The Irrawaddy Magazine |
- The Dangers of Reporting on Nepotism
- The Irrawaddy Business Roundup (September 13, 2014)
- China Turns Up Heat on Ex-Security Chief With Crash Probe
| The Dangers of Reporting on Nepotism Posted: 12 Sep 2014 06:00 PM PDT  Prospective land buyers visit a village in Twante Township on Aug. 25. A plan to expand Rangoon by 30,000 acres, taking in farmland west of the city, including in this township, was kept secret from the public until late August. (Photo: Sai Zaw / The Irrawaddy) Recently, The Irrawaddy disclosed information that the government wanted to keep hidden from the public, and as a result we are now on the "blacklist" of Rangoon Division's chief minister. That's what one lower-level minister in the divisional government and a lawmaker in the divisional legislature voluntarily told The Irrawaddy, though they requested anonymity. The minister suggested that Irrawaddy reporters use pen names or forgo their bylines if they plan to continue writing investigative stories about the secrets of Chief Minister Myint Swe. The lawmaker claimed to have overheard the chief minister telling another official in the divisional legislature that he was not pleased by our thorough reporting. "The Irrawaddy should be put on the blacklist—see the critical stories they keep writing," the lawmaker quoted the chief minister as saying. On Sept. 2, an investigation by our news organization revealed the nepotism of Myint Swe, who awarded the contract for a multi-billion dollar city expansion project to two Chinese businessmen who have had a close relationship with him for years. Myint Swe's divisional government awarded the contract secretly to the businessmen's largely unknown company, Myanmar Say Ta Nar Myothit. Without any prior consultation, the chief minister announced the decision to the divisional legislature on Aug. 22, leading to criticism by lawmakers about a lack of transparency for such a major development project. The Irrawaddy's Burmese-language journal and its English-language website first reported that the company belonged to the two Chinese businessmen, Xiao Sen and Xiao Feng, who, according to several of our sources, are quite friendly with the chief minister. We reported that the two businessmen had also received business concessions in the past thanks to their close relations with other high-ranking officials in the former junta, including a retired major-general, former Construction Minister Khin Maung Myint and former Rangoon Mayor Aung Thein Lin, who is now a member of the Lower House of Parliament. One week later, as local journals and websites reported on the divisional government's lack of transparency, government officials backed down and said they would put out a tender for the development project in the near future, giving all private companies a chance to participate. However, the business circle in Rangoon remains skeptical. Our investigation was not intensive, but it did reveal the tip of a rampant practice of nepotism among high-ranking officials in the current central and local governments. And while we could have dug much deeper, it was enough to anger the chief minister. Myint Swe, however, is not atypical. For decades, government officials in Burma have been notorious for padding their pockets by granting lucrative business concessions to cronies and close family members. In the past, censorship prevented anyone inside the country from disclosing these murky deals that affected not only public assets but also natural resources. "Nothing has changed," a well-known and wealthy businessman told me over the phone when I called to ask about Myint Swe's recent deal with the Chinese businessmen. He said Xiao Sen and Xiao Feng, like some other lesser known cronies in the country, do not appear on the US sanctions list.  Kyaw Zwa Moe is editor (English Edition) of According to a ranking by graft watchdog Transparency International, Burma ranks 157 out of 177 countries on an index measuring the perceived amount of corruption in the public sector. Parliament passed an anti-corruption law in September last year, leading to the formation of an ant-corruption commission that is headed by and largely composed of former military officials. Upper House Speaker Khin Aung Myint told The Irrawaddy in early 2012 that fighting graft was the most important issue facing the country in its transition from half a century of military rule. He said he was approving a parliamentary committee to investigate how ministries spent their budgets and that the legislature would urge the government to take action when needed. Two years later, it seems that little has been done. Last month, President Thein Sein acknowledged in a speech that bribery remains rampant. "Civil service officers need to change their morality and spirit to call for an end to corruption," he said, calling for more progress in the anti-corruption campaign before his term ends in 2015. The president talks the talk, but he does not walk the walk. If he was serious about tackling this problem, he would encourage the media to uncover the corruption of high-ranking members of his government who have secret business deals with cronies. Instead, journalists come under fire when they investigate such issues. In 2012, for example, six key ministries were found to have misused millions of dollars in state funds, according to a government audit report released to members of the Lower House. Local media wrote about the audit report, and one of the journals, The Voice weekly, was charged with libel. The charge was later dropped, but nobody from the ministries was prosecuted. And now The Irrawaddy has landed on the Rangoon chief minister's "blacklist." These days, it seems to be more dangerous for journalists to report on corruption and nepotism than it is for them to cover political issues. The government may or may not be shifting toward democracy, but clearly it still has many secrets—very profitable secrets—that it refuses to reveal. The post The Dangers of Reporting on Nepotism appeared first on The Irrawaddy Magazine. |
