U.S. Markets closed

Trump Comments Help Huawei CFO Cry Foul Over ‘Politicized’ Case

Krista Gmelich, Natalie Obiko Pearson and Patricia Hurtado

(Bloomberg) -- Huawei Technologies Co. Chief Financial Officer Meng Wanzhou began her legal battle against U.S. extradition at a Vancouver court Wednesday claiming her case is politically motivated, citing comments by U.S. President Donald Trump.

The Supreme Court of British Columbia was expected to schedule Meng’s first extradition hearing but instead ordered another preliminary appearance on May 8 as Meng’s defense argued that there were "serious concerns" about the U.S. handover request to face fraud charges in Brooklyn, New York.

“There are concerns about political character, political motivations, comments by the U.S. president," said Richard Peck, one of Meng’s defense lawyers. He said several legal matters must be dealt with, including a claim that her arrest was improper, before extradition hearings can proceed. "It’s a complex case. We anticipate that it will proceed at a number of stages."

The comments shed some light on Meng’s strategy in a politically explosive proceeding that could take years. History shows that if Canada follows the letter of its law, Meng will probably be extradited. But she’s gearing up for a legal offensive, beefing up her phalanx of lawyers and suing the Canadian government for allegedly trampling her constitutional rights in an effort to discredit the case against her.

Political Character

China has accused Canada of abetting "a political persecution" against its biggest technology company and has demanded the release of Meng, daughter of billionaire Huawei founder Ren Zhengfei. Trump has muddied the legal waters with conflicting statements on whether he might try to intervene in what’s supposed to be an independent law enforcement operation in order to boost a China trade deal.

"It appears the defense has seized upon President Trump’s comments," said Philadelphia-based lawyer Theodore Simon, an expert in extradition who handled the case of American exchange student Amanda Knox. Meng’s lawyer’s statements indicate her defense team has reviewed Article 4 of the U.S.-Canada extradition treaty, which says that extradition shouldn’t be granted for requests "of a political character."

"If they’re saying this offense and the extradition has a ‘political character,’ it wouldn’t surprise me for them to also argue that Meng isn’t going to be treated fairly," Simon said. Even if Meng loses the first round and a Canadian judge orders her extradition, she can still appeal the decision to Canada’s justice minister and argue her case is of a political character, he said.

Prisoner in Vancouver: Huawei CFO Awaits Fate in Splendor

Meng, who wore a wool cap, purple hoodie and yoga pants for her brief appearance, was greeted by protesters torching a Chinese flag and an "Extradite Meng" placard at the courthouse Wednesday.

U.S. prosecutors in New York accuse Meng of fraud, alleging she lied to banks including HSBC Holdings Plc to trick them into processing transactions for Huawei that potentially violated Iran trade sanctions. She faces multiple criminal charges, each of which carries a maximum sentence of 30 years in prison, according to court documents.

Arrested on Dec. 1 while on a stopover at Vancouver’s airport, Meng was released on C$10 million ($7.5 million) bail and has been living with her husband and youngest daughter in one of the family’s two luxury homes in Vancouver, a city where they’d often spent their summer holidays.

Court Protesters

Her case has become entwined with that of two Canadians -- Michael Spavor and Michael Kovrig, who were detained in China nine days after her arrest and remain in captivity. On Wednesday, protesters calling for her swift handover contrasted Meng’s arrest with that of the two Canadians.

"I don’t worry about Mrs. Meng -- I worry about these two people," in China, said Louis Huang, 49, who emigrated to Canada from China about two decades ago. Nearby, another protester used a cigarette lighter and fistful of newspaper to torch a red Chinese flag.

"She’ll receive fair and transparent court proceedings,” Huang said. “If she’s innocent, she’ll be freed."

Chinese Arrests Are All Too Familiar for Past Canadian Detainees

Spavor and Kovrig will soon mark three months in secret jails, where they’ve had a total of seven consular visits combined and have yet to see a lawyer. After Canada last Friday formally moved Meng’s case toward extradition proceedings, China responded swiftly, accusing Kovrig on Monday of spying and alleging that Spavor supplied him with intelligence.

Black Jails

In China, Kovrig, a Canadian diplomat on leave from the foreign service, was working for a Brussels-based nonprofit research group, while Spavor was a North Korea travel guide based in the Chinese border town of Dandong. They were whisked away by China’s state security to extrajudicial detention centers known as "black jails."

Kovrig and Spavor are being held in isolation, questioned multiple times a day in cells where the lights can’t be turned off, according to a person familiar with the situation. Kovrig has also been questioned on his activities as a diplomat. Canadian officials believe that’s a violation of the Vienna Convention -- to which China is a signatory -- conferring ongoing immunity for that period in his life.

China’s Central Political and Legal Affairs Commission announced Monday that Kovrig had “severely” violated Chinese law by spying and stealing state secrets while working for the International Crisis Group and said that Spavor was his primary contact. Also in January, a Chinese court changed the punishment for a third Canadian, Robert Schellenberg, from a prison term to a death sentence in a drug case in a one-day trial at a Chinese court.

--With assistance from Josh Wingrove and Peter Martin.

To contact the reporters on this story: Krista Gmelich in New York at kgmelich1@bloomberg.net;Natalie Obiko Pearson in Vancouver at npearson7@bloomberg.net;Patricia Hurtado in Federal Court in Manhattan at pathurtado@bloomberg.net

To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net, Peter Blumberg, Elizabeth Wollman

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.