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C O N F I D E N T I A L SECTION 01 OF 03 SHENYANG 000134 SIPDIS E.O. 12958: DECL: 09/26/2028 TAGS: PGOV, PHUM, SOCI, ECON, CH SUBJECT: NORTHEAST CHINA: CORRUPTION SCANDALS SNARE JUDGES, SENIOR OFFICIALS AND POLICE, BUT TO WHAT EFFECT? Classified By: CONSUL GENERAL STEPHEN B. WICKMAN. REASONS: 1.4(b)/(d). 1. (C) SUMMARY: Corruption scandals in northeast China over the past year have reached levels in seniority unseen for several years. Jilin Province quietly sacked ten of its High Court judges, but legal contacts say the Party prevented a thorough investigation. Attorneys report that judicial corruption in northeast China remains endemic. Major cases in Jilin have also claimed its highest-level official in thirty years and two former chiefs of state- owned enterprises, while in Liaoning, corruption prosecutions have netted high-level police officials and the province's food-safety chief. A concerted effort to combat the region's corrosive official corruption does not seem to be at work; prosecutions seem ad hoc instead of systematic. Domestic reporting on the cases largely has been absent or orchestrated to limit local citizens' exposure to events. Northeastern Chinese of all stripes bemoan official corruption as a fact of life here. END SUMMARY. 2. (C) Officials in northeast China have long struggled to overcome the stigma of past corruption cases--one of the juiciest resulted in the execution of a Shenyang vice mayor--but, try as they might, prosecutions are reaching levels in seniority unseen for several years. Hardest hit has been Jilin Province, where a trickle of prosecutions over the year claimed ten of the province's most senior judges, as well as high-level former officials and the former chief of one of its premier state-owned enterprises (SOEs). THE JUDICIARY: JILIN SUPREME COURT JUSTICES SACKED --------------------------------------------- ----- 3. (C) Most intriguing, and unreported in the PRC press, was the quiet sacking of at least ten corrupt justices on the Jilin High People's Court. Our contacts in Jilin Province legal circles say the arrests occurred sometime in late 2007. Details remain hazy, but according to Professor HE Zhipeng (PROTECT) of Jilin University's School of Law, one of the PRC's top law schools and alma mater of most of the judges implicated, one version has it that flags were raised when authorities discovered commercial property being titled to a High People's Court clerk. Subsequent investigations traced the property transfers to a number of justices accepting bribes from claimants, in some cases from both sides simultaneously. Using the clerk to coordinate, judges had been instructing claimants to engage the services of particular attorneys who would, in turn, funnel money to the judges through the clerk in exchange for a favorable ruling, said Professor He. Another version of the affair holds that authorities latched onto the corrupt clerk after the family of one aggrieved claimant approached police for revenge on a judge whom he had paid off. 4. (C) Punishments for the judges implicated in the affair varied. Several were stripped of their posts and Party membership, while as many as six received prison sentences of up to ten years, which they are now serving, said Professor He. (NOTE: In an effort to clean things up, the Dean of Jilin University's School of Law, ZHANG Wenxian, was elevated this year to head the court, according to his successor, XU Weidong (PROTECT), who told our Jilin University contacts the general contours of the case. Our contacts told us Zhang is a respected figure who has earned acclaim for transforming Jilin University's law school during his tenure. END NOTE.) Notable in the investigation phase of the affair is the leading role of the Party's Discipline Inspection Commission, which had the proverbial "first cut" at the judges because, as our Jilin University contacts pointed out, nearly all were Party members. He Zhipeng said that the prosecutors were instructed-- presumably by Party officials--to limit the number of judges investigated; our contacts assessed this was a sign that more of the many additional justices on the High Court may have been implicated in some way. 5. (C) Judicial corruption throughout northeast China remains a serious problem, according to legal contacts in Liaoning and Jilin provinces. Professor He linked the blight to judges' meager salaries. Judges in Jilin, for instance, earn roughly RMB 2000 (USD 300) per month, he noted. (NOTE: By comparison, average mid-level managers at major Jilin firms earn up to RMB 16500 (USD 2400) per month. END NOTE.) Also to blame is the Chinese legal system's absence of prohibitions on ex parte communication between judges and attorneys/claimants, which Professor He SHENYANG 00000134 002 OF 003 said was common in northeast China. As for Liaoning, Dalian attorney and current IVLP grantee ZHAI Yuzhong (PROTECT), told us that judicial corruption remains endemic in the province. It is common, for example, for Liaoning attorneys to "play mahjong" with judges, purposely losing large sums of money in order to influence the arbiters of their cases, according to Zhai. Professor He Zhipeng told us the practice is common in Jilin as well. That said, Dean Xu Weidong noted that judicial corruption of the sort exposed at the Jilin High Court currently tends to be more of a problem at the local trial-court level than at the high-court level because there is less oversight. THE EXECUTIVE: ARREST OF HIGHEST JILIN OFFICIAL SINCE '78 --------------------------------------------- ------------ 6. (C) Corruption charges in another case this year also implicated Jilin Province's highest-level official since 1978. Central authorities in April reportedly whisked away MI Fengjun--Party Secretary of provincial capital Changchun from 1995-2001 and a deputy chair of the Jilin People's Congress until 2008--to Beijing on suspicion of serious bribery and corruption, according to Caijing magazine. Mi apparently still has yet to be removed from his position as a National People's Congress (NPC) delegate. Current Changchun Party Secretary GAO Guangbin (PROTECT), a promising young up-and-comer with a Communist Youth League pedigree, told us recently that Mi's case is still under investigation. Emphasizing that he was now removed from Mi by several predecessors in the position, Gao claimed the case has had little impact on Jilin officialdom. He called Mi a "capable" politician, but ascribed his downfall to "individual" shortcomings. Others have suggested more institutional factors are at work. In June, for instance, Caijing magazine pointed to the corrosive force of localism: many senior Jilin officials are still drawn from within the province, allowing them to accumulate sufficient power to fend off investigations into their (ab)use of power. 