| The Irrawaddy Business Roundup (September 13, 2014) Posted: 12 Sep 2014 05:30 PM PDT Five Small Airports to Be Privatized, But 25 Others 'Not Commercial' Five of Burma's 30 small airports have been given approval to proceed with plans to sell or long-lease them to private operators, a travel trade report said. Burma's Civil Aviation Department named the five to be privatized as Bagan-Nyaung U, Heho, Tachilek, Thandwe and Kyaukphyu airports. "Bagan-Nyaung U Airport, which has seen a massive influx of tourists, could draw the most attention from private companies," the chief of the Directorate of Civil Aviation, Kyaw Soe, was quoted by TTR Weekly as saying. "The Directorate was given the job of overseeing the privatization of 30 airports, which will be leased or sold to private companies," the trade paper reported. "However, only five of the airports have the green light to negotiate with private firms at present and many of the airports listed are decades away from being profitable ventures." The small airports sell off comes as Burma prepares for an influx of millions more tourists. Ministry of Hotels and Tourism has forecast up to 5 million people visiting Burma in 2015, up from 2 million in 2013 and a predicted 3 million this year. Foreign and Burmese firms will be invited from Sept. 15 to bid for one of three construction contracts to develop the planned Special Economic Zone (SEZ) around the central coast town of Kyaukphyu, Arakan State. Twelve companies have already expressed interest in investing in the development, likely to initially cost US$200 million, said the Kyaukphyu economic zone management committee, according to Eleven Media. The development will be divided into three sections, according to the committee: a deep-water port, an industrial estate and a residential area. About 4,000 acres of land around Kyaukphyu have been allocated for the SEZ, said Eleven Media. Maung Muang Thine, vice-chairman of the Kyaukphyu economic zone management committee, said that the committee would choose contract winners by the end of this year, Burma's Ministry of Electric Power is meanwhile assessing four bids to build a 50-megawatt gas-fueled power station in the SEZ. A new commercial traffic bridge is to be built across the River Moei, which forms part of the border between Burma and Thailand. It will cost about US$94 million, mostly paid for by Thailand, and will supplement the old bridge linking Mae Sot on the Thai side with Burma's Myawaddy, said World Highways magazine. Construction is scheduled to begin in early 2015 and be completed within a year, it said. The new bridge will have a weight capacity of 100 tons. The Mae Sot-Myawaddy crossing carries most of the land trade between the two countries. A new bridge was mooted in 2009 by the chamber of commerce in Thailand's Tak Province, which said the old bridge was inadequate for growing trade. The Mae Sot area is one of several Thai areas being considered for special border trading status under a plan put forward in August by the military-installed National Council for Peace and Order. US government encouragement to American businesses to invest in Burma is being "hindered by the legacy of sanctions," a report said. "Few US banks are willing to transfer money into or out of the country. And even money transfers through a third country like Singapore often get blocked by US firms if Myanmar appears in a company name," said the Wall Street Journal. The US business newspaper cited the case of Daniel Rathbun, an American businessman who visited Burma recently and was subsequently hassled by his bank. He had accessed his account from a computer in Burma and SunTrust Banks said this contravened its rules and threatened to close his account. "Many banks see allowing any Myanmar transactions as problematic. Despite lifting of the broad ban, US authorities still blacklist more than a hundred Myanmar companies and individuals because of alleged relationships with the country's military," said the Journal. "While US State Department officials are encouraging American business to invest in Myanmar, the banking woes and the blacklist have stopped many companies from doing so," it said. "Fewer than a dozen companies have reported investing more than half a million dollars in Myanmar. Those include Coca-Cola, Western Union and Gap Inc." Vietnamese business investment in Burma could top $1.5 billion by the end of 2015, a trade association predicts. At present, Vietnam has seven projects in the country totaling $600 million in value, the biggest of which is Hoang Anh Gia Lai Group's hotel, apartments and offices complex in Rangoon, with a price tag of $440 million, said The Vietnam News Agency (VNA). "The Association of Vietnamese Investors in Myanmar (AVIM) hopes Myanmar will accelerate the licensing process for Vietnamese projects in the fields of textiles, agriculture, health care, energy, construction material production, finance and banking," said VNA. AVIM chairman Tran Bac Ha announced the $1.5 billion target at a meeting with the Speaker of Burma's Parliament, Shwe Mann, who was visiting the Vietnamese capital Hanoi, said VNA. AVIM members include Vietnam's state-owned oil and gas monopoly PetroVietnam and Vietnam Airlines. The post The Irrawaddy Business Roundup (September 13, 2014) appeared first on The Irrawaddy Magazine. |
