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I go back to the people of these countries themselves.
And they can see what's happening.
They can see how they're losing their sovereignty.
They can see how the Chinese are moving in under the guise of the
Belt Rd. Initiative and how they're
basically sucking up these national resources.
And they're giving very, very little back.
Today we welcome Mr. John Cassara.
John started his career as a CIA covert operations officer and
then moved to the US Treasury as a special agent, where he worked
in counterterrorism and financial intelligence.
During that time he also detailed to the State
Department's INL or International Narcotics and Law
Enforcement to support counterterrorism, finance and
anti money laundering. John also worked at US Customs
on counter illicit trade and trafficking and illicit arms
smuggling. John is currently a board member
of Global Financial Integrity and the Coalition Against
Illicit Economies and published the book Specified Unlawful
Activities About China's Illicit Economy.
I will have links to the book and his full bio in the show
notes. So with all that, please welcome
John Cassara to the show. I'm glad I finally got you on
the air. I've read your books and and
enjoyed them, and actually have listened to some of your
interviews. Thank you.
We've been so focused on China as the ideological, the
military, the economic, the commercial threat that we're
missing what I call the criminality of the CCP.
Right. Well, what gets me is reading
your book makes me think the CCP run the illicit trade and
trafficking within the country. But I'm not so sure.
They have total control overseas because of the capital flight.
And I wonder if they've got a tiger by the tail, because at
some point there's so much money flying out of China that if its
economy collapses, there's going to be nothing left but the mafia
to take over. Yeah.
By far and away, China leads the world in capital flight and it
leads in so many ways and I talked about that in the book.
The CCP and the upper cadre of China definitely benefit from
that. Everybody that can is getting
some capital out of China, kind of an insurance policy or
investing in Western real estate or trying to get that second
country passport as you intimated some of these bubbles.
Burst, whether it be the stock market or the real estate or
civil unrest or whatever it is, it's going to be an interesting
situation. Sure, and it makes me wonder if
it's going to become a fiefdom. Yeah, you know, because those
who have are going to own everything and then those who
have not are going to be beholden to him in a way.
Absolutely. I mean, a lot of people say, oh,
China has done so much since the CCP came to power and have a
large and growing middle class and more prosperity for their
people. And that's true, and they should
be given a lot of credit for it. But it's still power in the
hands of a very few. The average Chinese citizens has
no vote, has no say in how things are run there, and
economically it's just a very small percentage of people that
they control most of the wealth in that country.
Right. And I think who Jintao really
allowed a middle class to grow because they were so desperate,
they had fallen so far behind economically that they had this
massive country with a billion people doing agriculture and
minor production. I think that when he realized
that they were struggling even to feed their population, I
think that's when they really opened up markets to the US and
the rest of the world for manufacturing and trade and it
captured their imagination. But I think that the stressors,
a middle class expecting more freedoms, and especially when
they traveled and saw how the rest of the world lived, was
creating pressure against the CCP that at some point couldn't
be tolerated. When she's in pain, came to
power, he really wanted to recentralize everything back
into a more CCP controlled environment and is driving the
economy into way free. Actually, the financial markets
in China are running right now. They're so controlled and all
the regulators and oversight have been punished for doing
anything that might counter the CCP policy that it's causing
them to. What is how brands say?
That their foreign policy reach and their economic reach are
peaking. Yeah, I agree.
I mean, use the word control. And that's exactly what's going
on. I mean, the Ccp's ultimate
objective and just about everything they do is to cement
control. And they do that in so many
different ways and they aim to hold on to power.
And they've been very, very successful about that, right?
Does this make the CCP more dangerous as they struggle with
controlling an economy that is now peaking?
Because what they're doing is they're compensating for the
peaking regular economy with their illicit economy.
Well, one of the things I did in my book was I focused on what I
call 12 specified unlawful activities.
Yeah, I call it your 12 indictments on China.
My 12 indictments of China. Including the narcotics trade
and human trafficking and illegal timber and fishing and
wildlife trafficking and right, you know, corruption that is
also a specified unlawful activity.
And for those of that have not read the book, I the the numbers
behind this is just staggering, absolutely staggering.
And I totaled this all up using reputable sources.
You're talking about $2 trillion a year?
