloss on this little piggy.
Washington deliberately gave Vancouver authorities just one
day to plan and make the arrest. They did not have time to look at the broader
picture, consider the international consequences, or consult with Ottawa. Let’s
face it, they were played for suckers – OK, if not suckers at least country
bumpkins.
Not Justin Trudeau’s brightest moment
However, the prime minister of Canada, Justin Trudeau, has
not exactly been a smart national leader and avoided the sinkhole laid out
before him. He had plenty of opportunities to tamp down this sordid affair.
Instead he lost control of the situation.
Five days after Meng was detained, her arrest was finally
made public, and the Chinese Embassy in Canada was furious and demanded her
immediate release. Ottawa did not respond.
Ten days later, two Canadians were detained in China,
heretofore referred to in the media as the “two Michaels.” Beijing denied that
the arrests were related to Meng’s arrest, which of course Trudeau wouldn’t
buy. But Trudeau also did not acknowledge the reciprocal nature of China’s
action.
Instead, he accused China of using arbitrary detention to
achieve political goals and said that to give in to Beijing would put more
Canadians at risk.
His reasoning is a real head-scratcher. Urging Canada to
release Meng is hardly politics but humanitarian, and it’s hard to see how
arranging a prisoner swap would endanger more Canadians – unless Ottawa is
planning to intercept more Chinese business executives transiting Canadian
airports in the future.
There are plenty of voices within Canada telling Trudeau
that he can cut off the extradition process if he wants to. One summary reads:
“The Extradition Act in 1999 gives the justice minister ‘unfettered discretion
to withdraw an extradition at any time during the judicial phase of
extradition,’ which offers the federal government a very clear option.”
Even though China has significantly reduced its imports from
Canada, Trudeau appears undeterred. He apparently treats placating the
irascible Donald Trump as more important than Canada’s sovereignty and national
interest. He even fired his ambassador to China, a historic first, for publicly
suggesting that Trump’s public comments provided grounds to stop the
extradition.
Too bad Justin is just not a chip of the old block that was
his father, Pierre Trudeau. Fifty years ago, Pierre led Canada to establish one
of the first diplomatic relations between a Western country and People’s
Republic of China, two years ahead of US president Richard Nixon’s visit to
Beijing and nine years before formal normalization between the US and China.
Now, it appears unlikely that any surprising turnabout
development is likely to take place at the court hearing on Monday. Meng’s fate
will have to wait for the outcome of the US presidential election on November
3.
K J Noh and I have outlined the messy legacy created by US
Secretary of State Mike Pompeo and a long list of actions that former
vice-president Joe Biden will have to take to right the ship of statecraft if
he wins the election.
Assuming that he wins, upon taking over the Oval Office, he
will have many things to tend to, but one of his easiest tasks will be to drop
the extradition process for Meng promptly. It’s long overdue and the decent
humanitarian thing to do.
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