Arizona Republic from Phoenix, Arizona • Page 16

A16 The Arizona Republic Sunday, April 4, 1999 SUNDAY SPECIAL REPORT Cfa center Inese-Ai means commercial venture. They are investing money to make money." COFCO's venture in American capitalism is part of its transformation since its founding in 1952 as a small trading company that dealt in foodstuffs. 'Z Its businesses now include hotel chains, highway construction and shipping lines. A Chicago arm has issued $150 million in commercial paper basically short-term loans that the company uses to finance its operations. BNU, COFCO's Phoenix subsidiary, man- ages apartment complexes in Las Vegas and Seattle and also provides auto financing to customers across the West.

Other Chinese companies own a steeF'l mill in Delaware and timber forests Washington state. The People's Liberation Army, whose generals have sometimes shown a strong inclination toward entre- is linked directly to the PRC government," Wong said. "I'm Chinese, but I'm American. So while I support the center, I have to be careful that I'm not promoting their government." K.C. Tang, another Chinese-American leader in Phoenix, is delighted with the center.

"Hopefully, this will be a showplace for us," he said. "It's a beautiful place." The market, with its wide variety of imported foods, has become a magnet for lovers of Asian cuisines. Many Mexican-American shoppers, like Evelia Llanes Blanco, are drawn by the selection of fresh seafood, including the catfish and talapia that swim in the store's large tanks. "I like to come here for the shrimp," Llanes Blanco said, pointing to a large bag of shrimp in her grocery cart. Some Chinese- jmn i.nji mmiw rfto 'vf John White With its pagodalike roof lines and ornate replicas of Chinese monuments, the COFCO Chinese Cultural Center stands out among the other office buildings on 44th Street.

By Jerry Kammer The Arizona Republic It's one of the most head-turning buildings in east Phoenix, a dramatic import of Asian architecture amid the ordinary office menagerie on North 44th Street. With its 16-foot-tall feng shui statues, pagodalike roof lines and ornate replicas of Chinese monuments, the COFCO Chinese Cultural Center exudes an air of mystery. But look closer, and its significance becomes more clear: The $35 million center represents the emerging economic might of an ancient land. The center, located just south of the Papago Freeway, is part of the large and growing Chinese economic presence in the United States, stretching from coast to coast and including industries such as real estate, steel manufacturing and financial services. A compound of shops, offices, restaurants and a supermarket, the center is owned by the People's Republic of China, which has thrown off the Marxist ideology that long condemned capitalism as a form of "bourgeois decadence." But its communist ownership has caused some controversy among the Chinese-American community here.

"Some of the people don't want to support something built by the Red Chinese," said Manny Wong, publisher of the Asian Times new spaper. Wong, who was hired last year as a consultant to boost flagging rentals at the center, said he has taken a different message to the Chinese-American public. "I tell them this signifies the culture of all the Chinese people." Wong "We're trying to get away from that political thing." That message is enthusiastically echoed by Elizabeth Mann, the Chinese-born woman who runs the center for COFCO. a giant corporation under the Chinese Ministry of McDowell Rd. PHOENIX Map area Chinese Cultural Center preneurship, owns corn- panies that have invested -in real estate and sold children's toys and consumer goods.

But that is expected to -change in the wake of last year's call by Chinese'" President Jiang Zemin for the military to drop its commercial activity and concentrate on ing its fighting force. In Phoenix, COFCO has plans for expanding -the center with a hotel' and new office "We think this is good place to do busi- -ness," Mann said. are working hard to pro- Americans say the cultural center shows little of Chinese culture except for the garden that fronts 44th Street with handcrafted replicas of pagodas and palace gateways. "They call it the Chinese Cultural Center, but you don't see much Chinese culture there," said Mike J. Wong, a retired grocery store owner.

"There are cultural aspects," Barry Wong said, referring to Chinese Week and plans to host Chinese artists and performers. "But number one, it's a manages the center as well as Chinese-owned apartment complexes. It also provides consumer credit and manufactures shoes in China. Support for the center is not as broad as Mann would like. Although the center hosted this year's Chinese Week in Phoenix, the opening ceremony was held at City Hall because a Taiwanese delegation was uncomfortable with the center's ownership.

