EXPLOITATION OF MANILA CHINESE BY PHILIPPINE AND NATIONALIST CHINESE OFFICIALS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00457R007600250009-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: November 16, 2016
• Document Release Date: April 25, 2000
• Sequence Number: 9
• Publication Date: May 2, 1951
• Content Type: REPORT

*lease 2000/ CIA-RDP62-0 760
FIC4110 ormaa, U.3. WIT, ALS MIT 25
NTELLIGENCE AGENCY REPORT NO.
REPORT
COUNTRY .Philippines
SUBJECT Exploitation of Manila .Chinese by Philippine
and Nationalist Chinese Officials
1. Extortion raids and other operessive acts directed against Chinese residents
of the n111'0:40E1 by PhiliPPine Government and rationaliet,Ghinee0A4ffiCiale_.
have increaeeA7e*etantially since 1 January 1951. While the pattern of those
oppressive activities is well known, the underlying causes are complex and th
cannot .be immediately determined.
2. The orineiPal tlativetioreof the officials who are: involved in these 'actiVitieee
? aPPeees to have been that of personal profit. Among the Nationalist Chinese ,
officials involved, a second motivation may be a desire to ensure the political
orthodoxy of Philippine Chinese in terms of unswerving political loyalty to
? CR TANG Kai-shek.
3, Both Philippine ani Chinese officials probably hope that these activities els?
will serve to Deduce Communist influence in the Philippine Chinese community.
However, the Chinese are becoming uneasy under this treatment. Many Chinese
have been forced to the conclusion that they might expect better treatment
from a Commeelet regime than they are receiving from the present Philippine
Administration,
4. Members of the Philippine Chinese community were extremely 'interested in the.
Government's eenduet of the CO Pak Deportation case. The Government produced
evidence at the deportation hearings indicating that CO had contributed
financially to the Chinese Communist Party and to PhilipPineAlseident.greUPs.
The Government also claimed that CO attempted to bribe thaB,4ortation Board.'
. Cleves hot admired by leading Philippine Chinese businessmen ware convinced
, . . - _ .
that he may have contributed to the HMB and to the Chinese Communist Party in
order to protect his interests in gambling, prostitution, and narcotics smUdgling.
After CO WS demorted in February 1951, these Chinese became coneinced'that the
Government's evidence had been fabrioated: There have bean indications that -
the Philippine Military Intelligence Service previouele has manufactured
evidence to support a case, sometimes on direction from a higher authority.
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6. Chinese leaders who previously had believed that CO supported the Communiets
learned from members of his family that he had been Visited in December 19;(1
lay Senator 3. S. Montano who told him that the Governmeet had evidence agaeest
him which was to be used in deportation proceedings. Montano told CO that bis
derortation could be prevented by a payment of 1100001,000. CO was are that
his racketeering might lead to his deportation, and he offered to pr apprexi-
metely 1100,000, claiming that he would be obliged to liquidate all his apeets
te pay the larger sum since he was worth only 11,200,000.
7. Montano reportedly refused to acemet 1100,000. He returned after several 6eys
eith SHIH I-Sheng, Secretary General of the Philippine Kuomintang organizeeion,
eeo, acting as mediator, eonvinced Montano to acoept 1300,000. CO elaimod
that he would eonsider the matter, but that this payment would bankrupt him,
8. ehortly after Montano's later visit to GO, Major General Mariano Castanedte
then Chief of Staff of the Armed Forces of the Philippines (AFP), reporteely
lined Major Jose P. Cardenas, then Chief of MIS, to withdrav the charges
against CO. Cardenas reportedly refused, claiming that CO had supported the
Communists. Subsequently, Howe Speaker Eugenio Perez reportedly asked
Defense Secretary Ramon Magsaessee to kill the charges against CO, claiming
that he did rot believe CO WSB guilty and that CO had eromised him financial
srpnort in the election. Magsaysay reportedly refused to intervene,
9. Menbere of the CO family have claimed that neither CO nor his family offered
bribes after he vas arrected. After CO's arrival in Taiwan, the Nationeliet
Government inforned Ambassador CH'EN Chih-plIng that there was not sufficient
eridence to convict CO of aiding the Chinese Communiet Party. GWEN 1.1913
directed to procure additional evidence from the Philippine Government,
10. On the basis of evidence submitted by NISI the Manila Municipal Court iesuci
varrants for the arrest of Vicente CO and CO Kuan, CO's on and brother, ou
) Anril 1951. CO Kean was anproached on 2 April 1951 by SHIH? who offeeed
to have the warrant withdrawn for Y100,000. SHIH accepted the 720,000 wilier,.
CO Xuan offered, and it is not known if the warrant was withdrawn. By 6 April
:51, neither Vicente CO no CO Kean had been apnrehended by the Manila Pollee
Or MIS.
P. Under the pretext of arresting Corrunistsand Communiet sympathizers, the Paella
Police began a series of raids on Chinese residences in Manna eurly in March
1951. Raiding parties are equipped with warrants which are issued by Judge
Teasiano
on an average of ten per day, or with MIS evidence. Chinese Cenenanist
eamphlets are planted on the eremises raided.
. The threat most caneonly used is that of deportation. Since most Philippine
(Mese do not have citizership or may lose it formal or alleged offenses,
teey are extremely vulnerable. Deportation nay mean loss of local assets,
oe well as possible punishment on Taiwan if they are charged with Communist
antiviey,
13. When arrests are rade, the poorer Chinese are released immediately on payment
of bribes ranging free 1300 to 1500. The more affluent individuals are ordered
to report to the Police at a later date. These latter are visited after the
Pelice depart by SHIN' who offers to arrange financial settlements for payments
bred on the wealth of the individuals. Chinese whe are infect guilty of
no Dime offense also are subjected to sueh extortion.
