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DAM-L SCMP news article on Fraud at the Ministry of Water Resources (fwd)
----- Forwarded message from owner-irn-three-gorges@netvista.net -----
From owner-irn-three-gorges@netvista.net Fri Aug 25 19:27:20 2000
Date: Fri, 25 Aug 2000 16:15:29 -0700 (PDT)
Subject: SCMP news article on Fraud at the Ministry of Water Resources
Sender: owner-irn-three-gorges@netvista.net
(Sender's note: China's Ministry of Water Resources (MWR) has been a strong supporter of the Three Gorges dam, overseeing studies of the Leading Group for the Assessment of the Three Gorges Project and the work of the Yangtze Valley Planning Office, which is responsible for development plans of the Yangtze River).
South China Morning Post, Friday, August 25, 2000
Reaching to new heights of fraud
by MARK O'NEILL
A short distance from Beijing's western railway station
stands a brand new 28-storey glass skyscraper.
Curiously, the building is empty and the site deserted but
for a security guard at the gate.
This skyscraper, which cost 600 million yuan (about
HK$560 million), should never have been built. It is one
of the biggest examples so far of corruption within the
central Government. According to a report by the
Auditor-General, Li Jinhua, published last month, 36 of
the 55 ministries and commissions of the central
Government were guilty of misusing money allocated to
them in 1999.
The skyscraper belongs to the Ministry of Water
Resources (MWR), which Mr Li singled out as one of
the most corrupt after it embezzled three billion yuan, or
10 per cent, of its 1999 construction budget of 30 billion
yuan for office and apartment blocks, hotels,
stock-trading and "administrative costs".
"Work stopped on the building two years ago," said the
guard. "It was illegal and built without approval. It was
supposed to have been auctioned, but this has not
happened. I do not know why. It is a pity - the building
looks good enough to me."
The MWR obtained permission to build the skyscraper by
falsifying documents, and collected the money by
siphoning off funds allocated to its local operations.
Money that should have gone to build dykes, irrigation
ditches and dams was stolen for a building which a small
number of officials intended to use in part for themselves
and to lease the rest for personal profit.
Shoddy dykes were blamed for catastrophic floods in the
summer of 1998 when thousands of people lost their lives
and property. They were so badly built, they became
known as "bean curd".
It was in 1994 that the ministry decided to build a
well-appointed building in Beijing, equipped with
restaurants, retail space, meeting rooms, offices and
apartments. It chose the Fengtai district in the southwest
of Beijing because this was an area designated for
commercial development by the city government, and
also where the western railway station, the largest in
Asia, was built.
The problem was that on June 24, 1993, the State Council
issued an order banning government departments from
building expensive hotels and office blocks. To get round
this, the ministry falsified an application that was dated
April 18, 1993 - two months before the ban. Although
aware that it was fake, the planning commission of
Beijing city approved the application, back-dating it to
June 18, 1993 - six days before the ban. The ministry
failed to apply for approval from the State Council as it
should have done for such a large investment.
The building's purpose was also falsified. The application
said that it would be used as a flood forecast centre and
communications base to co-ordinate nationwide anti-flood
work and would contain a Sino-Japanese irrigation
technology training centre. The application also
under-stated the price at 170 million yuan.
The finished building contains none of these facilities. It
has 30 floors of which five are designed for commerce,
restaurants and meeting rooms, 10 for offices and 13 for
guests.
The next problem facing the MWR was how to get the
money. Since the building was illegal and not within its
official budget, it had to steal the money from its
organisations nationwide. According to an investigation
by Mr Li's office, the MWR took funds from the budgets
of its branches and bureaus in nine other provinces. All
the cash had been allocated by Beijing for water projects.
In July 1997, the MWR held a meeting of senior officials
who were heads of different Communist Party branches,
making each of them responsible for collecting at least 50
million yuan.
Mr Li has now ordered that the building be auctioned.
Officials at his office and the MWR declined comment
on why this had not happened.
Among other examples of the ministry's corruption is the
stealing by the local government of Qingyuan in
Guangdong of 314 million yuan, or 20 per cent of the
money allocated for migrants from a dam project, for
investment in real estate, factories, apartments for
officials and two cement plants that lost money as soon
as they opened. About 1.8 million yuan was used to buy
golf club memberships for a few top government officials
and for foreign trips.
In another case, 20 million yuan allocated for building
work on the Tai Lake in Jiangsu province was given to a
Shanghai stockbroking company and used to trade
treasury bonds and new share issues.
Mr Li also discovered that local branches of the MWR
were involved in the misuse of 2.85 billion yuan of the
100 billion yuan in special bonds, issued in the second half
of 1998 to stimulate the economy. For example, Dianbai
county in Guangdong stole 9.32 million yuan set aside for
local officials' wages. Officials of Changde city in Hunan
province stole 1.06 million yuan allocated for the
strengthening of dams and put the money into bank0
accounts in their own names.
The corruption in the MWR and other ministries is
widespread despite years of campaigns against it by the
Government and the party. "Every year the annual report
by the Auditor-General is shocking," said Shao Daosheng,
a scholar at the China Academy of Social Sciences.
"It is a disaster for the nation and the people. For
example, an investigation of tax payments in 12 provinces
covered several cities and counties and revealed
irregularities of 9.37 billion yuan. If the investigations
were done everywhere, it would be an unimaginable
figure.
"The reasons for this corruption are complicated but the
full extent of it is never explained to the public. Society
does not know, nor does the media. Cases are simply
given to the 'concerned department' or 'concerned
leaders' to deal with."
Mr Shao said corruption often involved many people and
the economic interests of an organisation. "You cannot
throw an entire department into prison, so the cases are
dealt with 'internally'. In this way, big cases become small
and small ones are not investigated at all."
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