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148 In June 2017, a joint investigation by the Australian Broadcasting Corporation and Fairfax Media revealed that the Australian Security Intelligence Organization (ASIO) had warned the major political parties that two of Australia’s most generous political donors had “strong connections to the Chinese Communist Party” and that their “donations might come with strings attached.”” One of them leveraged a $400,000 donation in an attempt to soften the Labor Party line on the South China Sea. Most notoriously, an ambitious young Labor senator, Sam Dastyari, was shown to have recited Beijing’s South China Sea talking points almost word-for-word immediately after the political donor had threatened to withdraw his money. Dastyari was also shown to have given countersurveillance advice to the donor. As a result of these actions, Dastyari was forced to resign from Parliament. Again, the CCP was shown to be working both sides of the political aisle. The Liberal trade minister, Andrew Robb, was shown to have stepped directly from office into a consultancy job to the CCP- linked company that bought a controversial lease for the Port of Darwin. The contract showed Robb to be earning 880,000 Australian dollars per year (more than 600,000 US dollars plus goods and services tax) for unspecified services.® Response and Counterresponse In December 2017, as the political attacks on Dastyari came to a head, Prime Minister Turnbull revealed that his coalition government had been “galvanized” by a classified report into foreign interference which he had commissioned in August 2016. Turnbull unveiled a new counter-foreign-interference strategy which he said would be shaped by four principles. First, the strategy would target the activities of foreign states and not the loyalties of foreign-born Australians. As Turnbull put it, “Our diaspora communities are part of the solution, not the problem.” Second, the strategy would be country-agnostic and not single out Chinese interference. Third, it would distinguish conduct that is “covert, coercive, or corrupting” from legitimate and transparent public diplomacy. And fourth, it would be built upon the pillars of “sunlight, enforcement, deterrence, and capability.”° At the same time, the prime minister introduced sweeping new legislation into Parliament. One bill introduced a wide-reaching ban on foreign political donations, including measures to prevent foreigners from channeling donations through local entities.!° A second bill imposed disclosure obligations for those working in Australian politics on behalf of a foreign principal. This bill would capture many of the indirect methodologies of CCP intelligence and United Front Work Department (UFWD) operations that are not caught by the US Foreign Agents Registration Act. And a third tranche of legislation would close some large loopholes in the Australian criminal law by introducing tough but graduated political interference and espionage offenses. Appendix 2 HOUSE_OVERSIGHT_020607