$2 trillion a year in in criminality around the world
where Chinese actors CCP is involved.
And why is this so significant is because the I MF estimate of
about two to 5% of world GDP save $4 trillion a year.
So if you look at the two trillion that China's
responsible for, that's roughly half.
And again, it's staggering. And so much of their economy
depends on criminality, as you said.
And this is where CCP Inc, as I call it, is most vulnerable.
Yeah, I don't know if you heard my show on mapping out people's
illicit financial actions, their family's actions, and then using
that as negotiation for reforms in a country.
I did listen to some of it. OK, I don't know if it's nuts or
not, but that's something I've been trying to promote.
Yeah, yeah. Makes sense?
Just trying to figure out new tools to put in the arsenal.
Well, that's just it. I think we have to be more
creative. I go back to the finding after
911. A lot of what happened to us was
because of, quote, UN quote, lack of imagination.
This was like the 9/11 Investigative Committee.
Lack of imagination. And we keep doing the same old
things over and over and over again.
And I write about that a little bit in the book, too, as far as
you know, steps forward. Yeah, it worked in the past and
so you can just plug it in and go right.
And regarding, for example, money laundering, we have spent
so much time talking about following the money, but we've
not really done a very good job at it.
We go after the people involved or.
Go after the product involved, whether that product is drugs
or, I don't know, stolen cars or weapons or high technology.
That's what we go after. But we have not emphasized the
money. And after all, our adversaries
are motivated primarily by money, by greed that will hurt
them more than anything else, money and value.
Right. Oh man, the casinos.
Now that's where you really push some money around.
Oh yeah. I've heard it from you and Sam
Cooper up in Vancouver and Calvin Krusty who just recently
did a show. He came up and talked about how
the flood of narcotics shipments and money laundering and the
casinos up in Canada really shifted their political
positions, how government is being run, the cost of living up
there, PRC and. Also, for some reason, Iranian
networks are up there influencing that civil society
to the point where it's really having challenges.
Yeah, absolutely. I wasn't aware of the Iranian
presence there, but it doesn't surprise me.
Yes, I think what you're referring to, they call it the
Vancouver method of money laundering.
And there's this interplay going on between gaming, gambling, the
casino industry there, the purchase of real estate, drug,
money laundering. And underground financial
systems. And it's just, it's all
intertwined. And the Cullen Commission which
had the honor of testifying for in British Columbia, did a great
job of looking at this. If anybody's interested, you can
get online or even read a number of the statements.
But they they tried to unravel it and it's like you said and
it's just a huge impact. And we see that elsewhere,
particularly in real estate, people say why is it's so
expensive? Why?
Why can't I afford to buy a house in my neighborhood
anymore? And a lot of this has to do with
foreign money coming in or drug money Competing with your money
is to purchase real estate, and this is controlled by the mafia.
Right. Matter of fact, I was just in
New York City and some friends of friends were sitting there
talking. And like my building, the first
three floors are all Chinese. Well, they all must be
industrialists because they have these fancy cars and they have
these nice apartments. And I'm thinking to myself, no,
they're not industrialists. Their numbers are crazy, and I
write about that a little bit in the book.
Oh, if you go back for the last 10 years or so, it changed a
little bit during the COVID era. But by far and away, the Chinese
people are the biggest purchasers of US residential
real estate in the world, and the numbers are are
astronomical. And once again, I understand it,
you're Chinese middle class and you know want to invest in, in
say US residential real estate, whether it be in California or
Florida or Texas or whatever it is, it's a good investment.
Yeah. And that's why when people talk
about competition with China and and they keep pointing towards
the military and it's important, don't get me wrong, if we didn't
have a military to offset. Aggressive behaviors in the Indo
Pacific, then we would have exclusive economic zones run by
China, but we're not focusing on the rest of the political,
economic and information side and we got to look at it more
holistically. Right.
For me, when I went into writing this book, it was kind of a wake
up call because I tried to go in with an open mind.
I tried to educate myself and after a year or so of looking at
all this stuff, I mean, I was took my breath away.
But I I've never seen anything like this before.
We're getting distracted. For example, you know, right now
Chinese involvement with the fentanyl trade is in the news,
understandably, justifiably so. Or we talk about Chinese
influence and things like we're going harvesting or human
trafficking or forced labor camps, this time of thing.
