He struck billions of dollars’ worth of deals in Russia, Eastern Europe and Africa. He sought business with war-torn places like Chad and with international pariahs like North Korea.

Ye Jianming, a fast-rising Chinese oil tycoon, ventured to places only the most politically connected Chinese companies dared to go. But what he wanted was access to the corridors of power in Washington — and he set out to get it.

Soon, he was meeting with the family of Joseph R. Biden Jr., who was then the vice president. He dined with R. James Woolsey Jr., a former Central Intelligence Agency director and later a senior adviser to President Trump. He bestowed lavish funding on universities and think tanks with direct access to top Washington leaders, looking for the benefits access can bring. He asked one former American security official: If he bought oil fields in Syria, could the former official persuade the American military not to bomb them?

That effort has unraveled. Mr. Ye is in Chinese custody and is under investigation for unspecified crimes. The trial and conviction in New York last week of one of his top lieutenants, Patrick Ho, showed that company officials used bribery to win oil and energy contracts in Africa.

China’s rise in political power and wealth has created a new generation of business tycoons whose clout and cash can open doors. Former Washington officials, many with access to the White House and to American military and intelligence institutions, have proven to be eager to help.

But the fall of Ye Jianming shows that China’s lack of openness can make it difficult to know who, exactly, is sitting on the Chinese side of the table. On the American side, some don’t ask enough questions — or never asked any at all. It’s a relationship that is all the more fraught given the trade tensions between the two countries, which were recently heightened by the arrest of a top Chinese technology executive on the request of American prosecutors.

“This is a guy who courted and maintained networks with the People’s Liberation Army and took the strategy of ‘friends in high places,’” said Jude Blanchette, a senior adviser and China head at Crumpton Group, a business intelligence firm. “What becomes clear about Ye Jianming is that he is an incredibly adept navigator of politics.”

Many who met Mr. Ye believed he was the grandson of a famous Chinese military leader; people in his hometown say he comes from a family of boatmen. Many believed he had access to untold wealth; now, it appears his empire was built on a mountain of debt. Many believed his company must have deep connections and business savvy to be so successful; the Chinese state news media have accused him of bribery.

In Washington, many saw the initial version of the story as compelling, and Mr. Ye as a chance to take part in China’s rise. Those high hopes led to full Rolodexes. Last year, as American authorities closed in on Mr. Ye’s company, the first call made by one of his emissaries in custody was to Mr. Biden’s brother.

“In China, if you can provide proof of association with a high-level official, you are assumed to be powerful,” said Jorge Guajardo, a former Mexican ambassador to China.

“It signals anyone who gives you trouble that you are connected.”

Of Heroes and Boatmen

Ye Jianying was a hero of China’s Communist revolution. Marshal Ye, Mao once said, “saved the party, saved the Red Army and saved us.”

Many assumed Ye Jianming, the quiet but ambitious oil magnate, was Marshal Ye’s grandson. Mr. Ye at times denied it. But others in his business circles fanned the rumors, said two people who were aware of their activities. Those people spoke on condition of anonymity because of the legal trouble Mr. Ye and his businesses face.

Mr. Ye grew up in a city called Jian’ou, a poor but lush region of bamboo groves and rice plantations in the southern province of Fujian. A three-tiered, newly refurbished shrine to the Ye family stands among plain concrete buildings and more dilapidated wooden houses.

His father and grandfather ferried people and goods along the region’s inland waterways, locals said. Mr. Ye worked a series of odd jobs before buying a small piston factory that supplied the military, his introduction to the People’s Liberation Army.

Mr. Ye told Fortune magazine that he got his break in 2006, when he acquired assets the government had confiscated from a smuggling kingpin. He rebranded the business as CEFC China Energy.

CEFC operated on the fringes of the oil world. It focused on trading oil futures and securing the rights to overseas oil fields in strife-torn places like Chad, South Sudan and Iraq. In 2011, Mr. Ye sent a gift to North Korea’s leader at the time, Kim Jong-il, according to that country’s official news agency.

He seemed to have the blessings of Beijing. State banks offered CEFC billions of dollars in loans. The company also hired a large number of former military officers, whom Mr. Ye told visitors he prized for their organizational skills. He was deputy secretary of a Chinese military organization from 2003 to 2005 that congressional researchers called a front for the People’s Liberation Army unit that has “dual roles of intelligence collection and conducting People’s Republic of China propaganda.”

As the company prospered, Mr. Ye moved its headquarters to Shanghai, where he built a corporate campus modeled on Zhongnanhai, the Communist Party’s leadership compound in Beijing. Adorned with Chinese art, calligraphy and stately furniture, the company’s campus was dotted with villas for executives and a building to host officials and foreign dignitaries.

