Running out of options

Raymond Li

Borders and immigration officials have been a bit of an issue for China's arch-fugitive Lai Changxing, ever since the early days of a career in which he built up the biggest smuggling empire in the history of the People's Republic.

Lai, 53, who was born to a poor family in Jinjiang, Fujian province, entered Hong Kong illegally in the 1970s, to return home as a self-made Hong Kong-based businessman several years later. It was that initial success that propelled him towards setting up the Xiamen Yuanhua Group in 1994, thanks to his many connections with senior government officials.

Over the years he became so powerful and well connected that in the late 1990s in Xiamen it was said his empire was the mainstay of the coastal city's economy.

Lai's downfall began when he fell foul of then premier Zhu Rongji, who had had enough of an upstart whose empire was said have smuggled US$10 billion worth of contraband and which had suborned numerous politicians and officials in Fujian.

Lai's empire allegedly smuggled a wide range of goods, including cigarettes and liquor worth billions of yuan, into the mainland, and some reports said the group also smuggled weapons. It was also investigated for tax evasion and bribery.

Details of Lai using beautiful women and money to bribe high-ranking officials at a multimillion-yuan complex in Xiamen known as the Red Mansion have been reported for years. The infamous six-storey building in Xiamen's northern Huli district was lavishly equipped with guest rooms, saunas, karaoke rooms and entertainment suites, used by Lai to lure officials into his web of corruption. It has now been converted into a job training centre, after serving as a museum of the corruption rampant in Lai's time, complete with its erotic art and massage tables.

Zhu struck against Yuanhua in 1999 and the group's swift collapse led to the downfall of dozens of senior government officials, among whom Li Jizhou, then vice-minister of public security, was one of the most senior. Li was sentenced to death, with a two-year stay of execution, for bribe-taking and dereliction of duty in 2004.

Others caught up in the crackdown were less fortunate. Among the hundreds of officials and businesspeople implicated in Lai's smuggling empire, 11 were put to death in November 2000. A further 73 people were given terms of up to life in prison for their involvement in the Yuanhua smuggling racket.

Lai was reported by state media to have bribed Xiamen vice-mayor Zhao Keming with a sauna and prostitute at the Red Mansion around 1996 and 1997 in return for concessions on a project. Zhao was given suspended death sentence in 2002. Xiamen's customs chief, Yang Qianxian , was given 10 million yuan to keep a mistress; Lai provided the couple with houses in Xiamen and Hong Kong in the late 1990s. Yang was among those executed in 2000, along with former deputy director of the Fujian Public Security Bureau Zhang Rushun and former Xiamen vice-mayor Lan Fu . Li Jizhou, a deputy minister of public security, was reported to have spent three days in the complex with a charming young woman to whom he had been introduced by Lai. Li was given suspended death sentence in 2001.

Lai was rumoured to have links to a leading folk singer to whom he had given a multimillion-yuan villa in Beijing. In return, she was said to have lobbied on his behalf when his illegal operation came to light.

Lai fled Xiamen on a speedboat, accompanied by his wife and daughter, after being tipped off that Zhu was about to arrest him. He made his way to Vancouver via Hong Kong, which he had been able to enter on a Hong Kong passport he obtained by claiming he had been adopted by a family friend - at the age of 35. In 2002 the Hong Kong government, reportedly acting under heavy pressure from Beijing, revoked them, saying he had obtained them dishonestly

In November 2000, Lai was arrested at a casino in Niagara Falls, beginning a protracted battle for asylum. As part of his attempt to win refugee status he Lai made a public confession, admitting that he had indeed bribed officials, including Jia Qinglin , No 4 in the leadership hierarchy and chairman of Chinese People's Political Consultative Conference and Jia's wife, Lin Youfang, who was head of the Fujian Foreign Trade Corporation for several years in the 1990s.

Lai also claimed that he had deals with former President Jiang Zemin's top aide, Jia Tingan, who had been Jiang's secretary for over 20 years before Jiang's retirement and is now a general in the People's Liberation Army. Jia Qinglin was party chief and governor of Fujian province from 1985 to 1996, the period when Lai was most active.

Lai claimed he had been able to flee with help from higher-ups whose careers he could ruin if he was ever brought to trial. He repeatedly said he would want to write an autobiographical account of the scandal, although no such book was published.

He has been in and out of detention facilities while arguing that he cannot get a fair trial in China and that he is at risk of being mistreated in custody should he ever be sent home. His most recent arrest was made by Canadian border service authorities on July 7, to prevent him going into hiding.

Under pressure to fight corruption, which the Communist Party fears could threaten its grip on power, authorities officially sought Lai's deportation in November 2007. At that time, mainland authorities assured the Canadian government that, unlike his accomplices, Lai would not be executed.

Zhu said he was so determined to have Lai deported that, albeit reluctantly, he would nevertheless honour the pledge not to have him executed. 'He should be executed three times, and even that is not enough. Now that we have agreed that he will not be executed, that is the biggest concession we can make,' the premier was quoted as saying at the time.

Beijing has since gone to great lengths to convince Canada to extradite Lai, and in March promised that Canadian embassy officials would be allowed to visit him in prison and conduct third-party medical checks if he were convicted in China.

Despite finding some form of sanctuary in Canada, Lai again acquired a reputation for criminal behaviour.

Vancouver police detective James Fisher told Lai's detention hearing that Lai was in charge of an illegal gaming operation run out of a home in Richmond, British Columbia, and that Lai was in partnership with loan shark Betty Yan, who was found shot dead in a Richmond industrial park in April 2009.

Ong Yew-kim, a Hong Kong-based expert on mainland law, believes China would have little to gain by executing Lai, as 'that would represent a huge blow to what Canada stands for'.

China has signed bilateral extradition treaties with a number of countries, including Spain and France, to waive capital punishment for people facing extradition.

Nevertheless, extraditions under those agreements have been held up by international politics, diplomatic wrangling and discrepancies in the justice systems.

Canadian Foreign Minister John Baird indicated earlier this week in Beijing that both countries had wasted too much time on white-collar fraudsters. He also reaffirmed the independence of Canada's judicial system.

Beijing-based criminal lawyer Yi Shenghua said the issue of Lai's deportation was now less political than it was 10 years ago and has become more of a legal issue.

Analysts say that many senior officials once rumoured to have links with Lai, such as Jia, would retire during the next party reshuffle anyway, but Yi said that the most urgent issue was for Chinese authorities to push for greater transparency in the judicial system by allowing international access to court rulings.

'The international community needs to see for themselves what the Chinese government is up to ... and whether those implicated could have the same judicial safeguards as they do in other countries,' Yi said.

'If people could be convinced from the bottom of their hearts that this is the case, deportation will no longer be an issue.'


The amount, in US dollars, smuggled out of China from the mid-1990s to 2008 by 15,000 corrupt officials, according to Financial Times