FALUN GONG: STRUCTURE AND FINANCING AS SEEN FROM

C O N F I D E N T I A L SECTION 01 OF 04 HONG KONG 004115

SIPDIS

NOFORN
SIPDIS

NSC FOR DENNIS WILDER
DEPT FOR EAP/CM

E.O. 12958: DECL: 10/17/2031
TAGS: PHUM PINR PGOV HK CH
SUBJECT: FALUN GONG: STRUCTURE AND FINANCING AS SEEN FROM
HONG KONG

REF: HONG KONG 1142

Classified By: E/P Chief Laurent Charbonnet. Reasons: 1.4(b,d).


1. (C) Summary: The Falun Gong (FLG) movement has virtually
no organizational structure, coordinated policy, or central
financing, according to numerous Falun Gong contacts in Hong
Kong. It is better thought of as a very loose association of
practitioners who communicate through emails and
regularly-held meetings and spend their personal funds to
broadcast their message via a rather sophisticated group of
media outlets worldwide. Those media outlets, including the
"Epoch Times" (ET) newspaper, New Tang Dynasty Television
(NTDTV),the "Sun" radio, and the "Sound of Hope" shortwave
radio, on the other hand, do have organizational structure
and financing and can operate as a proxy for a FLG
organization. However, these media outlets should not be
viewed as synonymous with FLG. ET and NTDTV view themselves
as the anti-communist voice of China, but ordinary FLG
practitioners don't see themselves that way. Ordinary
practitioners, as well as the broader FLG movement, seem
rather non-political. Moreover, the movement is almost
completely decentralized. Wealthy local donors provide much
of the funding for FLG events and media operations, and they
operate independently of FLG founder Li Hongzhi, who lives in
New York. Each of our contacts insisted that they receive no
direct or specific instructions from Li or anyone else in New
York. End Summary.

2.(C) We spoke with the following individuals to discuss FLG
structure and organization: David Matas, a veteran
international human rights lawyer who has done legal work for
Falun Gong torture victims and other Chinese dissidents;
Sophie Xiao, FLG activist in Hong Kong; Cheryl Ng, editor of
ET in Hong Kong; Sarah Liang, reporter for NTDTV in Hong
Kong; Fionna Ching, FLG activist in Hong Kong; and Cheuk
Yuen-wong, President of NTDTV Australia, and Law Yuk-kai,
Director of the Hong Kong Human Rights Monitor (Protect all.)


A Movement Without Much Organization
--------------


3. (C) There really is no FLG organization, no members, no
hierarchy, no vetting of people, no coordinated policy, no
instructions, no spokesperson, no statements on behalf of the
group, no assets, no bank accounts, and no fund raising. We
heard this consistent message from each of our contacts.
What exists is a very loose association of practitioners who
communicate through emails and regularly-held meetings and
spend their personal funds to broadcast their message through
a rather sophisticated group of media outlets worldwide.
Those media outlets, including the ET newspaper, NTDTV, the
"Sun" radio, and the "Sound of Hope" shortwave radio are
closely connected with the FLG movement and staffed largely
by FLG volunteers.


4. (C) Falun Gong, which literally means "practice of the
wheel of law" and is also known as "Falun Dafa" (great law of
the wheel of law) is a system of mind and body development
started in 1992 in China by Li Hongzhi, who now lives in New
York. According to Master Li, as he is referred to by FLG
practitioners, when one cultivates their mind they can
ultimately assimilate to the supreme nature of the
universe--truthfulness, compassion and forbearance. Li's
philosophy of life is detailed in his book, Zhuan Falun
(turning the wheel of law). FLG practitioners view Li and
his book with reverence, though they don't consider Li a
prophet or FLG a religion. We were repeatedly told that one
can be both a FLG practitioner and, for example, a Christian.
One of our contacts said she views FLG as "simple rules of
life." However, she also said that she feels closer to
Master Li than to her own father. There are no reliable
estimates of the number of FLG practitioners worldwide--the
Chinese government says there are 70 million while a FLG
website claims there are 100 million.


