Cleaning Cash

For Xu Maiyong, a former deputy mayor of Hangzhou, Zhejiang Province, and Jiang Renjie, a former deputy mayor of Suzhou, Jiangsu Province, their common ground is not merely that they were both sentenced to death this July because of corruption, but their family members were also involved in bribery and helped them launder the illicit money.

“It is common for corrupt officials’ family members to participate in the crimes at present, because it is easier for corrupt officials to accept bribes under the cover of their family members,” Wang Zhenyu, deputy director of the Public Decision-making Research Center with the China University of Political Science and Law, told the Global Times. “Besides, officials take bribes more brazenly when they do it through family members.”

Family-involved crimes

Qi Jiqiu, the wife of Xu Maiyong, was accused of money-laundering offenses and bribery crimes this March as she assisted her husband to obtain land for a property company and was paid-off with a house worth more than 3 million yuan ($450,000), according to the Procuratorial Daily, a newspaper supervised by the Supreme People’s Procuratorate.

Qi also helped Xu transfer the illicit money into securities and deposit money into bank accounts.

Qi helped transfer and launder more than 40 million yuan for her husband between April 2007 and January 2009.

In fact, Qi was not the only one who helped family members collect bribes. Jiang Yi, the son of Jiang Renjie, helped his father launder illicit money through registering an investment company in Shanghai.

According to news reports by the Procuratorial Daily, the briber issued a bank draft for the sum of 82.5 million yuan for Jiang Yi, who then gradually transferred the money to his newly established company.

Chen Guangming, the younger brother of Chen Guangli, who was a former deputy mayor of Yibin, Sichuan Province, was sentenced to six years in jail and fined 2 million yuan after he helped his elder brother accept 17 million yuan in bribes, which was then laundered through houses and investments.

Hard to control

Corrupt officials usually transfer their capital by smuggling cash, either by carrying it to other countries and regions themselves or through illegal private banks and alternative remittance systems.

Corrupt officials also buy and sell foreign exchange through illegal private banks, according to the Procuratorial Daily.

“At present, more and more corrupt officials and their family members tend to launder money through Internet banks, which avoids direct meetings during the transition processes,” He Ping, a professor who was an expert at studying money laundering from the East China University of Political Science and Law, told the Procuratorial Daily.

“Besides, they choose to launder money through buying houses and gambling, or transfer money with the help of their accountants and lawyers,” she added.

According to He, only when money laundering is effectively crackdown upon can corruption crimes be effectively prevented, because money laundering – a highly confidential and professional industry – makes it hard to find proof of corruption.

In addition, multinational money laundering is increasing and efforts to stamp it out are ineffective, Wang Xinhuan, an official with Beijing People’s Procuratorate, told the paper.

According to Wang, money laundering is gradually expanding to non-financial companies, which have no effective monitoring mechanisms to crack down on corruption cases and therefore make it harder to control corruption crimes.

“The non-financial institutions, such as real estate, pawnshops, law firms and accounting firms should also shoulder their responsibilities of cracking down on money laundering and their participation might be a huge attack on corruption,” said He Ping, the paper reported.

Prevention of crimes

“The cardinal method to control corruption is to reform the political structure, or more precisely speaking, to limit the power of officials,” Wang Zhenyu, a professor with the China University of Political Science and Law, told the Global Times.

Wang Yukai, a professor of public management at the Chinese Academy of Governance, agrees.

“A system that can more severely restrain officials’ powers should be set up to prevent corruption crimes,” he said.

Zhu Lijia, a professor at China’s National School of Administration, said a system to declare property belonging to officials’ families is needed.

“Only when family properties, not just the properties of officials themselves, but also the properties of their family members are included can they have less chance to commit a crime of embezzlement,” Zhu told the Global Times on Wednesday.

Global Times

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