The United States Justice Department unsealed an indictment September 2 in New York City against two naturalized Marshall Islands citizens that alleges they bribed numerous high-level elected and other officials in the Marshall Islands to gain government support for establishing a controversial semi-autonomous zone for foreign investment activities.
Cary Yan and Gina Zhou were extradited from Thailand and arrived in New York City last Friday, US Justice Department officials announced. Yan and Zhou, both naturalized Marshallese citizens who are originally nationals of China, had been in jail in Thailand since August 2020.
Yan and Zhou are charged with three counts of violating the US Foreign Corrupt Practices Act and two counts charging money laundering. “The US Attorney announces extradition of two defendants charged with bribing high-level officials of the Republic of the Marshall Islands,” said an announcement of the unsealing of the indictment against Yan and Zhou issued the US Attorney’s Office of the Southern District of New York.
The charges are the result of a multi-year investigation by the US Federal Bureau of Investigation and the US Justice Department. The charges were originally filed in August 2020 and unsealed September 2, 2022.
The charges refer to six Marshall Islands officials by number designation, not by name. Five of the six, who are described as “Official-1,” “Official-2,” etc. in the indictment, are alleged to have accepted bribes or other financial benefits including paid-for travel expenses, while one is said to have refused to accept a bribe to support legislation to create the special investment zone for Rongelap Atoll. The charges allege that Yan and Zhou paid bribes and also paid for travel and entertainment of high-level Marshall Islands officials for events related to supporting a foreign investment initiative in the Marshall Islands, including a public launch of the plan in Hong Kong in April 2018.
“As alleged, Cary Yan and Gina Zhou’s bribery scheme was designed to influence and manipulate the legislative process of the Republic of the Marshall Islands in order to benefit themselves and their associates financially,” said US Attorney Damian Williams in a statement. “Yan and Zhou’s bribes blatantly flouted the sovereignty of the Republic of the Marshall Islands and its legislature, and the dedicated investigative work carried out by this Office and our partners signals that the Southern District of New York will not tolerate those who violate the integrity of democratic processes.”
US law enforcement said that Yan and Zhou engaged in numerous corrupt practices that aimed at subverting the legislation process in the Marshall Islands for their personal interests. Yan was the proponent in 2018 of the “Rongelap Atoll Special Administrative Region” (RASAR) — a bid to set up a special foreign investment zone that would have been exempt from many of the country’s laws — that President Hilda Heine’s government refused to endorse. The Heine administration’s refusal to support introduction of a draft RASAR bill to Nitijela led RASAR supporters to move a vote of no confidence against Heine in November 2018. It was unsuccessful.
“Yan and Zhou allegedly engaged in a multi-year scheme to bribe elected officials in the Marshall Islands and to corrupt the legislative process,” said Assistant Attorney General Kenneth A. Polite, Jr. “The department is committed to prosecuting individuals who participate in international corruption and undermine the integrity of democratic institutions and the free marketplace.”
FBI Assistant Director Michael J. Driscoll said in a statement, “As alleged, the defendants conducted multiple illegal activities to benefit their personal interests at the expense of the people of the Marshall Islands.”
The charges are filed in New York because Yan ran a non-governmental organization, the World Organization for Governance and Competitiveness, that was registered in New York in the 2016-2018 period that “held itself out as maintaining ‘special consultative status’ with the United Nations Department of Economic and Social Affairs from at least in or about 2016 to at least in or about 2018,” said the court charges. “Yan … held himself out to be the President and Chairman of the NGO.”
The NGO paid for the travel of several Marshall Islands officials to Hong Kong, said the charges. “A number of RMI officials attended the April 2018 conference, including Official-1 and at least two members of the Marshall Islands legislature with the ability to vote on the RASAR Bill if and when it was introduced (‘Official-2’ and ‘Official-3’),” the unsealed charges state. “The NGO paid for the travel of those officials to Hong Kong, and for their accommodations and entertainment while there. During the conference, Official-2 gave a speech praising the RASAR.”
