China Is Rapidly Catching Up To The U.S.-- In Corruption Among Political Elites

Yesterday, when I read the RNC had put obscure, horribly corrupt, former one-term Utah Congresswoman Enid Greene (AKA- Enid Mickelsen and Enid Waldholtz) in charge of the search for an appropriate locale for the 2016 Republican National Convention, I joked around by tweeting ole Enid should consider a place where GOP economic policies are appreciated, either China, which has benefitted from American conservatives incentivizing companies to ship jobs there, or an offshore tax haven like the Cayman Islands or Bahamas, where the easy money is sloshing around because the GOP opposes tightening tax loopholes for the super-rich. Later in the day… the tweet above alerted me to The Guardian piece by James Ball about how the U.S. isn't the only nation where self-entitled, anti-social capitalist pigs are hoarding money offshore. It's another all too familiar China corruption story. All the more reason for Enid to have the Republican National Convention there, especially if they're going to nominate some sociopath and class war avatar like Ted Cruz (which is likely).

In any case, the Chinese government has always aggressively denied reports that top political elites are crooks and that they and their families have become fabulously wealthy after dismantling Communist social mores. Ball writes that "[m]ore than a dozen family members of China's top political and military leaders are making use of offshore companies based in the British Virgin Islands" and that the brother-in-law of China's current president, Xi Jinping, as well as the son and son-in-law of former premier Wen Jiabao are among the political relations making use of offshore havens." And, of course, income inequality is catching up with American income inequality. The U.S. is the shining example… and more:

The documents also disclose the central role of major Western banks and accountancy firms, including PricewaterhouseCoopers, Credit Suisse and UBS in the offshore world, acting as middlemen in the establishing of companies.

The Hong Kong office of Credit Suisse, for example, established the BVI company Trend Gold Consultants for Wen Yunsong, the son of Wen Jiabao, during his father's premiership-- while PwC and UBS performed similar services for hundreds of other wealthy Chinese individuals.

The disclosure of China's use of secretive financial structures is the latest revelation from "Offshore Secrets," a two-year reporting effort led by the International Consortium of Investigative Journalists (ICIJ), which obtained more than 200 gigabytes of leaked financial data from two companies in the British Virgin Islands, and shared the information with the Guardian and other international news outlets.

In all, the ICIJ data reveals more than 21,000 clients from mainland China and Hong Kong have made use of offshore havens in the Caribbean, adding to mounting scrutiny of the wealth and power amassed by family members of the country's inner circle.

As neither Chinese officials nor their families are required to issue public financial disclosures, citizens in the country and abroad have been left largely in the dark about the elite's use of offshore structures which can facilitate the avoidance of tax, or moving of money overseas. Between $1trillion and $4trillion in untraced assets have left China since 2000, according to estimates.

China's rapid economic growth is leading to a degree of internal tension within the nation, as the proceeds of the country's newfound prosperity are not evenly divided: the country's 100 richest men are collectively worth over $300 billion, while an estimated 300 million people in the country still live on less than $2 a day. The Chinese government has made efforts to crack down citizens' movements aimed at promoting transparency or accountability among the country's elite.

…One Chinese political family whose financial affairs have not escaped scrutiny — at least in the west-- is that of the former premier, Wen Jiabao. In November, the New York Times reported that a consultancy firm operated by Wen's daughter, who often goes by the name Lily Chang, had been paid $1.8 million by the US financial services giant JPMorgan.

However, the ICIJ files reveal the role of the BVI's offshore secrecy in obscuring Chang's links with her consulting firm, Fullmark Consultants. The company was set up in the BVI by Chang's husband, Liu Chunhang, in 2004, and he remained as sole director and shareholder until 2006, when he took a job in China's banking regulation agency.

Nominal ownership of the firm was transferred at that time to Zhang Yuhong, a Wen family friend, who the New York Times reported had connections with the Wen family's business interests.

…Other "princelings"-- a widely-used term for the families of China's political elite-- with offshore ties include: Li Xiaolin, a senior executive in one of China's state-owned power firms and the daughter of former premier Li Peng; Wu Jianchang, the son-in-law of China's late "paramount leader" Deng Xiaoping; and Hu Yishi, a cousin of former president Hu Jintao.

