Below is an article entitled: “Ticket scalping: A U.S. open market on the Chinese black market” by John Canzano, Oregonian columnist

Wednesday August 13, 2008, 12:11 AM

“BEIJING - The man tells me to hop on the subway, ride past the stop for the Forbidden City - get off at the Dongdan Station - then look for eight towering, shiny windowed buildings that make up the Oriental Plaza.

"Find building E2," he says.

I'm to ride the elevator to the 19th floor, and make certain I'm not followed, and when I arrive at the receptionist's desk, I'm to ask for "RC and Associates."

Who's RC?

Who knows?

Hey, you want Olympic tickets don't you?

So welcome to the black market, real-life capitalism in a country that outlaws scalping or the resale of tickets for above face value. Also, welcome to the operating offices of a ticket seller that is facing trouble at home, and, if discovered, trouble here.

Beijing authorities arrested more than 400 people in the last week in a ticket sales crackdown, but there's money to be made, so tickets are changing hands all over this city. And you should know that when I walk into the back-room offices, what I see shocks me. It is this:

Americans.

Lots of them.

Three of them are on the telephones, buying and selling tickets. Another is on the Internet, scanning ticket-auction sites. Another is passing out Subway sandwiches and cans of soda to those working.

There are American employees handing off envelopes to Chinese couriers, and others dealing with a steady flow of customers picking up tickets. And in one office, there are mountains of $100 bills on a table, and a man is feeding them into a counting machine that rips through them, "PFFFFFFFFFFFFTTT," making Chairman Mao's face on the bills blur past.

You need tickets?

On the carpeted floor of another office, there are a half dozen stacks of the unmistakable orange tickets sitting out in the open, on the floor. Some of the stacks as tall as a foot high and the Olympic security holograms twinkle under the fluorescent office lights.

Across the hall, a clean-cut 30-something man named Jeremiah Kraft, who says he is the manager of the operation, is sitting behind a desk, hammering numbers into a calculator. He's meeting with two local office clerks, a husband and a wife, who rode the subway here trying to sell a pair of tickets to the sold-out Rhythmic Gymnastics final.

They bought the tickets less than $20 each months ago, and want $1,000 now.

"I can't go higher than [$750] each," Kraft said. "OK. I gotta go."

The couple left without selling.

The operation in tower E2 is run by an Austin, Texas-based company called TicketCity. It is an Internet reseller, operating mostly in the United States. And it's among the few agencies working undercover in Beijing.

By the way, if you get online at any of a half-dozen other outfits offering Olympic tickets for sale, there's a good chance you'll still end up here on the 19th floor, picking up your tickets. Those businesses collect a handling fee, then sell the order to TicketCity.

"People are so in the dark about how it works," an employee said.

The law has turned the spotlight on TicketCity back home, though.

The Texas Attorney General's office is suing TicketCity under the state's Deceptive Trade Practices Act, alleging the company sold opening ceremony tickets it didn't possess, and then, failed to deliver them. The company, by the way, says it is "vigorously defending itself" against the claim.

Also, the U.S. Olympic Committee and the International Olympic Committee both said TicketCity is not an authorized Olympic-ticket reseller and anyone who sells a ticket above face value is operating outside the law in Beijing.

Which probably explains why Kraft said, "We'd like to fly under the radar right now." And why the employees here act suspicious and antsy - as if they're expecting a police raid - any time someone new walks into the room. Also, it's why they're going by "RC and Associates," which is one of a few for-profit corporate names TicketCity registered with the Texas Secretary of State's office in the last 15 years.

The operation feels lucrative, and ambitious, but also flimsy- as if everything could be gone in 15 minutes, leaving nothing behind but sandwich wrappers, the desks and the bowl of mints sitting at the reception desk.

The Games organizers sort of caused some of this, yes?

They've unknowingly made TicketCity a short-term fortune by controlling the initial distribution of tickets, making it difficult for foreigners to come to China and steering a disproportionate number of tickets into the hands of locals. So people feel far safer selling to an American company in a tall, beautiful building than to a stranger on the street, who could be an undercover police officer.

The company operating in building E2 has obtained such a large market share of the tickets available that it's now steering prices, even as it's facing legal problems back home.

On ticketcity.com Wednesday afternoon in Beijing, beach volleyball tickets were priced at $280 each, men's basketball tickets at $210 each. And while they're unable to sell opening and closing ceremony tickets, a pair of tickets for today's morning swim session at the Water Cube was priced at $19,998.

You can find Olympic tickets for sale from private parties allover the Internet. But you can also get burned. Or arrested. And thieves and cons know that people breaking the law to obtain tickets aren't likely to contact the authorities if they get duped.

Ironic, isn't it?

What we have here is a Communist government that has helped foster a bit of pure American capitalism, and an old-fashioned black market. The 10 employees on the 19th floor could be arrested today. But if all goes well, the employees of TicketCity tell you they'll rake in "a big score," in Beijing, and then board flights to the United States that will take them out of here a few days before the closing ceremony.

Until then, they're answering phones, counting money and hoping that noise down the hall isn't the authorities.

I've never seen sandwiches eaten with such angst.”