Geopolitics

Corruption In China: How Public Officials Took $120 Billion, And Ran

A report by China’s central bank found that thousands of Chinese government officials have smuggled billions out of the country and fled, mainly to the U.S., highlighting "the corruption within a corrupt system".

Corrupt Chinese officials tend to send their families abroad, and join them later. (Ivan Walsh)
Corrupt Chinese officials tend to send their families abroad, and join them later. (Ivan Walsh)
Xin Haiguang

BEIJING - Just how many corrupt Chinese government officials have fled overseas? How much money have they stashed away? And how did they manage to transfer such colossal sums abroad?

Last week the Bank of China published a report entitled "How corrupt officials transfer assets overseas, and a study of monitoring." The report quoted statistics based on research by the Chinese Academy of Social Sciences. Since 1990, the number of Communist Party and government officials, public security members, judicial cadres, agents of State institutions, and senior management figures of state-owned enterprises fleeing China has reached nearly 18,000. Also missing is about 800 billion yuan (more than $120 billion).

The Bank of China emphasized the fact that nobody, up to now, has been able to provide an authoratitive figure of the exact sum pilfered, and the recent figure of 800 billion yuan is only an estimate. It is nonetheless an astronomical sum. It is equivalent to China's total financial allocation for education from 1978 to 1998. Each official stole, on average, an estimated 50 million yuan (more than $7 million). Precisely because this is only an estimate, one can imagine the real numbers are actually much bigger. Some media have reported that the wife of the Deputy Chief Engineer of the Ministry of Railways, Zhang Shuguang, recently caught for corruption, owns three luxury mansions in Los Angeles, and has bank savings of as much as $2.8 billion in America and Switzerland. This gives a glimpse of the broader picture.

The number of corrupt officials fleeing China is a sign of the seriousness of the government's attempt to tackle corruption. But if corruption, dereliction of duty and the abuse of power are the norm, then this escape of corrupt officials represents the corruption within a corrupt system. It highlights multiple embarrassments in China's anti-corruption campaign.

From the initial corruption to organizing the smuggling of large sums of money abroad takes some time. For someone to be corrupt during this time without being caught, this is the first embarrassment.

Next, when a corrupt official prepares his flight, he usually starts by sending his wife and children overseas, and stays alone in China as a so-called "naked official." To have such "naked, yet unexposed" officials makes for a second embarrassment.

In a country where capital outflow is strictly controlled, how on earth do these people manage to transfer their money overseas successfully? This is the third embarrassment.

And the fourth embarassment? How they manage to change their identity. These crooks usually hold multiple passports and use many identities. For instance, the former Governor of Yunnan Province, Li Jiating, had five passports, all real.

How they escape punishment adds the fifth embarrassment. Extradition involves the political and judicial systems of two countries, each with its own concept of law enforcement. The judicial procedure is often complicated and tedious. Extradition is very often obstructed by the fact that a person condemned to death in absentia cannot be extradited for human rights reasons. In addition, China has not signed extradition treaties with the main destinations, the U.S. or Canada, so once the official has run away, the chance of catching him and putting him on trial is near zero.

Even if they do get caught, the stolen funds are rarely recovered. This is the sixth embarrassment. The United Nations Convention Against Corruption sets out the principle of returning illegal assets, but in practice the procedure is difficult. Not only does China have to show that it owns the assets, it also has to share some of the money with all countries participating in the joint action. After deductions here and there, there won't be much left.

And, finally, the seventh embarrassment: the government officials who have managed to escape set an example for those still hiding at home. Some used to hold high positions with access to important state secrets, and were very likely bribed by hostile forces. This is a potential threat to China's political, military and economic stability.

It is for these reasons that it is more important to stop corruption at the source than to catch the culprits after it has happened.

Policies combatting money laundering or obliging leading government employees to report their personal wealth will not solve this problem. Nor will the close monitoring of so-called "naked officials'. The efficient solution would be to establish a clean system where nobody dares to become corrupt. Certain media have suggested the implementation of a property declaration system. This would be like using anti-aircraft guns to fight mosquitoes. Still, at least it is a weapon that knows its target.

Read the original article in Chinese.

