The privately-owned "USA Pavilion" at the Shanghai World Expo has collected an estimated $100 million in tax-exempt cash and in-kind contributions from more than 70 American and Chinese multinationals.
One of the "USA Pavilion's" most important partners is the Shanghai AmCham (American Chamber of Commerce), a franchise of the US Chamber of Commerce (USCOC).
Based on recent revelations by Think Progress, Shanghai Expo 2010, Inc. (the "USA Pavilion's" owner), the Shanghai AmCham, and the Shanghai Consulate which has aided them are now suspect.
A lack of oversight and tax returns is impeding knowledge about the finances and purpose of the "USA Pavilion" - and now the Expo is about to close, the "USA Pavilion" with it. Has the perfect crime been committed out of sight, over the horizon? Federal investigators hold the key to our understanding. They'd better act soon.
I've written frequently in the Huffington Post about the "USA Pavilion" at this year's Shanghai World Expo. There's a lot not to be said for it, besides that it resembles a shopping mall with a fast-food court - which essentially is what it is. I use quotes for "USA Pavilion" because the pavilion is privately owned and operated. The only thing "USA" about it is its logo. It didn't earn the "USA" brand; it bought it.
The "USA Pavilion" was conceived and functions as a prototype for privatizing other government functions. That's the reason the "USA Pavilion" is the only private "national" pavilion at the Shanghai Expo - the 199 other pavilions are all government-owned - and our only private national pavilion ever.
The "USA Pavilion's" messaging is totally corporate. It's also tax exempt, despite having no visible charitable purpose, which means that America's taxpayers ultimately will pay the multi-million-dollar bill for this six-month promotional extravaganza, conducted in their name.
But wait: there's more. That might be the most alarming.
(Here I must issue a disclaimer: much of what follows is speculative, not fully substantiated by documented facts. That's because the documents with the facts have intentionally been kept hidden, out of public view. Pending the completion of highly confidential federal investigations, the best I can do is state what is currently known and explain its significance. You, the reader, can draw your own conclusions.)
It now appears, based on recent revelations by Think Progress, the public arm of the Center for American Progress, there could be a more sinister motive behind privatizing the "USA Pavilion." The Bush Administration which launched the US Expo effort may have planned all along to use a wholly privatized pavilion, beyond Congressional oversight, as a mechanism for collecting and secretly flushing back into the American political system potentially large amounts of corporate money, money that could then be used to wage war on Democratic candidates in future elections. The "USA Pavilion's" private owners and their allies in business and government might be doing that right now.
In one such scenario, Group A collects the boodle, Group B packages it and sends it back to USCOC, and Group C provides government cover. I can't say for sure that it's happening, but it could be. And that would explain a lot that heretofore has been unexplainable about the "USA" Pavilion.
Shanghai Expo 2010, Inc. (SE 2010) is the shadowy firm that owns and operates the pavilion with the flimsiest of authorizations from the State Department, and with no public oversight to speak of. Its finances have never seen the light of day, yet it sits on a huge pile of cash provided by corporate contributors. Ironically (with a capital "I"), Secretary of State Hillary Clinton may have inadvertently abetted such an hypothetical scheme when in early 2009 she personally raised a reported $60 million-plus in corporate money for SE 2010.
SE 2010 is tightly partnered with the Shanghai AmCham, one of the US Chamber of Commerce's overseas franchisees that specializes in arranging deals between local and American businesses. According to Think Progress, the AmChams also function to collect dollars overseas from foreign and American interests, then gives the boodle to the US Chamber of Commerce, the most reactionary business organization, to finance campaigns against Democratic candidates. The Shanghai AmCham's president sits on SE 2010's board of directors. The Shanghai AmCham runs and is compensated for the "USA Pavilion's" impressive business-government program. In one possible scenario, the Shanghai AmCham might receive excess transaction payments that could in turn be funneled back to the Chamber.
