Chinese Official Is Dismissed in Pension Scandal

By Maureen Fan
Washington Post Foreign Service
Tuesday, September 26, 2006

BEIJING, Sept. 25 -- The Communist Party chief of Shanghai was fired Monday in the highest-level purge of a Chinese official in more than a decade. Analysts called the dismissal an effort by President Hu Jintao to make a bold statement against corruption and consolidate his power in advance of an important party congress.

Chen Liangyu, who presided over China's high-rise and business capital and its 17 million people, sometimes clashing with officials in Beijing, also lost his seat on the country's ruling Politburo.

The official New China News Agency said Monday that investigators believe that Chen, 59, helped loot the city's pension fund of hundreds of millions of dollars. He helped enrich illegal entrepreneurs, the agency reported, and engaged in cronyism on behalf of family members and his staff, who also severely violated various laws.

There was no public response from Chen on Monday. His photograph and other personal material about him has been removed from the city's Web site.

Official corruption is a prime concern among the Chinese public, and the Communist Party has promised repeatedly to attack it aggressively.

Analysts also saw the dismissal as related to a party congress that will convene late next year. At that meeting, Hu is to pick party leaders who will serve under him during his second five-year term.

Chen was a political protege of former Chinese president Jiang Zemin, who is from Shanghai. In the same way that Jiang tried to shore up his legacy by promoting his own proteges and loyalists, analysts here said, Hu is making room in the ranks for allies in hopes that they will help him govern and retain influence after he steps down.

The apparent struggle between those loyal to the two leaders does not reflect a disagreement in ideology, according to a Western diplomat with extensive experience in Asia. Instead, the elbowing is about patronage and influence.

Liu Xiaobo, a leading political dissident and literary critic, said that "anti-corruption is always a useful tool in the fight for power among high-ranking officials."

Chen, born in October 1946, earned an architectural degree from a People's Liberation Army institute. He joined the Communist Party in 1980, holding a succession of posts before being appointed Shanghai party secretary in 2002. In that job, he oversaw a metropolitan area that is studded with glass office towers and functions as the hub of one of the world's most dynamic economies.

The city's stature suffered a blow in recent years due to corruption scandals -- at least two people were named earlier in the pension fund investigation -- and an overheated real estate market. Chen reportedly clashed with President Hu and Premier Wen Jiabao over Beijing's attempts to slow the city's economic growth.

His removal will bring no change to local economic policies in Shanghai, state media said. Chen is being temporarily replaced as party boss by Shanghai's mayor, Han Zheng.

The last Politburo member to be fired in a corruption case, in 1995, was Chen Xitong, then mayor of Beijing. But his case pales compared with Chen Liangyu's, which involves far greater amounts of money, Liu suggested. Chen Xitong was sentenced to 16 years in prison. After serving eight years, he was released earlier this year for what officials called medical reasons.

Beijing is believed to have sent teams of investigators to Shanghai, where they went around in black cars with tinted windows to question officials. The Communist Party often conducts what turn out to be criminal investigations of its own before it allows municipal authorities to begin formal investigations by prosecutors or police. The party investigators sometimes use a technique known as shuang gui , an extra-legal procedure that involves secret detention and questioning of suspected officials.

Party officials have been increasingly speaking out against corruption recently, but it is unclear whether their rhetoric is filtering down to the local level, where corruption remains rampant.

"We must realize that China is now experiencing a profound system transformation, a profound structural adjustment, and a profound social change," wrote Wu Guanzheng, head of the party's Central Commission for Discipline Inspection, in an article emphasizing anti-corruption efforts in a party journal this month.

"Generally speaking, the party's working style is good, but there are still some serious problems," Wu wrote in the Sept. 16 issue of Qiu Shi magazine. "For example, some party officials lie to their supervisors, some only focus on getting a higher position, some seek illegal benefits using power, some fight the central government's decisions if they conflict with his regional interests, some appropriate public monies, and so on."

Because of upcoming elections of local party officials this year and next year, officials should pay special attention in rooting out the guilty, he said. "We should bring ruin and shame to their political reputation and make them suffer from great financial loss and moral regret."

The New China News Agency report about Chen Liangyu stressed that senior cadres must pay particular attention to "improving their performance." It also called on them "to guard against temptation and to persist in stringent self-discipline."


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