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When the Dalai Lama announced plans to visit Toronto last year, China's consul-general wasn't happy. "It has come to my attention that . . . the Economic Development Committee of the City of Toronto has been rendering assistance to Dalai's visit," Chen Xiaoling wrote to all 44 city councillors, including Mayor David Miller.

Calling the Dalai Lama "the biggest serf owner in old Tibet," Ms. Chen warned that economic and cultural co-operation between China and Toronto was at stake. "That is why I write to you, in the hope that the City of Toronto continues to respect China's sovereignty over Tibet . . . by not allowing and facilitating Dalai's visit to Toronto, not declaring the so-called 'Tibet Week,' not having any official contacts with Dalai."

Ms. Chen is on a two-month vacation and wasn't available for comment.

Zhang Hua, a Chinese consulate spokesman, said, "The consulate . . . has never and will never participate in or interfere with Canada's affairs."

But interviews with politicians, community activists and documents obtained by The Globe and Mail show that the Toronto consulate and its friends have repeatedly tried to influence political decisions at the federal, provincial and municipal levels that conflict with the interests of China's Communist regime.

The stakes are high. With the Beijing Summer Olympics just three years away, the regime is hyper-sensitive about its image. And with China now Canada's third-largest trading partner, Torontonians have an interest in maintaining good relations -- they could provide an entrée into the world's fastest-growing economy.

"They always hold that over you. It's the big stick," said Michael Walker, city councillor for St. Paul's. "They've written letters, put pressure on us suggesting that we might jeopardize business deals." Among those he has heard mentioned are the sale of Candu reactors (failed), a Bombardier rail link to Tibet (successful) and a two-panda loan for the Metro Toronto Zoo (in negotiation).

Last January, Mr. Walker and other councillors received yet another letter from the consulate, this time advising them to boycott a Chinese New Year's party in Toronto. "You may have received an invitation to the gala or have been asked to send a letter of congratulation to this event," it said. "We hope you will handle this invitation with great caution."

The host organization, a Toronto television station called New Tang Dynasty, is linked to the spiritual-exercise group Falun Gong. Also known as Falun Dafa, it stunned Chinese authorities in 1999 when 10,000 adherents staged a sit-in outside Communist Party headquarters in Beijing.

China has since outlawed the group and now arrests devotees, often sentencing them without trial to years in a labour camp.

But on the sidewalk outside the Chinese consulate on St. George Street, adherents protest daily and with impunity. Last year, Joel Chipkar, a spokesman, successfully sued a deputy consul-general for defamation for calling him a member of a "sinister cult." After the diplomat ignored an Ontario Superior Court order to pay $1,000 in damages and $10,000 in legal costs, the court ordered the Bank of China in Toronto to freeze his account and garnishee the money. The Chinese government-owned bank also ignored the court order. The diplomat returned unimpeded to China.

Mr. Walker, who considers the meditation group a "lifestyle" choice, discovered how sensitive the consulate is about Falun Gong in 2001 when he first proposed a day in its honour. The consulate wrote to every city councillor. Echoing its own policy in China, it also asked them to ban the group from "government venues" such as Nathan Phillips Square.

"Most of us will be friendly with China," Mr. Walker said. "It's such a big economy. But it can't abuse that power. When they interfere in our internal affairs, that's where I draw the line."

Last year, the consulate again wrote city councillors, spelling out exactly why they should vote down a Falun Gong week. "If passed, the motion will have a very negative effect on our future beneficial exchanges and co-operation," it warned.

Reynald Doiron, chief spokesman for the Department of Foreign Affairs in Ottawa, said he was not aware of the consulate's activities. He noted that Chinese diplomats in Canada are allowed to explain their government's position on various matters.

"But threatening retaliatory measures is somewhat off the mark," Mr. Doiron said. "What construes acceptable behaviour or meddling in local affairs has to be determined by the protocol section."

Socializing is part of a diplomat's job, of course. Local politicians say admiringly that Ms. Chen is particularly energetic, often inviting them to lunch and dinner. But she also goes as far as to suggest that they vote certain ways, or face consequences.

Ms. Chen has personally lobbied the mayor on the issue of a Falun Gong day, according to a spokesman for Mr. Miller. Councillor Adam Giambrone (Davenport), who has met Ms. Chen several times, thinks that she and other consulate officials raised the issue over lunch. "They expressed their opinion about not wishing this to go forward."

Honorary days or weeks are normally innocuous. Last year's selections included Gingivitis Week and School Crossing Guard Appreciation Day. Tibet Week, however, never got off the ground. And each year a majority of city councillors vote down a resolution to commemorate Falun Gong. Sometimes they even vote down the chance to debate the issue.

Norm Kelly (Scarborough-Agincourt) and Giorgio Mammoliti (York West) have lunched with Ms. Chen. And they are among those who defeat the measure each year.

Mr. Kelly, who hosted a backyard BBQ to welcome Ms. Chen when she first arrived, said he voted against a Falun Gong day because it was beyond the "city's realm."

Mr. Mammoliti, a previous chair of the Toronto Zoo, also votes against Falun Gong days. The zoo has been trying to bring two pandas here, and Mr. Mammoliti said Ms. Chen has played a key role in the ongoing negotiations. "She was very instrumental in helping us get meetings in China with the right people."

Raymond Cho (Scarborough-Rouge River), who is the zoo's current chairman, said he declares a conflict of interest and abstains from voting on a Falun Gong day . "If I support Falun Gong, I don't think the Chinese government would appreciate that," Mr. Cho said.

