Albanese dinner host's family fortune linked to corruption scandals involving relatives

Fortune of Australian billionaire family linked to corruption scandal involving relatives in China The fortune of Australian billionaire Phillip Lee, whose son recently hosted a Labor fundraising dinner attended by Prime Minister Anthony Albanese, has been linked to major corruption scandals involving members of his family in China, an ABC investigation has found. The ABC can reveal Mr Lee is the son-in-law of a disgraced Chinese transport official who steered expressway construction contracts at an inflated price in southern China's Guangdong province to Mr Lee's company in the 1990s. A Chinese court in 2005 found the project cost was inflated by more than 100 million yuan ($21 million), pushing the total price tag to more than 180 million yuan ($37.6 million), at the expense of the public purse. Mr Lee has not been accused of any wrongdoing in relation to his father-in-law's actions. The revelation comes as scrutiny intensifies over the family's wealth after Mr Lee's 25-year-old son, Felix, hosted Mr Albanese, former Victorian Premier Daniel Andrews, and bank executives at the family's Point Piper mansion, known as Mandalay, last month. The luxury property was purchased outright by Phillip Lee and his wife, Shi Xiaobei, for $39.9 million in 2015. The three-level European-style mansion offered Mr Albanese panoramic views of the Sydney Harbour Bridge and Opera House from its marble balcony, but there was a problem. The Sydney mansion has previously been the subject of asset-freezing orders, after the Australian Taxation Office (ATO) pursued the couple over claims of more than $278 million in unpaid tax in 2021. The ATO obtained court orders freezing the couple's Australian assets. The orders covered 17 residential, commercial and rural properties, Star City Casino accounts and luxury vehicles including a Bentley, a Rolls-Royce Ghost and a Porsche Cayenne. The Lee family denied any wrongdoing and later reached a settlement with the ATO for an unknown sum. Under that settlement, a Commonwealth charge remains registered over their properties, including Mandalay, until the debt is repaid in full. Asked by the ABC's Insider program last month whether the ATO allegations concerned him, Mr Albanese said that he was "not aware of those issues" and noted Phillip Lee "wasn't there" on the night. However, integrity expert Geoffrey Watson said it was "grossly incompetent" and "deeply unsatisfying" for the prime minister to attend a dinner at a property connected to "a serious taxation investigation". Mr Watson, who is the founding director of the Centre for Public Integrity, said the prime minister should explain what was discussed at the dinner. "Presumably, by having his ritzy dinner at this amazing property, there are going to be things said which are of value. Otherwise, it wouldn't be organised," he said. "And this isn't a personal matter. It's a public matter. "This is about a fundraising exercise with someone who has a lot of money, a lot of power, and a clear interest in influencing government policy." Phillip and Felix Lee were not accused of any wrongdoing. In response to the ABC's questions, a spokesperson for Mr Albanese said, "We don't comment on private dinners". "Donations are a matter for the Labor Party and will be disclosed in the usual way, as is appropriate,"the spokesperson said. Under the usual disclosure process, the public would not see how much money a party spent or received, including from donors, for the financial year until the following February. Mr Watson and other experts are lobbying for real-time disclosure, which would notify the public of political donations as they were made. "If I get out of an Uber, I will have my receipt within 30 seconds," Mr Watson said. "There is no real impediment to providing real-time disclosure of the sources of political money." Corruption scandals linked to family fortune Until now, key details of the Lee family's past business dealings in China have received little public attention in Australia despite the billionaire's pattern of lavish spending. The ABC has traced the family's fortune using findings by Chinese anti-corruption authorities and state media reports, Chinese business records, and material from the ATO investigation into the couple's assets and income. An affidavit filed in the Federal Court in 2021 by a lead ATO investigator reveals a small but important detail: Mr Lee changed his name in 2001. This was just months before Phillip Lee and his wife Shi Xiaobei became Australian citizens in 2002. According to the ATO affidavit, Phillip Lee was previously known as Xie Fei. "Xie" being Phillip Lee's late father's surname, while Li is his mother's surname. According to the affidavit, Mr Lee told the tax office that his father had started a real estate and freeway construction business in China around 1985 and invested in freeway projects with local governments across several provinces and cities. Then, in the early 1990s, he joined the family business. In his immigration application to Australia dated 18 November 1999, which was cited in the affidavit, Mr Lee said he established a freeway construction firm, Guangdong Hushen, in 1993, and the company was awarded the contract to construct the Shenzhen-Shantou Expressway in southern China. The ABC has 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 in the 1990s. At the time, China's expressway boom gave local transport officials considerable sway over which companies received contracts. However, it also created opportunities for abuse of power, and many transport officials across the country were arrested or investigated over the following decades. A Guangdong anti-corruption party magazine said that during the highway construction, Mr Lee was close to Niu's wife, who recommended him to her husband. Lee was also reportedly in a