“There were elaborate dinners with entertainment,” said Roger Tamraz, an energy broker who visited the CEFC headquarters. “We had one show with people dancing and banging drums. You couldn’t even speak during the dinner.”

By last year, when he turned 40, Mr. Ye had joined the ranks of China’s superrich. He owned a four-bedroom villa in Hong Kong, a $35 million Gulfstream G550 corporate jet and luxury apartments in Manhattan. From 2009 to 2017, CEFC’s revenue jumped from $48 million to $37 billion.

Abroad, Mr. Ye’s public profile exploded. He bought a $9 billion stake in Rosneft, Russia’s state oil giant, putting his company at the center of the complicated relationship between Beijing and Moscow. He struck deals in Eastern Europe and Africa, places where China hoped to increase its influence. He met with world leaders like President Milos Zeman of the Czech Republic and President Recep Tayyip Erdogan of Turkey. In Israel, the former defense minister Avigdor Lieberman presented him with the Yakir — meaning “beloved” — of the Jewish People Award.

“He had this aura of being a rich investor, and he built up his social network,” said Martin Hala, an academic based in Prague who tracked the company’s networking efforts in the Czech Republic.

“It’s been clear for some time that this is not just a Chinese commercial company, that they had some intelligence ties,” Mr. Hala added. “People from the U.S. intelligence agencies should have known something was going on.”

Mr. Ye Goes to Washington

Ye Jianming’s early efforts to break into the Washington power broker scene didn’t always pan out.

Five years ago, CEFC approached Bobby Ray Inman, a retired admiral and national security adviser to President Jimmy Carter, about setting up a joint venture, Mr. Inman said in an interview. The company promised it would pay him $1 million a year, without specifying what business they would go into. He turned down the offer.

Later, Mr. Inman said, CEFC officials called him and said they were considering acquiring oil fields in Syria. Could he help them persuade the American military not to bomb them? Again, he said no.

“They were looking to do business deals in the energy space and they were looking for connections to help them do that,” said Mr. Inman, who said he kept American officials apprised of his communications with CEFC.

Eventually, Mr. Ye met more people. On a 2015 trip to the United States he met with Alan Greenspan, the former Federal Reserve chairman, to discuss the economy, according to CEFC.

He also met with Edward W. Scott Jr., a former software tycoon active in Washington political and philanthropic circles, during a dinner at Marcel’s, an upscale Belgian restaurant, ostensibly to talk about CEFC’s interest in buying an ethanol plant in which Mr. Scott had a financial interest. But the conversation instead focused on introductions Mr. Scott might make to other powerful figures he was friendly with, like the Microsoft co-founder Bill Gates. Alexander Pyntikov, a technology entrepreneur who attended the dinner, said several CEFC associates and what appeared to be a dozen bodyguards roamed the restaurant while they talked.

“The whole thing he was into wasn’t very clear,” Mr. Scott said. “It was very murky.”

To build influence, Mr. Ye turned to Vuk Jeremic, a Serbian diplomat and former president of the United Nations General Assembly whom CEFC hired as a consultant, and Mr. Ho, a former Hong Kong official. CEFC also donated at least $350,000 to the Institute for the Analysis of Global Security, a politically connected think tank, according to court testimony. The think tank counts Robert C. McFarlane, the Reagan-era national security adviser, as its president and Mr. Woolsey, a Clinton-era C.I.A. director, as its co-chairman.

In an emailed statement, Mr. McFarlane said his encounters with CEFC were related to research on American dependence on foreign oil. “I have never had any organic or contractual relationship with CEFC,” he said. Mr. Woolsey didn’t respond to requests for comment.

Mr. Ye also further loosened CEFC’s purse strings, donating as much as $100,000 to the Clinton Foundation. Outside the Beltway, a CEFC foundation donated at least $500,000 to a Columbia University research center, winning Mr. Ye notice within the energy industry and among China watchers. Neither foundation responded to a request for comment.

Columbia’s School of International and Public Affairs said in a statement that it “has had no contact with CEFC or any of its officials for more than a year, nor have we accepted further contributions.”

CEFC also organized forums in Hong Kong and Washington that brought together retired American and Chinese military officers, among other events. All the while it continued to network.

“They kept coming back and saying, ‘Can we organize contacts?’” Mr. Pyntikov said.

It wasn’t long before Mr. Ye began to strike deals in the United States. In early 2017, CEFC agreed to buy one-fifth of Cowen, a New York boutique investment banking firm, for about $100 million, though the deal never received approval in Washington and was abandoned.

By 2015, Mr. Ye had begun working on perhaps his most politically connected quarry yet: the family of Mr. Biden, the vice president.

