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This is your host, Jack Gaines. NCA is a product of the Civil Affairs Association and brings in people who are current or former military diplomats, development officers and field agents to discuss their experiences on ground for the partner nations, people and leadership.
Our goal is to inspire anyone interested in working the last three feet of Foreign Relations. To contact the show, e-mail us at capodcasting@gmail.com or look us up on the Civil Affairs Association website at www.civilaffairsassose.org. I'll have those in the show notes. 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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And most importantly to those currently working out with the partner nation's people or leadership to forward US relations, thank you all for what you're doing. This is your host, Jack Caines. Stay tuned for more great episodes. One CA podcast.