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14. At leest one local Kuomintang official ehares in the extortion, and maw
Chinese believe that CH'EN may also be receiving a share, although this
still has not been proved. However* SITIH could not act as he does without
tbe Ambassador's knowledge. On occasion, CH'EN has threatened to deport
certain Chinese suspected of engagine in anti-Communist activities without
direction from Taiwan,
15. In recent weeks, Philinnine officials have compiled a list of more than
90 Chinese who are to be deported, principally on the grounds that they have
violated nrice control laws. Nationalist officials in Manila heve advised
the Ambaseador that the list includes the names of anti-Compunist Chinese
wnem he should nrotect from deportation. Some of those slated for deportainon
'ave been visited by SHIA who has offered to arrange their clearance for a
financial settlement.' Nationalist officials believe that the Ambassador hos
neglected to take ur the matter with Philippine officials.
16. Leaders of the Philipnine Chinese comennity reportedly have long been dis-
satisfied vith the extent of the nrotection from Philippine officials which
has been given by. the Ambassador. It is believed that CH'EP has been an
obetaele in their efforts to develop amicable relatione.
17. CM! is uaid to have sought to emphasize the foreign character of the
Pbilippine Chinese community and to keep it apart from the Filipinos and
thereby under his control. Chinese leaders cite as evidence of tbis the
speeches rade by CIT'EN on the subject of Philippine-Chinese relations in
which he deolared that Chinese who are guilty of illegal activitiesshoule
be shot. These leaders believe that CH'EN 's remarks have tended to brann tie
entire Chinese comaunity as composed entirely of law-breakers.
CH'EN also hes been criticized by these Chinese leaders for hie attempts to
organize an anti-Communist committee among Philippine Chinese which he could
nominate himself. This committee is not criticized for its purpose, but for
the fact that it is to he exclusively Chinese in character with its activities
limited to narades and rallies which it is believed accomplish no practical
purnose.
19. CHIENns efrorts to raise funds for the defense of Taiwan also have been
questioned. Urder his urging, a fund of $00,000 was collected for this
perpose in the last year, and CH'EN has insisted that P.0,0009000 must now
be collected, although Chinese leaders have declared that they would prefer
to contribute to Philippine defense..
20. According to Chinese leaners, CH'EN recently informed Defense Secretary
Magsaysay that theMilitary Intelligence Service (MIS) list of Philippine
Chinese Communists was inaccurate, but he nossessed a complete and
accurate list. CH'EN does not in fact possess such a list, but he has
since been erdeavering to compile one which the Chinese leadero fear mey
include the names (if anti-Communists or persons who are CHIEW's political
enemies.
21. In an effort to improve relations between Philippine Chinese and the Filipinos,
Chinese leaders have determinfd to organize a group vhich will be known as
t-he Chung Fei Hsieh Hui e4 At), or Sino-Philippine Association, which
will include nrominent Filipinos. The provisional group of this orgaelzation
is heeded by YANG CH'I-ttei. Vice Chairmen include SHIH HaIng-shui (J&)and YAO Val-klun (40.-T ). Other important Chinese members include
Albino necip and Peter LIM (LIN Wei-po 07A246 ). This organization vill
attempt to represent the Chinese commenity in its relatione with the Filipinos
in solving outstanding Sino-P1ilipnine probleme. A Filipino of outstandieg
political reputation will be sought as honorary chairman, with persons of
'similar stature as its directors.
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22. Leaders of the Philiepine Chinese community have nrenared a study of Chinese
Communist activities in connection with efforts to eliminate Communise in t;le
country. The servey is based on investigations made by various Chinese beeiness
orranizatioms and intelligerce investigations by various Chinese. Meportene
conclusions of the summary include the follawinet
a. There are ap roximately 4,500 Chinese Comnunists in the Philippiees,
of vhom approximately 750 are armed. All of the Chinese Communiets
are "cenvinced Communists", and most or them are Party members.
b. Most of these Chinese Communiste are retail clerks, with the remainine
nembers drawn from the ranks of students, cultural workers, educators,
nerchants, and gangsters, in that order. The large concentrations of
Ch nee Communists are in Manila, Central Luzon, Southern Luzon, and
Wndanao? in that order.
c. The number of Philippine Chinese who support the Communists or who
are in sympathy with them is difficult to ascertain. Maw indivtduale
summit the Commenists only because they are coerced.
d. Details of the activities of Chinese Communists in the Philippines are
not known. However, it is believed to be certain that Chinese Communiet
Party orpanizers and technicians have been sent from China to the l'h!3,/1p?
pines, that Philippine Chinese Columnists communicate with China by
clandestine radio, an4 that some light weapons and funds have been srincgled
from China to the Philippines.
e. There is some evidence to sugeest that Philippine Comm:mists have received
technical, financial, and other assistance from a large scale clandestine
operatien which may be directed from the USSR. It io believed that thb
operation has utilized Chinese, as well as FiliDimos and Europeams, 5,
the Philippines.
23. rie Chinese leadees who prepared this stuly plan to continue their investigaAors
ale to erepare plans for a project tobe operated in conjunction with the
Philippine Governrent to eliminate Communist influence in the Chinese com-
munity.
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IIIIIII Comet, are previous reports which
I
'seer.II extortion ra (s on PhU1pine Chinese nrincipally Marne Chinese
besinesemen, by the Manila Police Department and other Government officialen
described the efforts of CP'EN Chiti?ping, Eatioralist Ambaasador
to erevent PhilipnIne Chinese ftem etgaging in Chinese Third Force activitfee.
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