Australian Prime Minister Anthony Albanese recently attended a Labor fundraising dinner hosted by Felix Lee, son of billionaire Phillip Lee, whose family fortune is tied to major corruption scandals in China. An ABC investigation revealed Mr. Lee is the son-in-law of a disgraced Chinese transport official who funneled inflated expressway construction contracts to Mr. Lee's company in the 1990s.
Chinese courts, 21 years ago in 2005, found that one such project's cost was inflated by over 100 million yuan ($21 million), pushing the total price tag to more than 180 million yuan ($37.6 million) at the public's expense. Phillip Lee has not been accused of wrongdoing in relation to his father-in-law's actions. This systematic overpayment represents a direct transfer of collective resources into private hands.
The Roots of Accumulated Wealth
The ABC traced the Shenzhen-Shantou project to a corruption scandal involving Phillip Lee and his father-in-law, Niu He'en, then director of Guangdong's Department of Transport. Niu He'en was investigated by local authorities 23 years ago in 2003 and tried in Guangzhou 22 years ago in 2004 on charges of bribery and abuse of power. Chinese Communist Party anti-graft investigators found Niu had favored Mr. Lee's Guangdong Hushen for contracts worth a combined 180 million yuan ($37.8 million), overriding objections from subordinates who questioned the company's qualifications. The court found Niu neglected his duties, subcontracting parts of the project to his son-in-law and setting prices at his request, causing the state to lose over 100 million yuan ($21 million). Niu was sentenced to 13 years in jail for bribery and dereliction of duty 21 years ago in 2005.
Similar practices by Mr. Lee's relatives were replicated elsewhere. In 2000, two investment companies in which Mr. Lee held stakes bought a construction company from the provincial transport department for 30 million yuan ($6 million). This deal was arranged by Phillip Lee's relative, Lu Wanli, then director of the transport department in Guizhou province. Lu helped secure a string of expressway contracts for Mr. Lee's company, Guizhou Huancheng. Lu Wanli was later sentenced to death for bribery 22 years ago in 2004, after fleeing to Fiji 24 years ago in January 2002 and being repatriated in April that year.
The State's Role in Protecting Capital
The scrutiny of the Lee family intensified after Felix Lee hosted Mr. Albanese, former Victorian Premier Daniel Andrews, and bank executives at the family's Point Piper mansion last month. This luxury property, Mandalay, was purchased outright by Phillip Lee and his wife, Shi Xiaobei, for $39.9 million 11 years ago in 2015. The mansion had previously been subject to asset-freezing orders 5 years ago in 2021, when the Australian Taxation Office (ATO) pursued the couple over claims of more than $278 million in unpaid tax. The ATO obtained court orders freezing 17 residential, commercial, and rural properties, casino accounts, and luxury vehicles. The Lee family denied wrongdoing and later reached a settlement with the ATO for an undisclosed sum. A Commonwealth charge remains registered over their properties, including Mandalay, until the debt is repaid in full, demonstrating the state's willingness to negotiate with accumulated wealth.
Mr. Albanese, asked about the ATO allegations, stated he was "not aware of those issues" and noted Phillip Lee "wasn't there" on the night. Integrity expert Geoffrey Watson called it "grossly incompetent" and "deeply unsatisfying" for the prime minister to attend a dinner at a property connected to "a serious taxation investigation." Mr. Watson, founding director of the Centre for Public Integrity, highlighted that such events are about "a fundraising exercise with someone who has a lot of money, a lot of power, and a clear interest in influencing government policy."
Liberal Solutions and Their Limits
Mr. Lee told the ATO 9 years ago in 2017 that he had sold all his Chinese business interests for about $200 million around 1998, transferring roughly $90 million to Australia and holding the rest in offshore accounts. However, an ATO affidavit referred to a 2004 affidavit where Mr. Lee stated he "had substantial funds in Chinese currency held in China," contradicting his claim of transferring all proceeds. The ATO affidavit also alleged Mr. Lee continued to receive income from China after migrating to Australia through other family members and associates. It examined payments Mr. Lee described as loans from his mother—$25 million 14 years ago in 2012 and $100 million 11 years ago in 2015—which the ATO described as "unexplained income," noting his mother had not declared taxable income in China for a very long time.
Albanese's spokesperson declined to comment on "private dinners" and stated that "Donations are a matter for the Labor Party and will be disclosed in the usual way, as is appropriate." Under this "usual disclosure process," the public would not see how much money a party spent or received until the following February. Mr. Watson and other experts are lobbying for real-time disclosure, arguing there is "no real impediment" to providing immediate transparency on political money. This reform effort, while aiming for transparency, does not challenge the fundamental structure that allows wealth to purchase political access and influence, merely seeking to make the transactions visible after the fact.