Thread by @PekingMike

THREAD: Some of our findings in our investigation into Elaine Chao and her family's shipping company, Foremost Group. This involved lots of people, reporters in the US (me and @EricLiptonNYT) as well as in Shanghai and Beijing (@keithbradsher and @suilee) nyti.ms/2JRCBjK

@EricLiptonNYT @KeithBradsher @suilee 2/x Where to start? I think we'll do this chronologically. Elaine Chao's father, James S.C. Chao (赵锡成），entered Shanghai's Jiao Tong University in 1946. He didn't stay long, since he wanted to study navigation and that program was at a crosstown school, but....

@EricLiptonNYT @KeithBradsher @suilee 3/x At Jiao Tong there was an engineering student a couple of years ahead, Jiang Zemin. He went on to become General Secretary of the Communist Party and President of China. Did they know each other at Jiao Tong? We don't know. Fast forward....to 1984

@EricLiptonNYT @KeithBradsher @suilee 4/x James Chao is a successful owner of a shipping company, Foremost Group. He is invited to the 35th anniversary of the founding of the PRC, where he meets with paramount leader Deng Xiaoping. It is all spelled out on a display at a museum in Shanghai. Here it is:

@EricLiptonNYT @KeithBradsher @suilee 5/x: That same year, 1984, when Elaine Chao was 31 and a White House fellow, the family buys a stake in a Chinese marine electronics equipment company that soon partners with Raytheon to import and make radars, VHF radios, fathometers, fish finders and the like.

@EricLiptonNYT @KeithBradsher @suilee 6/x: So China is an amazing place. Sometimes it is so secretive. But SOMETIMES, its disclosure is far, far superior to that in America. Such is the case with companies. And we were able to get the full, 367-page company file.

@EricLiptonNYT @KeithBradsher @suilee 7/x: This file gives detailed shareholding information and company formation documents going back to 1984. So I do this for a living. I +LOVE+ combing through Chinese corporate documents (I'm very weird that way) and I have never gotten docs this old.

@EricLiptonNYT @KeithBradsher @suilee 8/x: You can comb through the entire 367-page file, which @EricLiptonNYT uploaded to the story and put on document cloud. Look for the words "Chinese corporate documents" and click the link. We redacted personal info like ID cards.
Here's the story link:
nytimes.com/2019/06/02/us/…

@EricLiptonNYT @KeithBradsher @suilee 9/x: So there's a good reason it is rare to get documents this old. There simply weren't that many companies in 1984 in China. Chairman Mao had only died 8 years earlier. Deng Xiaoping's opening up was less than 6 years old. But the Chao family bought a stake, using US dollars.

@EricLiptonNYT @KeithBradsher @suilee 10/x: It was so old that few, if any, people had word processors that could write in Chinese. So things were handwritten. Like this document. It is an important one.

@EricLiptonNYT @KeithBradsher @suilee 11/x The name at the top is "电子工业部雷达工业管理局“ - The Radar Industry Management Bureau of the Ministry of Electronics Industry. The Ministry of Electronics Industry is long gone, but in 1984 it was led by an up-and-coming official by the name of .... Jiang Zemin.

@EricLiptonNYT @KeithBradsher @suilee 12/x: Remember him? He was at Jiao Tong University in the late 1940s, where James Chao was, briefly. We don't know if they met and we have no documents saying that this very early investment in China had anything to do with him. The Chao family (see story) does not recall this.

@EricLiptonNYT @KeithBradsher @suilee 13/x: But the Chao family investment, including the names of Elaine Chao's parents, is very clearly spelled out in the Chinese corporate documents, which are filed with the government. It is also recorded by the local government in Shanghai on a website:
shtong.gov.cn/Newsite/node2/…

@EricLiptonNYT @KeithBradsher @suilee 14/x: The above web page says that starting in 1985 the Chaos used profits from the radar company, Xiamen Marine Electronics Equipment Company, to fund charity work. Here is a screenshot in case the link goes dead

@EricLiptonNYT @KeithBradsher @suilee 15/x: In addition to the corporate documents and the government web page above, we also talked to a former employee, Mr. Zheng Chaoman, who started working there in the mid-1980s. He remembered that "Elaine Chao's father" was involved in the company.

@EricLiptonNYT @KeithBradsher @suilee 16/x: So much of this long-defunct company's products was clearly aimed at civilians use, such as for fishing fleets. But the company also targeted the military for sales. There are references to that, such as on this page.

@EricLiptonNYT @KeithBradsher @suilee Here. This refers to some VHF gear for "military use" (item 3)

@EricLiptonNYT @KeithBradsher @suilee 17/x: The USA did not have an arms embargo on China in 1984. There is no indication that this was illegal in any way. The arms embargo came after June 4, 1989, amid outrage over the bloody suppression of the democracy protests on Tiananmen Square.

@EricLiptonNYT @KeithBradsher @suilee 18/x: And that is when the Chao family asked to exit the investment..July 1989. By then, Elaine Chao was Deputy Secretary of Transportation in the George H.W. Bush administration. They owned it through a Panamanian company. It is all documented here

19/x: But while the Chao family exited the radar company (the were divested by 1990), their main business in China - buying ships from state-owned shipyards - was just getting underway. In 1988 Elaine Chao's father ordered two ships from a shipyard in Shanghai.

20/x: This was China State Shipbuilding Company, then as now state owned. Over the last 30 years, Foremost Group, the family company, has been the biggest North American customer for CSSC, it said in 2013, when Elaine Chao met with the head of the company in Beijing

21/x: But back to 1989. On August 26, 1989, James Chao and his wife Ruth visited Beijing, and they met with Jiang Zemin, by then the brand new General Secretary of the Chinese Communist Party

22/x: This was important for China. Companies the world over were shunning China because of the events on Tiananmen Square that June. Their visit with Jiang was on the front page of the People's Daily.

23/x: It is also recorded in the museum in Shanghai dedicated to Elaine Chao's late mother. Here is a photo of that:

24/x: What is especially notable is the caption. They met at "202庭“ in Zhongnanhai, the leadership compound next to the Forbidden City. This is a villa. It once was Chairman Mao's villa. Most visitors to Zhongnanhai get met at the "Purple Light Pavilion" (紫光阁）。

25/x: Over the next 15 years, Mr. Chao would meet Jiang Zemin as least six more times. Five when Jiang occupied the top position in leadership. MORE TOMORROW. END FOR NOW.