-Caveat Lector- <A HREF="http://www.ctrl.org/"> </A> -Cui Bono?- January 22, 2000--NYTimes Big Smuggling Ring With a Wide Reach Scandalizes China By ERIK ECKHOLM BEIJING, Jan. 21 -- With mounting intensity, China's leaders have railed about the mortal dangers that smuggling and corruption pose to society and Communist Party rule. Now, as details emerge about the largest smuggling scandal yet -- a conspiracy that apparently involved dozens of party, police and banking officials, the wife of Beijing's powerful party chief, virtually the entire customs department of a major seaport, and a flamboyant corporate leader who has vanished -- the basis for those fears is becoming clearer. During the 1990's, the sprawling syndicate smuggled billions of dollars' worth of cars, oil and industrial materials through the bustling southeastern port of Xiamen, evading huge sums in taxes, according to officials familiar with the case. This was no pickup scheme to sneak the odd container past a customs booth, but a systematic corruption of the port to allow rivers of goods to pass through illegally. The case, which the central authorities began investigating last fall, has to be embarrassing and sobering for President Jiang Zemin, who has spearheaded the anti-corruption crusade. But even more, it suggests critical weaknesses in the Communist Party and its ability to govern the vast country. "This was a cooperative, well-integrated operation," said Ding Xueliang, a Chinese-born expert on corruption issues, noting the apparent suborning of Xiamen's entire customs branch and the complicity of the police and politicians. "Law and party discipline became irrelevant in a whole city," said Mr. Ding, a research associate at Australia National University who is now conducting research in Hong Kong. "That's got to be the most worrying thing for the central leadership." The Xiamen case is only the most extensive of several recent scandals involving large numbers of officials who cooperated in crime, Mr. Ding said. "These large criminal schemes will destabilize the political and social situation in China much more than one or two dissidents in the streets with slogans," he said. The country's top leaders have stayed publicly mum about the investigation, which is being carried out by hundreds of agents who were specially sent from Beijing and have taken over two hotels in Xiamen. So far, only a few hints about this smuggling case in Fujian province, on the coast across from Taiwan, have been reported in the state-controlled media here. But too many people have been detained or otherwise affected for the inquiry to remain a secret. Prime Minister Zhu Rongji described the giant investigation in a recent internal party speech, an official said today, while accounts from Hong Kong newspapers have appeared on Chinese Internet sites. Bit by bit, officials in Xiamen and Beijing have privately confirmed to foreign reporters many startling details about a case that has Beijing's political cognoscenti buzzing with speculation about where it may lead. Party officials in Beijing confirmed today that this month, as investigators closed in, a deputy mayor of Xiamen, Lan Fu, and his wife fled the country. The Chinese authorities believe that the couple flew to Australia, and officials said they had asked for the two to be arrested through Interpol. The Australian Embassy here said it had no knowledge of Mr. Lan's whereabouts or of requests for his arrest. A senior police official in Fujian was reportedly arrested for helping Mr. Lan and his wife flee. According to reports in Hong Kong newspapers, since September all middle-ranking and senior officials in Xiamen have been forbidden to travel outside China without special permission. Among other senior officials reportedly accused in the case are another deputy mayor of Xiamen; the deputy chief of police for Fujian province; the chief of police in Fujian's provincial capital, Fuzhou; the Xiamen customs chief; two of Xiamen's deputy party secretaries, and three senior bank managers in Xiamen. Many of the suspects have already been held for months for interrogation. In other recent high-profile smuggling cases, some officials convicted as ringleaders were given a death sentence. The detention of the wife of the Beijing Communist Party secretary, Jia Qinglin, who is also a member of the party's policy-making Politburo, is especially embarrassing and sensitive for the top leaders. Mr. Jia was formerly party secretary in Fujian province, and his wife, Lin Youfang, held powerful posts in Fujian's economic planning establishment and a provincial government trading corporation. Mr. Jia had been picked by President Jiang to help clean up the image of Beijing, tarnished by the rampant corruption of city's former mayor and party secretary, who in 1998 was sentenced to 16 years in prison. Party officials said today that in an effort to salvage his career, Mr. Jia recently divorced his wife, but this could not be confirmed. As the top political official of China's capital, Mr. Jia presided over the huge parade on the 50th birthday of the People's Republic on Oct. 1. His political future is now unclear. The man at the center of the scandal is Lai Changxing, president of a corporation called the Yuanhua Group, which carried out most of the illegal trading. Mr. Lai had cut a large figure in Xiamen, sponsoring the local soccer team and investing in a giant office and hotel complex with a planned 88-story center. He bought an expensive apartment and company offices in Hong Kong. And, investigators say, he bought the support of the Xiamen customs authorities and the police for his smuggling operations. The authorities have closed down the Yuanhua company, and at some point last fall Mr. Lai disappeared, presumably into a secret life abroad. While President Jiang has not spoken publicly about the Xiamen case, spreading word about the scandal has led to new scrutiny of his Jan. 14 speech to the Central Disciplinary Inspection Committee, the party's internal investigations body, which was published the next day in the party's newspaper, People's Daily. "Leading cadres must be strictly supervised," he said. "Leading cadres who are found to have violated discipline and the law must certainly be strictly investigated and handled." "The more senior the cadre, the more famous the person, the more rigorously cases of violation of discipline and law must be investigated and handled," he said. "No matter who they are, no matter what their seniority, they should be punished in whatever way is appropriate." ================================================================= Kadosh, Kadosh, Kadosh, YHVH, TZEVAOT FROM THE DESK OF: <[EMAIL PROTECTED]> *Mike Spitzer* <[EMAIL PROTECTED]> ~~~~~~~~ <[EMAIL PROTECTED]> The Best Way To Destroy Enemies Is To Change Them To Friends Shalom, A Salaam Aleikum, and to all, A Good Day. ================================================================= <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are not allowed. Substance—not soap-boxing! These are sordid matters and 'conspiracy theory'—with its many half-truths, misdirections and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. 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