AmCham and SE 2010 work closely with the Shanghai Consulate, directed by Consul General Bea Camp. Behind its public facade and traditional show-the-flag functions, the Consulate works to promote transactions of various types between the Chinese and American political and business interests. With Condoleeza Rice effectively checked out and the Embassy in Beijing still recuperating from the Olympics, in 2008 and 2009 the freewheeling Shanghai Consulate was totally free to innovate private arrangements between SE 2010, AmCham, American and Chinese multinationals, and the Chinese government - arrangements that have yet to see the light of day.
So: Is the "USA Pavilion," whatever else it may be, also a front for nefarious political purposes? I'm personally not a fan of conspiracy theories, but in the real world, actual rackets often resemble fantasy capers. Over the three years that I've been observing this slow-motion train wreck, the pieces of this puzzle make a lot more sense in the racket direction. And Occam's Razor is seldom wrong.
All the facts aren't in, so the picture is still sketchy. SE 2010, the company that owns the "USA Pavilion," hasn't opened its books to the public since SE 2010 was incorporated in March 2008. Nor, according to the IRS, has it filed a single required tax return as of August 2010, neither before nor after having been granted tax-exempt status by the IRS in July 2009. So the multi-multi-million-dollar money flows taking place in and around SE 2010 and the "USA Pavilion" remain large unknowns. Anything is possible.
What is known and documented is that:
• Chinese money, apparently procured by the State Department, has been infused in the USA Pavilion at least twice without State's public notice.
• Seventy American and Chinese multinationals have ponied up as much as $100 million in contributions and investments for a pavilion that should have cost half that much (or less).
• Suspect transactions have taken place among SE 2010 and at least one of its primary vendors. One forced the resignation of SE 2010's founding CEO in June 2010.
Press accounts in niche press and well-respected blogs have determined that much. There's obviously more to this story, just out of reach.
The symbiotic relationship between SE 2010, Shanghai AmCham, and the Shanghai Consultate is fraught with disturbing possibilities. (A stateside office of the State Department, the Educational and Cultural Affairs Bureau (ECA), is also implicated. However, with the exception of one special consultant who advises the Shanghai trio, ECA has been for the most part a dog wagged by its tail.)
For example, when SE 2010 was secretly created with the State Department's help in February 2008 prior to receiving in private, without public notice or review, a sole-source authorization to seek funding for a pavilion - an egregious procurement violation - it began life with a $500,000 gift from an unknown herbal pharmaceutical firm with its offices in New Jersey and operations in Shanghai. Was this Chinese money? One might well wonder.
Then, eight months later in October 2008, when SE 2010's inexperienced founders publicly threw in the towel (complaining they couldn't raise private funds), the Shanghai Consulate and AmCham quickly stepped in to salvage the operation. SE 2010 was reinvigorated, one of the founders publicly stated (and told me), with "help" from the Chinese. I take this to mean money, a considerable amount. The Chinese also contributed the services of a still unidentified "Chinese industrial design" firm to redesign the pavilion and make it cheaper, thus presumably easier to fund.
(The redesign eliminated many eco-features. This lack recently created an opportunity for yet another problematic transaction between SE 2010, a broker of carbon offsets, and the Chinese government, perhaps the first of many paybacks. I've written about that elsewhere in the HuffPo.)
These multiple alleged exchanges may have violated the Foreign Agents Act, not to mention agreements between SE 2010 and the State Department, and between the State Department and the Chinese government. Better legal minds would know.
The Shanghai Consulate and AmCham's "rescue" of SE 2010 was more aggressive than simply passing the hat. When a large group of Shanghai's American business expats objected to bailing out SE 2010, claiming that the personalities of the founders, perceived as carpetbaggers, were creating bad vibes in the Shanghai business community - they were locked out of special meetings to strategize a solution. These meetings were hosted by AmCham president Brenda Foster and led by Consul General Camp and her henchmen, public affairs officer Tom Cooney. This despite the fact that most of the objectors were respected members of the Shanghai expat community and reportedly members of AmCham.