relationship with Niu's university-aged daughter. According to Niu's indictment, the first problematic dealing was in 1995, when Niu gave Mr Lee's company Guangdong Hushen a contract to install 140 kilometres of expressway railing. The following year, Niu awarded the company another 38.7 million yuan ($8.1 million) contract to install guardrail locking wedges, components rarely required on expressways in the region. Prosecutors later alleged the wedges were overpriced, of poor quality, and oversupplied. Niu was investigated by local authorities in 2003 and in the following year was tried in Guangzhou on charges of bribery and abuse of power. The Chinese Communist Party anti-graft investigators found Niu had favoured 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 also found Niu had neglected his duties to the benefit of his son-in-law by subcontracting parts of the project to him and setting prices at his request, causing the state to lose more than 100 million yuan ($21 million). Niu was sentenced for 13 years for bribery and dereliction of duty in 2005. Mr Lee and Ms Shi were not accused of any wrongdoing. Official fled to Fiji on a fake passport Similar questionable practices by Mr Lee's relatives were replicated in other parts of the country. In 2000, two investment companies in which Mr Lee held stakes, Shanghai Shenshen Investment Co and Guizhou Guishen Investment Co, bought the construction company Guizhou Huancheng from the provincial transport department for 30 million yuan ($6 million). According to Chinese state media, the deal was arranged by Phillip Lee's relative, Lu Wanli, who was then director of the transport department in China's south-west Guizhou province. In his political position, Lu helped secure a string of expressway contracts for Mr Lee's company, Guizhou Huancheng. About the same time, Lu also worked with Xinjiang Xinshen, a company run by one of Mr Lee's business associates, to push for the same locking wedges used for the Shen-Shan expressway to be used on Guizhou's highways. A 700-million-yuan purchase contract for the highway safety products was later signed between the state-owned Guizhou Express Group led by Lu at the time and a company owned by Lu's son-in-law, Zhao Jun. The arrangement drew the attention of anti-corruption investigators, leading to Zhao's arrest in August 2001. Anticipating his own downfall, Lu obtained a Chinese passport under a false name and fled to Fiji in January 2002. He was repatriated in April that year and sentenced to death for bribery in 2004. Mr Lee and Ms Shi did not reply to ABC's email with questions sent to their legal representative. A private number registered under Ms Shi could not be reached on Wednesday. The Lee Family Office, a private investment office of Felix Lee, also did not respond to ABC's questions by email. Moving money to Australia As part of the ATO's years-long investigation into the Lee family's unpaid taxes, Mr Lee told the ATO in 2017 that he had sold all his Chinese business interests for about $200 million around 1998, transferred roughly $90 million to Australia, and held the rest in offshore accounts. But the ATO affidavit also refers to a 2004 affidavit filed by Mr Lee in an earlier unrelated legal proceeding in which Mr Lee said he "had substantial funds in Chinese currency held in China". The statement appeared to contradict his claim that he had transferred all proceeds out of China when he migrated to Australia around 2000. The ATO alleged in its affidavit that Mr Lee continued to receive income from China after migrating to Australia through other family members and associates who may have held shares or run businesses on his behalf. The ATO affidavit examined payments Mr Lee said were loans from his mother: $25 million in 2012 and $100 million in 2015. But the ATO described the payments as Mr Lee's "unexplained income", noting his mother had not declared taxable income in China for a very long time. The ATO also investigated whether the couple's Australian assets had been acquired using foreign income sources that the authorities alleged were effectively controlled by Mr Lee. In one example, the ATO affidavit alleged Mr Lee's mother transferred $40 million to Mr Lee's then 10-year-old son, Edward's bank account, and that money was used to buy the Mandalay mansion in 2015. Currently, Phillip Lee's wife, Shi Xiaobei, is the sole owner of Mandalay. The ATO identified foreign funds in the purchase of Ms Shi's other residential properties in NSW between 2000 and 2017, including several Point Piper apartments near Mandalay. Mr Lee's lavish spending Phillip Lee is no stranger to controversy in Australia. In 2022, an NSW inquiry into Star Casino heard that Mr Lee had turned over more than $2 billion at the venue between 2007 and 2021, making him one of the casino's largest patron by turnover. Mr Lee told the inquiry that Star Sydney staff had helped him transfer $11 million in gambling funds through a Chinese bank card in a single day. In 2024, the Australian Financial Review ranked Mr Lee among Australia's 100 richest people, estimating his property-derived wealth at $1.6 billion. But some of the couple's land purchases have been dogged by controversy. A 400-hectare bushland property they bought at Fame Cove on the NSW Mid North Coast has attracted several pollution fines, and its development rights have been blocked by the local council. It is unclear whether any of the business and development interests of the Lee family was discussed during the Point Piper dinner last month. Mr Watson said there were no "binding rules" governing politicians' engagement in political functions, leaving access to the country's most senior figures open to wealthy donors, without proper scrutiny. "What sort of interests could be pushed in that room, with the most powerful decision-maker in the country?" he said. "I want to know. We're entitled to know."