China government audit uncovers corruption

World Today

Financial audits of government finances in 2013 helped uncover 314 serious cases of “law and disciplinary violations” involving 1,100 people, a new report has showed.

These people’s illicit acts were found by auditors of central and local revenue and spending last year, according to the National Audit Office’s (NAC) 2013 audit report to the Standing Committee of the National People’s Congress on Tuesday.

The guilty parties mainly work at government offices with administrative approval rights or departments controlling important state assets or resources, the NAC said in the report, but it did not reveal how these people were dealt with.

The report said that 112 are group cases, involving 760 people. Each of these cases involves a “nest” of people, centering on one or several officials who grasp public power or resources. In 31 cases, the principal suspects’ family members also participated.

The report also said that suspects are committing crimes in a more covert way, such as asking for shares of a company in place of cash or laundering money under the disguise of doing public good.

While inspecting the China Investment Corporation and other two financial companies, the NAC found that they have illegally given loans or covered bad loans. These loans totaled about 18.3 billion yuan (2.9 billion U.S. dollars).

The eight state-owned banks, including the ICBC, were found to have lent 375 billion yuan to companies barred from gaining such loans.

The NAC also uncovered 11 cases, worth 80 billion yuan, in which suspects had used the Internet to swindle money or raise funds illegally.

China’s latest anti-graft investigation is raising questions about the fate of the former president’s top aide, whose political ascent was hurt by a lurid scandal involving his alleged cover-up of his son’s death in a speeding Ferrari.

The Communist Party’s anti-graft watchdog said in a brief statement that a vice chairman of Shanxi province’s political advisory body, Ling Zhengce, was under investigation for “serious” violations.

The party made no mention of the official’s brother, Ling Jihua, a key aide to former President Hu Jintao and the father of the young man in the Ferrari scandal. Then, a commentary about the case by an official news agency on Friday hinted that Ling Jihua might also be implicated — though the commentary’s swift deletion by government censors suggested divisions in the party’s top leadership over the case, analysts said.

“The fire seems to be approaching Ling Jihua, but the question is, will it spread and burn him?” said Zhang Lifan, an expert on elite Chinese politics in Beijing. “It shows that in fact, there might be chaos at the highest levels of the party because the various factions are playing their cards.”

In the lead-up to a generational handover in power in 2012, Ling Jihua had appeared destined for a seat in the party’s Politburo, a council of top leaders. He had served as head of the party’s general office, which gave him influence over key personnel arrangements, a position comparable in U.S. politics to the president’s chief of staff.

But then his son crashed a Ferrari in Beijing in March 2012 during what might have been sex games with two nude or half-dressed women, reports by Hong Kong media said months later, and Ling Jihua was accused of covering up the scandal.

He was later named as the head of the United Front Work Department, a position that removed him from the center of power. In recent months, he has kept a relatively low profile, making infrequent public appearances.

But the party’s investigation into his brother has brought him back into the spotlight, earning him an indirect mention in Friday’s commentary in the state-run Xinhua News Agency.

“Seen from the recent cases of officials who have been sacked, some people use blood ties and marriage as a link to form a ‘clan of corruption,’ to protect one another,” the commentary about Ling Zhengce’s case said, without mentioning Ling Jihua by name.

A politician might use public funds or his authority to benefit one of his siblings, then rely on that sibling to use his influence over hiring and internal investigations at key moments, it said in a general description of family ties and political patronage.

The commentary, titled “Having Someone in the Imperial Court Still Doesn’t Help,” seemed to be intended to highlight Ling Zhengce’s relationship with his brother and hint at the possibility that Chinese President Xi Jinping might target a key ally of his predecessor, said Willy Lam, an expert on Chinese politics at the Chinese University of Hong Kong.

“The very pointed Xinhua commentary this morning did indicate a possibility that Xi could go after Ling,” Lam said. He added, however, that “it is equally likely that this is mere intimidation tactics” intended to limit his predecessor’s attempts to interfere in Xi’s leadership.

“In any event, Xi has succeeded in discrediting the entire Hu Jintao faction,” Lam said.

The Chinese government has not publicly acknowledged Ling’s rumored link to his son’s 2012 Ferrari crash or the accident’s consequences on Ling’s career. Ling Zhengce, presumably in the custody of party investigators, could not be reached for comment. The United Front Work Department which Ling Jihua heads did not respond to a faxed request for comment.

Story by Xinhua and the Associated Press.