TOC Ready Room 23 March 2023: China, moles, and economic mischief (the non-TikTok kind)

What’s wrong and right with the world.

There are always too many interesting new developments to try to cram very many of them into a single Ready Room.  This edition, like all the rest, will leave a number of promising nuggets on the cutting-room floor.

But here are a couple of standouts from this week’s haul so far.

“China mole” info from think-tank officer sheds light on DOJ stance on Bidens in 2019

Miranda Devine has a great piece at New York Post on Wednesday about the explosive information from a Washington, D.C. think-tank principal, Gal Luft, that in a period prior to early 2019, “Hunter Biden had an FBI mole named ‘One-Eye’ who tipped off his Chinese business partners that they were under investigation.”  Luft’s think tank partnered with a Chinese counterpart to host conferences on energy-sector topics.

The Chinese executives who reportedly benefited from the ”mole” included Hunter Biden associates Patrick Ho and Ye Jianming (the latter the chairman of state-owned Chinese energy corporation CEFC, and sponsor of Luft’s think-tank partner).

Luft’s think tank is the Institute for Analysis of Global Security, which he runs “with former CIA Director James Woolsey and former national security adviser Robert McFarlane as advisers,” according to Devine.  Luft himself has a background in intelligence with the Israeli Defense Force.

The House of Representatives is now probing this allegation, including Luft’s disclosure that he contacted the U.S. Department of Justice in 2019 to inform DOJ of the information he’d been given.

The interesting part is the timing of his interaction with DOJ.  Justice interviewed him on 28 and 29 March 2019.

I tweeted a thread about that timing earlier, and will let it speak for itself here.

(Aside: Luft’s reference to the “China mole” as “One-Eye” has commenters popping in every 30 seconds with One-Eye jokes about Louie Freeh.  I’m not sure if any of them is alluding to an actual connection between Freeh, the Bidens, and their Chinese and Romanian associates, discussed here in 2021.  Hunter-gate is nothing if not a merry tale.)

The thread highlights what makes the timing of Luft’s interview with DOJ so fascinating.  It came just when other key developments were bringing to light Hunter Biden’s connections in Ukraine.  Besides John Solomon’s signal reporting, which literally bracketed the dates of Luft’s interview, the media had been expressing suspicion for the previous four months – since November 2018 (e.g., here, here) – about Rudy Giuliani’s quiet role in investigating Ukraine’s involvement in the 2016 U.S. election.  (On 9 May 2019 Giuliani would publicly state that he was planning a trip to Ukraine to expand his probe, then two days later cancel the trip due to reported blowback on it.)

In a curious side-note, a self-styled watchdog group, American Oversight, later submitted a FOIA request for communications involving Giuliani and Secretary of State Mike Pompeo, targeting the exact period when Luft was interviewed by DOJ.  American Oversight was founded in March 2017 and peopled by senior Democratic and Obama administration operatives, claiming in January 2019 to be “the top Freedom of Information Act litigator investigating the Trump administration.”

Clearly there was significant interest from the Left in what Trump officials and advisors were doing at that time to investigate the Bidens’ foreign connections.

It’s also worth noting that in the exact same period, on 31 March 2019, Volodymyr Zelensky came out of the first round of that year’s presidential election in Ukraine as the vote leader, with a significant 30% to 16% advantage over rival Petro Poroshenko.  Poroshenko was the incumbent – and the president who had obliged Joe Biden in 2016 by dismissing a prosecutor who was investigating Burisma.

So all in the space of less than a week, Joe Biden and the Democrats faced the emerging prospect of Ukraine’s information on the Bidens coming out through the media, the compliant president of Ukraine being replaced, and Giuliani possibly expanding his probe (perhaps with the State Department’s approval.  It’s likely that Biden and the Democrats were being kept informed by their own Ukrainian contacts of who Giuliani was talking to.  They probably had a very good idea what was going on).

In the very same week, a walk-in in the person of Gal Luft tipped Justice off to the “China mole,” reportedly a Hunter Biden asset.

All of this fell just weeks before Joe Biden announced his candidacy for president, on 25 April 2019.

