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Crime & Corruption

China: State firms paid half the bribes rail executive Luo Jinbao received

Luo Jinbao

About half of the bribes taken by a former top railways executive came from other state-owned railway companies, prosecutors have said, painting a damning portrait of rampant corruption in the sector.

During the trial of former China Railway Container Transport chairman Luo Jinbao in Heilongjiang last week, it was revealed that several state railway companies showered Luo with cash, cars and luxury goods to win bids and escape punishment for construction code violations, mainland media reported. Payments from companies amounted to half of the 47 million yuan (HK$57.7 million) in bribes Luo is accused of accepting between 2005 and 2010.

In that time, he oversaw preparations for the high-speed line from Shijiazhuang to Taiyuan, and led the Railways Ministry’s bureaus in Hohhot, Inner Mongolia, and Urumqi, Xinjiang .

Ten companies under China Railways and China Railway Construction paid Luo 14 million yuan, in addition to giving him a Land Rover and a luxury watch, The Beijing News reported.

Luo, 56, once told his lawyer, Gao Zicheng, that he dared not refuse such bribes from the railways sector and he feared he might offend the bosses of the companies, the newspaper said.

Luo’s trial was widely seen as a warm-up for a series of graft cases involving former top railways officials, including ousted railways minister Liu Zhijun and former deputy chief engineer Zhang Shuguang.

A source from the railways sector told Caixin Century Weekly that bribing regional bureau chiefs was a common practice for state-owned railway companies as competition for bids was fierce.

“After winning a project, a state-owned company would usually give about 2 per cent equivalent of the total budget to the project manager, or the regional railway bureaus, and it would ask for 5 per cent kickbacks when subcontracting the project to other private construction companies,” the source said.

“It was not surprising for a regional railway head to take a bribe of 47 million yuan under such rules,” the source said.

It was worse after China embarked on a frenzy of high-speed railway construction spearheaded by Liu in 2003.

Luo received 16.5 million yuan and a BMW sedan from Wang Haosheng, a middleman who helped private contractors win railway bids, the magazine reported. Prosecutors also accused Luo of illegally owning a shotgun and 250 shells, which he said he kept for hunting. The Beijing News said Luo turned over more than 27 million yuan, the two cars and two apartment buildings in Beijing and Sanya, Hainan province.

Evidence made public made no mention of Luo’s ties to Liu or Shanxi businesswoman Ding Shumiao.

Mainland media have previously reported that it was Luo who introduced Liu to Ding, who made 800 million yuan on rail projects and reportedly arranged young women to have sex with Liu.

Luo’s lawyer Gao told The Beijing News that his client had only introduced himself to Ding after learning the businesswoman was close to Liu. Luo has reportedly been suffering from severe depression since being put under detention in Shanxi in 2010.

Source: SCMP “State firms paid half the bribes rail executive Luo Jinbao received”

About chankaiyee2

Author of the book "Tiananmen's Tremendous Achievements" about how with the help of Tiananmen Protests, talented scholars with moral integrity seized power in the Party and state and brought prosperity to China. The second edition of the book will be published within a few days to mark the 25th anniversary of Tiananmen Protests All the parts in the first edition remain in the second edition with a few changes due to information available later and better understanding. There are also some changes for improvements of style. The new parts are Chapters 12-19 on events in China after the first edition was published: The fierce power struggle for succession between reformists and conservatives; Xi Jinping winning all elders’ support during his mysterious disappearance for 2 weeks in early September, 2012; and Xi Jinping Cyclone. Chan Kai Yee's new book: SPACE ERA STRATEGY: The Way China Beats The US An eye-opening book that tells the truth how the US is losing to China. The US is losing as it adopts the outdated strategy of Air-Sea Battle while China adopts the space era strategy to pursue integrated space and air capabilities: It is losing due to its diplomacy that has given rise to Russian-Chinese alliance. US outdated strategy has enabled China to catch up and surpass the US in key weapons: Hypersonic weapons (HGV) that Pentagon regards as the weapon that will dominate the world in the future. Aerospaceplane in China’s development of space-air bomber that can engage enemy anywhere in the world within an hour and destroy an entire aircraft carrier battle group within minutes. Anti-satellite (ASAT) weapons, anti-ASAT weapons, stealth aircrafts, drones, AEW&C, etc. The book gives detailed descriptions of China’s weapon development based on information mainly from Chinese sources that the author monitors closely. U.S. Must Not Be Beaten by China! China is not a democracy. Its political system cannot prevent the emergence of a despotic leader or stop such a leader when he begins to bring disasters to people. A few decades ago, Mao Zedong, the worst tyrant in world history did emerge and bring disasters to Chinese people. He wanted to fight a nuclear war to replace capitalism with communism but could not bring nuclear holocaust to world people as China was too weak and poor at that time. If a despot like Mao Zedong emerges when China has surpassed the US in military strength, world people will suffer the misery experienced by Chinese people in Mao era. China surpassing the US in GDP is not something to worry about as China has the heavy burden to satisfy its huge population, but China surpassing the US in military strength will be world people’s greatest concern if China remains an autocracy. US people are of much better quality than Chinese people. What they lack is a wise leader to adopt the correct strategy and diplomacy and the creative ways to use its resources in developing its military capabilities. I hope that with the emergence of a great leader, the US can put an end to its decline and remain number one in the world. China, US, space era strategy, air-sea battle, space-air bomber, arms race, weapon development, chan kai yee


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