What should I do when a predatory conference will not listen to us and the journal might retract our paper?
The key statement in the above may be "Mr. C have powerful connections in government". That is an issue that may be impossible to overcome. If there is an ethics process in your profession generally, you can bring things to their attention. You can bring it to the attention of the conference committees and journal editors. Unfortunately you may be fighting powers that you can't overcome. 

Given sufficient power and influence, yes, they can do whatever they want - ethical or not. If you can shine enough light on it you might get some satisfaction and it may come back to haunt Mr. C in the future, but making powerful enemies in some places isn't necessarily wise (or even healthy). Proceed cautiously. If you can build allies, it may help.