An aide to Mr. Ye met the vice president’s second son, Hunter Biden, in Washington. Mr. Ye then met privately with Hunter Biden at a hotel in Miami in May 2017, according to people with direct knowledge of the meetings who were not authorized to speak publicly because the meetings were private. Mr. Ye proposed a partnership to invest in American infrastructure and energy deals, the people said.

During this period, the vice president’s son was managing Rosemont Seneca Partners, an investment firm he formed with Chris Heinz, the stepson of John Kerry, the former secretary of state. Mr. Heinz said he has no knowledge of CEFC and ended his relationship with Rosemont Seneca in 2015.

It is unclear whether Hunter Biden struck any business deals with CEFC or Mr. Ye. Through his attorney, Hunter Biden declined to comment.

CEFC also tried to bring prominent Republicans into its orbit in anticipation that they might take control of the White House after the 2016 election. In a 2014 memo after the November midterm elections that year, CEFC outlined a plan for reaching out to top Republicans and politically connected people. The company should begin making that outreach “as soon as possible,” it said, in order to form a “relationship and friend base.”

Suspicions and Wiretaps

James Biden, a financier and brother of the former vice president, was in a hotel lobby in November 2017 when he got a surprise call on his cellphone. The call was from Patrick Ho, Mr. Ye’s lieutenant. Mr. Ho, 69, was in trouble.

Federal agents who had monitored CEFC’s rise since at least the summer of 2016 had sprung into action, arresting Mr. Ho in New York on allegations that he had bribed African officials in Chad and Uganda. Days later, federal agents showed up at Mr. Ye’s luxury apartment building across from Central Park with a subpoena to interview Mr. Ye, said people familiar with the matter.

Mr. Ye has not been charged with wrongdoing in the United States, but the legal actions there began a series of events that led to his downfall. They have also changed the narrative of Mr. Ye and CEFC, as court documents and other new information portray a bumbling company with much less political heft than it appeared.

During Mr. Ho’s trial, federal prosecutors said that he bribed officials in Chad and Uganda and tried to make CEFC a middleman with Iran to avoid oil sanctions. They also said CEFC was involved in the unseemly business of attempting to deal arms in conflict zones.

In Chad in 2014, the bribery took the form of gift boxes containing $2 million in cash, prosecutors said. When President Idriss Déby opened the packages, he was surprised and quickly rejected the money. Later, the authorities said, CEFC recast the $2 million in cash as a donation to the “people of Chad.”

Prosecutors said some of the meetings to further the bribery schemes took place in a $5 million apartment CEFC had bought on the 78th floor of the Trump World Tower at United Nations Plaza.

David Zornow, one of CEFC’s lawyers at Skadden Arps in New York, declined to comment. Edward Kim, a lawyer for Mr. Ho, declined to comment.

Mr. Ye, meanwhile, has disappeared into the custody of the Chinese authorities. He was last seen in February, when his private jet touched down in the Chinese city of Hangzhou. CEFC is struggling under $15 billion in debt.

Mr. Ye’s problems could get still worse. In October, China Central Television, the official government broadcaster, accused Mr. Ye of bribing a provincial party boss to help CEFC secure the money to make bigger and more high-profile deals.

In Washington, many of Mr. Ye’s new acquaintances ultimately came to naught.

In a brief interview, James Biden said he had been surprised by Mr. Ho’s call. He said he believed it had been meant for Hunter Biden, the former vice president’s son. James Biden said he had passed on his nephew’s contact information.

“There is nothing else I have to say,” James Biden said. “I don’t want to be dragged into this anymore.”

— Alexandra Stevenson reported from Hong Kong, David Barboza reported from Boston, Matthew Goldstein reported from New York and Paul Mozur reported from Jian’ou, China. Doris Burke, Cao Li, Ailin Tang, Tiffany Fehr and Carolyn Zhang contributed reporting.

Alexandra Stevenson is a business correspondent based in Hong Kong, covering Chinese corporate giants, the changing landscape for multinational companies and China’s growing economic and financial influence in Asia. @jotted • Facebook

David Barboza is a New York-based correspondent. He was previously the Shanghai bureau chief.  In 2013, he won the Pulitzer Prize for International Reporting and was also part of the team that won the Pulitzer Prize for Explanatory Reporting. @DavidBarboza2

Matthew Goldstein covers Wall Street and white collar crime and housing issues. @mattgoldstein26

Paul Mozur is a Hong Kong-based technology reporter. He writes about Asia’s biggest tech companies, as well as cybersecurity, emerging internet cultures, censorship and the intersection of geopolitics and technology in Asia. He previously worked for The Wall Street Journal. @paulmozur

Source: Read Full Article