Dispatch

Broken Tooth and New Macau

How China crushed the triad gangs and created the world's new gambling Mecca.

MACAU — One of Macau's most infamous gangsters must be feeling like Rip Van Winkle.

When Wan Kuok-koi, 57, better known as Broken Tooth, was released from prison on Dec. 1, nearly 14 years after he went behind bars, he emerged to a city utterly transformed. Instead of cars burning in the streets, Bentleys with dual Macau-China license plates prowl newly built highways. Gone is the sleepy, rough-around-the-edges colonial backwater, supplanted by a city that has become the gaming capital of the world, with more than five times the annual gambling revenue of Las Vegas. In a little more than a decade, Macau has calmed down, cleaned up, and gotten immensely rich. And now, nearly two months after being freed, the former leader of 14K, Macau's biggest and most-feared criminal triad, has barely made a ripple. After vowing there was "absolutely no way" he would disturb the peace in Macau, Broken Tooth seems to have gone into hiding, with local media reporting a rumor that he exiled himself to Thailand or Hong Kong for several months as part of an agreement with Chinese authorities.

One month before he was arrested in 1998, Wan said that "anyone who's done something bad to me will never escape. I won't kill him. I'll make him take a voyage to another world." Now he says he simply wants to become a law-abiding citizen, and that revenge is a thing of the past. "I don't want to affect the stability of Macau. There's absolutely no way I want to do that. I want to be left alone," a bashful-sounding Wan said to the Hong Kong-based English-language newspaper the South China Morning Post.

It's a far cry from the swaggering Broken Tooth of old, but one that fits the times. In 1998, Wan was the irrepressible criminal king of Macau, then a Portuguese colony in its tumultuous last days. Like Bugsy Siegel in 1940s Las Vegas, he had a reputation for violence, ruthlessness, and ambition that approached megalomania. Wan earned his nickname as a young man after crashing his car and damaging his teeth. (He later had them capped.) As he rose through the triad ranks, he was shot twice and survived an attack from a meat cleaver that rendered two fingers permanently immobile. In the 1990s, he drove a purple Lamborghini and bragged about losing more than $1 million at a single gambling session. In an interview with Newsweek in 1998, he claimed to have 10,000 triad followers. And at the time of his arrest for loan sharking and money laundering, he was said to be watching the 1998 movie Casino, an autobiographical film he commissioned to dramatize his criminal exploits (not, it seems, connected to the Robert De Niro film of the same name).

In the years leading up to Macau's handover to China, triad violence surged as gangs vied for a bigger share of the pie that would be left after Portuguese power receded. The high point was 1999, the year of the handover, when 42 people died in gang-related attacks. Broken Tooth's triad torched cars and was believed to have killed a Portuguese gambling official near the Casino Lisboa. At Wan's disco, Heavy Club, a mannequin dressed in a police uniform reportedly dangled from a noose tied to the ceiling.

Under Portugal, a somewhat reluctant colonial power, the city had a sleepy air and a sluggish economy to match: a combination of triad violence and the Asian financial crisis caused Macau's gross domestic product to contract by 6.8 percent in 1998. Portugal repeatedly tried to return Macau to China as part of its 1970s decolonization push, but Beijing refused to retake sovereignty until 1999. At the time of the handover, textile manufacturing dominated Macau's economy, and the relatively small casino industry was controlled entirely by Stanley Ho. Seen in Macau as a sort of roguish, eccentric patriarch -- part Howard Hughes, part Donald Trump -- Ho allegedly earned the money to start his first business as a reward for single-handedly defeating pirates who attacked an employer's ship during World War II.

Nowhere is the contrast between then and now more apparent than in the Lisboa, Ho's landmark property and one of the city's oldest and most iconic casinos. It was also Broken Tooth's old haunt. Wan allegedly had a $50 million stake in a VIP room at the Casino Lisboa and was arrested in a suite at its hotel back in 1998. Then, the casino -- a tacky structure resembling a multicolored onion -- was guarded by a battalion of cops wielding automatic weapons. Today, the automatic weapons are gone, the casino has expanded with an enormous, glitzy addition shaped like a golden lotus flower, and the lobby is filled with tourists elbowing each other to pose in front of a life-sized gingerbread house. (The seamier side remains: A basement hallway below the Lisboa has a parade of prostitutes perpetually cat-walking between a restaurant and a fruit stand.)