5. (C) Despite our contacts' insistence that FLG has no
hierarchical structure, it does, in fact, have a very loose
organization. Cheuk Yuen-wong, President of NTDTV Australia,
reluctantly told us after some pointed questioning that FLG
has a "branch committee" in each country that is typically
made up of about 5-10 people (in some jurisdictions with
small numbers of FLG practitioners, however, the branch
committee might consist of a single person, as in Hong Kong
where wealthy restaurant chain owner Kam Hung-cheung is the

HONG KONG 00004115 002 OF 004


sole member of the committee and referred to as the
"chairman"). These branch committees organize FLG
conferences and galas, make decisions regarding protests and
demonstrations, coordinate legal strategies, and generally
decide how to allocate funds. However, FLG has no funds of
its own. All of the money for specific events or causes is
provided by individuals on an ad hoc basis.


6. (C) Given this, it's not surprising that the branch
committees are almost invariably comprised of large donors
who direct where their money is to be spent. Cheuk, who is
one of the largest FLG donors in Asia, told us that he is now
serving as a senior consultant to the Australian branch
committee. (Note: Cheuk is a Hong Kong native and former
civil servant who made a fortune in the textile business
before retiring to Australia in 1987. End Note) Cheuk said
the selection process for branch committee members tends to
be rather informal--he called it a "self-nomination process."
He added that it was difficult work and not easy to get
people to volunteer their time. "You need to have a lot of
patience and forbearance," Cheuk said.


7. (C) Of course, many branch committee members are also
involved in the local or regional operation of NTDTV and ET.
As such, the structures of FLG's media outlets, which are
much more defined than those of FLG itself, can operate as a
proxy for a FLG organization. What's more, while these media
organizations are separate entities, the funding is fungible,
and often flows across organizations and regions depending on
the financial needs and perceived usefulness of the local
operation. For example, Cheuk controls NTDTV's operations in
Australia, but as one of the wealthiest FLG donors in Asia,
he also provides most of the funding for ET operations in
Hong Kong and elsewhere. Cheuk told us that he is currently
trying to decide whether to continue to fund the printing of
ET in Hong Kong, which Cheuk said is enormously expensive,
costing about USD130,000 a month. Thus, even though most of
our contacts claimed that the media outlets are very separate
businesses, it seems obvious that at the very top where the
funding is provided, the organizations are linked, at least
in the minds of wealthy donors.


8. (C) Each of our contacts insisted that they receive no
direct or specific instructions from Master Li or anyone else
in New York. Cheuk said that Master Li "never tells us what
to do or how to do it." Our contacts at both NTDTV and ET
stressed that Master Li never comments on the stories they
run. Fionna Ching added that "everything is in the book
(Zhuan Falun)." However, Sarah Liang told us that Master Li
will sometimes communicate with FLG practitioners through
written articles when he wants to direct the movement away
from a certain topic. She said this often involves drawing a
line between politics and FLG beliefs.

Media Outlets Much More Political Than FLG Itself
-------------- --------------


9. (C) International human rights lawyer David Matas
cautioned that the various media outlets associated with FLG
(ET, NTDTV, the "Sun," and "Sound of Hope") should not be
viewed as synonymous with the FLG movement. "There's an
overlap, but they are not the same thing," Matas told us. ET
and NTDTV are extremely critical of the Chinese Communist
Party (CCP) and see themselves as the anti-communist voice of
China. "Our main goal is to expose the CCP and show the
world what they are all about," Cheryl Ng told us. She said
that ET reporting was focused on CCP behavior, history,
influence, and activities around the world. However,
ordinary FLG practitioners don't see themselves as
anti-communist crusaders. Ordinary FLG practitioners are
actually rather non-political, and don't have a secular
political philosophy or agenda, Matas said. Sarah Liang told
us "a lot of people want FLG to become political and do
pro-democracy work, but we're not political. We don,t want
this responsibility. We just want our faith." In fact, many
FLG practitioners are "not too keen on" the anti-communist
stories contained in the ET, including the "Nine Commentaries
on the Chinese Communist Party," which offers a very critical
history of the CCP, Sophie Xiao told us. Xiao joked that she
often tells ET staff that they might actually be able to sell
their paper if they wrote fewer FLG stories. However, she
added "we can't tell them (ET) what to do."