But wait; there’s more.  On 7 April 2019, John Solomon published another article, sourced from Ukrainian officials, revealing the Ukrainians’ frustration that they’d been trying for quite a while to provide to DOJ information on Burisma, the Bidens, and related topics including Democratic officials and the 2016 election – and DOJ wasn’t interested.

This was the DOJ of the Trump years, apparently stonewalling the Ukrainians in direct contravention of what would undoubtedly have been Trump’s preference in the matter.

So, in aggregate, DOJ knew in late March and early April of 2019 much more than the public knew until this week, about Hunter Biden’s activities with and on behalf of foreign associates.  DOJ knew this before the first impeachment effort against Donald Trump, before the FBI obtained the Hunter Biden laptop (formally in December 2019), and long before the October 2020 censoring of the news about the laptop broken by Miranda Devine and the NY Post.

In the case of China, DOJ knew about a “mole” who was allegedly known to Hunter Biden and was giving investigation information to the Chinese.

In the case of Ukraine, DOJ actively resisted knowing as much as it could have known.  Or, at least, resisted receiving information which it might then have to acknowledge being aware of.

In April 2019, Hunter Biden dropped his laptop off at the repair shop in Delaware.  The stonewalling, know-nothing cycle at the FBI and DOJ started all over again.  In December 2019, the Democratic-controlled House of Representatives voted to impeach President Trump, supposedly for cooperating with Russia to push lies about the Bidens and thus interfere in the upcoming 2020 election.

China lurking in the background of unsavory industry developments

It’s gotten to the point that one rarely comes up empty checking for a China angle to an untoward event involving the Biden administration and U.S. industry.

The most recent such event was reported at The Federalist on Wednesday 22 March.  An Apache group is trying to defend sacred land in Arizona against a Biden administration plan to allow the land to be mined by a foreign joint venture, Resolution Copper.

According to reporter Victoria Marshall:  “[I]n 2014, the government transferred the land to a foreign-owned mining company Resolution Copper, which plans to obliterate the site by creating a 1,000-foot crater, due to a large copper deposit 7,000 feet below Oak Flat’s surface. Such a crater will destroy Oak Flat forever, rendering the Apache’s religious practices obsolete, insist the locals who are fighting the development.”

Neither Republicans nor Democrats have a history of such an insensitive approach to a dilemma of this kind.  The Federalist points out that the U.S. government has been protecting the site since the Eisenhower administration, more than 60 years ago; i.e., through the ensuing administrations of both parties.

The Apache group and its supporters, after a hearing before the Ninth Circuit en banc this week, await a ruling from the court on whether the destruction of sacred ground “substantially burdens” the Apache’s right to religious worship.

It turned out to be worthwhile looking into who benefits.

If the Ninth Circuit rules against the Apache, Americans will be one step closer to a precedent that would be very dangerous to the religious liberties of all of us.  Such a ruling would presumably be appealed to the Supreme Court.

But Congress should also be concerned that Resolution Copper, under cover of being a joint venture by Australian companies, would probably be mining copper to sell to China.

It doesn’t seem unrelated that this is the particular instance in which the Biden administration proposes to run roughshod over the Apache’s religious concerns.

U.S. assets seized in Mexico

Earlier this week, meanwhile, an Alabama-based company, Vulcan Materials, found a port facility at Punta Venado on the Yucatan Peninsula, used for its subsidiary’s limestone operation in the state of Quintana Roo, seized in an armed raid by the Mexican military.

Kyle Shideler of the Center for Security Policy posted a letter from Alabama State Representative Chip Brown, expressing concern about Vulcan’s plight.

Alabama’s U.S. Senators, Katie Britt and Tommy Tuberville, weighed in as well.

A dispute between Mexico and Vulcan, which quarries limestone in Mexico, has been in NAFTA arbitration since 2018.  Mexico reportedly repudiated a prior “agreement to unlock a portion of Vulcan’s aggregates reserves in Mexico,” resulting in a standoff in which Vulcan’s export permits are being denied.

But here’s the kicker.  What Mexican President López Obrador (“AMLO”) now wants Vulcan to do is agree to run a tourist operation and cruise ship dock in Quintana Roo, as the price of being able to export its product again.

An AP report from 27 April 2022:  “Last week, López Obrador pressured a U.S. gravel company into agreeing to operate a tourist resort and cruise ship dock at a quarry it owns on the Caribbean coast.”