In 2002, the Macau government broke Ho's monopoly on gaming and opened it up to international players. It granted six casino licenses to foreign operators, including Las Vegas mogul Steve Wynn and GOP-bankroller and Las Vegas Sands CEO Sheldon Adelson. (Ho remains a powerhouse; he owns 17 of Macau's 34 casinos.) Beijing also loosened restrictions on mainland tourists coming to visit Macau, in an effort to boost the economy after the SARS epidemic struck China in 2003. And yet Macau's success was far from a sure bet.

The outlook for the city at the time was still murky enough that Gary Loveman, CEO of the world's largest gaming company, Caesars Entertainment Corporation, gave Macau a pass -- a decision he has since called his worst mistake. In 1998, 800,000 mainlanders visited Macau. In 2011, it was 16 million. As the only Chinese territory where casino gambling is legal, Macau has an irresistible allure to the newly rich and the middle class alike. In 2012, gambling revenues reached $38 billion. But one of the most striking changes after the handover was an end to the violence that had plagued the territory. Immediately after regaining sovereignty, China set up a garrison of the People's Liberation Army in Macau. Within a year, violent crime had dropped 46 percent. This was due partly to the jailing of Broken Tooth and the presence of China's military. But much of it is because it's more profitable for triads to help keep the peace.

Triads get a piece of this new action by dominating the "junket" industry of Macau, which brings high-rolling gamblers to the territory and collects debts on behalf of the casinos. These businesses also allow VIPs to stake more than the $50,000 legal limit on how much money Chinese are permitted to take out of the country every year. (In essence, junkets collect their clients' money on the Chinese side of the border and give them loans to gamble on the Macau side.) This scheme makes a convenient vehicle for money laundering. Steve Vickers, Hong Kong's former chief of the Criminal Intelligence Bureau, has said that he knows of "no Chinese junket operator that doesn't have some association with triads."

Although Broken Tooth's conviction dealt his old triad, 14K, a heavy blow, the gang remains active in Macau, as do his former associates. In August, six men with alleged triad ties, wielding hammers and sticks, attacked Ng Man-sun, one of Broken Tooth's bitterest former rivals. And one week before his release, police arrested Broken Tooth's former right-hand man for attempted murder.

"Everyone realizes that triads are still active," says Ricardo Pinto, a Portuguese publisher who covered the triads as a journalist in the 1990s. "Now they are working in a kind of legal framework, which of course changes very much the perception of their activities.... Now they are behaving more like normal businessmen. They made peace with society and joined Macau by operating in a legal way."

That is not to say that triads have given up on crime, of course. Around the world, these crime syndicates continue to be major players in drug trafficking, prostitution, financial fraud, software piracy, loan sharking, and human smuggling, according to a Library of Congress report on Chinese criminal organizations.

"Junkets are allowed to operate because they are good for the business of casinos," says Bill Chou, professor of public administration at the University of Macau. "The casino license holder does not care how they go about attracting the high rollers, who are sometimes also the gangsters in other parts of the world." He says that junkets are seen as more or less mainstream businesses, though most "are still controlled by gangsters."

The junket trade can still lead to some occasionally violent attacks that take place out of the public eye. In July, two mainland gamblers were stabbed to death in a five-star hotel after failing to pay up on large gambling losses. That same month, a Chinese woman with a Japanese passport was found bludgeoned to death in a residential area. Macau police believe both crimes are tied to junket operators and triads. Both murders remain unsolved.

For locals, Macau's rapid changes have not all been positive. The flood of tourists and foreign money has driven up the price of real estate by more than 400 percent since 2004. Traffic and pollution have worsened. And residents say the government has all but ignored their concerns in the drive for breakneck economic growth.

"Like China, Macau has become one of the most money-making places in the world," says Hao Zhidong, a sociologist at the University of Macau. In fact, he says, many people have actually become nostalgic for Portuguese rule -- Broken Tooth and the years of violence notwithstanding. Many say the city has become too venal, too focused on gambling, and too indifferent to the political demands of its citizens.

