BEIJING – Chinese philosopher Lao Tzu once wrote that the more laws and order are made prominent, the more thieves and robbers there will be.
He probably never imagined on just how big a scale that belief would be proven true today.
A recent People's Bank of China report this week announced that an estimated $123 billion dollars has been embezzled by corrupt Chinese officials over the last two decades. It is believed that between 16,000 and 18,000 officials were responsible for the graft.
In an astounding new report released by the People’s Bank of China, it was reported that since the mid-1990’s, between 16,000 and 18,000 corrupt Chinese government employees and executives of state-owned enterprises have fled the country with assets estimated at $123 billion.
The report comes as China this week has been gearing up to celebrate the 90th anniversary of the founding of the ruling Communist party.
According to the study, the government employees came under a broad range of positions from judicial and police officers to executives and managers of Chinese state-owned companies and institutions. Equally wide ranging was the means by which the money was brought out of the country with the report citing offenders carrying out sophisticated bank transfers, forging fake contracts or sending relatives or mistresses abroad to buy property or assets. Still others simply carried cash out of the country in suitcases.
Where these officials and their ill-gained assets fled to was often decided by their position. The study found that the majority of the officials were relatively low-ranking, without the financial or political means to secure visas for western or more developed countries. Those officials opted then to escape to neighboring countries like Thailand, Burma, Russia and Mongolia. Still others float between countries in Africa, Latin America and Eastern Europe, waiting for their chance to eventually immigrate to a more desirable nation.
So where was the preferred destination for the most well connected and criminally enriched? No other than the United States of America.
“It is of the lowest risk to be an official in China!”
The response online from Chinese netizens over the report was understandably livid. On Sina Weibo, the popular Chinese microblogging site, users fumed over the shocking numbers released.
“There is no use to only monitor, there has to be political system reforms,” said one user, “The authority's power should be monitored to tackle the fundamental problem, otherwise the country will be completely robbed one day.”
Others took umbrage that the bank’s report would release such a detailed explanation on how these officials had safely embezzled the money, worried that other copycat officials would follow suit.
“Why did the report made it so clear how the transfer can be done? Do they actually want to tell those people that they have ‘eight ways to escape?’” wrote a user named “shoumairutun,” “Now those who did not previously know how to do this have learned how.”
Others though received the news with a degree of humor. Rui Cheng Gang, a well known CCTV journalist who is popularly followed online joked that the best way to catch these corrupt officials was to stakeout outside luxury stores, writing, “I suggest monitoring the areas in which luxury stores are located where the criminals will frequently appear. Ha!”
Popular sentiment was probably best summed up though by a user named “qimiao,” who simply wrote, “It is of the lowest risk to be an official in China!”
U.S. just how safe a safe haven?
Numbers on just how many corrupt Chinese officials have fled to the United States are shaky at best. The U.S.-based Chinese language newspaper, World Journal, has previously reported that more than 1,000 officials are in the United States, predominantly in major metropolitan areas like New York, Los Angeles and San Francisco.
Though the United States presently has no extradition treaties with China, in recent years the Justice Department has in certain instances repatriated Chinese nationals suspected of embezzlement.
Perhaps more promising, the Justice Department has cooperated with Chinese investigators in bringing some former officials to trial in the United States for their crimes. In August 2008, a US federal court in Las Vegas convicted two former Guangdong bank officials on counts of embezzlement, money laundering and passport fraud.
Former Bank of China managers Xu Guojun (L) and Xu Chaofan (R), were found guilty in US federal court in Las Vegas. The 2008 case revolved around charges the two embezzled $485 million over a period of 10 years.
Known as the “Kaiping case,” the two defendants, Xu Chaofan and Xu Guojun and their families were accused of defrauding state bank, the Bank of China of $485 million over a period of 10 years.
The Xus, who had been managers at the Bank of China branch in Kaiping, Guangdong province had fled to the United States and been residing there for seven years before being indicted. Their successful prosecution was hailed in the local Chinese press as a big step towards greater Sino-US criminal judicial cooperation, with the China Daily at the time declaring it the “biggest case of its kind since the founding of New China in 1949.”
Last year the State Department reemphasized its willingness to assist China on similar cases involving embezzling officials and their families. After all, cooperation between the two countries not only familiarizes both parties with how each works, but it also allows U.S. officials a closer look at what is often times a quite opaque window into China’s financial and judicial process.
In recent years Communist party officials have consistently stressed the need to stamp out corruption, with President Hu Jintao even saying that it threatened the party’s very legitimacy. While the graft numbers are staggering, their release suggests at the very least the party’s willingness to acknowledge and hopefully begin the long process towards patching up these holes in regulation and enforcement.