Former U.S. military pilot arrested in Australia had worked for South African flying school

By Kirsty Needham

SYDNEY (Reuters) - A South African flight school under scrutiny by authorities in Britain for recruiting British ex-military pilots to train Chinese military fliers says a former U.S. Marine arrested in Australia last month was a former contractor for the school.

The Test Flying Academy of South Africa (TFASA) also told Reuters it had a previous business relationship with a Chinese businessman, Su Bin, who was jailed in the United States in 2016 for conspiring to hack U.S. defence contractors' computers.

Su Bin organised for Chinese Peoples Liberation Army pilots to come to South Africa to do TFASA training courses between 2009 and 2013, an aviation source told Reuters. The school said it has had no contact with Su Bin since 2013.

Former U.S. Marines pilot and Australian citizen Daniel Edmund Duggan was arrested in New South Wales at the request of the U.S. government in the same week Britain announced a crackdown on former military pilots working for intermediaries, including TFASA.

There is an arrest warrant for Duggan in the United States, but it and the charges he faces are sealed. Duggan, who faces possible extradition to the United States, denies breaching any law there or in Australia, his lawyer has said.

"Mr Duggan undertook one contract for TFASA in South Africa over 10 years ago, since when the company has not had any contact with him," TFASA told Reuters. Duggan trained Chinese pilots for TFASA, an aviation source told Reuters.

Duggan's lawyer, Dennis Miralis of Nyman, Gibson and Miralis, did not immediately respond to a request for comment about his client's work for TFASA.

Reuters had reported that Duggan moved from Australia to China in 2014 to work as an aviation consultant, and had listed the same Beijing address as Su Bin. Su Bin was arrested in Canada in July 2014 and sentenced to prison in the United States two years later after pleading guilty in a high-profile hacking case involving the theft of U.S. military aircraft designs by the Chinese military between 2009 and 2014, court records related to sentencing in the case show.

Marketing materials for TFASA list Su Bin's company, Lode Technologies, as one of the Chinese businesses it works with in China for "flight test execution and consultation, flight test training and certification". "Mr Su Bin facilitated a small number of TFASA training courses in South Africa around ten years ago but the company has had no contact whatsoever with him since 2013," the company's spokesman said in a written response to Reuters questions.

The British government said last month it was taking steps to stop former military pilots from training the Chinese armed forces.

The proposed measures include changing the law to make it an offence for a pilot to continue training a foreign military after being warned by British intelligence agencies to stop, following reports by Sky News and the BBC that the South African flight school was among the intermediaries recruiting British pilots to train China’s People’s Liberation Army.

"We are aware of Chinese recruitment schemes headhunting serving and former UK Armed Forces fast jet pilots to train People’s Liberation Army personnel in the People’s Republic of China (PRC). This could lead to UK national security being compromised so we are taking decisive steps to halt this activity," Britain’s Ministry of Defence told Reuters in a statement.

"All serving and former personnel are already subject to the Official Secrets Act, but we are reviewing the use of confidentiality contracts and non-disclosure agreements, while the National Security Bill will create additional tools to tackle contemporary security challenges – including this one.”

China’s foreign ministry said it was unaware of the situation when asked by Reuters to comment on Su Bin’s work for the South African pilot school and the British government’s moves to stop its pilots training the Chinese military.

South Africa’s defence ministry did not respond to a request for comment about Su Bin’s work for the South African flight school. The U.S. Department of Justice declined to comment.

TFASA responded to the British crackdown on former military pilots training Chinese pilots in a statement on its website, saying all of its activities were legal.

In the website statement, TFASA confirmed that it had Chinese clients and that many of its employees were ex-military, but said it had “never actively recruited tutors directly from individuals serving in the Armed Forces of any NATO country.”

Many of its pilots were already working in the private sector, it said. Australia said on Wednesday its intelligence agencies and federal police are "investigating a number of cases" of former military pilots being approached to work in China in military-related training. It was also reviewing rules that prohibit former defence personnel from divulging state secrets or official information.

Robert Anello, the lawyer who represented Su Bin in the 2014 hacking case, did not respond to a request for comment and Su Bin could not be reached for comment.

(Reporting by Kirsty Needham in Sydney; additional reporting by Michael Martina in Washington; Wendell Roelf in Cape Town; Elizabeth Piper in London; and Beijing newsroom. Editing by Gerry Doyle)