Even though Broken Tooth's days as a kingpin may be over, whenever he returns from exile, he may find Macau almost as congenial a place to make money as in the 1990s. While he lost millions of dollars in property due to police confiscations after his arrest, he has emerged from prison with many connections intact, including his brother, Wan Kuok-hung, who built a profitable business supplying uniforms to the casinos. Local newspapers have even reported a rumor going around -- that Broken Tooth's old friends and rivals have decided to give him a welcome-back present: a share of the lucrative junket business in exchange for hanging up his gun. Defanged, perhaps, but not out of business.

Ed Jones/AFP/Getty Images

Dispatch

Paranoid Plots and Empty Aisles

Paralyzed by Chávez's absence, Venezuela's shaky government is inventing threats from abroad. But the hungry masses aren't buying it.

CARACAS - Lidia Gonzalez doesn't have time to look for counter-revolutionaries. She's too busy looking for sugar.

Hours after Venezuelan Vice President -- and current de facto leader of the country in Hugo Chávez's absence -- Nicolás Maduro told the nation that government security forces had uncovered a plot to assassinate him and the president of the National Assembly, Gonzalez was waiting in line at the store. Shelves were riddled with empty spaces where the food used to be.

An employee at the Agriculture Ministry here in Venezuela's capital city, she was returning home when a friend called to let her know that sugar had just been delivered at their local supermarket. She promptly forgot about Maduro and his exhortations to beware of foreign agents looking to destabilize the country.

"I haven't seen sugar in weeks," she says. "The revolution is important and I love our president. But I suspect Maduro was just talking nonsense. It's just another farce, another show. They have cried wolf too often."

Maduro made his accusations before tens of thousands of red-shirted followers who heeded the government's appeal to flood the streets of Caracas on Jan. 23 in a show of support for President Hugo Chávez. The president remains in intensive care in a Cuban hospital and hasn't been seen or heard from since Dec. 11, when he underwent his fourth operation for cancer. Since then, there have been repeated rumors that he is unconscious, breathing with a ventilator, or dead. All have vehemently been denied by Maduro and the government. Doubts only grew after the Madrid-based El Pais erroneously published a photo of a man it claimed was Chávez breathing with the help of a machine. The paper subsequently said it had been duped and that the photo had come from a medical website. The Venezuelan government has vowed to sue the paper in Spanish courts.

Maduro said during the Jan. 23 rally -- which was held on the 55th anniversary of the overthrow of Venezuela's last dictator, Marcos Pérez Jiménez -- that right-wing extremists from both Venezuela and abroad were involved in the assassination plot. He often had to shout above the din of his supporters, many of whom were chanting "With Chávez and Maduro, the country is safer!'' and "They will not return!" in reference to the country's pre-Chávez leaders.

"We have been following for some weeks groups who have infiltrated the country with the objective of making an attempt against the life of my colleague, [National Assembly President] Diosdado Cabello and against my life," Maduro said to the crowd. "The criminals who have slipped into our country aren't here to ask us for cacao." 

Maduro, who was anointed Chávez's heir apparent on Dec. 8, provided no proof of his allegations, but said the government would shortly take action against the plotters. After the speech, Maduro left for Cuba where he said he would meet with Chávez, leaving others to give more details.

Interior and Justice Minister Néstor Reverol said on Jan. 24 that the groups had even given code names to their targets. Maduro, whose first job was driving a bus, was codenamed the "bus driver," while Cabello, a former military man, was "the little lieutenant."             

"We're not going to give the far right even one millimeter to destabilize the country," Reverol told journalists. "We have activated all of the police and intelligence officials. We have strengthened security measures for the comrades." 

Reverol didn't announce any arrests, and gave no reason why none had yet been made. State Attorney General Luisa Ortega Díaz told listeners of her radio program that they should "be alert" for plotters and people seeking to destabilize the country. A special prosecutor has been assigned to investigate, she said.

Assassination plots are nothing new in the Bolivarian Republic of Venezuela. During Chávez's 14 years in power, the president alerted the country to more than a dozen such plots against his life. Few arrests were ever made; no proof was ever given. The charges have usually surfaced at times when Chávez was facing domestic problems, and Maduro seems to be following suit, says Vanessa Neumann, an analyst who follows Venezuela at the Foreign Policy Research Institute.

