Tags: China | corruption | Zhou

Major China Corruption Probe Hints at Continuing Power Struggle

Major China Corruption Probe Hints at Continuing Power Struggle
Zhou Yongkang

By    |   Wednesday, 02 April 2014 09:34 AM

The noose is tightening around Zhou Yongkang, a former head of China’s domestic security entangled in a vast corruption investigation, and the highest-ranking figure to become embroiled scandal in the history of the communist state.

Chinese authorities have seized assets worth at least 90 billion Yuan ($14.5 billion) from Zhou’s relatives and associates, two sources told Reuters. More than 300 of his relatives, political allies, protégés and staff have also been taken into custody or questioned in the past four months, said the sources, who have been briefed on the investigation.

The sources said prosecutors and the party's anti-corruption watchdog had frozen bank accounts with deposits totaling 37 billion Yuan and also seized domestic and overseas bonds and stocks with a combined value of 51 billion Yuan after raiding homes in Beijing, Shanghai and five provinces.

Investigators further confiscated about 300 apartments and villas worth around 1.7 billion Yuan, antiques and contemporary paintings with a market value of 1 billion Yuan and more than 60 vehicles.

While most of the assets were not in Zhou's name, the sources said, it was unclear what proportion was ill-gotten and would eventually be turned over to the state.

Yet the sheer size of the seizures, the scale of the investigations and Zhou’s status in the ruling elite make the corruption probe unprecedented in modern China.

"After being the equivalent of the Minister of the Interior, he was a member of the Standing Committee of the Politburo of the Communist Party, that is to say, one of the seven or eight most influential people from all over China," François Dufour, president and founder of AAA-China Analysis, told FRANCE 24.

Reuters reported that Zhou, 71, has been under virtual house arrest since authorities began formally investigating him late last year. He is the most senior Chinese politician to be ensnared in a corruption investigation since the Communist Party swept to power in 1949.

Dufour said the leaks of information were themselves revealing, noting that the fact "that Reuters may have had access to this information shows that Beijing has Zhou Yongkang in the viewfinder.”

The investigation would appear to show that President Xi Jinping is tackling graft at the highest levels, yet there might also be an element of political payback after Zhou opposed the prosecution of Bo Xilai, a former politburo member, who was jailed for life in September for corruption and abuse of power.

"Zhou Yongkang was one of Bo’s biggest supporters," said Dufour. "Bo Xilai was someone who could have embodied opposition to the direction in which Xi Jingping is taking the Communist Party. Zhou Yongkang was more the shadowy operator exercising immense influence behind the scenes."

Before Bo's downfall, Zhou had recommended that Bo succeed him as domestic security chief. Since Zhou’s retirement in 2012, the post has ceased to exist.

There is no evidence, however, that Zhou will suffer the same fate as Bo.

"If a trial were to take place it would be an earthquake of rare intensity in the Chinese political landscape," said Dufour. Beijing might avoid risking a sensational trial that could further undermining public faith in the party.

Putting someone as powerful as Zhou in the dock might also undermine support for Xi from other party elders. In ordering the investigation, Xi broke an unwritten rule that incumbent and retired members of the Politburo Standing Committee were immune from prosecution.

In the secretive world of China's Communist Party, targets of its investigations usually disappear, often for months or even years, until an official announcement is made.

The government has yet to make any official statement about Zhou or the case against him and it has not been possible to contact Zhou, his family, associates or staff for comment. It is not clear if any of them have lawyers.

A third source with ties to the leadership said Zhou had refused to cooperate, insisting he was the victim of a power struggle.

"Zhou Yongkang is tough and claims it is political persecution," the source said.

Zhou rose through the ranks of China's oil and gas sector. He built a powerful and influential network the head of the China National Petroleum Corporation, the parent company of PetroChina, the largest oil extraction company in the country. In that role he was courted by local politicians and was able to build a "clientele” that helped push him to the summits of the state.

“The energy sector is known to be one of the most corrupt in the country," said Dufour.

In 2006, the arrest of the CEO of Sinopec, China No. 1 oil refiner, Chen Tonghai, in 2006 highlighted the questionable practices in the sector. Chen had cached tens of millions of dollars in secret accounts and had even hidden bundles of notes into his toilet.


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The noose is tightening around Zhou Yongkang, a former head of China’s domestic security entangled in a vast corruption investigation, and the highest-ranking figure to become embroiled scandal in the history of the communist state.
Wednesday, 02 April 2014 09:34 AM
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