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Trial reveals depth of China’s corruption

Li Qiang was, up until July 21, one of the most influential political figures in Chongqing, one of China’s fastest growing cities and its biggest municipality. A high-ranking official in the ruling Communist Party, Li was also the head of a business conglomerate and a billionaire. He controlled vast swathes of the city’s real estate, owned dozens of casinos and even ran the public transportation system. So unchallenged was Li’s influence on this city that on his command, the entire public transportation system came to a grinding halt on one day, when he ordered 8,000 taxis to stay off the roads and stopped the buses from running. In Chongqing, Li’s word, ably enforced by his notorious network of thugs and gangsters, was the law.

His words tore apart Huang Gobi’s life. She watched in horror one evening as a group of thugs wielding machetes entered her home, sliced up her husband in front of her eyes, and assaulted her. Her crime: resisting the Chongqing real estate mafia’s attempt to take her land. Her troubles didn’t end there. When Huang approached the police, and then the courts, she discovered her attackers’ accomplices ruled at every level of officialdom. The police turned her away, and threatened to send back the thugs. The courts wouldn’t hear her case.

Li’s and Huang’s stories are by no means unique in China. Stories of local officials abusing their power are rife across China’s provinces, where central laws and the judicial system are often rendered impotent in what are effectively fiefdoms run by influential local politicians like Li. But while many Chinese continue to suffer in silence, Huang’s voice has now, against all odds, been heard across the country, and given others hope of a promise of change.

In an unprecedented crackdown on Chongqing’s mafia launched on July 21, Li was among hundreds of influential government officials, businessmen, judges, and police officers who were arrested. The crackdown was initiated by the city’s charismatic new party secretary Bo Xilai, with Beijing’s backing. Thirty one suspects, including Li, are now standing trial, charged with crimes ranging from running mafia-style gangs, prostitution rackets, and illegal gambling outlets to bribery, tax evasion, and killings. Among those who face corruption and criminal charges are 1,500 public servants, several influential judges, 70 gang leaders, three billionaires, and 250 police officers.

Huang had her day in court last week. The sad testimonies the Chongqing People’s court heard last week from her and others have laid bare the nexus between the political elite, business interests, and the mafia that holds sway in many of China’s cities. The trial in Chongqing has revealed how deep the rot lies in China’s system, and how far it has spread across different branches of government from the judiciary and the police force to the highest levels of the Communist Party.

Many scholars here trace the origins of the problem to the blurring of political and business interests, which began when market reforms were launched three decades ago. Even as money poured into an economy dominated by state-owned enterprises, regulations and laws remained outdated and opaque. Chongqing, in China’s west, is in many ways a microcosm of the larger changes that market reforms brought to China’s political economy, and also the challenges posed to the country’s institutions.

The city was the centrepiece of Beijing’s ‘Go West’ industrial development drive launched in 2000 to bring infrastructure to western China, which has lagged behind the industrialised and prosperous east. The drive succeeded in rapidly transforming a once-backward city. Shiny skyscrapers, sprawling industrial parks, and impressive economic zones stretch across the municipality, which is home to 31 million people. The development was made possible by a massive $ 1 trillion yuan (around $ 150 billion) investment.

But it wasn’t just infrastructure that this money financed. It also funded the emergence of figures like Li. Pu Yongjian, a professor at Chongqing University, says there is a clear correlation between the emergence of the city’s powerful mafia in the past decade and the pumping in of money. The lines separating business and politics blurred, some say it even dissolved. Pu points to policies such as admitting successful businessmen like Li to high positions within the government — Li served as a deputy to the Chongqing Municipal People’s Congress and on the transportation administration. People like him used their positions within their government to expand, unchecked, both their business interests and political control.

The “godfather” of the Chongqing fiefdom who encouraged the rise of figures like Li was Wen Qiang, a former police commissioner and head of Chongqing’s judicial bureau. Wen, who also stood trial last week, was accused of giving umbrella protection to dozens of gangs who ran the real estate mafia, brothels, and casinos. Among the gang-lords is Xie Caiping, known as the city’s “godmother” and Wen’s sister-in-law. So brazen was Xie, a former official in the taxation bureau, that she ran a casino and brothel on the city’s main street — it stood right opposite the Chongqing People’s Court. The lurid details of Xie’s life have been splashed across the front pages of local newspapers. She operated 80 illegal casinos, brothels, and drug-running outlets. When arrested, she told a local paper: “My brother is God and he is the law. What do I need to fear about?”

Part of the reason the trial has transfixed China is the sordid nature of the Chongqing underworld that has been exposed and the impunity with which political figures seemed to operate. Those wronged like Huang Gobi simply had no recourse to justice in a broken political system, a common frustration that resonates with many in China’s provinces. “This kind of behaviour wouldn’t have been tolerated even under the Qing Dynasty,” was how Bo Xilai, who started the crackdown, put it. He said “black power” was not just expanding to economic sectors, but also “infiltrating into politics, damaging the image of the party and the country.”

Chongqing’s ills are but an extreme manifestation of a disease that is widespread in China. The past three decades since the reforms of 1978 have seen central regulation, and central influence, retreat. This has paved the way for local officials to expand their power, so much so that in Chongqing, it became difficult “to differentiate between criminals and government officials,” said Professor Pu. So deep is the corruption rot that scholars have argued in recent years it has become the single biggest threat to the ruling Communist Party’s legitimacy.

Beijing is beginning to listen. The party’s Central Committee, its highest decision making body, in a September plenary session acknowledged in the clearest terms yet the size of the corruption problem, accepting that it was “severely harming and weakening” the party’s rule. The committee also declared it would “explore the arduous and complicated nature of the combat against corruption.” Many view the Chongqing crackdown as a first step, as a warning shot Beijing has fired to provincial mandarins.

If anything, the Chongqing case has illustrated how difficult a challenge Beijing faces in tackling corruption. The problem for Beijing is fighting corruption has itself become highly politicised. Launching a corruption drive involves reaching a consensus among competing factions at the highest levels of the Communist Party. The targets, like Wen Qiang, often have connections at the highest levels of government. It is understood that it took no less than the intervention of President Hu Jintao for Bo Xilai to finally get the green light to take Wen on. The crackdown has also brought Bo many detractors in Beijing, who say he is now overextending his reach and using the trials to push himself up the party hierarchy.

But politics aside, the crackdown is a welcome and long overdue first step, and a strong message for provincial governments in China. The problem for Beijing is that across the length and breadth of the country, there are hundreds of influential Wen Qiangs still ruling with impunity, and tens of thousands of Huang Gobis still waiting for their day in court.

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