Pacific Gambit: China’s Infiltration into Palau’s Elite and Criminal Underworld

Inside the Chinese Communist Party and Triad’s Push into the Pacific Island Nation

By Bernadette Carreon, Aubrey Belford, and Martin Young of OCCRP

Title: Pacific Gambit

Subtitle: Inside the Chinese Communist Party and Triad’s Push into the Pacific Island Nation

Palau: A Pivotal Battleground

China’s influence in the Pacific Island nation of Palau represents a significant battleground in the expanding confrontation between China and the West. With organized crime figures, some linked to the Chinese Communist Party (CCP) and the Triads, attempting to establish a foothold, the nation has become a focus of concern for Palauan authorities and Western allies.

Key Findings

1. Illegal Gambling Operations: In 2019 and 2020, hundreds of mostly Chinese citizens were detained and deported for involvement in illegal online gambling operations based in Palau. These operations were a part of a broader effort to establish a presence in the nation.
2. Local Elite Involvement: Among those involved in these illicit ventures were local elites, such as former Presidents Tommy Remengesau, Jr., and Johnson Toribiong.
3. Expansion into Other Enterprises: Linked to these gambling operations were other questionable enterprises, like a controversial investment scheme offering passports to wealthy Chinese for a steep price.

A New Wave of Arrivals

Palau, a country of 18,000 people, has historically welcomed newcomers. But the arrival of young, mostly Chinese citizens in 2018 and 2019 raised concerns. Behaving unlike typical tourists, they stayed inside, relying on daily deliveries of food and sex workers.

The Criminal Underworld

Upon discovering these newcomers’ involvement in illegal online gambling operations, Palauan law enforcement uncovered ties to known Chinese organized crime figures, creating a palpable concern.

Beyond the Criminal Underworld

Chinese influence in Palau is not limited to the criminal world. Politicians have been courted with lucrative offers, and the Chinese embassy has spent millions on development projects. These efforts have shifted Palau’s political landscape, raising concerns among Palauan civil society and Western allies.

The Threat to Stability and Democratic Institutions

With organized crime figures entangled with national and local leaders, Palau’s stability and democratic institutions pose a threat. International organizations, including the United Nations and nonprofits, have expressed growing concern and urged decisive action against Chinese organized crime.

Balancing Interests

The challenge lies not only in combating Chinese infiltration but also in managing Palau’s strategic interests without appearing anti-Chinese. With China’s growing influence in the region and investment in Palau’s infrastructure, the question of how Palau navigates this intricate web of political and criminal influences remains unanswered.

This investigation, produced by Bernadette Carreon, Aubrey Belford, and Martin Young of the Organized Crime and Corruption Reporting Project, sheds light on the risks that Palau faces as it becomes a nexus in the intensifying rivalry between China and the West and the criminal underworld.