7. (SBU) Mi's downfall preceded that of another prominent Jilin official. PRC media announced in July this year that TIAN Zhong, Deputy Party Secretary of Changchun between 1998 and 2006, had been sentenced to life imprisonment for bribery and embezzlement involving millions of dollars over nearly a decade. It appears that Tian's testimony laid the groundwork for Mi Fengjun's (imminent) prosecution. Tian's sentencing came several months after a series of more minor corruption-related busts elsewhere in the province, like that of Jilin City's Vice Mayor YU Guohua, whom authorities announced earlier in the year had been sacked for accepting millions of renminbi in bribes from business interests. THE SOEs: TWO FORMER CHIEFS ARRESTED ------------------------------------ 8. (C) The former chiefs of two major Jilin-based SOEs have also been implicated in corruption scandals. Police in March reportedly detained LIU Xianlu, the former chairman of heavyweight Jilin Grain Group, on suspicion of embezzlement and bribery involving over ten million dollars, again according to the hard-hitting Caijing magazine. Liu was an NPC delegate for five years until March 2008. Contacts at the group--the PRC's largest grain-trading firm, which handles over sixty percent of the country's global grain transactions--told us Liu's abuse of power was a product of the "old system" at the firm. Prior to internal reforms there in 2003-2004, the firm's lack of transparency and management controls offered Liu too much room to maneuver. This explanation may be incomplete, however. Some overseas press reporting, for instance, has suggested that former high-level political officials may also have been implicated in Liu's misdeeds, though we have been unable to confirm this. 9. (SBU) In December 2007, several months before Liu's detention, Jilin authorities in another major case sentenced to death the former chairman of Northeast Expressway for corruption involving millions of dollars he defrauded from shareholders. The case is thought to be linked to an even larger Heilongjiang-based corruption scandal that broke in 2004. THE POLICE: TOP COPS SHELTERING CRIMINAL GANGS --------------------------------------------- - 10. (SBU) South of Jilin, recent months have also seen the (partial) conclusion of a major police scandal in Liaoning Province that recalled a massive 2001 corruption bombshell involving official collusion with criminal elements that SHENYANG 00000134 003 OF 003 eventually implicated over 100 Shenyang officials, including the mayor, vice mayor, and senior judges. Liaoning authorities in June tried ZHANG Jianming, the former Deputy Director of the Shenyang Public Security Bureau (PSB), on charges of bribery and protecting a major Liaoning criminal syndicate for over a decade. His trial was conducted in a stadium because Zhang, who before his arrest was once considered an anti-crime "hero," was accompanied by so many other defendants. By July, Liaoning Province had prosecuted at least eleven police officers, including Zhang, for sheltering three mafia groups in Liaoning Province, according to official media. Police charged included heads of anti-narcotics units, though the Shenyang rumor mill has it that the city's narcotic squads are still in league with criminal drug traffickers. Zhang Jianming was found guilty, but details of his sentence remain unknown. 11. (U) Zhang's downfall appears to be among Liaoning Province's most prominent corruption cases since that of Zhang Shusen in 2007. Zhang, the former chief of the province's Food and Drug Administration, was sentenced in October to 15 years in prison for embezzlement and accepting bribes from pharmaceutical companies manufacturing substandard products, among others. IMPLICATIONS ------------ 12. (C) Northeast China appears to be witnessing some of its highest-level corruption prosecutions since 2004-2005, when a massive government post-selling scandal in Heilongjiang Province triggered the downfall of over 400 officials, including former governor Tian Fengshan, provincial Organization Department chief Han Guizhi, and a number of judges. Many northeasterners today, however, remain cynical or in the dark. Events over the past year do not suggest a concerted effort to combat the region's corrosive corruption in many areas of official life. Investigations and prosecutions seem to be ad hoc instead of concertedly systematic. Domestic reporting within northeast China on many of the cases has been either deliberately downplayed or entirely absent, as in the case of Jilin's High Court judges. In many instances, the most detailed domestic reporting has been "cross-regional" in nature, carried out by, and only appearing in, non- northeastern Chinese news sources, thereby limiting the local public's exposure to events. Northeastern Chinese businessmen, lawyers, journalists, academics and ordinary citizens still tell us that official corruption remains widespread in the region, a fact of life in everything from securing schooling for their children to obtaining approvals for construction projects. 13. (C) Worth watching in the period ahead will be the impact of the Jilin cases on the fortunes of provincial Party Secretary Wang Min and Governor Han Changfu. Both are out-of-towners who were brought into northeast China by Beijing with a mandate to, among other things, clean up the province. SWICKMAN