NORTHEAST CHINA: CORRUPTION SCANDALS SNARE JUDGES,

C O N F I D E N T I A L SECTION 01 OF 03 SHENYANG 000134

SIPDIS

E.O. 12958: DECL: 09/26/2028
TAGS: PGOV PHUM SOCI ECON CH
SUBJECT: NORTHEAST CHINA: CORRUPTION SCANDALS SNARE JUDGES,
SENIOR OFFICIALS AND POLICE, BUT TO WHAT EFFECT?

Classified By: CONSUL GENERAL STEPHEN B. WICKMAN.
REASONS: 1.4(b)/(d).


1. (C) SUMMARY: Corruption scandals in northeast China over
the past year have reached levels in seniority unseen for
several years. Jilin Province quietly sacked ten of its
High Court judges, but legal contacts say the Party
prevented a thorough investigation. Attorneys report that
judicial corruption in northeast China remains endemic.
Major cases in Jilin have also claimed its highest-level
official in thirty years and two former chiefs of state-
owned enterprises, while in Liaoning, corruption
prosecutions have netted high-level police officials and
the province's food-safety chief. A concerted effort to
combat the region's corrosive official corruption does not
seem to be at work; prosecutions seem ad hoc instead of
systematic. Domestic reporting on the cases largely has
been absent or orchestrated to limit local citizens'
exposure to events. Northeastern Chinese of all stripes
bemoan official corruption as a fact of life here. END
SUMMARY.


2. (C) Officials in northeast China have long struggled to
overcome the stigma of past corruption cases--one of the
juiciest resulted in the execution of a Shenyang vice
mayor--but, try as they might, prosecutions are reaching
levels in seniority unseen for several years. Hardest hit
has been Jilin Province, where a trickle of prosecutions
over the year claimed ten of the province's most senior
judges, as well as high-level former officials and the
former chief of one of its premier state-owned enterprises
(SOEs).

THE JUDICIARY: JILIN SUPREME COURT JUSTICES SACKED
-------------- --------------


3. (C) Most intriguing, and unreported in the PRC press,
was the quiet sacking of at least ten corrupt justices on
the Jilin High People's Court. Our contacts in Jilin
Province legal circles say the arrests occurred sometime in
late 2007. Details remain hazy, but according to Professor
HE Zhipeng (PROTECT) of Jilin University's School of Law,
one of the PRC's top law schools and alma mater of most of
the judges implicated, one version has it that flags were
raised when authorities discovered commercial property
being titled to a High People's Court clerk. Subsequent
investigations traced the property transfers to a number of
justices accepting bribes from claimants, in some cases
from both sides simultaneously. Using the clerk to
coordinate, judges had been instructing claimants to engage
the services of particular attorneys who would, in turn,
funnel money to the judges through the clerk in exchange
for a favorable ruling, said Professor He. Another version
of the affair holds that authorities latched onto the
corrupt clerk after the family of one aggrieved claimant
approached police for revenge on a judge whom he had paid
off.


4. (C) Punishments for the judges implicated in the affair
varied. Several were stripped of their posts and Party
membership, while as many as six received prison sentences
of up to ten years, which they are now serving, said
Professor He. (NOTE: In an effort to clean things up, the
Dean of Jilin University's School of Law, ZHANG Wenxian,
was elevated this year to head the court, according to his
successor, XU Weidong (PROTECT),who told our Jilin
University contacts the general contours of the case. Our
contacts told us Zhang is a respected figure who has earned
acclaim for transforming Jilin University's law school
during his tenure. END NOTE.) Notable in the investigation
phase of the affair is the leading role of the Party's
Discipline Inspection Commission, which had the proverbial
"first cut" at the judges because, as our Jilin University
contacts pointed out, nearly all were Party members. He
Zhipeng said that the prosecutors were instructed--
presumably by Party officials--to limit the number of
judges investigated; our contacts assessed this was a sign
that more of the many additional justices on the High Court
may have been implicated in some way.


5. (C) Judicial corruption throughout northeast China
remains a serious problem, according to legal contacts in
Liaoning and Jilin provinces. Professor He linked the
blight to judges' meager salaries. Judges in Jilin, for
instance, earn roughly RMB 2000 (USD 300) per month, he
noted. (NOTE: By comparison, average mid-level managers at
major Jilin firms earn up to RMB 16500 (USD 2400) per
month. END NOTE.) Also to blame is the Chinese legal
system's absence of prohibitions on ex parte communication
between judges and attorneys/claimants, which Professor He

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said was common in northeast China. As for Liaoning,
Dalian attorney and current IVLP grantee ZHAI Yuzhong
(PROTECT),told us that judicial corruption remains endemic
in the province. It is common, for example, for Liaoning
attorneys to "play mahjong" with judges, purposely losing
large sums of money in order to influence the arbiters of
their cases, according to Zhai. Professor He Zhipeng told
us the practice is common in Jilin as well. That said,
Dean Xu Weidong noted that judicial corruption of the sort
exposed at the Jilin High Court currently tends to be more
of a problem at the local trial-court level than at the
high-court level because there is less oversight.