China's political elite were not the only individuals taking advantage of the BVI's offshore anonymity. At least 16 of China's richest people, with a combined estimated net worth in excess of $45 billion, were found to have connections with companies based in the jurisdiction.

Among those was Huang Guangyu, the founder of China's largest electronics retailer and once the country's richest man. Huang and his wife had a network of more than 30 companies in the BVI, according to the ICIJ records. Huang subsequently fell from grace and was in 2010 sentenced to 14 years in prison for insider trading and bribery.

Despite his imprisonment, Huang's offshore network is not standing idle. In 2011, one of his BVI firms made an unsuccessful bid for the Ark Royal, the retired aircraft carrier which was once the flagship of the British navy. According to press reports, Huang planned to turn the carrier into a shopping mall, but navy officials decided instead to scrap the ship.

…The role of major Western financial institutions in establishing offshore structures has also attracted scrutiny, despite being a routine and entirely legal function for many of them.

The ICIJ records show both PricewaterhouseCoopers and UBS had extensive contacts with incorporation agents in the BVI and other territories in the region. In total, UBS helped incorporate more than 1,000 offshore institutions for clients from China, Hong Kong or Taiwan, while PwC had a role in establishing at least 400.

…The amassed wealth and alleged corruption among China's political elite has been a topic of growing interest not only in the Western media, but also-- to a limited extent-- within China itself.

Spurred on by President Xi's public statements around anti-corruption efforts, a Chinese academic and activist, Xu Zhiyong, inspired a "New Citizens' Movement" in the country-- an informal civil society group which among other goals aims to increase the financial transparency of the country's elite and curbing corruption.

The movement, however, has faced strong opposition from Chinese authorities. Numerous participants in the New Citizens Movement have been arrested at public gatherings, while its founder Xu is in prison facing charged of "gathering a crowd to disrupt public order", and faces up to five years in prison. Meanwhile, international journalists who have reported from within the country on the wealth of China's political elite have faced immigration difficulties from the government, or trouble with authorities.

Closer to home, we have the loathsome Mafia crook from Staten Island and GOP cohort from Illinois, Aaron Schock, a closet case who's entire life is just one big lie, blatantly breaking campaign finance laws with crooked Republican donors and skipping away with not even a slap on the wrist. Although Schock's hometown media has been covering his ass for years, the Peoria Pundit is keeping up with her scandals and in DC, Roll Call broke the story of Schock's involvement with one of Grimm's crooked schemes:

In an action that may be part of a strategic plan to bring pressure on someone under investigation, Federal Bureau of Investigation agents arrested a person who is a friend and donor to a Congressman who is currently under investigation for campaign finance violations.

Diana Durand, of Houston, Texas, was arrested last Friday and accused of a contribution scheme to use the names of others to funnel $10,000 to the 2010 campaign of Rep. Michael Grimm, R-N.Y. She allegedly lied to federal agents about her actions. Rep. Grimm’s 2009-2010 campaign finance records show he received $41,550 from contributors in Texas, including $22,700 from employees of Sun Coast Resources.

Grimm’s attorney stated, “We are saddened that the government took the extraordinary step of arresting a single mother on these allegations, and hope the matter will be resolved quickly. The complaint does not allege any improper conduct by Congressman Grimm, and he denies any wrongdoing.”

Durand is also accused of funneling other funds to a second candidate. Durand, an employee of Sun Coast Resources, who contributed $2,400 to Rep. Aaron Schock, R-Ill., is accused of giving $4,800 to co-worker to be a ‘straw donor’ and asking the money be passed on in contributions to Rep. Schock. Schock’s campaign finance records shows he received $13,309 from contributors in Texas, including several who also gave to Grimm.

Darren and Rebecca Frye, who appear to have been financing Schock's career, have given hundreds of thousands of dollars to notoriously corrupt Republicans besides Grimm and Schock, from John Boehner, John Thune and Paul Ryan to small fry crooks like Marlin Stutzman, Bob Dold, Robert Gibbs, Schock heart-throb Adam Kinzinger.

Neither McDonnell nor Christie… 2 other crooked Republicans, Grimm and Schock