Nevertheless, the Taiwan Economic and Cultural Office in Los Angeles sent a delegation to festivities at the Cultural Center. State Rep. Barry Wong, R-Phoenix, calls the center "a major contribution to the city and state." But he said the center cannot escape political controversy even if the owner of the 99 Ranch Market is Taiwanese-American. "You can't escape the fact that the center Foreign Trade. COFCO is the China National Cereals, Oils and Foodstuffs Import Export Corp.

Fortune magazine last year ranked the Beijing-based corporation 309th on its list of the world's 500 largest companies. "People like to gossip, but there's not as much tension as some people exaggerate about," Mann said. "We all agree we are promoting Chinese culture. We are not promoting any government." Mann said rentals of the center's office and commercial space have picked up after a slow start last year. The center held its grand opening last December, a year after The 99 Ranch Market became the first store to begin business.

"We're doing very well," Mann said. Mann is president of a Phoenix-based COFCO subsidiary named BNU, which tn Gateway Blvd. I Van Buren St. 1 Washington St. 14 mile PueblO Grande 14 km Museum The Arizona Republic mote Phoenix.

MANN'S CONTACTS Elizabeth Mann rose to prominence over the past decade while making a series of contacts with Chinese and American associates, some of whom have been involved in controversy. usinesswoman 15 As head of the visa section of the Beijing embassy from 1994 to 1996, he provided visa assistance to Elizabeth Mann and COFCO. During this period he repeatedly violated State Department rules by accepting Mann's offer of free use of COFCO-owned apartments in Norwalk, and Las Vegas. Head of a powerful Chinese conglomerate, CITIC, he invested heavily in Arizona-based real estate partnerships that were marketed by Elizabeth Mann when she worked at Ambanc, a Phoenix investment company. In 1996 he became a central figure in allegations that President Clinton sold access to the White House in return for campaign contributions.

wields influence, makes contacts mmm Top executive in Arizona for COFCO, a corporate giant owned by the Chinese government and the owner of the COFCO Chinese Cultural Center. President and part owner of COFCO Credit. In 1985 he accepted a federal court plea bargain on charges that he violated banking conflict-of-interest laws. He was barred from ever serving as an officer of a federally insured bank. BUSINESSWOMAN, fivm Page Al hard-driving resident of northeast Phoenix, had maintained a low profile in her adopted land.

But her circle of financial influence has included: A Chinese vice president's son who became a central figure in the still-swirling allegations that President Clinton sold access to the White House. A former colonel in the People's Liberation Army who was indicted in the United States in 1996 on weapons smuggling charges. A business partner at COFCO's lending arm who came to Arizona A former colonel in the Chinese People's Liberation Army, he directed a PLA subsidiary that partnered with Ambanc to buy apartment complexes in Norwalk. and Seattle. In 1996 he was indicted on gun smuggling charges.

He fled the country before he could be arrested. The Arizona Renuhlic later informed her that the investigation into her finances had been terminated. "It was totally dissolved the same year," she said. "There was nothing to hide." Mann's partner in COFCO Credit is Jack Gray, a Texas native and former New York investment banker who pleaded guilty in 1985 to two criminal violations of federal banking conflict of interest laws. Gray was ordered to pay restitution of $154,000 as well as a $100,000 fine, the largest fine the U.S.

Office of the Comptroller of the Currency had ever assessed. He was also banned for life from being an officer of a federally Xiaoping. Andong directed the firm's entry into the Ambanc partnership that owned the Cedar Meadows apartments for several years. Another was Deng Zhifang, a son of Deng Xiaoping. He worked briefly at Ambanc's office on Tatum Boulevard in the early 1990s.

"He tried to sell some deals for us, but nothing came of it," McDonnell said. In 1993, after becoming a U.S. citizen, Mann went to work for COFCO, becoming president of the Phoenix subsidiary whose name, BNU, adorns the license plate of her green Mercedes. BNU stands for Beijing and the United States, she said. attorneys to look into it on behalf of BNU.

