China Punishes Over 3,000 Officials for Stimulus Graft

Jakarta Globe, May 20, 2010

Beijing. China disclosed widespread corruption on Thursday linked to its 4 trillion yuan ($585 billion) stimulus, announcing that thousands of officials had been punished for taking bribes, embezzlement and other abuses.

The announcement confirmed public fears that the flood of spending and a stimulus-linked easing of curbs on real estate development would fuel chronic corruption that communist leaders say is the most serious threat to their power.

More than 3,000 officials including several mayors received penalties ranging up to life in prison for offenses related to the stimulus or to construction projects, said a deputy minister at the Supervision Ministry, Hao Mingjin.

“We will tackle corruption with a heavy fist,” said another official, Fu Kui, head of the ministry’s enforcement department. “Today, with many corruption cases likely to happen, if we don’t take tough measures, it will be hard to suppress this.”

The stimulus is credited with helping to revive China’s economic growth, which jumped to 11.9 percent in the first quarter.

It pumped money into the economy through spending on building airports and other public works, but Beijing also tried to spur growth by ordering local officials to step up approval of real estate projects that previously were blocked in an effort to cool a construction boom.

The criminal cases announced on Thursday were concluded over a six-month period from October to April.

The government announced in December that 12 officials were prosecuted for stimulus-related graft but Thursday’s disclosures indicated abuses were far more pervasive and extended to all areas of China.

In addition to the criminal penalties, Hao said more than 5,000 people received punishment from the ruling Communist Party, a step that can end an official’s career.

The officials said misconduct helped to fuel a surge in housing prices, which jumped 12.8 percent in April over a year earlier.

Beijing worries about a possible boom and bust in real estate prices and is trying to cool surging housing costs, which it sees as a political liability.

Associated Press