THE EXECUTIVE: ARREST OF HIGHEST JILIN OFFICIAL SINCE '78
-------------- --------------


6. (C) Corruption charges in another case this year also
implicated Jilin Province's highest-level official since

1978. Central authorities in April reportedly whisked away
MI Fengjun--Party Secretary of provincial capital Changchun
from 1995-2001 and a deputy chair of the Jilin People's
Congress until 2008--to Beijing on suspicion of serious
bribery and corruption, according to Caijing magazine. Mi
apparently still has yet to be removed from his position as
a National People's Congress (NPC) delegate. Current
Changchun Party Secretary GAO Guangbin (PROTECT),a
promising young up-and-comer with a Communist Youth League
pedigree, told us recently that Mi's case is still under
investigation. Emphasizing that he was now removed from Mi
by several predecessors in the position, Gao claimed the
case has had little impact on Jilin officialdom. He called
Mi a "capable" politician, but ascribed his downfall to
"individual" shortcomings. Others have suggested more
institutional factors are at work. In June, for instance,
Caijing magazine pointed to the corrosive force of
localism: many senior Jilin officials are still drawn from
within the province, allowing them to accumulate sufficient
power to fend off investigations into their (ab)use of
power.


7. (SBU) Mi's downfall preceded that of another prominent
Jilin official. PRC media announced in July this year that
TIAN Zhong, Deputy Party Secretary of Changchun between
1998 and 2006, had been sentenced to life imprisonment for
bribery and embezzlement involving millions of dollars over
nearly a decade. It appears that Tian's testimony laid the
groundwork for Mi Fengjun's (imminent) prosecution. Tian's
sentencing came several months after a series of more minor
corruption-related busts elsewhere in the province, like
that of Jilin City's Vice Mayor YU Guohua, whom authorities
announced earlier in the year had been sacked for accepting
millions of renminbi in bribes from business interests.

THE SOEs: TWO FORMER CHIEFS ARRESTED
--------------


8. (C) The former chiefs of two major Jilin-based SOEs have
also been implicated in corruption scandals. Police in
March reportedly detained LIU Xianlu, the former chairman
of heavyweight Jilin Grain Group, on suspicion of
embezzlement and bribery involving over ten million
dollars, again according to the hard-hitting Caijing
magazine. Liu was an NPC delegate for five years until
March 2008. Contacts at the group--the PRC's largest
grain-trading firm, which handles over sixty percent of the
country's global grain transactions--told us Liu's abuse of
power was a product of the "old system" at the firm. Prior
to internal reforms there in 2003-2004, the firm's lack of
transparency and management controls offered Liu too much
room to maneuver. This explanation may be incomplete,
however. Some overseas press reporting, for instance, has
suggested that former high-level political officials may
also have been implicated in Liu's misdeeds, though we have
been unable to confirm this.


9. (SBU) In December 2007, several months before Liu's
detention, Jilin authorities in another major case
sentenced to death the former chairman of Northeast
Expressway for corruption involving millions of dollars he
defrauded from shareholders. The case is thought to be
linked to an even larger Heilongjiang-based corruption
scandal that broke in 2004.

THE POLICE: TOP COPS SHELTERING CRIMINAL GANGS
-------------- -


10. (SBU) South of Jilin, recent months have also seen the
(partial) conclusion of a major police scandal in Liaoning
Province that recalled a massive 2001 corruption bombshell
involving official collusion with criminal elements that

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eventually implicated over 100 Shenyang officials,
including the mayor, vice mayor, and senior judges.
Liaoning authorities in June tried ZHANG Jianming, the
former Deputy Director of the Shenyang Public Security
Bureau (PSB),on charges of bribery and protecting a major
Liaoning criminal syndicate for over a decade. His trial
was conducted in a stadium because Zhang, who before his
arrest was once considered an anti-crime "hero," was
accompanied by so many other defendants. By July, Liaoning
Province had prosecuted at least eleven police officers,
including Zhang, for sheltering three mafia groups in
Liaoning Province, according to official media. Police
charged included heads of anti-narcotics units, though the
Shenyang rumor mill has it that the city's narcotic squads
are still in league with criminal drug traffickers. Zhang
Jianming was found guilty, but details of his sentence
remain unknown.


11. (U) Zhang's downfall appears to be among Liaoning
Province's most prominent corruption cases since that of
Zhang Shusen in 2007. Zhang, the former chief of the
province's Food and Drug Administration, was sentenced in
October to 15 years in prison for embezzlement and
accepting bribes from pharmaceutical companies
manufacturing substandard products, among others.

IMPLICATIONS
--------------


12. (C) Northeast China appears to be witnessing some of
its highest-level corruption prosecutions since 2004-2005,
when a massive government post-selling scandal in
Heilongjiang Province triggered the downfall of over 400
officials, including former governor Tian Fengshan,
provincial Organization Department chief Han Guizhi, and a
number of judges. Many northeasterners today, however,
remain cynical or in the dark. Events over the past year
do not suggest a concerted effort to combat the region's
corrosive corruption in many areas of official life.
Investigations and prosecutions seem to be ad hoc instead
of concertedly systematic. Domestic reporting within
northeast China on many of the cases has been either
deliberately downplayed or entirely absent, as in the case
of Jilin's High Court judges. In many instances, the most
detailed domestic reporting has been "cross-regional" in
nature, carried out by, and only appearing in, non-
northeastern Chinese news sources, thereby limiting the
local public's exposure to events. Northeastern Chinese
businessmen, lawyers, journalists, academics and ordinary
citizens still tell us that official corruption remains
widespread in the region, a fact of life in everything from
securing schooling for their children to obtaining
approvals for construction projects.


13. (C) Worth watching in the period ahead will be the
impact of the Jilin cases on the fortunes of provincial
Party Secretary Wang Min and Governor Han Changfu. Both
are out-of-towners who were brought into northeast China by
Beijing with a mandate to, among other things, clean up the
province.
SWICKMAN