The snowballing corruption scandal centring on Zheng Xiaoyu, former director of the State Food and Drug Administration, is significant in several ways. First, it is the latest example of the endemic corruption that permeates every branch of the government, and is another telling sign of the failure of the mainland leadership's anti-corruption campaign. Second, it calls into question the future of the watchdog, which was only set up in 1998 along the lines of the US Food and Drug Administration. Third, it again raises important questions over how to better monitor leading government officials and their immediate family members. State media reports said his son, Zheng Hairong, and wife Liu Naixue had also been arrested on suspicion of colluding with him to sell drug manufacturing permits. Two of Zheng's top aides - Hao Heping, head of the watchdog's department of medical equipment, and Cao Wenzhuang, chief of the drug registry department - were also arrested. Both Hao and Cao once worked as Zheng's secretaries. It is believed mainland leaders have been shocked by the scale and extent of corruption within the watchdog. On January 24, Premier Wen Jiabao held a special State Council meeting on Zheng's corruption case, and concluded that he was 'in serious dereliction of duty, took advantage of his power to accept bribes, and protected and encouraged his family members and aides to engage in illegal activities'. While the details are unclear, state media reports have painted an alarming picture with potential life-threatening implications for tens of millions of hospital patients. Zheng and his close aides have been accused of selling drug manufacturing permits to pharmaceutical firms and accepting bribes for approving purchases of medical equipment. One of Zheng's 'major accomplishments' since becoming the watchdog's first director was to force all pharmaceutical firms to reregister with the administration between 1999 and 2003. The 21st Century Business Herald reported that documents bearing official approval were sold for between tens of thousands of yuan and several hundred thousand yuan. For example, Yu Qingxiang, a deputy director of the watchdog's Jilin branch, sold more than 1,000 approval documents for 10,000 yuan each. Yu was jailed for 15 years in July. One now shudders at the thought of buying or taking any mainland medicine, and the leadership is obviously worried. It has ordered a review of all 168,740 drug manufacturing approvals granted between January 1, 2005, and August 31, last year. Leaders have also ordered a massive re-education campaign for all watchdog officials and each is expected to go through a vigorous vetting process. While these efforts may help save lives and improve the watchdog's image in the short-term, there is a bigger question: can they help restore people's confidence in the agency's ability to do its job properly? The answer will have to be no if the watchdog continues to operate in its current structure. The next batch of officials is most likely to suffer a similar fate, as the temptations of money are too great to refuse under the opaque regime. To restore people's confidence, the leadership should consider abolishing the agency and create new independent bodies to approve drugs and medical equipment. Those new bodies should mainly comprise medical experts and academics, instead of government bureaucrats, and the process should be as transparent as possible.