All understandable. But what we're not doing is
looking at the totality of it. All those 12 specified unlawful
activities I talked about money laundering, criminal
methodologies or Chinese centric criminal enablers.
We're missing the big picture and we're not asking a lot of
questions and part of that is because of their influence
operations. You know Calvin Christie on his
interview talked about how. Chinese benefactors are donating
to NGOs in Canada. They're not an iron fist.
They're just saying, look, we understand that you have
frustrations with the PRC and the illicit trade trafficking,
but can you just tamper it down a little bit?
Can you just soften the language so that you're not creating an
international incident? And just by donating and trying
to soften the tone they're trying to vanillaize.
The narrative if they can bring down the skepticism against
China and then continue with the pro China narrative, then it
doesn't look like there's any real resistance to the Chinese
structural way of trade and commerce, and so it helps shift
the population's attitude. Many people have said Chinese
have a very long term perspective on things and it's
been very, very effective for them.
As I said, one day we're going to wake up and realize what's
happening. Sure.
John, you also teach because I saw that you are connected with
the GMU track program. I am.
I've done some really wonderful work with them.
I'm a big admirer of the program over at George Mason University,
and I work closely with Dr. Louise Shelley.
If you haven't talked to her, I suggest you should.
She's just a world expert on issues involving transnational
crime. I really enjoy it and it's
gratifying at this tail end of my career to go out there and
kind of give back a little bit. Is it mostly how to spot illicit
trade and trafficking during their duties as an enforcement
officer? I talk a lot about trade based
money laundering and value transfer underground financial
systems. It depends what they want, but I
try in my writing and in my teaching to take complicated
topics and make it accessible for everybody, right?
It's hard to do, and I learned so much by trying to do that.
You kind of relearn everything again from from new eyes.
You kind of relearn everything, and that's what I do, you know,
It's been a lot of fun. And the reason I'm angling this
question is. I've got a lot of people who
work foreign policy in the field.
So field agents, military, civil affairs, defense attaches, some
State Department folks that work, public diplomacy, some Aid
and Development folks. And so I really try to focus on
advice that can help them do their job.
And I was just wanted to pick your brain to say if someone's
working in the field and they're working with the population,
what are the indicators that a field agent could use to help
spot? That something's not quite right
in this area. There are many indicators for
dirty money, but I want to change that up.
Go ahead. If you're somebody that's going
into a country and you're talking to officials, how to get
them to pay attention to you, all right, I've learned this
hard lessons over the years. For example, right after 911 we
went in all over the world and I was part of this because I
worked with State INL at the time.
We delivered training all over the world dealing with threat
finance. So it was basically you're with
us or against us. If you don't cooperate, Big 6
going to come down. I'd go into a country and I be
invited in to talk to them about money laundering.
And they'd invite me and just so they could say, yeah, we're
working with the US And so they'd listen to me and they'd
say, you know, John, thank you for coming all the way out here,
but we really don't have a problem with money laundering.
We don't have a problem with tariff finance.
And thank you very much, but that's OK.
And then I changed the conversation and I said, well,
you may think you don't have a problem about money laundering,
but. Let's look over here and talk
about trade based money laundering and if we talk about
trade based money laundering, let me show you how much revenue
you are losing. Then they're very, very
interested because every country and say I've ever worked with
they are flying for new revenue sources.
So if you approach it that way, then they're very receptive.
So you got to come in and basically say you know you're
missing revenue here and then that attracts them to.
Yeah, they'll make the reforms. They'll devote the resources,
etcetera, etcetera. You know, years ago I was
invited to Italy. I spent six years of my life in
the embassy in Rome. This was about from 1990 to 1996
and I headed up the first really truly international anti money
laundering task force. Between the US Customs Service,
Treasury at the time and the Italians, particularly the
Guardia Finanza, the the fiscal police, And we looked at Italian
American organized crime by being full of dirty money going
back and forth between Italy and the United States.
And I learned so much from that experience.
And one of the things that the Italians were telling me because
I kept stressing money laundering.
And they were saying, yes, that's all true, but there's
other types of things as well. For example, illicit tobacco in
Italy was a big deal then, as continues to be a huge issue
today. A lot of these are tax crimes.
