The United States Department of Justice has issued indictments against two naturalised Marshall Islands citizens.
The indictments allege that the pair bribed numerous high-level officials in the Marshall Islands in an attempt to get support for establishing a semi-autonomous zone on Rongelap Atoll, which would become a base for foreign investment activities.
Cary Yan and Gina Zhou were extradited from Thailand, where they had been imprisoned since November 2020, and arrived in New York City on Saturday.
Yan and Zhou are both naturalised Marshallese citizens who are also known as Hong Hui Yan or Chen Hong and Chaoting Zhou or Angel Zhou, respectively.
The duo are charged with three counts of violating the US Foreign Corrupt Practices Act and two counts related to money laundering. These charges are the result of a multi-year investigation by the US Federal Bureau of Investigation and the US Justice Department.
The charges relate to six Marshall Islands officials, who not named but are listed by number designations ("Official-1", "Official-2" etc.). Five of the six officials are alleged to have accepted bribes, while the other allegedly refused to accept a bribe, in exchange for supporting legislation to create a special investment zone on Rongelap Atoll.
As well as bribes, Yan and Zhou allegedly paid for the Officials' travel and entertainment of high-level events, including a public launch of the plan in Hong Kong in April 2018.
US Attorney Damian Williams stated that: "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.
"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 allege that Yan and Zhou engaged in numerous corrupt practices aimed at subverting the legislative 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.
President Hilda Heine, right, with daughter Kathy Jetnil-Kijiner, minutes after being elected the first female president of the Marshall Islands in January 2016, was targeted for "revenge" by proponents of a controversial foreign investment scheme, said criminal charges filed by the US Justice Department in New York. Photo: Marshall Islands Journal
In 2021 this initiative was repackaged by Yan and other proponents as the "Digital Economic Zone of Rongelap Atoll" (DEZRA) and promoted as way to address the Marshall Islands' economic development. The Islands' had suffered long term effects from US nuclear testing, which left most of Rongelap Atoll off-limits due to high radiation levels.
John Douglas, Chairman of the Financial Services Volunteer Corps, a group connected to the US Department of Treasury described DERZA as "such an invitation to unscrupulous activities that I would be surprised if any reputable financial institution would want to deal with the government that condones this." This statement was made in May 2021, while the legislation was being proposed to Parliament.
Photo: Marshall Islands Journal
Because President Heine's government 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. The DEZRA legislation, although introduced to parliament in 2021, was never adopted.
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 have been filed in New York because Yan ran a non-government organisation (NGO), the World Organisation for Governance and Competitiveness, which was registered in New York in the 2016-2018 period. This NGO "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."
Photo: Marshall Islands Journal
The charges allege that the NGO paid for the travel of several Marshall Islands officials to Hong Kong: "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 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 also allage that when the RASAR legislation was introduced to parliament in 2018, "the defendants offered and provided a series of bribes and other incentives to obtain the support of RMI legislators for the RASAR Bill."
The alleged bribes include a US$22,000 bribe to "Official-4," which Zhou allegedly described as 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 RASAR legislation was still pending in September 2018 when Yan and Zhou allegedly "offered a cash bribe to a Marshall Islands Official ("Official-5") to support the RASAR Bill." However, Official-5 refused to accept the bribe.
During this same period, Yan and Zhou paid a "cash bribe to Official-3," the charges state that "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."
"In an email sent on or about December 1, 2018, to the defendants, a Marshall Islands Official ("Official-6"), promised Yan 'revenge' against the then-President Heine of the RMI ("President-1"), who had successfully opposed the RASAR Bill," Following the late 2019 national election, Heine lost the presidency and MP David Kabua became President in January 2020.
Assistant Attorney General Kenneth A. Polite, Jr. stated that: "Yan and Zhou allegedly engaged in a multi-year scheme to bribe elected officials in the Marshall Islands and to corrupt the legislative process. The department is committed to prosecuting individuals who participate in international corruption and undermine the integrity of democratic institutions and the free marketplace."