The report points out that “The Alabama-based aggregates company Vulcan Materials — once known as Birmingham Slag Co. — has no experience at doing either, and would just like to continue mining gravel.”

Further down in the article, which recounts AMLO’s pattern of such pressure with a number of companies, AP continues:  “Vulcan Materials has crushed limestone and it has a deep-water port, Punta Venado, that it uses to export shiploads of gravel to Florida for road projects. López Obrador also wants Vulcan to operate a cruise ship dock just across from Cozumel — the world’s busiest port of call for cruise ships.

“So the president offered ‘a deal’ to the company — run a water park and a cruise ship dock, or the government will shut down the quarries. And he threatened further action.”

A few days after that update, in early May 2022, Mexican authorities shut down the quarry, which Vulcan runs under its Mexican subsidiary Sac Tun.  Now, in March 2023, Mexico has seized Vulcan Materials’ port operation.

Most readers will attribute this high-handed move to the manifest weakness and fecklessness exhibited by the Biden administration.  Independent of any other factors, AMLO has no reason to expect pushback.

But the timing of the new move, and in particular the demand that Vulcan suddenly become a tourist industry operator, is interesting, in light of recent developments with Vulcan’s local partners:  Mexican cement producer Cemex (with which Vulcan runs the quarry), and the state of Quintana Roo.

Both entities notably ramped up cooperation with China in 2019.  Cemex, one of the world’s largest cement producers with a number of foreign subsidiaries (including the U.S.), has been eyeing the Asian market for years, and in October of 2018 had launched a joint Philippines-based venture with a Chinese firm, through Cemex’s Philippines subsidiary.  In March 2019 Cemex Ventures, the company’s investment arm, opened its first Asian office in Shanghai.  And in November 2019 Cemex Ventures closed its first deal to enter the Chinese market.

A month before that deal, in October 2019, officials of Quintana Roo met with a Chinese delegation to discuss a slate of areas for economic cooperation.  One was a long-held vision for a Mayan Railway running down Quintana Roo’s coast – an aspiration Vulcan Materials has affirmed it would be happy to participate in.

Another was growing Quintana Roo as a tourist destination, with port expansion to accommodate more traffic on the mainland as well as the highly popular cruise destination of Cozumel.  A number of recreational attractions were reportedly discussed; the Chinese were enthusiastic about all of them.

As the earlier links indicate (e.g., the AP report from April 2022), increased tourism and a Mayan Railway for Quintana Roo are also reportedly pet projects of President López Obrador.

The connections between China, Quintana Roo, and Cemex all began to flower not long after the 2018 dispute erupted between Mexican authorities and Vulcan Materials.  Less than three months after the negotiations of late 2019, COVID-19 hit, and put the brakes on a lot of planning around the world.  In 2020, a U.S. election produced a change of national leadership that took hold in January 2021.  These factors are worth considering in an analysis of the timeline of our story.

Now, as much as tourism is worth economically – and it’s worth a lot – something seems a bit “off” in AMLO’s approach to Vulcan Materials.  It’s not immediately clear why Vulcan couldn’t be invited into a joint venture in which Vulcan wouldn’t be assigned to do what it has no expertise in; i.e., run tours, ferries, and recreational venues like water parks.

Investing capital and providing services to the development project seem more up Vulcan’s alley.  A proficient partner could be recruited to run the tourist infrastructure.  It’s fair enough to offer Vulcan such an opportunity: the price of continuing to operate in Quintana Roo as new conditions emerge in Mexican plans. 

China, on the other hand, pursues a global strategy of parachuting in and running infrastructure comprehensively developed by China.  As with a nearby resort project in Antigua and Barbuda (mentioned in this earlier TOC article), China is adept at turning commercial development into Chinese outposts, and compensating local officials and business partners well for the latitude to do so.  “Tourist” and entertainment developments are pretexts for Chinese footholds in locations from Cabo Verde in the Atlantic to Sri Lanka, Kiribati, and the Caribbean.

Frankly, this smells to me like a squeeze-out of Vulcan, with China lurking in the background.  That may seem like a stretch at the moment.  But consider the larger context through a focus on the one word we haven’t highlighted so far:  port.