On Feb. 15, 1996, five days' before the double transaction was to close, one of the attorneys reported -his suspicion that Elizabeth Mann had devised a "scheme for personal profit" and had "breached her fiduciary duty" to BNU. The attorney alerted Arizona As sistant Attorney General Michael Cudahy, who examined the records and launched a grand jury in--vestigation. "It appears that BNU is victim of the possible criminal" activity by Mr. and Mrs.

Cudahy wrote in a letter to the -Manns' attorney. Elizabeth Mann defended thC deal, saying it had been arranged -because of concern that the seller would raise the price if it knew" COFCO was behind it. She said COFCO officials in: China had approved the arrange- ment. "We just wanted to be a quiet buyer," she said. 'Z But in the face of the controversy, -the Manns canceled the deal, even-though they had locked in the $3.6 million price.

BNU bought the I property directly for $3.6 million. -Frederic Mann received one com--mission on the deal, instead of the-two commissions called for undct.I the double escrow. With no deal to probe, Cudahy canceled the state's investigation. JZ On occasion, Mann's contacts have reached into the U.S. Embassy -in Beijing.

As The Arizona Republic reported last week, the man who directed the embassy's visa section, repeatedly violated State Depart-; ment rules by accepting Mann's--offer of free use of COFCO-ownedl apartments in Las Vegas and walk. Mann denies impropriety in her-ties to Charles Parish, visa officer at-the Beijing embassy from 1994 tcC 1996. Speaking of Parish's visits to," COFCO's offices in Phoenix, she said, "We want to promote Phoenix." But Parish acknowledges the apC pearance of a conflict of interests between his official duties and hir relationship with a corporate executive who sought visas from hii office. Despite the controversies, Mann -remains enthusiastic and deter mined. She has set a course for ambi tious COFCO expansion.

At the cultural center's grand opening! Mann said the center would be model for similar developments across the country. She also interpreted for COFCO President Zhou Mingchen, who called for closer business and cul- tural ties. "If these two countries can really join hands together," Zhou said, "iLZ will be a great force that will hclp the 2 1 st century." Jerry Kammer can be reached at 444-8185 or at jerry.kammerpni.com vid e-mail. Research librarians Joanne Dawson and-Donna Colletta contributed to this story. with potential clients and brought them to the office." Two of the investors Mann brought to Ambanc would become central figures in scandals that strained relations between Washington and Beijing.

The first was Wang Jun, the son of Wang Zhen, vice president of China from 1988 until his death in 1993. A New York Times obituary described Wang Zhen as "a general who rose through the Communist ranks to become one of China's most powerful leaders and among the hardest of the hard-liners." In 1996, Wang Jun became a controversial figure after he met with President Clinton at a White House reception for political fundraisers. Wang's visit caused a furor, not only because of his political pedigree, but because it was arranged by Yah Lin "Charlie" Trie, a Little Rock businessman at the center of allegations that the Chinese tried to use campaign contributions to influence U.S. policy. Clinton's critics suggested that Wang had bought access to the White House, and Clinton later acknowledged that the visit had been "clearly inappropriate." Wang is the head of the Chinese International Trust and Investment or CITIC.

It is China's most powerful financial and industrial conglomerate. Mann had no ties to the White House controversy. She had arranged for Ambanc President Jack McDonnell to meet Wang eight years earlier. The two men soon discovered that they shared a love for golf. As they played the course at Scotts-dale's Gainey Ranch, they discussed business, McDonnell recalled.

Soon, CITIC joined the Phoenix company in a series of partnerships. CITIC bought into Ambanc partnerships that purchased an office insured bank. Gray, who lives in Paradise Valley, did not return phone calls. Mann defended him, saying he made a mistake. "He cannot do banking again," she said.

"But his knowledge of banking is what we need." Gray and Mann's husband teamed up in 1993 BNU manages the cultural center and Chinese-owned real estate in Phoenix and Las Vegas. It owns three shoe factories in China, and a subsidiary named COFCO Credit provides automobile loans in Arizona and other Western states. Records filed with the Arizona Corporation Com building at the Scottsdale Air Park, the Cedar Meadows Apartments in Peoria, 1,200 acres of undeveloped land in Sun Valley west of Phoenix and 143 acres at Goldfield Ranch east of Fountain Hills. Cedar Meadows has since been sold. CITIC was one of several Chinese corporations that Mann brought into Ambanc investments.