"It is a page right out of the Chávez playbook that fits well with the traditional Bolivarian narrative of a revolutionary force fighting evil, plotting imperialists who want to oppress the Venezuelan people and undermine democracy for their own benefit," Neumann says. "Chávez has used it to marvelous effect over the years to change the topic of domestic discontent. Maduro has shown us how much he has learned from Chávez and been groomed by the Cubans: he uses some of the same rhetoric as Chávez and has improved his public speaking markedly."

This time, Maduro's playing of the assassination card coincides with mounting food shortages throughout the country, and rumors of a growing feud between himself and Cabello. Staples such as sugar, coffee, cooking oil, meat, wheat flour, rice, corn meal, and chicken are in very short supply, leading to long lines outside supermarkets. Toilet paper, toothpaste, and dishwashing liquid have also disappeared. Canisters of liquid natural gas, which Venezuelans use to cook their meals, are in short supply as well.

"There is no cornmeal, no rice, no pasta, no wheat flour," said Luisa Mendez, a 36-year-old housewife in the central industrial city of La Victoria. "And when supplies arrive they immediately vanish. What kind of revolution is this?"

Over the last few days, government officials have moved to seize stockpiles of foodstuffs held by companies, which have been accused of hiding products while waiting for prices to rise. The companies, on the other hand, have complained that the government is seizing the inventories they need to produce more goods. Pepsi, for instance, has complained about stockpiles of sugar it imported from Guatemala being seized. 

The supply shortage is partly due to the government's own economic policies and Maduro's refusal so far to take long-delayed economic decisions. Chávez had been expected to devalue the country's currency this month. The government derives nearly half of its revenue from oil sales, which are dollar-denominated. Any devaluation would give the government more bolívares to spend. Anticipating a devaluation, the black market bolívar has fallen to 18 to the dollar. The official exchange rate, however, still stands at 4.3 to the dollar.

There were also expectations that the government would raise the costs of many items, the prices of which are set by the state, including toothpaste, toilet paper, and dishwashing liquid. These items have been in short supply as producers, arguing that they can't make a profit at current prices, have reduced output. 

Key decisions on these and other policies now seem to be indefinitely delayed in the ongoing power vacuum. During his 14 years as president, Chávez eroded the autonomy of the country's political institutions, and was personally involved in nearly every key decision. His absence has now paralyzed the government, with seemingly no one willing to take control.

Miranda state Governor Henrique Capriles Radonski, who unsuccessfully ran against Chávez in October and is expected to be the opposition candidate if new elections are held, criticized the government for not moving to solve the country's problems. Those who don't know how to govern "cover up the reality with insults and threats," he said at a local council meeting.

Maduro and others have said that Chávez is more and more animated, talking and showing signs of recovery, but doubts persist. Maduro said that Chávez appointed former Vice President Elías Jaua as the country's new foreign minister and showed a document on television bearing the president's signature. The opposition quickly pounced, saying that if Chávez was well enough to sign documents, why couldn't he make a call to the state television station to let people know he was alive and recuperating?

"I think we would have heard from Chávez by now if he were able to speak," says Risa Grais-Targow, an analyst with Eurasia Group. "That he hasn't appeared suggests his condition is very delicate."

The country's Supreme Court ruled earlier this month that Chávez could stay indefinitely abroad while remaining head of state. The justices also rejected opposition calls for an independent medical commission to examine the president to see if he is still fit for office.

The reason is simple: If Chávez were unable to serve, Cabello would become acting president and would have to schedule fresh elections within 30 days. Backers of the president may be stalling to allow Maduro more time to grow into the job while the deification of Chávez progresses.

Meanwhile, state television runs constant footage of Chávez embracing children and elderly women. They also released a remix of John Lennon's "Imagine" with new revolutionary lyrics. "Imagine Venezuela, leaving forever in peace," the song suggests. But the president's most fervent supporters have shorter term concerns, Neumann warns. "Venezuelans, even those who support Chávez, will be fed up after another month of this," she says.

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