Breaking tradition, China president begins corruption inquiry
China’s President Xi Jinping has targeted Chinese Communist Party leader Zhou Yongkang in an extraordinary corruption inquiry, a first for someone of Zhou’s rank, and put his family’s extensive business interests in the cross hairs.
The New York Times
HONG KONG — His son landed contracts to sell equipment to state oil fields and thousands of filling stations across China. His son’s mother-in-law held stakes in pipelines and natural-gas pumps from Sichuan province in the west to the southern isle of Hainan.
And his sister-in-law, working from one of Beijing’s most prestigious office buildings, invested in mines, property and energy projects.
In thousands of pages of corporate documents describing these ventures, the name that never appears is his own: Zhou Yongkang, the Chinese Communist Party leader who served as China’s top security official and the de facto boss of its oil industry.
But President Xi Jinping has targeted Zhou in an extraordinary corruption inquiry, a first for a Chinese party leader of Zhou’s rank, and put his family’s extensive business interests in the cross hairs.
Xi has widened the inquiry of Zhou to include his wife, a son, a brother, a sister-in-law, a daughter-in-law and the son’s father-in-law, all of whom have been taken away by the authorities in recent months, according to relatives and witnesses.
The finances of the families of senior leaders are among the deepest and most politically delicate secrets in China.
Officially, the Chinese leadership has said nothing about the corruption investigation into Zhou or the detention of his immediate relatives, and Xi’s ultimate intentions about how to handle the case remain a matter of speculation.
Some political analysts argue that a leader of Zhou’s status would not face an inquiry of this kind unless Xi regarded him as a direct threat to his power. Zhou’s family’s financial dealings lost their immunity only because Zhou fell from favor, not because elite business dealings were being criminalized.
But another school of thought is that Xi considers the enormous agglomeration of wealth by spouses, children and siblings of top-ranking officials a threat to China’s stability by encouraging mercenary corruption and harming the party’s public standing.
An investigation by The New York Times of the assets held by Zhou’s relatives highlights the sums involved and illustrates how deeply invested members of the party establishment are in industries where political connections are important.
Three of Zhou’s relatives — a sister-in-law, a son and the son’s mother-in-law — hold or have controlled stakes in at least 37 companies scattered across a dozen provinces, from Audi dealerships to property firms, according to corporate documents filed with the government.
Seventeen focus on investments in energy, mostly in ventures with the state-owned oil giant China National Petroleum Corp. (CNPC), which Zhou headed in the 1990s. Nine center on Sichuan province, where Zhou served as party chief from 1999 to 2002.
In all, the holdings examined are worth at least 1 billion renminbi ($160 million) although that estimate is based on a limited assessment of each company’s value and does not include real estate or overseas assets.
Even so, these assets make Zhou the third member of the nine-man Politburo Standing Committee that ruled China from 2007 to 2012 to have family members with documented wealth exceeding $150 million.
No evidence has emerged that proves Zhou, 71, was involved in the investments or did anything illegal. Nor is it clear that his relatives violated any Chinese laws or used their relationship with Zhou to secure deals. But Xi appears confident he has enough evidence to eliminate Zhou’s influence.
Zhou began his career as an oil-field technician. He rose through the ranks until he became head of CNPC, which accounts for more than half of China’s oil production and three-quarters of its gas production.
In 2002, he was appointed minister of Public Security and, in 2007, he joined the Politburo Standing Committee, the party’s top echelon, and assumed control of the body overseeing the police, courts and intelligence agents.
At least three of Zhou’s relatives profited from CNPC’s rise: his oldest son, Zhou Bin; Zhan Minli, his son’s mother-in-law; and his sister-in-law, Zhou Lingying, the wife of a younger brother.
Zhou Bin, 42, is majority owner of a Beijing company that sells equipment to the Liaohe Oil Field and to CNPC oil fields in at least three other provinces, corporate records show.
His mother-in-law, Zhan, 71, owns companies selling natural gas with CNPC in two provinces. Zhou Lingying, 63, teamed up with CNPC to sell natural gas in another province and owns stakes in companies that also work with CNPC in western China, according to the documents.
All told, the three relatives hold or have recently held ownership stakes in at least 11 companies that have done business with CNPC or the other state-owned oil giant, Sinopec, company documents show.
At least four of the companies are owned in part by CNPC subsidiaries.