10. (C) This is not to say that FLG is not involved in
promoting pro-democracy issues in China and Hong Kong. FLG
practitioners always turn out in Hong Kong for the annual

HONG KONG 00004115 003 OF 004


June 4 candlelight vigil and the July 1 march. What's more,
FLG was instrumental in collecting signatures for the
petition drive against "Article 23" national security
legislation in the summer of 2003, Director of the Hong Kong
Human Rights Monitor Law Yuk-kai told us. However, for FLG,
these issues are more about survival than about politics.
FLG viewed the Article 23 bill as a direct threat to their
existence, believing that the legislation would be used to
outlaw its activities in Hong Kong.


11. (C) Another critical difference between FLG and the media
organizations is their differing legal status in many
jurisdictions. In Hong Kong, FLG is registered under the
Societies Ordinance, which means that it does not conduct
fundraising. In fact, when it comes to fundraising, our
contacts told us "Master Li forbids it." As such, FLG has no
assets or bank accounts in Hong Kong, or anywhere else.
However, the situation is different for the media
organizations, which are funded almost exclusively by
donations. In Hong Kong, ET and NTDTV are registered under
the Companies Ordinance, which requires the disclosure of
financial information. Similarly, NTDTV Australia is
registered as a non-profit company. Cheuk Yuen-wong told us
that NTDTV Australia has submitted a request to the
Australian tax authorities to designate NTDTV a charitable
organization, which would allow them to accept donations
tax-free. NTDTV is also seeking financial assistance from
the United States Government, Cheuk told us. He said that
the President of NTDTV in New York, Li Zhong, had submitted a
request to the USG and was awaiting a reply. (Note: Cheuk
couldn't recall the details of the request or where it was
submitted. End Note.)

New Tang Dynasty Television
--------------


12. (C) New Tang Dynasty Television is an independent,
nonprofit television station based in New York. It
broadcasts a variety of cultural, leisure, political and news
programs in Mandarin, and select programs in Cantonese and
English. It was launched in February 2002 by five Falun Gong
practitioners, and went global on July 1, 2003 with the
launch of a 24-hour satellite channel, which is available in
North America, Europe, Australia, and Asia. The station's
studios are located in New York, and it also operates 60
reporting centers worldwide. The reporting centers are
independent, and have almost complete freedom in choosing the
topics they report on. Despite this rather expansive reach,
NTDTV's operation is barebones and requires very little
overhead. For example, Cheuk Yuen-wong told us that NTDTV
relies almost exclusively on volunteers, most of whom work
part-time. In fact, NTDTV has no paid staff in its New York
offices. Some of the station's volunteers are trained
technicians, cameramen and reporters, but many simply learned
on the job. The overwhelming majority, though not all, of
the volunteers are Falun Gong practitioners. The reporting
centers occasionally send staff to New York for training,
Cheuk told us.


13. (C) NTDTV's operations are funded almost exclusively
through donations from wealthy Falun Gong practitioners,
Cheuk said. Because of the volunteer nature of their
operations, the bulk of their expenses involve satellite
transmission. The four satellites NTDTV uses, "Telestar"
over North America, "Hotbird" over Europe, "New Sky Satellite
6" over Australia, and "W5" over Asia, cost about USD400,000
per satellite, per year. Cheuk said that NTDTV began having
difficulty renewing these satellite contracts in 2004 after
Beijing started putting pressure on the satellite companies
to stop transmitting NTDTV programming. Thus far, however,
NTDTV has been able to renegotiate its contracts, though
under less favorable terms than prior to 2004.