Another, property records show, was Polytechnologies, a business arm of the People's Liberation Army. In 1992, a Polytechnologies subsidiary called Dynasty Holdings became Ambanc's limited partner on apartment complexes in Norwalk, Calif, and Seattle. Those investments, according to McDonnell, were guided by Robert Ma, a Dynasty executive and a former Chinese army colonel who was indicted in 1996 on federal charges of smuggling 2,000 AK-47 rifles into California. Ma fled the country before he could be arrested. Prosecutors provided startling details about the smuggling ring and said the rifles were destined for U.S.

street gangs. Even more ominous was their claim that the smugglers had offered to sell rocket launchers, anti-aircraft missiles, machine guns and tanks. Mann downplayed Ma's role in the People's Liberation Army deals with Ambanc. "It's not Mr. Ma, it's the company," she said.

As to her role in attracting the Chinese investors, she said, "I promoted Phoenix, and I helped to promote the Phoenix opportunities. But it wasn't just me. I wouldn't take all the credit." Although Wang and Ma were the two most controversial Chinese who participated in Ambanc deals, there were other prominent Chinese who were drawn to Arizona through Mann's contacts. One was Andong Zhong, son of the finance minister for China's "paramount leader," the late Deng after criminal violations at an Atlanta bank led federal authorities to ban him from banking. An otficer at the U.S.

Embassy in Beijing who repeatedly violated State Department rules by accepting favors from Mann while he provided visa assistance for her. Despite the controversy in her associates' pasts, Mann has drawn praise from community leaders for her role in establishing the cultural center. Phoenix City Councilman Cody Williams, whose district includes the center, called Mann "an astute, assertive, charismatic woman." "She had a clear vision and she brought it to fruition," Williams said, referring to the center. "It's an architectural masterpiece in the middle of the desert." Mann's family has also achieved success here. Husband Frederic, also a native of China, is a real estate broker and businessman.

Their son, Henry, a senior at Horizon High School, has been nominated to the Naval Academy by U.S. Sen. John McCain and to the Air Force Academy by U.S. Rep. John Sha-degg.

Mann was born and raised in Nanjing. She came to Arizona in the early 1980s to study at Thunderbird, the American Graduate School of International Management. After graduating, she worked as an analyst for Eli Lilly Co. in Indiana, studied international trade at Penn State University and returned to Arizona in 1987 to accept an offer from Ambanc, a Phoenix investment company. Her job was to find Chinese investors for partnerships that bought apartments and other properties in several Western states.

"I was a marketing person," Mann said. "I developed contacts Jack Gray on a pair ot property transactions that brought them a handsome profit. On the same day they bought undeveloped land near Sky Harbor International Airport, they sold it to a group of investors from the Chinese city of Zhenjiang at a $385,000 profit. But it was another real estate deal that drew the attention of the state grand jury. The transaction began in late 1994, when the Manns established Vista Capital Management to buy the cultural center site on 44th Street, just south of Loop 202.

The Manns planned to buy the land for $3.6 million and sell it to BNU for $6 million, records show. But before the deal could close, a Mann subordinate named Jianwei Ding became suspicious and hired mission show that Mann owns 24 percent of COFCO Credit. Mann said there is nothing unusual about a government corporation sharing ownership with its executives. "It's my incentive from COFCO," she said. "I built this company for them, and I think they are very appreciative of what I have done." By the mid-1990s, however, government investigators in Arizona were focusing more critical attention on some of Mann's ventures.

In January 1996, Justice Department lawyers informed Mann that she was "a target of a grand jury investigation" in Arizona based on evidence that she had failed to report income by using "foreign bank accounts opened in the name of fictitious offshore entities." Mann said the Justice Department promoted Phoenix, and I helped to promote the Phoenix opportunities. But it wasn 't just me. I wouldn 't take all the credit. Elizabeth Mann on her role in attracting chinese investors.