Last month, Mr. Walker -- who has never lunched with Ms. Chen -- made a motion asking the federal government to investigate allegations by defectors that China has 1,000 spies in Canada. The next day, Mr. Mammoliti said he couldn't recall the motion or how he voted. When pressed, he said, "I probably voted against it." Asked why, he said: "I haven't seen any spies in the city of Toronto."

Tony Wong (MPP-Markham) has also experienced the attention of the consulate. An outspoken critic of China after the 1989 Tiananmen massacre, he was ignored by the consulate when he first ran in 1994 for a council seat in Markham.

He lost that election, but ran again in 1997 and won. "That's when they invited me to the [Chinese]National Day celebration in Toronto," Mr. Wong said. His staff confirms that relations warmed as he kept winning re-election.

After Mr. Wong became the only Chinese Canadian elected at the provincial level, the consul-general invited him and his wife for a 10-course banquet prepared at her $3-million residence on the Bridle Path. "They were probably happy I condemned Falun Gong," said Mr. Wong, 56. "They talked to me about how difficult it is to deal with Falun Gong outside of China because Falun Gong is able to get the sympathy and support of politicians here who don't understand its true nature."

Ms. Chen isn't the only one in Toronto concerned about furthering the interests of the Chinese government. The most prominent of the consulate's friends are Hughes Eng and Ping Tan, two Chinese-Canadian community leaders widely perceived as Chinatown's go-to guys. Asked about his relationship with the consulate, Mr. Eng replied: "We seem to be working fine with them."

Take the campaign to squelch a Falun Gong day. After the consulate wrote to city councillors, Mr. Eng sent similar letters to them, in his capacity as chairman of the Confederation of Toronto Chinese Canadian Organizations.

Mr. Eng and Mr. Tan, a Malaysian-born lawyer who sits on the board of the Bank of China, do not deny their close ties to the consulate, their backing of certain candidates and their own China-friendly stance. Indeed, the two men routinely echo official government views. In 1989, when the Chinese army shot their way into Tiananmen Square, they backed the government. "The students went too far," said Mr. Eng, 77.

Two years ago, he organized a Tibet exhibit that critics decried as Chinese government propaganda. "Most photos showed how happy the local folks are," conceded Mr. Eng, often called the "grandfather" of the Chinese community.

Mr. Tan, 61, fired a Falun Gong devotee at Bond International College, a private school he owns in Toronto that has contracts to train Chinese government officials and teachers. He said she was practising breathing exercises during office hours. The case is now before the Ontario Human Rights Commission.

The modus operandi for both the consulate and its friends includes banquets, connections to Ottawa, face-time with mainland officials and VIP trips to China. Last January, Mr. Tan travelled to China with Prime Minister Paul Martin. Post-SARS, Mr. Eng doled out some of the $200,000 the federal government gave to revitalize Chinatown and co-signed cheques.

Mr. Tan and Mr. Eng have also organized numerous banquets here in honour of Chinese officials, including former president Jiang Zemin and former premiers Li Peng and Zhu Rongji. "It's an occasion for networking," Mr. Tan said. "Sometimes we help both sides by telling them who is important and who can help them."

With 500,000 ethnic Chinese in greater Toronto, Mr. Eng and Mr. Tan are starting to tap China-friendly candidates. In 2003, they fundraised for Thomas Qu, a slight, scholarly looking engineer who is the first person from mainland China to run in Ontario for elected office. Mr. Qu (pronounced choo) also happens to be a vice-president of the Federation of Toronto Chinese Canadian Organizations, the same group that sent letters to the mayor and city councillors warning it would be "a serious political error" to vote for a Falun Gong day.

"We like to encourage new young immigrants from mainland China," Mr. Tan said.

Although Mr. Qu lost his race for a city council seat in Markham, Beijing noticed him. Last March, it granted him observer status at the annual two-week session in Beijing of the advisory Chinese People's Political Consultative Conference, apparently the first Canadian citizen to be thus honoured.

Told that some describe him as "the first Chinese-consulate candidate," Mr. Qu scoffed. "You can't say that," he said. "But they'd probably be happy to see me running."

Both Mr. Eng and Mr. Tan said the consulate is always happy when Chinese-Canadian candidates run for office. "Unless you're really against them," Mr. Eng said. "But it's very low-key. Honestly, they don't tell me who they prefer."

Personally, Mr. Eng didn't prefer Olivia Chow, the city councillor for Trinity-Spadina, who ran as an NDP candidate for Parliament last year. She denounced China after Tiananmen Square and for 15 years attended the annual memorial march.

Still, Ms. Chen tried to mend relations, inviting Ms. Chow to lunch. "She really tried to be a 'friend,' " Ms. Chow said, using her fingers as quotation marks.

But Ms. Chow didn't denounce Falun Gong. And then she persuaded Mr. Miller to attend an exhibit on the 1989 Tiananmen massacre. "The Chinese consul was really upset," she recalled.

Soon after, Mr. Eng, a long-time Liberal, held a press conference endorsing Tony Ianno, the Liberal incumbent. Mr. Eng has endorsed Mr. Ianno before, but this time he said he arranged for an unusually high number of volunteers, 200 to 300, many from mainland China. They canvassed Chinatown and blitzed old-age homes, telling elderly voters who couldn't read English how many lines to count down to reach Mr. Ianno's name on the ballot.

"They had mainland people all over the polls on election day," said Ms. Chow, who is married to federal NDP Leader Jack Layton.

Mr. Ianno, who won by about 800 votes, disputed the number of volunteers Mr. Eng provided. But he said he usually counts only those who signed up in his office. Asked about his stance on Falun Gong and his relations with the consul-general, Mr. Ianno said he has never denounced the group. He has also declined a lunch invitation from Ms. Chen.

"I don't deal with issues not related to Canada," he said flatly. "I don't get involved."

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