Chinese state bodies implicated in €450m fraud


CHINA: CHINESE GOVERNMENT agencies embezzled €450 million last year, an audit of state finances has revealed, including the misuse of millions in disaster relief funds, reports Clifford Coonan

Presenting an annual report prepared for the Chinese parliament, the National People's Congress, Auditor-General Liu Jiayi said 117 cases of embezzlement were uncovered in 2007, and 14 top officials detained. A total of 88 people were arrested, prosecuted or sentenced, and another 104 people were punished for the violations.

Mr Liu said the audit encompassed 53 central government departments and their subsidiary units, and discovered the abuse or embezzlement of 4.52 billion yuan (€450 million) in 2007, down from 7 billion yuan (€700 million) the year before.

Mindful of the poor public image that corruption gives the Communist Party in China, the government is quick to stamp out any blatant corruption and regularly introduces anti-graft investigations and campaigns.

The most recent inquiry, spanning 10 central government departments, has shown that €2.5 million allocated for disaster relief was used for the construction of government buildings or disappeared into administration expenses, according to a Xinhua news agency report.

The news comes as China works to rebuild large chunks of Sichuan province following the 7.9-magnitude quake on May 12th, killing nearly 70,000 people and leaving five million homeless.

The 10 government agencies audited included the education and commerce ministries, the National Bureau of Statistics, State Administration of Taxation, and the State Administration of Radio, Film, and Television.

Among the problems revealed by the investigation were falsifying budget accounts, fund appropriation and embezzlement, underreporting revenues and over-reporting expenditures.

Last year the government launched a website for the fledgling anti-corruption bureau but it crashed under the pressure of so many complaints.

The Communist Party said that nearly 2,000 local cadres were disciplined or charged with corruption-related crimes last year.

However, the process of investigation is all internal and is not especially transparent.

After auditing the 2007 state budget spending, expenditures of 29.38 billion yuan (€2.9 billion) were found to be "problematic" at the ministerial level, Mr Liu said.

A major bone of contention among the general public is land- use fees.

Inquiries into the fees in 11 major cities, including Beijing, Tianjin, and Shanghai last year showed 8.4 billion yuan (€840 million) had been misused.

In June, the country's auditing watchdog found that 11 city governments had kept more than 186 billion yuan (€19 billion), or more than 70 per cent of revenues generated from land sales, off their books to spend freely without supervision.