--- SEARCH ---
Learning Chinese
Learn to Cook Chinese Dishes
Exchange Rates
Hotel Service
China Calendar

Hot Links
China Development Gateway
Chinese Embassies

Corrupt Banker Extradited from US

On April 16, a man with close-cropped hair and wearing casual clothes disembarked from an airliner that had just arrived in Beijing from the United States. He looked calm, almost smiling.

Looks can be deceiving, however, and there was certainly nothing serene about this scene.

Waiting for the man was a throng of law enforcement agents, all dressed in dark uniforms and packing pistols and beepers. And none of them was smiling.

They promptly clamped a pair of handcuffs on the man's wrists and whisked him away.

It might have looked like an outtake from a cinematic crime drama, but this one was guaranteed to send shivers down the spines of Chinese officials who have pilfered public funds and vanished overseas. The man was Yu Zhendong, former president of a Bank of China branch in Kaiping, Guangdong Province, and he is accused of collaborating with a couple of former colleagues to steal US$483 million.

Yu's extradition was such a major triumph in the Chinese government's campaign against official corruption that pundits pontificated for weeks afterward on the meaning of the move as well as all the behind-the-scenes legal wrangling between China and the US that preceded it.

Crime and punishment

Those who have pillaged public coffers might now think twice before fleeing to the US with their families. But experts seem to agree that one incident of expulsion will not be deterrent enough to stop them from trying.

The crackdown on corrupt officials has been escalating. Those who used to be off-limit-or at least seemed to be so, such as provincial-level officials-are increasingly becoming fair game. According to media reports, over the past decade some 16 or17 provincial leaders would "fall from the horse" each year. Last year, the number rose above 20, which experts interpret as an indication of increased government vigilance.

The penalties have also become harsher, reveals Li Yongzhong, an eminent anti-corruption scholar. Of the 13 cases made public last year, one received the death penalty, two were given reprieves from death sentences, two were sentenced to life in prison and two others received prison terms of longer than 10 years.

Li, director of the research office with the Chinese Communist Party's Central Commission for Discipline Inspection, compares two sets of figures to show that rampant corruption is being tackled with more aggressive countermeasures.

From 1992 to 1997, 669,000 Communist Party members were disciplined and 121,500 were expelled. Among them, 20,295 were county-level officials, 1,673 bureau-level and 78 provincial-level. From 1998 to 2002, there were 846,000 disciplined and 137,700 expelled, of which 28,996 were county-level, 2,422 bureau-level and 98 provincial-level. The figures indicate rate increases of 13 to 44 percent, depending on the parameter examined.

In an online discussion, Li was asked why the wave of corruption has not plummeted with the harsher punishments. Instead, it seems to be swelling into a tidal wave.

That perception is misleading, Li responded. The surge in cases reflects more criminal activities being uncovered rather than ineffectiveness of the anti-corruption policies. "The fact that those officials would flee demonstrates that the Communist Party and the Chinese authorities do not tolerate corruption. Of course, it also shows the system has major loopholes."

An ongoing survey by the CPC Central Commission for Discipline Inspection shows that in 2003, 51 percent of the public was "satisfied" with the government's fight against corruption. In 1996, the satisfaction rate was only 32.8 percent. "This time the thunder is loud, but the raindrops are also falling hard," explains Li, rephrasing the old analogy for half-hearted policies or poor implementation.

Li, who is also director of the China Supervision Society, lists six methods of "primitive accumulation" by officials, which refers to amassing wealth through illegal means: (1) the issuing of permits for land use; (2) authorizing loans; (3) authorizing tax reductions; (4) manipulating the stock market; (5) turning a blind eye to smuggling or even participating in it; and (6) subcontracting major infrastructure projects.

Li says in some places it has become routine for a corrupt official first to send his or her spouse and child abroad, followed by a massive outflow of illegal money. Finally, when everything is ready or when there is a whiff of investigation, the official orchestrates a stunning disappearing act and joins the family. Some even gamble away much of their ill-gotten gains in Las Vegas.

