China’s Railway Network of Corruption

Liu Zhijun, formerly China’s Minister of Railways, was removed from office on charges of corruption in 2011 and expelled from the party earlier this year. Liu’s return to state media coverage has led to speculation that his court date may soon be approaching. A combination of Liu’s corruption coming into light and the Wenzhou crashes last year has put the Ministry of Railways under heavy scrutiny, resulting in the exposure of corruption in lower offices, and spreading public criticism as far as the Chinese film industry. The bureau whose throne Liu once occupied recently released a document revealing the complex web of corruption pivoting around Liu . Caixin English reports on the document’s findings, and introduces Ding Shumiao, a key intermediary of Liu’s:

A graft investigation into former railways minister Liu Zhijun that started in February 2011 has concluded with the ministry issuing a document on August 3 that lists six disciplinary violations Liu committed.

The internal ministry notice sheds light on the complicated network of graft that functioned in China’s Ministry of Railways. The charges against Liu include corruption and sexual misconduct.

Several of the charges were connected to a close associate, Shaanxi businesswoman Ding Shumiao. Ministry prosecutors say Liu helped Ding secure supply contracts worth 3 billion yuan and allowed middlemen to take kickbacks during contract procurement.

The investigation into Ding, which started in January 2011, is also finished, a source close to the inquiry said. The amount of kickbacks that Liu and Ding shared will be a key factor in determining the money involved in Liu’s graft charges, a source close to the situation said. […]

On his Sinocism blog, Bill Bishop notes that the Caixin English piece is an abridged translation of the cover story from this week’s Caixin Century magazine [zh], and that it lacks the sexy and scandalous introduction that can be found in the original.

In a piece citing Caixin’s research, Hong Kong’s The Standard has more on the Railway Ministry’s report and on Ding Shumiao:

[The Ministry document] alleges Liu, 59, received an undetermined amount of money in bribes, with the most serious being 10 million yuan (HK$12.16 million) he allegedly pocketed from businesswoman Ding Shumiao’s company, Beijing Boyou Investment Management Corp.

The firm won a 3 billion yuan high speed rail project bid.

Ding, 57, also called Ding Yuxin, is chairwoman of the company.

She was also a member of the Chinese People’s Political Consultative Conference before being expelled last January for alleged bribery.

It is alleged that Ding was involved in several bribery cases including the high-speed rail project and the transportation of coal.

The assets of her company soared from 474 million yuan in 2008 to 4.5 billion yuan in 2010.

For more on corrupt officials, China’s railroad system, and the case of Liu Zhijun, see prior CDT coverage.


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