"Epoch Times"
--------------


14. (C) The "Epoch Times" is a free daily newspaper with
editions in ten languages distributed in roughly 30
countries. While it carries a broad range of international
political, economic, entertainment and cultural stories, its
primary focus is coverage of human rights issues in China.
While the paper claims an independent stance, it has often
been criticized as biased, and frequently contains editorials
harshly critical of the Chinese government and the CCP. ET
was founded by a small circle of journalists in China in 2000
that began relaying stories overseas of human rights abuses.

HONG KONG 00004115 004 OF 004


It launched an English-language edition in New York in August

2004. ET has a weekly print distribution of over 1 million.


15. (C) ET in Hong Kong (ETHK) is a relatively small
operation with only ten full-time employees, all of whom are
volunteers, according to Cheryl Ng. Of those volunteers,
three work as reporters and three or four work as "sales
staff." Interestingly, one of the ten is not a FLG
practitioner, Ng said. Although ET is currently a free
paper, ETHK is looking for a way to start selling it. The
paper's circulation in Hong Kong is about 40,000 per week.
Currently, the paper is distributed mostly by hand--FLG
practitioners can be seen daily at major tourist attractions
such as the Star Ferry handing out copies of ET. ETHK also
does a very small number of mailings, though none to the
mainland. However, Ng claimed that they regularly briefed ET
stories to important readers on the mainland by phone,
including dissident lawyer Gao Zhisheng in Beijing (Note:
This conversation took place prior to Gao's arrest in
Beijing. End Note.) Mainland tourists also often take
copies of the ET home with them, Ng said. Some tour
operators were advising mainland tourists not to take copies
of ET, but Ng said that most had stopped the practice after
receiving complaints from ETHK.


16. (C) ETHK also operates a "volunteer center" where FLG
practitioners "cold call" high-ranking CCP officials on the
mainland in an attempt to convince them to withdraw from the
CCP, Cheryl Ng told us. Ng called ths operation "very
successful."


17. (C) Ng clamed that several Hong Kong legislators have
toldher privately that ET is important for Hong Kong,
whether or not they agree with its reporting and eitorials.
According to Ng, ET is the only media rganization that the
CCP has no control over. Een CNN listens to what Beijing
sys because it doesn't want to jeopardize its access, Ng
added.


18. (C) Most of ETHK's USD130,000/month operating budget
comes from outside of Hong Kong--primarily from Australia.
It is common for offices in other countries to share funds
based on need, according to Ng. Less than 20 percent of
ETHK's funds come from advertising. Ng said that ETHK's
operations are "week to week" and she called it a small
miracle that the paper has survived.


19. (C) In January, ETHK opened a print shop in Tsing Wan,
which freed the paper from having to rely on outside printing
companies. It also allowed ETHK to begin printing large
volumes of its "Nine Commentaries," which offers a very
critical history of the CCP. Ng told us that ETHK has now
printed over 1 million copies of the Nine Commentaries, which
FLG practitioners regularly hand out to mainland and other
tourists in Hong Kong. (Note: On February 28, 2006 four
Chinese men broke into the print shop during working hours
and destroyed an expensive piece of machinery. The print
shop was closed for several weeks. Police investigated but
had made no arrests in the case as of this writing. See ref
for more details. End Note)

Other Media Outlets
--------------


20. (C) The Epoch Media Group also operates the "Sun" radio
station, and the "Sound of Hope" shortwave radio. The Sound
of Hope is broadcast from Australia and the U.S., and it has
a website where people can listen to broadcasts. Media
sources Minghui (clear wisdom) and "Renminbao" (The People's
Daily) are also closely associated with FLG. They contribute
stories to each of FLG's media outlets, and are used by few,
if any, non-FLG media.
Cunningham