Moreover, financial mechanisms are being cleverly employed in the trading of power for money. One is "options," by which an official grants benefits to someone who will return the favor down the road-principal plus interest. No cash transactions take place, so there is no trace of foul play. Another method is "transfer," whereby official benefits are exchanged for goodwill accorded to family members rather than to the official. The third method is "whitewashing," or money laundering in the broad sense, by channeling illegal wealth into legal or "not outrageously illegal" operations.

Li Yongzhong divides China's anti-corruption approaches since 1949 into three categories. The first phase was movement-based, when top leaders launched campaigns and galvanized the whole nation in one specific direction. The second phase, starting with the economic reform and opening policy, was power-based, when the attention of individual leaders was focused on this area. Now, says Li, the fight against corruption has become system-based. Without a system-based mechanism, policies can only have limited impact.

That's because corruption is not individual-based.

Li Tiecheng, Party secretary of Jingyu County, Jilin Province, took "gifts" in the amount of 440,000 yuan (US$53,000), about 2.3 percent of that county's total financial revenue. In his confession, he wrote, "The money was not for me, but for the position I happened to be in."

"There is an element of certainty in it when power is unsupervised and unchecked," says Li Yongzhong. The way an official first gets corrupted can be a "coincidence," such as a chance encounter or an innocuous gift. But once that opening is made in his mental barrier, it's downhill all the way, says Li. "It's a road of no return. Nothing can stop him."

Li feels the mainland should not copy Hong Kong's ICAC (Independent Commission Against Corruption) model, but create something that can prevent corruption from happening.

"The real victory would be a system that can deter such behavior," he says. However, as China is in the process of transforming itself from a planned economy to a market economy, there are plenty of loopholes in the system that enable people in the know to take advantage.

"That's a price we have to pay. Right now, the price of being corrupt is too low, while that of exposing it is too high," Li says.

One story that showcases the high cost of fighting official corruption is Guo Guangyun, whose perseverance in uncovering the misdeeds of provincial leader Cheng Weigao led to his own imprisonment. Even though he was eventually vindicated when Cheng was stripped of power, Guo, the anti-corruption hero, is now in ill health, the tragic result of eight years of abuse in the hands of the powerful and corrupt.

Li Yongzhong, while lamenting the suffering that preceded Guo's triumph, highlights the symbolic meaning: the central government has made a point of mentioning Guo's name in its report on the Cheng case.

"This is unprecedented and shows how serious the government is in fighting corruption," he says.

Li explains that China's power structure is in the shape of a pyramid. Officials are appointed by those who are one level above them. "This system, which was borrowed from the Soviet model, can reduce the sense of accountability that an official feels toward the public."

It is not feasible to expect equals or subordinates to supervise someone who can well determine their fate. Local courts and discipline committees sometimes tend to detach themselves from cases that involve officials in their own jurisdiction.

Right now, teams of inspectors are dispatched every year from the central government to local levels. The good thing is, these people are outsiders who do not fall under the halo of power of those under investigation. The bad thing is, they are often made up of people from various organizations who are on temporary missions and may treat their assignment as a mere formality.

In Li Yongzhong's opinion, this is an interim solution with high input but low output. The long-term answer, he emphasizes, is further implementation of "intra-Party democracy"-the pillar that can support power balance-and the structure of supervision.

As for Yu Zhendong, the Guangdong banker accused of stealing hundreds of millions of dollars, he admits that, "Once you get the ball of corruption rolling, it's beyond your control." He regrets what he did and wants to cooperate with law enforcement agencies in their investigation.

"I want to give myself a chance, and want them to give me a chance," Yu said.

(China Daily June 3, 2004)

The Twisted Road of Corruption
Party Official Calls for Clampdown on Corruption
Six Ministerial Officials Punished for Corruption in 2003
Bad Officials to Take Blame & Resign
Institutional Innovation Vital to Fighting Against Corruption
Party Watchdog Vows to Fight Corruption
Top 10 Corrupt Officials of 2003
Print This Page
Email This Page
About Us SiteMap Feedback
Copyright © China Internet Information Center. All Rights Reserved
E-mail: webmaster@china.org.cn Tel: 86-10-68326688