So they were cooperating with us, quote, UN quote, to combat
money laundering, but they were also looking at it to protect
and to procure revenue. And I initially had a problem
with that, but it's like whatever works.
Our operation was called Operation Primo Paso.
Primo Paso means first steps. They were taking those baby
steps roughly 30 years ago. Now Italy has one of the best
anti money laundering infrastructures in the world.
They've done excellent work and however a country chooses to get
there is fine. So.
Anyway, I just just wanted to get some of your notions from
the field on how people can spot or engage in these issues
because people travel and they're working in the field
now. Yeah, I was a covert CIA case
officer. Yeah, I love that role.
I love collecting intelligence, spotting, assessing, developing,
recruiting and getting that information back to
headquarters, back to the policymakers.
And then when I changed to law enforcement, I took a lot of
that with me. When I go overseas, I would
always be attuned to what was going on around me.
I asked a lot of questions. I went in there very humbly.
Would you please explain this underground financial system to
me? Would you explain to me how
whole wall would work? Would you explain to me this
gold trade that you're involved with?
How does that function? And I learned so many lessons
from that. I always like to go out and talk
to the locals and walk down those back streets and alleyways
and talk to the locals and figure out the way things are.
And it's paid a lot of dividends over the years.
And the interesting thing is doing all that time as kind of
like a cultural collector. Of intelligence.
Because if you're going down alleys and you're talking to
locals, you're you're getting more than just the different
scent collections that come in. You're actually getting to know
the people to where you can almost write the CIA country
book. By doing that, you can have a
better sense of why people would spark into a revolt or why they
have frustrations or why they accept the way conditions are in
a country. I think that.
That human assessment is critical in building relations.
It is critical, and I love that term.
Cultural collection, I've never heard that before, but that is
absolutely correct. It is so important cultural
collection. I'm gonna remember that.
We should name it. That way we can be famous for
Coulson. It's not human.
It's Coulson. I think you're absolutely right.
I think we've gotten away from that a little bit.
We could talk a little about Intel services and how things
have changed so much from the old Cold War era.
I think we saw some of that after 911.
We were so dependent on liaison sources.
Oh yeah, and relationships that we did not have, Our own people
go out as much as they used to. Well, and The funny thing is,
I've heard people discuss Iraq and the assumptions we had
because we didn't have people on the ground we didn't have.
Good intelligence on ground we were relying on you know
somebody of that was considered of authoritative source right
and the. It came out.
They had a political bent, yeah, that that was a tremendous
problem and we paid the price for it.
But but just compound that for other issues around the world,
we need to develop our own expertise, which kind of goes
back to the China thing we talked about.
There's just a lack of knowledge building with the China threat,
particularly in U.S. law enforcement.
We're pretty good in certain things.
For example, the FBI is pretty good counterintelligence or
pretty good countering intellectual property rights
theft, but not so good in other things and certainly not very
good in Chinese underground finance and money laundering
methodologies and this type of thing.
We have to do better. Well, I think we have strong IP
protections because our companies demand it, yeah, But
they don't see the corrosive effects of Chinese underground
financial structure. And so if it was more impactful,
I think that there would be more push.
I think that's a good point. The other thing I go back to
again, I'm circling back is once again the totality of the
threat. So if we just focus on counter
espionage or IPR, that's not going to do it.
You've got to look at the Big 12 and the enablers and the money
laundering methodologies and how they're all intertwined.
You just cannot look at one thing in a vacuum because truly
they're intertwined. You don't understand the problem
unless you see the big picture. Well, and that's one thing about
your book is it's. Heavy on details on the 12:00.
I'm going to call them indictments.
I just love calling them indictments.
I apologize. The 12 indictments and the
structures that you write about in the second-half of the book
is terrific. Are you going to come out with
something that talks the big picture policy summaries of or
recommendations from this? I was fortunate enough to be
invited to testify probably about six weeks or so ago.
Now up a Capitol Hill, this was a hearing on House Financial
Services, the National Security Subcommittee.
It was on fentanyl. So I talked to the members.
I talked to a lot of staff. I'm still talking to committees.
I went up the other day that the China Committee and I handed out
copies of my books to all the members and this type of thing.
So I have realistic expectations.
It's very hard for me to get my messaging out.
