Sunday, November 2, 2008

Take the Money and Run

Some of the money we send to China to buy stuff comes back in suitcases. many as 10,000 corrupt Chinese officials who have fled the country over the past decade, taking as much as $100 billion of public funds with them, according to an estimate by Li Chengyan, head of Peking University's Anticorruption Research Institute.

Corrupt officials are taking a big chance.

Chinese President Hu Jintao has repeatedly declared that the fight against fraud is a top government priority and courts have handed down heavy sentences against prominent offenders. Last year, the former head of the Chinese Food and Drug Administration, Zheng Xiaoyu, was executed after being found guilty of taking bribes to approve thousands of new drugs.

Despite that.....

Stiff punishments, however, do not appear to have curbed the phenomenon. Just this week, the deputy president of the Supreme Court and the head of parliament's budget committee were fired for corruption in an indication of how far the rot has spread even among the highest levels of government.

The runners do have certain advantages.

China has signed extradition treaties with only 31 countries. They do not include the US, Canada, or Australia – three popular destinations for Chinese officials on the lam. Only four western European nations have such agreements with Beijing.

"The top destinations are the countries with independent judicial systems," says Liao Ran, senior program coordinator of the Asia and Pacific department at Transparency International, a Berlin-based international corruption watchdog. "If you get help from a lawyer ... your appeals process can last for 10 years" in most Western countries, says Mr. Liao.

Some do get sent back.

In 2004, the US deported Yu Zhendong, accused of defrauding the Bank of China of $485 million. He was sentenced to 12 years in jail. Chinese officials also convinced the Canadian authorities last August to return Deng Xinzhi, alleged to be a swindler, who had sought refuge in Toronto. His case has not yet come to trial here.

Increased prosecution may cause more to run.

"A lot of corrupt officials do not dare stay in China now," says Mao. "There will be more and more officials heading abroad, and they will be taking more and more money with them."

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