War on Graft

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  With the active participation of the people, the Communist Party of China (CPC) has been doubling down on the fight against corruption, putting checks on the spread of undesirable work styles and corruption.
  In 2014, a total of 232,000 officials were punished by China’s disciplinary agencies, representing a 30 percent increase from the previous year, according to the work report delivered by Wang Qishan, Secretary of the 18th CPC Central Commission for Discipline Inspection (CCDI), at the Fifth Plenary Session of the 18th CCDI meeting, which was held on January 12-14.
  The handling of cases implicating corrupt high-ranking officials, such as Zhou yongkang, xu Caihou, Ling Jihua and Su Rong, showed the central leadership’s determination to punish corruption and strictly manage the Party, Wang said in the report.
  Disciplinary officials have focused on pressing issues such as forming factions and cliques, exchanging gifts bought with public money, banquets, travels, entertainment activities and ceremonies paid with public funds.
  “The situation has improved, but the root of the problem is still there. The more unscrupulous will try to find ways to continue, and our mission to prevent re-occurrence will be arduous,” Wang said, adding that the Party “cannot afford to lose” the war against corruption.
  While calling for harsher punishment, wise use of personnel, improved regulations and strengthened management, Wang urged central disciplinary groups to expand their coverage and increase the frequency of inspections to effectively uncover law violations in Party and government departments, state-owned enterprises (SOEs) and civil service institutions.
  “Inspections should focus on a specific case, person, unit, project or fund, and carry out the task with clear goals, flexible actions and precise detection,” Wang told inspectors, stressing that failing to spot violations or report to higher authorities will be viewed as a negligence of duty.
  According to Wang, the CCDI plans to increase scrutiny over SOEs in 2015 and pay more attention to uncovering misconduct by officials in key positions who meddle in construction projects, land leasing, state property management, using office power to seek personal benefits and other forms of corruption and negligence.
   targeting SoEs
  On February 11, the CCDI pledged to direct the country’s anti-graft campaign toward China’s largest state owned enterprises(SOEs).   The first round of the effort will cover 26 SOEs, including some of the nation’s largest and most high-profile energy corporations. They include China National Petroleum Corp, China National Offshore Oil Corp, China Huaneng Group, State Grid Corp. of China, China Power Investment Corp. and China Mobile Communications Corp. Thirteen teams of disciplinary inspectors were dispatched to these companies on February 24.
  SOEs have played an important role in China’s economy and made great contributions to economic and social development, Wang said. However, problems have been uncovered in the administration of many SOEs through inspection, audits and petitions.
  “Some officials disobeyed the law and pursued promotion through bribery. Problems have also been found in candidate selection, selling and buying positions and the forming of cliques. Some officials abused their power and sought benefits for their family members,” Wang said.
  Inspectors have been told to find new ways to check up on key people and issues, spotting problems of universal significance in conduct, personnel selection and appointments that go beyond mere corruption.
  Since 2013, authorities have organized five rounds of anti-graft inspections of ministries, provincial governments, SOEs and public institutions. The inspections revealed power-formoney deals between Party and government officials and heads of SOEs.
  On February 5, the CCDI started to make public the results of its third round of inspections in 2014, targeting major SOEs.
  Issues they found include leaders of Shenhua Group, the largest state-owned coal-based integrated energy company, accepting bribes in the coal trade, and officials with China Unicom “colluding with contractors or suppliers, using their power to seek money or sex.”
  One of the largest companies involved is state-owned China National Petroleum Corp., the country’s largest oil and gas producer and supplier, with a market capitalization of 2 trillion yuan ($325.2 billion). Forty-five executives and employees from the company are under investigation on suspicion of corruption, bribery and bribe-taking.
  Other issues including buying and selling of official positions, wining and dining at public expense, and helping relatives open businesses and obtain illegal profits were discovered in China Huadian Corp., Dongfeng Motor Corp. and other enterprises.
  Previous inspections over the past two years covered 14 major SEOs, which led to the fall of over 70 executives in 2014.   In fact, investigations into officials implicated in the latest round of inspections had begun way before the inspections’ results were made public. As of January 7, 12 officials in five companies were being probed for suspected “serious law and discipline violations” or “duty-related crimes.”
  The list included Hua Zeqiao, former vice President of China Shenhua Energy Company; Ren yong, assistant general manager of Dongfeng Motor Corp.; and China Southern Airlines’s vice general managers Chen Gang, xu Jiebo and Zhou yuehai.
  An official with the CCDI said that the amount of corruption detected among SOE executives during inspection has showed how rampant the problem is and how urgent they need to carry out their work.
