Further Fallout from Wen Family Wealth Exposé

At The New York Times’ The Lede blog, David Barboza answered readers’ questions about his recent investigation into the wealth of Wen Jiabao’s family, discussing the article’s origins, timing and sources:

I began looking into the business dealings of Wen Jiabao’s family late last year. I had been working on a series called “Endangered Dragon,” which looked at China’s government-managed economy, and wanted to include a piece that would give deeper insight into how China’s capitalism worked at the top. It is a broad subject, which I decided would be made more manageable by focusing on one family. I chose the prime minister’s family because I had heard conjecture about their business dealings for many years. People talked openly about the family’s wealth as if it was fact, but there was really no reporting on the subject that I could find that cited hard evidence backing up the claims. I kept scratching my head about why no one had tried to truth-squad the widespread rumors.

My only real source for this lengthy article was a filing cabinet full of documents I requested from various Chinese government offices over a period of about a year. After having some luck with my initial requests for corporate registration documents from the State Administration for Industry and Commerce bureaus, I went on a reporting spree: requesting and paying fees for the records of dozens of investment partnerships tied to the relatives of Wen Jiabao.

Barboza has previously explained how he gathered publicly available corporate records.

Foreign Ministry spokesman Hong Lei, who accused the article last week of having “ulterior motives” and trying to “smear” China, attacked it again on Monday. “There are always some voices in the world that do not want to see China develop and become stronger,” he said, “and they will try any means to smear China and Chinese leaders and try to sow instability in China. Your scheme is doomed to failure.”

People’s Daily’s former international news editor Ren Yujun has also attacked The New York Times. Instead of challenging Barboza’s report itself, however, he brought up the Jimmy Savile sexual abuse scandal in which the Times’ new chief executive, formerly at the BBC, has become embroiled. In another article [zh], Ren wrote of “an explosion in plagiarism and fabrication” at the newspaper, pointing out the 2010 Zachery Kouwe and 2003 Jayson Blair scandals. The Financial Times’ Simon Rabinovitch noted, however, that Ren’s own piece consisted almost entirely of unacknowledged passages from other articles, from Xinhua, People’s Daily and beyond.

While Barboza accused neither Wen nor his family of anything illegal, Donald Clarke wrote at China Law Prof Blog that Wen may still have broken Party disciplinary rules which “as written are arguably tighter than is reasonable”:

The bottom line is that Wen appears to be in violation of a Party rule requiring senior officials to prevent their close relatives from engaging in business in areas (geographical or subject-matter) under their jurisdiction or, failing that, to resign. Since Wen is the premier, all of China falls within his geographical jurisdiction, and pretty much all areas of business would be within his subject-matter jurisdiction as well. This, of course, means that his close relatives can’t engage in any business in or even relating to China at all. I don’t claim that this is a reasonable or practical result, or that it was intended by those who wrote the rule, but that’s how I read it. My reasoning is below.

Following a statement from Wen family lawyers on Saturday, Clarke also briefly discussed the prospect of legal action by Wen’s family within the United States. He linked to a more in-depth analysis by Jonathan Turley, who concluded that:

Wen may have lawyers but he may not have a particularly good lawsuit. The most important defense to defamation remains truth. That could put the family in a difficult position. As a highly secretive family in a highly secretive country, they are not used to American discovery rules. They could be forced to disclose copious amounts of financial records to make their case. Many could find that even a few million dollars as opposed to hundreds of millions as a curious nest egg for “Communist” leaders and their families.

Legal action at home might be more easily controllable; Isaac Stone Fish suggested at Foreign Policy that the Times’ past legal defeats in Singapore offer a precedent. But both He Weifang and Pu Zhiqiang told the South China Morning Post that even this would probably be considered too risky. Evan Osnos, assessing the fallout from Barboza’s report at The New Yorker, agreed, and dismissed “conspiracy theories” that the newspaper had been manipulated by Wen’s political enemies. He concluded:

• Not Surprised by This Story? Perhaps you should be. One of the standard lines going around in recent days has been the notion that this subject is somehow old news, that people already “knew” that Chinese leaders benefit from public office, so why bother? To me, that’s akin to saying that since we “knew” that campaign finance corrupts American government, we shouldn’t have bothered to unearth the crimes of the lobbyist Jack Abramoff; and since we “knew” British tabloids would walk a fine line to get a story, we shouldn’t have gotten so exercised about digging out the details of phone-hacking and the paying of police for information. In the end, that’s the nature of investigation: it puts details on what we don’t know but think we do. Sometimes the conventional wisdom is right, and sometimes it’s wrong, but you never know until you look. Corruption in China, after all, is hardly a scoop in itself. Lin Yutang, for one, wrote, “In China, though a man may be arrested for stealing a purse, he is not arrested for stealing the national treasury.”

He wrote that observation in 1935.