Shen Yun and a network of satellite organisations added more wealth by skirting rules to tap tens of millions of dollars in COVID-19 pandemic-era relief money.
And three former Shen Yun performers told the Times that they were used to ferry large amounts of cash into the US, a possible attempt to circumvent laws about reporting US currency transactions.
Keeping costs down
Shen Yun has kept its own costs down by wringing countless volunteer hours, and sometimes personal savings, from followers of Li, who has suggested he created the universe and instructed believers that Shen Yun performances can save people from a coming apocalypse by exposing them to his teachings.
Eager to heed Li, the followers have borne most of the financial burden for staging hundreds of Shen Yun shows around the world, including paying out of their own pockets to book venues, print flyers, buy advertising and sell tickets — even going into debt to cover upfront costs.
“They all think — including me before — we all think it is an important part of the path to godhood,” said Simone Gao, a former practitioner and Falun Gong media personality. “If you devote time, energy and money to this cause, the reward is incomparable to what you get in this world.”
It was not clear why Shen Yun has amassed so much money, or why nearly all of its assets — $US249 million in 2023 — were kept in cash and other liquid instruments.
Shen Yun’s representatives declined to answer questions about its finances. In the past, Li has said large sums of money were needed to battle the Chinese Communist Party, which has banned the movement and repressed its followers since the 1990s.
“For over 25 years, Falun Gong practitioners have struggled to peacefully resist persecution from the largest totalitarian regime on earth, and Shen Yun is a key part of that effort,” a Shen Yun spokesperson, Ying Chen, said in a statement to the Times. “Your attempts to brand Shen Yun as a grand moneymaking scheme are shocking and deeply offensive.”
Li Hongzhi, founder of Falun Gong, in a 1999 interview.Credit: AP
As Shen Yun has amassed wealth, its supporters have purchased real estate for Li’s movement, including Falun Gong’s 400-acre headquarters, known as Dragon Springs, which is about 100 kilometres northwest of New York City.
They have also subsidised the lifestyle of Li, now in his early 70s, and his wife, Li Rui, a top manager in Shen Yun.
One follower gave the movement her life savings before dying of cancer, virtually penniless.
A winning strategy
In recent years, Li and his aides have found yet another way to make money through Shen Yun. They have created companies that market products directly to Falun Gong followers, such as Heavenly Phoenix earrings for $US925 and Shen Yun-branded athleisure clothing. Practitioners have been told they should purchase the most up-to-date Falun Gong clothing for public events, including a reversible blue-and-yellow jacket for $US120.
From the start, Shen Yun has pursued a winning strategy for reaping huge profits: It has gotten other people to shoulder the costs of putting on its shows.
Although the group has a stated mission of reviving traditional Chinese culture while “providing audiences everywhere with an experience of beauty,” it does not routinely pay for the billboards, television ads or flyers depicting Shen Yun’s dancers leaping through the air that are ubiquitous in cities around the world. Nor does it generally cover the costs of venues, ticket sales, or hotels and meals for performers.
That burden has fallen on a network of smaller satellite organisations that Li and his aides have encouraged followers to form around the world.
Known as presenters, the organisations were incorporated as non-profits in the United States, operating in Atlanta, Los Angeles, Philadelphia and other cities.
Shen Yun has reaped huge profits by getting other people to shoulder the costs of putting on its shows.Credit: Anthony Segaert
The non-profits are staffed by practitioners who work as unpaid volunteers and have agreed to “bear the responsibility for all costs incurred” and be liable for losses, claims “and expenses of every kind and description” related to staging Shen Yun shows in their areas, according to a contract reviewed by the Times.
Every year, the groups collectively spend millions of dollars and keep only enough in ticket sales to cover their expenses, sending every penny of profit back to Shen Yun.
If a satellite organisation should spend more money than it earns, it still sends money to Shen Yun — and it falls on the people who run the groups to make up the difference.
Inside the local organisations, practitioners can feel immense pressure to deliver for Li, who has taught that success in selling Shen Yun tickets is an indicator of how devoted they are to his teachings.
He has also urged followers to advertise only in “well-to-do” areas and to set high prices for Falun Gong dance shows.
“Getting things for nothing,” Li said, “wouldn’t conform to this dimension’s principles.”
‘All her money is gone’
For all the time and money that the operators of the satellite organisations provided, some gave much more to the movement — and to Li himself.