Geography and destiny

Vulcan Materials has a port concession at a prime location.  We’ll see that on the maps below.

For nearly two decades, meanwhile, North American observers have been watching China’s entry into Mexican ports with growing concern.  As depicted in the 12 February TOC article linked above (filled with a lot more links), key facilities in four major Mexican ports are already managed either outright or jointly by Chinese companies.  Three – Ensenada, Lazaro Cardenas, and Manzanilla – are on Mexico’s West coast.  The fourth is Veracruz on the Gulf of Mexico.

All graphics: click to enlarge for legibility. See links in this post for sourcing, especially the group of links in the last paragraph of the “Fraternal peace ports” section. The treatment here (one of the links in that group) served as a useful filter and scoping device for what is a vast array of data points for potential inclusion. Some of the Chinese projects are not yet finalized or are on hold; the legend indicates which ones. Note on the YJ-18 rings for the southern tip of South America: they appear much larger than the others due to the map projection and proximity to the South Pole. They reflect the same YJ-18C range as the others. Google map; author annotation.

The map above gives a sense of how Mexican ports and their geography fit into China’s vision for virtual occupation on a global scale.  As I argued in February, this virtual occupation has as one of its top near-term goals effectively surrounding Beijing’s chief rival, the United States.

And in that context, Vulcan’s little port operation, used to support a limestone-and-gravel enterprise, is some very choice real estate indeed.

Here is the terminal area for the facilities at Punta Ventado (two views, one zoomed in for clarity).

Punta Venado port overview. Google satellite image.
Zoomed in view of Vulcan Materials’ Sac Tun terminal at Punta Venado. Note the proximity of Vulcan partner Cemex’s facilities. Google satellite image; author annotation.

Here’s the zoom out, showing where Punta Venado is located in relation to the larger region.  Alert readers will immediately notice that the port, while lying landward from Cozumel, is very close to the Yucatan Channel chokepoint between the Caribbean and the Gulf of Mexico.  (Note that having Cozumel as a baffle between Punta Venado and the open sea is a military advantage.)

Google map; author annotation.

Observe, on the map, the Chinese-infrastructure ports on either side of the chokepoint:  Veracruz, to the west, and the ports in the Bahamas, Miami, Cuba, and Jamaica to the east.  (See the 12 February post for background on China’s interest in those ports.)

In the February article, the main topic was container-launched missiles, which China could infiltrate into foreign ports and nearby infrastructure via shipping container.  This map from the February article shows range rings for the YJ-18C, the shipping container variant of the YJ-18 cruise missile, from the regional ports where such a threat could be most readily introduced.

Google map; author annotation.

The same information overlaid on a map stretching further west looks like this.

Google map; author annotation.

Note that at the moment, the Yucatan Channel isn’t a chokepoint with potential for such coverage.  But if Vulcan Materials is squeezed out, and China comes in to develop tourist infrastructure along the Mayan coast, that gap could be closed.

Google map; author annotation.

In February I noted that missiles aren’t the only things that can be brought in by shipping container.  They’re a uniquely useful thinking aid, given their inherent connection with geography, but they’re just one dimension of a potential “battlescape” prepared for hybrid warfare.  Don’t get fixated on container missiles.

The real point is the real estate:  controlling it, and being able to leverage it for hybrid-power advantage.  If China is “in” at the tip of the Yucatan Peninsula, ports where China runs tame have America’s southern frontier surrounded.

It’s when the United States looks weak that other nations think it’s good idea to at least keep their options open in such matters.  We can’t be sure what AMLO’s game is.  But we can be sure a U.S. company is being steamrolled, and that U.S. company’s port is right where Chinese strategists want to be.

Feature image:  U.S. Navy photo by Photographer’s Mate 2nd Class Felix Garza Jr. (Via Wikimedia Commons)


One thought on “TOC Ready Room 23 March 2023: China, moles, and economic mischief (the non-TikTok kind)”

  1. Why was the DOJ running interference for Hunter Biden when Joe was out of office and not yet a declared candidate for president? Unless things were set up for Joe to be declared president. And why, under the same circumstances did the Secret Service to the same on Hunter’s illegally obtained pistol.

    Just seems weird.

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