Photo - Ivan Walsh

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Paying tribute to the victims of the attack in Kongsberg

Terje Bendiksby/NTB Scanpix/ZUMA
Carl-Johan Karlsson

The bow-and-arrow murder of five people in the small Norwegian city of Kongsberg this week was particularly chilling for the primitive choice of weapon. And police are now saying the attack Wednesday night is likely to be labeled an act of terrorism.

Still, even though the suspect is a Danish-born convert to Islam, police are still determining the motive. Espen Andersen Bråthen, a 37-year-old Danish national, is previously known to the police, both for reports of radicalization, as well as erratic behavior unrelated to religion.

Indeed, it remains unclear whether religious beliefs were behind the killings. In an interview with Swedish daily Dagens Nyheter, police attorney Ann Iren Svane Mathiassens said Bråthen has already confessed to the crimes, giving a detailed account of the events during a three-hour interrogation on Thursday, but motives are yet to be determined.

Investigated as terrorism 

Regardless, the murders are likely to be labeled an act of terror – mainly as the victims appear to have been randomly chosen, and were killed both in public places and inside their homes.

Mathiassens also said Bråthen will undergo a comprehensive forensic psychiatric examination, which is also a central aspect of the ongoing investigation, according to a police press conference on Friday afternoon. Bråthen will be held in custody for at least four weeks, two of which will be in isolation, and will according to a police spokesperson be moved to a psychiatric unit as soon as possible.

Witnesses have since described him as unstable and a loner.

Police received reports last year concerning potential radicalization. In 2017, Bråthen published two videos on Youtube, one in English and one in Norwegian, announcing that he's now a Muslim and describing himself as a "messenger." The year prior, he made several visits to the city's only mosque, where he said he'd received a message from above that he wished to share with the world.

Previous criminal history 

In 2012, he was convicted of aggravated theft and drug offenses, and in May last year, a restraining order was issued after Bråthen entered his parents house with a revolver, threatening to kill his father.

The mosque's chairman Oussama Tlili remembers Bråthen's first visit well, as it's rare to meet Scandinavian converts. Still, he didn't believe there was any danger and saw no reason to notify the police. Tlili's impression was rather that the man was unwell mentally, and needed help.

According to a former neighbor, Bråthen often acted erratically. During the two years she lived in the house next to him — only 50 meters from the grocery store where the attacks began — the man several times barked at her like a dog, threw trash in the streets to then pick it up, and spouted racist comments to her friend. Several other witnesses have since described him as unstable and a loner.

The man used a bow and arrow to carry the attack

Haykon Mosvold Larsen/NTB Scanpix/ZUMA

Police criticized

Norway, with one of the world's lowest crime rates, is still shaken from the attack — and also questioning what allowed the killer to hunt down and kill even after police were on the scene.

The first reports came around 6 p.m. on Wednesday that a man armed with bow and arrow was shooting inside a grocery store. Only minutes after, the police spotted the suspect; he fired several times against the patrol and then disappeared while reinforcements arrived.

The attack has also fueled a long-existing debate over whether Norwegian police should carry firearms

In the more than 30 minutes that followed before the arrest, four women and one man were killed by arrows and two other weapons — though police have yet to disclose the other arms, daily Aftenposten reports. The sleepy city's 27,000 inhabitants are left wondering how the man managed to evade a full 22 police patrols, and why reports of his radicalization weren't taken more seriously.

With five people killed and three more injured, Wednesday's killing spree is the worst attack in Norway since far-right extremist Anders Breivik massacred 77 people on the island of Utøya a decade ago.

Unarmed cops

As questions mount over the police response to the attack, with reports suggesting all five people died after law enforcement made first contact with the suspect, local police have said it's willing to submit the information needed to the Bureau of Investigation to start a probe into their conduct. Police confirmed they had fired warning shots in connection to the arrest which, under Norwegian law, often already provides a basis for an assessment.

Wednesday's bloodbath has also fueled a long-existing debate over whether Norwegian police should carry firearms — the small country being one of only 19 globally where law enforcement officers are typically unarmed, though may have access to guns and rifles in certain circumstances.

Magnus Ranstorp, a terrorism expert and professor at the Swedish Defence University, noted that police in similar neighboring countries like Sweden and Denmark carry firearms. "I struggle to understand why Norwegian police are not armed all the time," Ranstorp told Norwegian daily VG. "The lesson from Utøya is that the police must react quickly and directly respond to a perpetrator during a life-threatening incident."

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