The exchanges became quite ugly. In one case, a dissenting AmCham member was interviewed in Hong Kong by Bloomberg TV in Hong Kong about a popular plan to beef up the US effort with expert help, participation from the expat community, and a possible appropriation from Congress. On his return to Shanghai, he was grilled by Cooney and his attack team. Reportedly, the inquisition was a mean one. Cooney was later rewarded for his bullying by being appointed to the position of US Deputy Commissioner for the Expo.
In the end, no compromises were made and the SE 2010/AmCham/Consulate alliance pushed on according to the existing plan, only to encounter another crisis in March 2009 when SE 2010 was again without funds. The heretofore patient Chinese Expo hosts this time threatened SE 2010 (and thus the "USA" with it) with removal from its favored location opposite the China Pavilion to one of the prefabbed pavilions for Third World nations.
That's when Clinton rode in to save the day. On assuming office, ill-advised by her Foggy Bottom team, she threw in with the Shanghai triumvirate and flung herself into personally raising for SE 2010, a private company with dubious credentials, nearly all of its current funding. She then signed a letter to the IRS in support of SE 2010's application for tax-exempt status, a letter obviously prepared for her as it closely resembled one signed by an equally unaware Secretary Rice a year earlier. The letter, which argued for SE 2010's importance because "federal law prohibits federal funding of pavilions at Expos," baldly misstates existing law, which contains no such prohibition.
Most of those contesting the Shanghai Consulate and AmCham's strong-arm tactics believed they were motivated by loyalty to the Bush privatization plan and their own careers. Any other solution would have required the Congress to step in and approve the arrangement, thereby imbuing the pavilion with a public purpose and ensuring public oversight. To that extent, they were correct.
But now it appears there may have been more to this story - a lot more.
If the charges made by Think Progress prove to be accurate, the private "USA Pavilion" may serve another purpose, more political than ideological: to act as an entrepot for tens of millions of dollars that could be deployed in future elections by the US Chamber of Commerce via the Shanghai AmCham. In these circumstances, the involvement of the unwitting Clinton, who ended up saving the day for the SE 2010/AmCham/Consulate alliance by filling SE 2010's coffers, would be a double blessing. Her active participation would be seen as an imprimatur for SE 2010's ownership of the "USA Pavilion" and the "USA" brand. And indeed, it's been touted that way by SE 2010 itself and its corporate hangers-on.
As I indicated earlier, much of this essay is surmise. Without a paper or money trail to follow, there's no way to know what motivated the Shanghai Consulate and AmCham to vigorously attack and finally defeat efforts to give the pavilion a truly public identity. Was keeping the "USA Pavilion" private essential to maintaining its availability as a money-laundering scheme? The question remains unanswered.
When the Expo closes at the end of this month, the "USA Pavilion" will be torn down and SE 2010 will be disbanded, its assets distributed in ways unknown. It will become more difficult to track down who paid what to whom, when and where, and for what purpose.
Federal agencies are looking into the matter. If the investigators discover no crimes have been committed, the air will have been cleared and everyone can return home satisfied. But if the investigators find otherwise, the implications would be staggering.
This spring, while visiting Shanghai to take in the Expo, Secretary Clinton according to reporters was taken aback with the "USA Pavilion's" overwhelming commercialism. Nevertheless, she dutifully keynoted dinners feting SE 2010, AmCham, the Shanghai Consulate, their multitude of American and Chinese corporate sponsors, and their Chinese government compadres. How tragically ironic if it is revealed at some future date that Clinton was hoodwinked.
Not that she was the only one. Though forewarned, the mainstream press and government watchdogs within the Obama Administration and Congress also paid no attention. Too bad. Even though the "USA Pavilion" is nominally private, we all might end up paying for it with our taxes and in the way we live our lives. Time will tell.