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Nepotism and Insider Knowledge Dog Shanghai Corruption Battle
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Last Friday, a Shanghai Securities News report depicted the investigation of Chen Shijie, a former Party chief of the municipal construction committee, who faces accusation of nepotism after abusing his position to help his son make illicit profits from construction projects. 

Chen's indictment followed that of Yin Guoyuan, former deputy director of the Shanghai housing, land and resources administrative bureau, who endured the same fate last month.
Their twin collapse blew the roof off a warren of connections between former government officials who entered real estate development after leaving public service, Takungpao observed in its comment page on Tuesday.

The article pointed the finger at officials who followed Chen's path, in becoming the president of Shanghai Real Estate Industry Association after his retirement as Party chief of the municipal construction committee.

This phenomenon, known as a "revolving door" factor among public administration ethics experts, concerns the transfer of experienced public sector executives towards the private sector or vice versa. 

These officials used insider knowledge to assist developers in avoiding cumbersome administrative procedures when obtaining planning permission, while taking a cut of any profits made from these deals. 

To every public servant seeking private employment, his administrative power should have a period of validity. In these jobs, they should obey rules as expected while ensuring their duties are carried out in a legal manner under public supervision. Once they have left government posts, they should wholly detach themselves from any position where their former contacts could benefit from their experience.

Land corruption in Shanghai has sounded the alarm on the abuses of power and this will hopefully enable the dismantling of the "revolving door" phenomenon.

Foreign countries have set up mechanisms to restrict former officials from using the "revolving door" to their advantage. For example, the United States passed the Ethics in Government Act (1978) following President Nixon's resignation during the Watergate scandal. It indicates that former government officials could not act as private sector lobbyists on any issues related to their former careers. Punishment is harsh with sentences ranging from one year to life sentences depending on the position involved and the seriousness of the solicitations.

However, China has no such options. Land administration officials are widely courted by developers for their business contacts, some even taking in six-figure salaries for providing aid. Chen Shijie, Yin Guoyuan and others are prime targets for developers seeking to corner a larger share of the market. 

(China.org.cn by Li Shen, April 19, 2007)

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