  Liu Junhai, a professor at the Law School of Renmin University of China, said China is strengthening the anti-corruption campaign concerning SOEs in a bid to accelerate SOE reform, which has been progressing slowly.
  Some officials and executives of SOEs, which monopolize power to allocate public resources, are taking all possible means to hold onto their power and resisting the setup of a market-oriented system, he said.
  Corruption and abuse of power in SOEs have raised operating costs, impaired the openness of the market, caused a huge loss of state assets, and hampered development of the firms.
  In realization of the severe situation, the CCDI set the task of inspecting all major SOEs this year at its January plenary session, making combating SOE corruption one of the priorities for 2015.
  Gao Bo, Deputy General Secretary of the Clean Government Studies Center under the Chinese Academy of Social Sciences, said the anti-corruption drive targeting SOE officials will help push forward China’s ongoing, broader overhaul of these companies and the economy. This is particularly important as China is coping with the “new normal” of slower economic growth.
   the military sphere
  Meanwhile, the People’s Liberation Army (PLA) of China also pledged to step up its extensive anti-corruption drive on January 30.
  The management and supervision of middle and high-ranking officers should be highlighted, said a document released by the CPC Central Military Commission (CMC), adding that they should insist on zero tolerance stance. “There should never be any sanctuary for corrupt officers in the military.”
  xi Jinping, General Secretary of the CPC Central Committee and CMC Chairman, said that corruption threatened the survival of the Party and called for serious reflection on the corruption case of xu Caihou, former CMC vice Chairman and by far the highest ranking military official currently being investigated and prosecuted.   In October last year, xu confessed to accepting huge bribes and taking advantage of his position to assist the promotion of other people.
  On January 29, the Ministry of Defense announced that anti-corruption inspections will target the armed force, including the PLA navy, air force, the Second Artillery Corps and the armed police.
  xu Qiliang, vice Chairman of the CMC, said earlier that senior officers within the PLA would be among the key targets of the ongoing crackdown.
  According to a PLA Daily report on January 29, more than 200 senior military officers have been reprimanded, demoted or removed from their posts after being exposed by military auditors.
  A total of 4,024 officers with the rank of lieutenant colonel or above, including 82 generals, have been the subject of scrutiny by PLA auditors since January 2013, the newspaper said. Of these, 21 were removed from their posts, 144 were demoted and 77 reprimanded and asked to correct the problems that were discovered, the report said.
  It added that another 61 officers were given poor evaluations because their units were found to be plagued with financial problems.
  More than 820 such problems at 180 military units were uncovered by auditors, who focused on infrastructure construction projects and the development of major weapons.
  Auditors also found 216 clues that led to suspected corruption or other misconduct. They reported these to PLA disciplinary inspectors or prosecutors, resulting in the formal investigation of more than 60 officers and internal punishment for nearly 160 service members.
  The number of clues uncovered by PLA auditors last year was more than the total reported in the three decades before 2014.
  Auditors prevented as much as 12.1 billion yuan ($1.97 billion) in military funds from being misused or wasted.
  About 12 million yuan ($1.95 million) was distributed irregularly to officers as subsidies were recovered.
  Nearly 19 billion yuan ($3.1 billion) was cut from construction projects and administrative spending, while a considerable proportion of the money saved was invested on improving training operations, the report said.
  The newspaper quoted an unidentified military prosecutor as saying that more than 90 percent of criminal cases within the PLA are related to infrastructure construction, property development, equipment purchasing as well as personnel and fund management.
  In early November last year, the CMC placed the PLA Auditing Office under its direct management. The office had been administered by the PLA General Logistics Department.   Last year, 15 high-ranking officers including former CMC vice Chairman xu and Gu Junshan, former deputy head of the PLA General Logistics Department, were placed under investigation on suspicion of corruption.
  Gong Fangbin, a senior colonel and political education researcher at PLA National Defense University, said a powerful auditing system will help the PLA carry out its antigraft efforts.
  Hou xiaohe, also a senior colonel and a strategy expert at the university, said corruption in the PLA is particularly harmful because it affects morale and combat capability.
  “If generals fill their pockets with embezzled money while ordinary soldiers sleep in ill-constructed camps, who will fight for the country when needed?” said xu Guangyu, a retired major general who is a senior adviser to the China Arms Control and Disarmament Association, a non-governmental organization.
  On February 11, the PLA Daily reported that a new round of audit covering all levels of the PLA will begin soon to deepen the anti-corruption efforts within the military.
