In China, corruption is hot topic at party congress

BEIJING — A mid-level public security official earning $19,000 a year acquires 21 houses, valued at more than $6 million. The former railroad minister is alleged to have accumulated $250 million in bribes, which he reportedly hoped to use to buy his way into the Politburo. Families of Politburo members are revealed to have fortunes in the hundreds of millions.

Corruption is very much the hot topic at the 18th Communist Party congress underway in Beijing. Once too sensitive to be discussed in public, graft is now the subject of grandiloquent editorials in state-owned media. President Hu Jintao, in his opening address to the congress Thursday, said it could “even cause the collapse of the party and the fall of the state.”

Pressure is on to adopt American-style “sunshine laws” requiring public disclosure of officials’ income and assets. At one session of the congress, Yu Zhengsheng, the Shanghai party chief, voiced support for public disclosure.

“When a complete and easy-to-supervise system is established, it will be the most efficient way to keep our family members and people around us in check,” said Yu.

Under China’s legal system, new officials are supposed to file statements to party disciplinary authorities detailing their outside income and assets. They are also required to state whether any family members have foreign passports or have moved overseas, a common strategy for sending ill-gotten gains abroad.

But out of 40 million officials, only about 3 million file and those reports are seldom scrutinized, said Lin Zhe, the top corruption expert at the Central Party School, where future officials are trained.

“The public should know how much the president of China is making, all the members of the Politburo, their families and children too,” said Lin, who carries her papers in a canvas tote, a conscious rejection of the Louis Vuitton bags so much in vogue among rich Chinese. “The reports get filed and put in a safe and nobody checks them.”

As China modernizes, tolerance of corruption has clearly diminished.

When Lin began writing about the topic in the 1990s, she had difficulty getting her books published in China. At this point, however, she is one of the party school’s most frequently quoted professors. A Pew Research Center poll last month rated corruption as a sharply rising public concern in China.

People used to simply roll their eyes and crack jokes, assuming that corrupt officials were an integral part of the official political culture. Nowadays, though, members of the public are increasingly taking matters into their own hands. Anti-corruption activists troll the Internet looking for photographs of officials that they then blow up for close-ups of wristwatches.

Yang Dacai, the head of the Shaanxi province Bureau of Work Safety, was outed in September by online vigilantes known as the “human flesh search engine.” They found 11 watches and various accessories worth more than $100,000. Cai Bin, a municipal inspection official in Guangzhou who gained the moniker “Uncle House,” was found to have 21 properties registered in the names of various family members, although he had reported only two.

“This is a very common problem with a one-party political system. Even a village chief can become very rich, and the higher your ranking the more money you can make,” said Zhang Lifan, a prominent Communist Party historian in Beijing.

A recent spate of exposes has uncovered incredible wealth in the upper echelons.

Relatives of Politburo Standing Committee members, the top ruling body, appear to have substantial interests in the oil, telecommunications, tobacco and utilities sectors. A WikiLeaks cable released in 2010 quoted a source as telling the U.S. Embassy in Beijing that “China’s top leadership had carved up China’s economic ‘pie,’ creating an ossified system in which ‘vested interests’ drove decision-making and impeded reform as leaders maneuvered to ensure that those interests were not threatened.”

The family of Premier Wen Jiabao, who is reputed to be the most reform-minded in the upper echelons, was reported by the New York Times last month to be worth $2.7 billion, with his mother holding a stake in an insurance company and his wife in precious gems, and his U.S.-educated son running a major private equity firm.

Wen’s supporters believe that although he is due to retire next year, he will push for greater disclosure of assets.

“He wants to rescue himself from scandal by showing there are others that have more money than he does,” said Watson Meng, the editor of Boxun, a U.S.-based website that follows Chinese political news.

Vice President Xi Jinping, who is on tap to replace Hu Jintao, is known to have instructed senior Communist Party officials that their relatives should not do business in their jurisdictions, a party regulation in place since 1997 but widely ignored.

“Rein in your spouses, children, relatives, friends and staff, and vow not to use power for personal gain,” he famously said in a 2004 anti-graft lecture. Yet his sisters and brothers-in-law were reported by Bloomberg this year to hold huge interests in China’s real estate, minerals and telecommunications sectors.

Nowadays, corruption doesn’t necessarily come in the form of hongbao, the red envelopes in which Chinese traditionally passed cash, but through a culture of self-dealing and cronyism. Weak regulations governing public bidding and conflicts of interest make it easy for officials and their families to parlay their guanxi, or connections, into wealth.

In the case of Bo Xilai, an ex-Politburo member whose wife was recently convicted of poisoning an English businessman, it is alleged that the wife, lawyer Gu Kailai, made millions representing real estate developers in Dalian at a time her husband was mayor. Gu’s sister, meanwhile, runs a printing company that has $100 million in exclusive contracts to print Chinese government documents.

Although national regulations lag behind, some municipalities have begun requiring full disclosure from officials. A district in the city of Xuzhou, in Jiangsu province, won praise in the state media this year because of a pilot project in which 600 top cadres submitted online statements of their holdings.

“It won’t happen overnight, but gradually around the country we are moving to a system of more transparency,” said Wang Yukai, a professor at the National School of Administration and a leading advocate of public disclosure.

In May, the Beijing Daily, the party mouthpiece that has frequently lashed out at U.S. Ambassador Gary Locke, challenged him to disclose his personal assets. But the tactic backfired; the U.S. Embassy published the information (ambassadors make $170,000 per year), which was already a public record in the United States. Tens of thousands of Chinese Web users wrote that if Locke did it, so should Beijing’s top officials.

They have not yet replied.

barbara.demick@latimes.com

Nicole Liu and Tommy Yang of The Times’ Beijing bureau contributed to this report.