I'm I'm not a big name. I don't have a publicist, but
I'm willing to talk to anybody and in my own humble way,
reaching out and trying to get this message out that China is
vulnerable. And it's one of those double
edged swords for them because they are profiting from it and
they're growing from it, but it's also killing them because
it's taking all the capital growth out of the country.
Yeah, it's a weird and complex issue, and of course you deny it
all too of. Course.
Well, of course we're cooperating with law
enforcement. We do this, we do that and the
other thing. But look at their actions.
Look at the fact. Yeah, look at their intent.
You know, you talk about Laos, you talk about Cambodia, and I
had so many examples on my book about Africa and stuff.
I go back to the people of these countries themselves and they
can see what's happening. They can see how they're losing
their sovereignty. They can see how Chinese are dig
in under the guise of the Belt Rd. initiative and how they're
basically sucking up these national resources and they're
giving very, very little back. They bring in their own workers.
And even though some of these countries have such high
unemployment rates, I feel for the people right Some of these
just stories, they just break your heart.
The Chinese going into places like Namibia, just raising these
old growth trees and everything and leaving the people with
nothing. It's just it's so sad.
Right. That's what I'm talking about.
We have field officers that go into these areas after
everything's been wiped out or is in the process and trying to
figure out how to bring people out of it because after that
they're much more willing to accept reforms in in one way.
China's own behavior is its worst enemy because they act
like jerks internationally, frustrates the populations
around the world, and it gives us an opportunity then to
rebuild those relationships that we've let kind of stall or age
over time. I hope you're right once again.
I just hope we learn that lesson in the near term.
Getting back to the populace in these countries that are being
victimized by the China juggernaut, I talk a lot of in
the book about how China's flooding these countries with
corrosive capital. A lot of them are payoffs.
It's, it's corruption, it's bribery, etcetera, etcetera.
But I think the people in these countries are aware of what's
happening. They may not be able to
articulate it. They may feel powerless to stop
it. But eventually I think there's
going to be a rebellion because they're going to look around and
say this country, our country belongs to us, it doesn't belong
to China. I quote a minister in I think it
was Ecuador after China went in and is basically taking over the
resources taken over the economies, just it's terrible
what they've done there. And he basically says we've lost
her own very sovereignty to the CCP, to China.
So sad and I hope people wake up.
Is it become an indirect economic colony or something?
It is. You know what?
Again, I had this anecdote, the book based on a true story.
I was doing some of this mentoring in an African country,
and I go out there and I met with the chief of the Intel
services and he took me around because I was talking about
China. And he took me by the parliament
building which China made. He took me by their equivalent
of the White House where the president lived, Chinese built
that. He took me by sports stadiums
and dams and all this other infrastructure project.
They built the airport. They built the road in from the
airport to the capital city. And beforehand our conversation,
this country used to be a colony.
And I said, aren't you afraid of losing your own sovereignty?
And he says, well, you know, I've talked to the president
about this. I've talked to the cabinet about
this. And right now they don't care.
They're just happy that these projects are being built.
And I think that says a lot. Maybe this guy I was talking to
was on the take himself. I don't know.
But it's visible. It's visible to anybody that
wants to look what's going on, but people are not looking.
They're not asking the questions and they're not reporting it.
And I think the media is is a large part to blame for that as
well. There's so many stories that
could be written, but for whatever reason they choose not
to all. Right.
Well, I've hit everything I can even imagine.
I've been all over the place. Well, for those that are
listening in, China specified Unlawful activities then the
subtitle of CCP Inc Transnational Crime and money
laundering available on Amazon Print version E version very
nominally priced. Again, I wanted to get this book
out. Right.
And it's a good read. Appreciate that.
My pleasure. All right with that.
I think we're good. I appreciate your time.
Well, thank you, Jack, and take good care.
Thanks for listening. And thank you John Cassar for
coming on the show. I'll have links to his bio, the
book and other references in the show notes.
We're currently shopping for interviews, so if you're
interested in coming on the show or hosting an episode, e-mail us
at capodcasting@gmail.com. I'll have that e-mail and the CA
Association website in the show notes.
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They are offering a 10% discount to when CA podcast listeners.
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And most importantly to those currently working out with the
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This is your host, Jack Caines. Stay tuned for more great
episodes. One CA podcast.