In 2006, one of Shen Yun’s first performers began travelling from his home in Maryland to Falun Gong’s headquarters along with his sister, also a performer, and their mother, a devoted practitioner. Soon, they all moved to Dragon Springs, known among followers as the mountain, to focus on dancing.
Shen Yun’s guarded compound in upstate New York. Credit: The New York Times
The man, whom the Times is identifying by his first name, Liang, and his sister eventually left Shen Yun. But their mother remained, working unpaid as a top aide to the Li couple and as a bookkeeper for the dance group.
She left the area only rarely, such as for Liang’s wedding in 2014. That same year, she and her husband sold the house they had owned in Maryland since the 1980s for $US485,000, records show.
Soon after, she began spending money for Shen Yun, her family would later learn. After Li Hongzhi remarked that Shen Yun’s orchestra should use only the best pianos, Liang’s mother arranged for the purchase of $US260,000 in premium models, according to records reviewed by the Times.
Other gifts and donations followed, including thousands of dollars in payments for Wi-Fi hot spots and domain names and monthly payments for the Lis’ mobile phone bills to Verizon, according to the records, Liang’s emails and people familiar with the events.
Li Hongzhi teaches that diligently practising his meditation exercises and reading his texts keeps the body healthy by purging the bad karma that causes illness. So Liang’s mother did not see a doctor when she began losing weight and becoming increasingly haggard around 2018.
By the autumn of 2019, she was 66 years old and down to 32 kilograms. Shocked at her appearance during a video call, her family finally persuaded her to get medical care.
The diagnosis was dire: kidney cancer that had spread through her body, leaving her with small odds of survival and tens of thousands of dollars in expected medical costs. She told Liang and his sister that she would not be able to pay for any of it.
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“My mom revealed that all her money is gone, donated to the mountain,” Liang emailed his friends on October 15, 2019. “Hundreds of thousands of dollars.”
As their mother was slipping away, Liang and his sister got another shock. An employee in the Shen Yun office accidentally mailed them a statement for their mother’s credit card, which showed charges from Saks Fifth Avenue and other shops. They discovered that her accounts had been used to buy tens of thousands of dollars in luxury items, apparently for the Li couple.
They showed thousands more spent on seafood and custom billiard cues — Li Hongzhi is an avid pool player — and assorted charges from high-end brands including Ferragamo and Tiffany. Li Rui appeared to have personally used his mother’s credit card, Liang wrote to his friends in an email.
Within weeks of seeing a doctor, Liang’s mother was dead. Afterwards, a portion of the money was repaid to her family, people familiar with the events said, although the source of the repayment was not clear.
Shen Yun’s spokesperson, Chen, said the Times’ account of these events was “inaccurate and misleading in numerous respects.” She said the details were subject to a confidentiality agreement, which she called “a carefully negotiated resolution of a misunderstanding.”
To track the flow of money into Shen Yun, the Times reviewed more than 15 years’ worth of tax filings for the main non-profit and dozens of its satellite organisations.
Reporters also examined hundreds of pages of internal Shen Yun-related records and communications and interviewed people with knowledge of the organisation’s financial dealings, including some who were directly involved in organising shows.
Shen Yun’s supporters found a new source of income when the pandemic hit in 2020, causing venues to close and putting a strain on the performing arts industry.
They did it in part by exploiting a loophole in a federal pandemic relief program launched to keep struggling arts programs afloat. The program was designed to award no more than $US10 million in grant funding either to any one group or up to five “affiliated” organisations, with rules that were meant to ensure no single entity got a disproportionate share of the aid.
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Shen Yun’s satellite non-profits were all run by ardent followers of Li’s, many of whom had staged Shen Yun shows in their cities and sent money back to the dance group for years. But on paper, none of the groups shared board members or were formally related to Shen Yun or to one another, and so they were allowed to tap the federal well without limitation, the Times found.
In all, at least 25 of the satellite groups applied to the so-called shuttered venue operations grant program and received a combined $US48 million, records show. Shen Yun, despite not performing for most of 2020 and 2021, reported a surge in assets in those years of $US50 million.
Meredith Lynsey Schade, a theatrical producer who worked with other applicants that sometimes struggled to get aid, called Shen Yun’s approach unethical.
“There are so many organisations that went under because they couldn’t pass the threshold,” she said. “Instead, one organisation is hoarding all of this money.”
This article originally appeared in The New York Times.
