China Jails Banking-Official-Turned-Property-Tycoon for Fraud

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Chinese home buyers look at models of an apartment project at a real estate fair in Ningbo, Nov. 2, 2012.
Chinese home buyers look at models of an apartment project at a real estate fair in Ningbo, Nov. 2, 2012.

Chinese authorities have sentenced a former state-run banking official to three years' imprisonment for fraud in a case analysts say is just a drop in the ocean of official corruption and highlights problems the ruling Chinese Communist Party faces in regulating itself.

A court in the northern province of Shaanxi handed down the jail term Sunday to Gong Aiai, known online by her nickname "the house lady" because of a huge property portfolio she amassed using fake ID cards, official media reported.

Gong was found in possession of four household registration documents, or hukou, a unique document issued to every citizen by authorities in their place of birth, state broadcaster CCTV quoted police sources as saying.

By the time she was detained in February, Gong had accumulated a total of 40 properties in Beijing worth around 400 million yuan (U.S.$65 million), it said.

Property prices are a major source of public anger in China, and have continued to skyrocket despite three years of measures by the government aimed at dampening the market.

Digging deeper

But analysts said corruption investigations in Gong's case, as in many others, had failed to dig deeper than the most obvious manifestations of graft, failing to pick up on the complex networks of favors and off-the-book transactions at every level of government, as well as at state-run enterprises.

"China's anti-corruption departments tend to view corruption as isolated incidents," Hu Xingdou, economics professor at the Beijing University of Science and Technology, said following Gong's sentencing by the Jingbian County People's Court on Sunday.

"They aren't allowed to broaden it out, nor are they allowed to include others who were implicated."

Hu said anti-graft investigators were limited by official directives forbidding them from pursuing new lines of inquiry during an existing investigation.

"If they are investigating someone, then they are only allowed to investigate that person," he said. "I think that's why the general public are still suspicious that they aren't talking about other people linked to this [probe]."

Police officer sentenced

However, one other person was also sentenced alongside Gong.

Zhang Xintang, the Shanxi province police officer who helped Gong to obtain a fake hukou registration document from the province's Xing county, was also sentenced to a year's imprisonment on Sunday. He has vowed to appeal, after saying he had no real choice in the matter, as the request was made by someone "higher up" than him.

"If the leaders tell me to process it, then I have to process it," Zhang said in his own defense.

Revealing linked cases

Ma Xiaoming, a former reporter with state-run Shaanxi TV, said property transactions were the most susceptible to corrupt practices, because leases could now be traded on the open market.

But he said the charges of fraud were likely too narrow to encompass the scope of Gong's activities.

"Once they have decided to charge her with fraud, then those are the charges against her, and everything else has to fit in with that framework," Ma said. "There's no way they would then go on to investigate anything else she might have done."

"This is how the Chinese Communist Party covers up the extent of its own corruption."

He said China's leadership was probably worried that effective investigations into corruption cases would reveal too many other, linked cases.

"They need to give themselves a way out," Ma said. "There are just too many corrupt officials."

Outed by whistleblowers

Gong, a former deputy head of the Shenmu County Rural Commercial Bank in Shaanxi's Yulin city, was detained formally on Feb. 4 after allegations that she owned more than 20 properties under false names surfaced on the Internet, with evidence from whistle-blowers.

President Xi Jinping, whose administration took over formally from president Hu Jintao in March, has warned that the Party must beat graft or lose power, sparking a nationwide clampdown on corruption.

However, political analysts say that officials with friends in high places are unlikely to be touched by the crackdown, and reports suggest many are liquidating their assets and making moves overseas.

China scored poorly in an annual global corruption index published last year by Transparency International, which measures perceptions of corruption around the world.

Mainland China ranked 80th out of 176 countries, down five places from the previous year.

Reported by Yang Fan for RFA's Mandarin Service. Translated and written in English by Luisetta Mudie.





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