China cracks down on stimulus-linked graft

China says thousands of officials punished in crackdown on stimulus-linked corruption

Joe Mcdonald, AP
20 May 2010

BEIJING (AP) — China disclosed widespread corruption Thursday linked to its 4 trillion yuan ($586 billion) stimulus, announcing that thousands of officials have been punished for taking bribes, embezzlement and other abuses.

The announcement confirmed public fears the flood of spending and a stimulus-linked easing of curbs on real estate development would fuel chronic corruption that communist leaders say is the most serious threat to their power.

A total of 3,058 officials including several mayors received penalties ranging up to life in prison for offenses related to the stimulus or to construction projects, said a deputy minister of the Ministry of Supervision, Hao Mingjin, at a news conference.

“We will tackle corruption with a heavy fist,” said another official, Fu Kui, head of the ministry’s enforcement department. “Today, with many corruption cases likely to happen, if we don’t take tough measures, it will be hard to suppress this.”

The stimulus is credited with helping to revive China’s economic growth, which jumped to 11.9 percent in the first quarter. It pumped money into the economy through spending on building airports and other public works but Beijing also tried to spur growth by ordering local officials to step up approval of real estate projects that previously were blocked in an effort to cool a construction boom.

Beijing has rebuffed appeals by Chinese activists to release details of its stimulus spending.

The criminal cases announced Thursday were concluded over a six-month period from October to April, according to Hao. He gave no details of possible earlier cases.

The government announced in December that 12 officials were prosecuted for stimulus-related graft but Thursday’s disclosures indicated abuses were far more pervasive and extended to all areas of China.

In addition to the criminal penalties, Hao said 5,241 people received punishment from the ruling Communist Party, a step that can end an official’s career.

Hao and Fu described 20 cases that they said were representative and many stemmed from officials taking bribes to approve real estate projects. Real estate is a frequent source of corruption in a system where the government owns all land and building permits can be lucrative and hard to obtain.

The officials said such misconduct helped to fuel a surge in housing prices, which jumped 12.8 percent in April over a year earlier. Beijing worries about a possible boom and bust in real estate prices and is trying to cool surging housing costs, which it sees as a political liability.

“Forcefully cracking down on corruption in real estate will play a positive role in curbing rapid housing price rises in some areas,” Fu said.

Among the most severe penalties announced Tuesday:

–An official in the western city of Chengdu, Zhou Xuewen, received a suspended death sentence in November for taking 22 million yuan ($3.2 million) to approve land sales. Such sentences usually are converted after a few years to lengthy prison terms.

–Officials from the cities of Suzhou, west of Shanghai, and Chifeng in the northern region of Inner Mongolia received life sentences for taking bribes to approve land transactions.

–A deputy mayor of Zhengzhou, an industrial center of 8 million people, was prosecuted for taking 19 million yuan ($2.8 million) to approve land sales. No verdict has been announced for the official, Wang Qinghai.

There is no indication whether corruption is abating despite repeated crackdowns and punishments imposed on thousands of officials every year.

On Tuesday, an appliance retailer who once was China’s richest businessman was jailed for 14 years for insider trading, bribing officials and other offenses. Other tycoons have been imprisoned on charges linked to misconduct by officials.

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