Weeding Out

By+Yin+Pumin

On April 17， Chinas anti-graft authority confirmed that Song Lin， Chairman of the China Resources Capital Holdings Co. Ltd.， is under investigation for suspected violations of discipline and law.

The news was released respectively by the Central Commission for Discipline Inspection（CCDI） of the Communist Party of China （CPC） and the Ministry of Supervision on their official websites.

Song， also the Party chief of the China Resources， had already been publicly accused of corruption for the second time， by a journalist with the Economic Information Daily affiliated with Xinhua News Agency on April 15.

Wang Wenzhi， the journalist who made the accusations， wrote a letter to the anti-graft watchdog claiming that Song had committed derelictions of duty and was keeping a mistress.

“Song arranged for his mistress to work in the Hong Kong and Shanghai branches of the United Bank of Switzerland. The mistress became an important channel for Songs accepting of bribes and conducting money laundering，” Wang said in the letter.

Citizens have been encouraged to expose corrupt officials involvement in bribery or corrupt behavior. Real-name reporting is an effective way for exposing corruption. Song is the latest in a string of senior state-owned enterprise （SOE） executives detained for corruption charges.

Getting results

The year 2013 was a particularly fruitful period for the anti-graft campaign launched by the new leadership. Among SOEs， 31 senior executives， including 20 chief executives， were sacked due to losses or corruption， according to The Beijing News， citing incomplete statistics on the campaign.

“That many SOE executives are being investigated shows that central authorities are determined to root out corruption in sensitive sectors，” said Mao Zhaohui， Director of the Center for Anti-Corruption and Clean Government at Beijing-based Renmin University of China.

“In many of these cases， corruption involved many persons and mainly happened in monopoly industries， such as oil， steel， coal， power， telecommunications and aviation，” Mao said.

For example， Xu Long， former Chairman of China Mobiles Guangdong Branch， was revealed last August by the detention of other two high China Mobile officials—Li Xinze， former General Manager of China Mobiles Guangzhou Branch， and Sun Lian， former general manager of the program planning division of Guangdong Mobile.

Xu Minjie， former Executive Director of China COSCO Holdings Co.， was apprehended last November as part of the investigations into Mao Shijia， former Chairman of Dalian Ruihai Petrochemical Shipping.endprint

The most influential arrest happened in the oil sector. According to a report from Beijing Times， at least 45 people related to China National Petroleum Corporation （CNPC）， the countrys largest oil and gas producer and supplier， have been investigated over graft allegations since last year.

Among them， 21 were managers at CNPC， and the other 24 were not company employees but had business with it， the report said.

The most recent case occurred on April 12， when Yan Cunzhang， General Manager of the CNPCs International Department， was probed for grave discipline violation.

The same day， Zhao Miao， head of the Organization Department of the CPC Sichuan Provincial Committee， was announced to be under investigation by the provinces anti-graft body. Zhao worked at CNPCs Sichuan bureau from 1982 to 2005.

In August last year， the CNPC removed four senior executives from their posts because of allegations of corruption.

In March， Li Dongsheng， former General Manager and deputy Party chief of the CNPCs Sichuan Branch， was taken in for investigation. Insiders say Li is being investigated for involvement in a bidding scandal in Pengzhou， Sichuan Province.

On April 9， Guo Yongxiang， former Vice Governor of Sichuan Province， was stripped of Party membership and expelled from public office for serious law and discipline violations. Guo worked for the CNPC from 1972 to 1998.

Within the CNPC， 148 anti-graft officials were asked by the company to report their work in a recent campaign， according to a report released on April 13 on the website of the CCDI.

Jiang Jiemin， former head of the Stateowned Assets Supervision and Administration Commission （SASAC）， is the highest-ranking of all the officials under investigation for activities related to CNPC. Jiang was arrested last September on corruption allegations.

Jiang is also the first member of the 18th CPC Central Committee to be purged since the 18th CPC National Congress in 2012.

Born in east Chinas Shandong Province in 1955， Jiang graduated from the University of Shandong and also took an in-service postgraduate course for ministerial officials and provincial heads at the Party School of the CPC Central Committee.

