China hands out death sentences in massive graft case

Joe McDonald

Wednesday, Nov. 8, 2000 | 8:27 a.m.

SHANGHAI, China - Eleven people, among them police and government officials, were sentenced to death Wednesday in communist China's biggest corruption scandal - a multibillion-dollar smuggling ring that touched the apex of power.

State television showed footage of confiscated cars, a sack of gold rings, wads of cash and credit cards and a six-story pleasure palace where officials were allegedly provided with sexual favors.

In all 84 people were convicted, with 12 sentenced to life imprisonment and another 58 receiving lesser terms in the huge racket centered on the shady Yuanhua Group in the busy southeastern port of Xiamen, state media reported. Another three received suspended death sentences, usually commuted later to life in prison.

While shielding leaders at the top, the government is making examples of lower ranked officials to convince a disgusted public that it is tackling pervasive corruption.

Thousands of officials have been punished in years-long anti-graft campaigns. This year, courts have put to death a deputy provincial governor and a deputy chairman of China's legislature - the highest-level officials executed for corruption since the party came to power 51 years ago.

"The government is dead serious about tackling corruption, and it's not just window dressing," said Daniel Gay, an economist for Singapore-based business research firm Strategic Intelligence.

However, the Communist Party's refusal to permit independent law enforcement will make it nearly impossible to end a system where graft is "part of the culture" for low-paid officials who don't answer to the public, Gay said.

"It's going to be years if not decades before China can stamp out corruption," he said.

The convicted were shown on state television standing before judges, flanked by green-uniformed police.

Among those sentenced to death were Deputy Mayor Lan Fu of Xiamen in Fujian province; the city Customs chief, Yang Qianxian, and Zhuang Rushun, deputy head of Public Security for Fujian, the reports said.

The magnitude of the case and the seniority of those involved is said to have caused rifts among Chinese leaders in Beijing.

But state media, in providing the government's fullest account of the case that was tried in intense secrecy, left many questions unanswered.

The reports made no mention of the former head of military intelligence, said by Communist Party insiders to have been toppled in the scandal, or of a tainted protege of President Jiang Zemin.

China's top police official in charge of fighting smuggling, quietly taken into custody nearly two years ago, also is to go on trial soon.

In all, bribed officials helped Yuanhua and others smuggle cars, oil, cigarettes and other goods worth $6.4 billion, the Xinhua News Agency said. The smuggling ring cost China's treasury $3.6 billion in lost import duties, it added.

One official reportedly took as much as $960,000 - a huge sum in a country with an annual per capita income of about $750.

China is especially worried about smuggling, which costs its treasury heavily in lost taxes.

Instead of drugs or weapons, much of the contraband is otherwise legal industrial raw materials or consumer products. High trade barriers meant to protect Chinese state industries have created rich incentives for smuggling by keeping import prices artificially high.

The latest case was so huge that it was divided among courts in Xiamen and four other cities in Fujian, where trials began Sept. 13.

Although much talked about since the investigation began quietly 15 months ago, the government and its media have been virtually silent on the scandal.

The announcement of verdicts Wednesday was the first time the government even disclosed the names of most defendants.

They included the Fujian director of the state-owned Bank of China, the deputy Communist Party secretary of Xiamen and its chief anti-smuggling investigator.

Among others convicted were two brothers of Lai Changxing, Yuanhua's boss, who got seven- and 15-year sentences.

Lai, who allegedly provided women to the officials at the pleasure palace shown on state television, is believed to have fled China ahead of police and is still a fugitive. Defendant Zhuang, the Fujian deputy police chief, was accused of advising Yang to flee.

Twenty-five of the defendants were expelled by the Communist Party and fired from government jobs, Xinhua said. It said eight worked in province-level departments.

The report did not clarify how many defendants were government officials. It named dozens of defendants with no mention of their jobs or government or Communist Party ties.