Tuesday, April 24, 2012

When masters of corruption are also students -- the thrill of the fall of Bo Xilai


Former Chinese Communist Party hot shot Bo Xilai and his apparently even more crooked (and suspectedly homicidal) wife, Gu Kailai, in Beijing in 2007

"For much of the last decade, while Bo Xilai was busy moving up the ranks of the Communist Party, and even striking populist themes aimed at improving the lot of the poor, his relatives were quietly amassing a fortune estimated at more than $160 million. His elder brother accumulated millions of dollars' worth of shares in one of the country's biggest state-owned conglomerates. His sister-in-law owns a significant stake in a printing company she started that was recently valued at $400 million. And even Mr. Bo's 24-year-old son, now studying at Harvard, got into business in 2010, registering a technology company with $320,000 in start-up capital."
-- from "As China Official Rose, His Family's
Wealth Grew
," by the NYT's David Barboza

by Ken

Oops! How tactless of Bo to get caught! Not to mention the missus's oopsiness in being suspected of involvement in the possible murder of a British businessman last November. (Suspicion that her husband may not have encouraged the most zealous investigation into the case has added to his litany of woes.) In what appeared to those of us far removed from the inner workings of Chinese politics, it led to Bo's stunningly swift removal from his seat on the Politburo and his important party command post in Chongqing. Here's how David Barboza sets the tone for his report:
Just a few weeks before his dramatic fall from power, Bo Xilai wrote an inscription in calligraphy, praising the Chongqing Water Assets Management Company, and urging support for its operations.

What he did not say was that a foundation controlled by his younger brother, Bo Xicheng, had acquired a stake in a subsidiary of the water company.

Mr. Bo had done something similar in 2003, while serving as governor here in Liaoning Province. He said his province would make supporting the Dalian Daxian company, a conglomerate engaged primarily in electronics manufacturing, one of the most important tasks of the next five years. A few years earlier, another company controlled by the same younger brother was listed as the owner of nearly a million shares in Dalian Daxian, worth about $1.2 million.

It is not clear whether Mr. Bo knew of the indirect stakes in the companies, or whether his brother profited from his pronouncements. But now, in the aftermath of Mr. Bo's dismissal . . . there are mounting questions about whether [he] used his enormous political clout to enrich himself and his closest relatives.

Worse still, from the standpoint of the Chinese political command:
Bo Xilai's downfall this spring has also cast a sharper spotlight on the hidden wealth and power accumulated by the Communist Party's revolutionary families, and by the sons, daughters, wives and close relatives of the nation's high-ranking leaders.

“This could really open a can of worms,” says Bo Zhiyue, a senior fellow at the National University of Singapore's East Asian Institute. “The relatives of other party leaders are also doing lots of business deals, and people will begin to ask: What about them? Was the Bo family the only one doing this kind of thing?”

Oh my! It's a public airing of dirty linen on the part of people who prefer to be thought of as not having linen.

It may not have been exactly what Deng Xiaoping had in mind when he introduced his brand of capitalism to his brand of socialism, but from where I'm sitting it bears an uncanny resemblance to what in this country passes for "free-market capitalism."

I can't claim credentials as a cultural anthropologist, but one thing I've learned from a lot of years of observing the world is that you don't have to teach people to be corrupt. f iIt's not quite a reflex, it seems to come awfully naturally. Which doesn't mean that you can't, er, coach corruption. People everywhere seem starved for knowledge, to learn better corruption technique -- of both the foundational "basic" and the cutting-edge advanced kinds -- and to stimulate their own creativity.

So it was fascinating to read New Yorker China correspondent Evan Osnos's recent report "The God of Gamblers," about Macau. The subhead was "Why Las Vegas is moving to Macau." The former Portuguese enclave, it seems, has vaulted past backwaterized Hong Kong as an engine of economic activity, all built around its historic involvement in gaming activity. The movers and shakers of Macau, Osnos tells us, have taken inspiration from Las Vegas but then escalated the scale of the operation -- and the movement of money -- to the point where what happens in Vegas seems, comparatively, hardly more significant economically than an after-school fund-raising scheme.

The scale of the corruption and criminality built into Macau's way of doing business, now so deeply embedded in the Chinese political and economic system, has so impressed the moguls of Las Vegas that many of them have jumped in, notwithstanding the serious handicaps faced by foreign players in so heavily rigged a system. None, apparently, embraced this brave new world more gamely than our own Sheldon Adelson. Ironically, his greed and ruthlessness are so extreme that he's facing problems with pesky U.S. government officials for consorting with kinds of people that legal gaming folk in Nevada aren't supposed to be consorting with. Oops!

I'm not planning to hold my breath till we see Shelly in irons facing life-altering criminal charges. It would be a sad commentary on wealth in free-market America if a man couldn't intimidate and buy his way out of such petty bureaucratic snafus. After all, is there any goal we can more reliably expect a President Willard Inc. to pursue than the final conversion of the U.S. economy to an all-rape, pillage, and plunder model?

Very much like the end product of Deng's "reforms" in China. It appears, if I've read Evan Osnos correctly, that the scale of corruption in China is so massive that the political command couldn't materially interfere with the money machine that is Macau if it was so inclined, which it shows no evidence of being. Oh, the Chinese oligarchs may look pretty tough when they're having unarmed demonstrators massacred, or riding herd on troublemakers intent on, well, making trouble regarding the way their country is run. It's quite another thing, though, to interfere with the livelihoods of, you know, players. Besides, aren't the authorities who would be in a position to exercise any such authority being sufficiently paid off by those players?

It all seems to work out as long as nobody gets too greedy.

Which brings us back to the unfortunate case of Mr. Bo and Ms. Gu. And again from where I'm sitting, it looks like the all-too-familiar case of authorities being forced to step in when one of their own just doesn't know his own place, and acts in a way that not only embarrasses but forces unwelcome attention on people who don't like being thusly embarrassed or facing unwelcome scrutiny.

It's a very Chinese story, I know. Specifically, a People's Republic of China story. Still, in its basic outlines, it has an awfully comfortable, familiar feeling.

Sheldon Adelson's monument to 21st-century corruption, the
Venetian Macao opened in 2007 as the world's largest casino.

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At 6:33 PM, Anonymous me said...

It seems to be difficult to get a real picture of what happened with Bo Xilai. The shitty American media are reporting it as something along the lines of "the fall of a rising star" but have said almost nothing about what's really going on.

Naturally, there's loads of celebrity news being shoved at me, along with the latest rantings of some conservative kook/asshole.

Who was this guy? Why did he get canned? I mean the real reason, not the corruption. What does this mean for the future of the Chinese government? And for the rest of the world?

The facts and a thoughtful analysis are hard to find.


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