As a party member， Jiang began his career as a technician at Shandongs Shengli oil field in December 1972 and worked his way up to become an assistant to the CNPCs general manager in February 1999， leading a team that oversaw the initial public offering of PetroChina， CNPCs publicly listed arm of operations.endprint

Jiang was named deputy governor of northwest Chinas Qinghai Province between June 2000 and April 2004， after which he returned to the CNPC as a deputy general manager. He was appointed to the newly created post of CNPC chairman in November 2011， a position he remained in until March last year， when he was named chief of the SASAC， a body which oversees 117 state companies.

Jiang was also the only former head of a state-owned energy company to be selected as a full member of the CPC Central Committee at the 18th National Congress in November 2012.

His downfall came after investigations into the afore-mentioned four senior executives of PetroChina.

Zhao Xiao， a professor with the School of Economics and Management of the University of Science and Technology Beijing， said that many senior SOE executives have faced great temptations to engage in corrupt practices after the government injected huge funds into state enterprises in a bid to boost the slowing economy dampened by the global financial crisis.

Without a proper supervisory mechanism， it is the SOEs presiding over monopolies that are most likely to engage in corrupt practices， Zhao said.

Zhu Poshan， an expert on the restructuring of the SOEs， said the current supervisory system allows administrators to be managers at the same time， thus providing more potential for corruption than normal government offices.

In many SOEs， the roles of chairman and Party secretary are frequently occupied by the same person to better facilitate decision making， and in some enterprises the chairman， president and Party secretary are all in one person， leading to a lack of proper supervision within the company.

Under such circumstances， supervision of company operations can only be achieved by external audits and outside supervision， Zhu said.

Wang Yukai， a professor with the Chinese Academy of Governance， said the investigation of more high-level SOE executives lends credibility to the CPCs anti-corruption efforts.

“Moreover， it continues to reinforce the notion that no one is ‘off-limits in the battle against corruption，” he said.

The road ahead

Probes into senior corrupt SOE executives are likely to be intensified in 2014， analysts said.

At an anti-graft conference in January， Zhang Yi， the new head of the SASAC， urged central SOEs to “set a higher priority on punishing corrupt officials” and contain the spreading trend of corruption” in central SOEs.endprint

He also called on discipline inspection committees in central SOEs to “maintain independence and authority when fulfilling their duties.”

Leaders of the central SOEs will be held responsible and severely punished if their dereliction of duty leads to the spread of corruption or they fail to stop， investigate and report major issues with corruption within their ranks， Zhang said.

As a response， Qiang Weidong， Secretary of the Party Disciplinary Commission with the SASAC， said in April that disciplinary officials in the SOEs will be required to focus more on antigraft work. He added that the supervision of the SOEs will be enhanced to keep a close eye on the State-owned assets.

All SOEs have at least one disciplinary secretary in the company， but many disciplinary chiefs have multiple duties， including some unrelated to anti-corruption work， Qiang told China Discipline Inspection Daily.

Disciplinary officials will no longer have duties unrelated to anti-graft work from May 1 onward， and they will attach greater importance to supervision， he added.

The CCDI has also determined to extend its reach to more sections. Since March 25， it started to send its first round of inspection teams for the year to various regions and sections.

Inspectors will be sent to the 10 provinciallevel regions including some monopolies， provinces， autonomous regions， as well as the Xinjiang Production and Construction Corps， the CCDI said in a statement.

The CCDI will also send special inspection teams to the Ministry of Science and Technology， Fudan University and China National Cereals， Oils and Foodstuffs Corporation， it added.

This is the third round of inspection by the CCDI after the 18th CPC National Congress. The first two rounds of inspection in 2012 covered a total of 11 provincial-level areas.

“The inspection covers more regions and sections than previous rounds， which indicates a stronger enforcement of anti-graft work，” said Yang Weidong， a professor with the Chinese Academy of Governance.

The addition of new special inspection teams this year will help cover more fields such as the use of funds or personnel management in scientific research departments or other institutions， Yang said， adding that it showed an expansion of the inspection effort.

Two top leaders of the China Three Gorges Corporation， a State-owned company which runs the worlds largest hydropower project， were removed from their posts on March 25， a move that came after disciplinary inspectors uncovered evidence of wrongdoing after a twomonth inspection at the end of 2013.

Yang believed that with the expansion of inspection from government to public institutions， any sector that may generate opportunities for abuses of power will become the target of inspection.endprint