  The plan is to conduct an investigation of all military personnel’s income and expenses during 2013 and 2014, according to the CMC.
  Zhao Keshi, head of the PLA’s General Logistics Department and leader of the audit group, said during the group’s first meet-ing on February 11 that the audit will help improve the army’s efficiency in utilizing financial resources.
  The investigation, which will cover all departments and ranks within the army, will be far-reaching and may involve conflicts of interest, Zhao said.
  The financial investigation will look into all cash records, receipts and expenses that exceeded original budgets to uncover cases of embezzlement and hidden caches of cash that corrupt personnel have siphoned from public funds.
  The CMC requires the army to make the investigation their top priority, and to regularly review its progress.
  “The investigation will dig out more ‘tigers and flies’ (high- and low-ranking corrupt officials) still hidden from the current graft probe. It will also facilitate better financial management within the army to avoid the abuse of power and to build up financial discipline,” said xu, now a senior adviser to the China Arms Control and Disarmament Association.
  The PLA Daily said in a commentary on February 10 that the army has achieved some success in the fight against military corruption after setting up a series of rules to curb the misuse of expenses and improve financial efficiency.   A list of names of generals at and above the army level who have been investigated or convicted recently was released on March 2.
  The list featured 14 senior officers from several military commands including Chengdu, Shenyang, Shanxi, Hubei and Guangzhou as well members of the navy, air force, second artillery corps, the PLA General Staff Headquarters, the National Defense University and the Academy of Military Sciences.
  Guo Zhenggang, Deputy Political Commissar of the Zhejiang Provincial Military Command, one of the 14 corrupt military officers, was put under investigation by the military procuratorate in February for sus- pected “serious legal violations and criminal offenses.”
   Entertainment areas
  During an online interview in late January, Li Qiufang, a member of the CCDI Central Committee, confirmed that the top disciplinary watchdog will ramp up its inspections of the film, radio and television industries this year, as several cases of corruption have been discovered.
  Discipline officers will investigate “hidden conditions” in the industries, according to the CCDI.
  Such “hidden conditions” often refer to bribes offered to officials or directors in order to increase circulation or advertising, or to improve the impact of TV programs or films.
  “The inspectors will focus on key areas, including the purchase and sales of film and television plays, large-scale programs, equipment procurement or Tv satellite coverage,”Li, Director of the central inspection team dispatched to the State Administration of Press, Publication, Radio, Film and Television(SAPPRFT), said on January 29.
  The flourishing cultural industry draws bundles of cash into many sub-fields. China now boasts the second-largest global film market with the box office amounting to$4.8 billion in 2014. The advertising revenue of Chinese Tv stations surpassed 130 billion yuan ($21.14 billion) in 2013.
  According to Li, the inspectors will also enhance supervision of media advertising, news reporting and overseas correspondence stations to prevent major graft.
  “We will develop a better understanding of the regular character and operating methods of any graft, especially any ‘implicit rules,’to crack down on such cases,” she said.
  Statistics from the CCDI show that the top anti-graft watchdog probed 405 graft cases involving the media last year, with 49 media directors placed under investigation on suspicion of corruption.   Last year, more than 20 directors and hosts from China Central Television (CCTv) were apprehended by disciplinary officers under accusations of graft, including Guo Zhenxi, former director at CCTv’s financial channel; Huang Haitao, Deputy Director at the program purchasing center; and Rui Chenggang, the former well-known host of a finance program.
  “The film, radio and television industries have never been clean. We must crack down on corruption in these fields,” said Li.
  In September 2014, a SAPPRFT Tv series censor was sentenced to 10 years and six months behind bars for taking bribes of 300,000 yuan ($47,970).
  “TV station executives have the final say in whether to let Tv series pass the censors and whether or not to buy them, and some producers promise a 10 to 15 percent cut of the total distribution fees to the executives to assure their work is aired,” said Wang Hailing, a screenwriter.
  Wang said these illegal deeds have enabled some poor-quality movies and Tv series to enter the market and argued that if the authorities do not implement stricter regulations, the whole industry will go downhill.
  “Stronger supervision and enforcement will benefit the industry until it can regulate itself,” said Zhang Peng, an associate professor at Nanjing Normal University. However, Zhang noted that a fair industrial environment with clear standards that regulate people’s behavior should be the long-term solution other than anti-graft campaigns.
  Li said that the administration will raise awareness among the media to cultivate proper behavior and clean up the media environment in order to foster its healthy development.
  Moreover, the inspectors should strengthen media inspections to collect tips about corruption and motivate the public to report clues about graft.
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