The charges state incorrectly that the RASAR legislation was introduced to parliament in August 2018 “by Official-2 and other RMI legislators.” In fact, the RASAR draft bill was never introduced to parliament because the Heine administration would not support it and it required a Cabinet member to support it for official introduction.“The defendants offered and provided a series of bribes and other incentives to obtain the support of RMI legislators for the RASAR Bill,” the charges say.
It details a $22,000 bribe to “Official-4,” which it said Zhou called a “loan.” “Official-4 had officially sponsored the RASAR Bill in or about August 2018, and also took other actions to attempt to pass the RASAR Bill in 2018,” the charges state.
With RASAR proponents pushing to get the draft legislation introduced in September 2018, the charges alleged that Yan and Zhou “offered a cash bribe to a Marshall Islands Official (“Official-5”) to support the RASAR Bill, which Official-5 refused to accept.” This likely refers to a Cabinet minister at the time due to the RASAR proponents need to gain at least one Cabinet minister’s endorsement for introduction.
During this same period, Yan and Zhou paid a “cash bribe to Official-3,” the charges said. “Official-3 had officially sponsored the RASAR Bill in August 2018, and also took other actions to attempt to pass the RASAR Bill before and after this cash bribe was paid.”
Because the government of President Heine refused to endorse the RASAR legislation, it was never actually introduced to parliament, sparking an unsuccessful vote of no confidence by RASAR and other opponents in the parliament in November 2018.
“In an email sent on or about December 1, 2018, to Cary Yan and Gina Zhou, a Marshall Islands Official (“Official-6”), who had worked with Yan and Zhou in the 2018 effort to pass the RASAR Bill, promised Yan ‘revenge’ against the then-President of the RMI (“President-1”), who had successfully opposed the RASAR Bill,” said the charges filed in New York. “President-1” refers to then-President Heine.
Following the late 2019 national election, Heine lost the presidency when the parliament elected Wotho Nitijela Member David Kabua president in January 2020.
The arrest and extradition to the United States of Yan and Zhou is “a big black eye for the Marshall Islands,” former Marshall Islands President Hilda Heine told Nitijela September 5 two days after the US Justice Department unsealed the charges.
“What is the Marshall Islands government going to do about the officials who accepted bribes?” asked the former president, who was the target of an unsuccessful vote of no confidence in parliament when her government in 2018 refused to support establishment of a “special administrative region” for Rongelap Atoll, known as RASAR. “What is the Nitijela and the government going to do about this big black eye for Marshall Islands?”
Heine said everyone understands that an accused is innocent until proven guilty. “We’re asking for an investigation of the (Marshall Islands) officials in the US indictment,” she said. “We want to know who they are. We took the oath of office not to benefit personally (from our positions). If they took bribes, they violated their oath.” She said the Marshall Islands “must have standards for its leaders.”
Speaker Kenneth Kedi, who represents Rongelap in the parliament and has been a backer of the RASAR plan, held a bible while saying forcefully he never took bribes and defended the RASAR proposal as one that was aimed at improving the difficult circumstances of nuclear test-affected islanders who suffer a high rate of cancers and who’ve lost the ability to live on their home islands due to radioactive contamination.
In a separate email communication responding to questions about the US indictment of Yan and Zhou, former president Heine said: “I am happy to finally see Cary Yan and his accomplice brought to justice and to see the RASAR saga exposed for what it is: A scheme to get some people rich at the expense of everyone else who call the Marshall Islands home.”
She called the entire affair with the RASAR plan and the alleged bribes to gain its passage by parliament an “embarrassment.”
“This case demonstrates how low some of our leaders are willing to go for their own personal aggrandizement,” she said.
Heine said that her government in the 2016-20 period “chose to follow good governance and the rule of law; others were ready to sell their country for some measly amount of money. What a shame! We need to take necessary actions to let the public know that the law does not allow public officials to use their offices for personal benefits and that accepting bribes is not ever acceptable behavior for leaders.”
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