Still plenty of ways to feather a nest

PUBLISHED : Saturday, 11 June, 2011, 12:00am
UPDATED : Saturday, 11 June, 2011, 12:00am

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The case of former Suzhou vice-mayor Jiang Renjie is interesting not only because it took almost four years to successfully prosecute him on corruption charges, but also because it gives a glimpse into the complex manoeuvring behind the giving and receiving of bribes on the mainland.

Jiang's case is also important in that it prompted the authorities to look into 'new types of bribes' and amend the law in 2007 to remove loopholes before they could finally secure his conviction in 2008.

Jiang, now 62, became Suzhou vice-mayor in 2001 and was given the responsibility of overseeing urban construction, transport and property development. He became the subject of a graft investigation in August 2004, but it was only in April 2008 that Nanjing Intermediate People's Court sentenced him to death for taking bribes. His appeal was rejected this March but his execution has not yet been announced, meaning his death sentence is still being reviewed.

Jiang was convicted of accepting more than 100 million yuan (HK$120 million) in bribes - the biggest haul by any mainland vice-mayor by 2008. But the most eye-catching detail of his case was that he managed to get 82 million yuan (HK$98.4 million) from a developer in one go.

How did Jiang manage to get such a large sum? And why did it take so long to convict him?

Based on court records and reports by the state media, it appears he was very careful when he took bribes. In June 2001, the Suzhou government planned to reappropriate a piece of land that had been leased to a developer, Ding Li Property Company, but which had been left idle for two years. Sales of land are forbidden on the mainland and urban land is leased to developers for 70 years.

Jiang smelled an opportunity because Ding Li had paid 9 million yuan (HK$10.8 million) to secure land and he expected the government would have to pay 18 million yuan (HK$21.6 million) to get it back as the city was going through a property boom at the time. He then collaborated with another developer, Gu Wenbin, who paid 12 million yuan (HK$14.4 million) to lease the land from Ding Li. Jiang and Gu hoped to share a profit of 6 million yuan (HK$7.2 million) on the difference .

However, Jiang was not directly in charge of the project; another vice-mayor was. And that vice-mayor insisted that the government would only pay the original 9 million yuan to get the land back.

But that did not stop Jiang, because he knew the game too well. He told Gu to claim to be a Hong Kong businessman and complain to the city government. The complaint was handled by a lower-ranking official, who was instructed by Jiang to settle the case by giving Gu another piece of land of the same size as a swap.

Gu later sold the second piece of land for a profit of 170 million. Then they had to figure out a safe way to share it with Jiang, the mastermind of the plot.

Jiang asked Gu to get a relative to open a company in Shanghai, with Jiang's son appointed to senior management level and put in control of its finances. That gave Jiang a virtual iron hold on the money and Gu even had to borrow from Jiang when he needed to take money from the company to help his cash flow.

Jiang was very careful to ensure that his son was not a shareholder of the company, and that became his defence lawyer's key argument when the case first went to trial in 2006.

During that trial, Jiang pleaded not guilty because the criminal law only covered those who took bribes for themselves or those who transferred money elsewhere to dodge investigations.

That case prompted the government to look into novel ways of taking bribes. It removed loopholes in 2007 by amending party regulations to make illegal any commercial co-operation or investment between officials and businessmen who obtained assistance from those officials.

While the government is hailing the case as an example of its determination to curb corruption, many questions remain. How can officials obtain such huge profits so easily? Jiang may have been caught, but what about others who use even more sophisticated methods to receive bribes?

One loophole has been removed but that does not mean there are not others out there yet to be discovered.