| China Turns Up Heat on Ex-Security Chief With Crash Probe Posted: 12 Sep 2014 05:00 PM PDT  Former Chinese Politburo Standing Committee Member Zhou Yongkang attends the closing ceremony of the National People's Congress at the Great Hall of the People in Beijing on March 14, 2012. (Photo: Reuters / Jason Lee) BEIJING/HONG KONG — Little is known about the exact circumstances in which Wang Shuhua was killed. What has been reported, in the Chinese media, is that she died in a road accident sometime in 2000, shortly after she was divorced from her husband. And that at least one vehicle with a military license plate may have been involved in the crash. Fourteen years later, investigators are looking into her death. Their sudden interest has nothing to do with Wang herself. It has to do with the identity of her ex-husband—once one of China's most powerful men and now the prime target in President Xi Jinping's anti-corruption campaign. Investigators are probing the death of the first wife of Zhou Yongkang, China's retired security czar, a source with direct knowledge of the investigation told Reuters. They are looking for evidence of foul play by Zhou in the crash, the source said. That investigators are going to such lengths to discredit Zhou is one sign of the power struggle that has raged at the very top of the Communist Party since the reins were handed to Xi almost two years ago. It isn't over. Another indication is that Xi is considering a proposal to let the 205-member Central Committee deliberate on whether to press criminal charges against Zhou, 71, rather than handle his case exclusively among top leaders, said one person with ties to the leadership. This would be an unprecedented departure from the party's usually more opaque decision making on internal discipline matters. It suggests that Xi believes he needs to ensure the backing of the wider leadership before moving to decisively neutralize Zhou. Xi and his allies are still uncertain how far they can go in their bid to eliminate the threat from a rival who once controlled China's pervasive security apparatus and built a sprawling network of patronage with tentacles deep in politics and business, according to sources with ties to the leadership. More broadly, as his anti-corruption campaign begins to threaten powerful vested interests, Xi needs to weigh the danger of a backlash from some of China's most politically connected families, who want to protect the vast wealth their proximity to power has afforded them. Ejected From Party? On July 29, the Central Commission for Discipline Inspection (CCDI), the party's internal watchdog, said in a terse statement that Zhou is under investigation "on suspicion of grave violations of discipline," usually a euphemism for graft. The watchdog's statement gave no details of the accusations against him but the 69-character announcement is being closely scrutinized for clues about the party's intentions. "The statement did not say he violated the law," says Bo Zhiyue, a senior research fellow and expert on Chinese elite politics at the National University of Singapore's East Asian Institute. "If Zhou Yongkang is only found to be guilty of violating party discipline, the worst punishment would be to expel him from the party." That move may not be far off, Reuters has learned. It is likely that Zhou will be ejected from the party, possibly as early as October when the Central Committee holds its fourth plenary session, according to sources with ties to the leadership. But before it moves to actually prosecute Zhou, the party wants to be sure it has an iron-clad case. Investigators are anxious to avoid a repeat of the trial last year of Zhou's ally, the former Chongqing party chief Bo Xilai, who recanted his earlier confessions and protested his innocence during a five-day trial, according to a person with leadership ties. Bo was jailed for life for corruption. The party is also considering the potential damage to its reputation if the allegations against Zhou are aired in a public trial. It would be difficult for the leadership to explain how Zhou appeared to have enjoyed wide support within the party as he climbed through the ranks to eventually become a member of the Politburo Standing Committee, the apex of political power in China, people familiar with the investigation told Reuters. If a defiant Zhou chooses to speak out at a trial, it could also deeply embarrass the party. From his years running the security services, Zhou has intimate knowledge of the affairs of current and retired leaders and their families, according to two sources with leadership ties. "Zhou knows too much," one of the sources said. "It is a huge risk." Zhou is believed to have been behind the bugging of senior Chinese leaders during the sensitive period in the run-up to the party's 18th Congress in 2012, which saw the once-in-a-decade transfer of power, Reuters reported in May. Premier Li Keqiang and his predecessor, Wen Jiabao, were the targets of the surveillance ordered by Zhou, who was searching for evidence of corruption, according to one person close to the leadership. Officials at CCDI and the State Council Information Office, which doubles as the spokesman's office for the cabinet, didn't respond to questions sent by fax to their offices. The Beijing Bureau of Public Security did not reply to phone calls seeking details on the police report into the crash in which Zhou's first wife died. Relatives of Wang Shuhua could not be reached. Bonds of Patronage Subduing Zhou and dismantling his network removes a potential threat to Xi and consolidates his authority as he pursues an ambitious agenda of restoring the party's prestige and accelerating China's revival as a great power. He is also unshackling himself from the bonds of patronage and family loyalties that have tied top Chinese leaders to their predecessors. Xi and Zhou were both protégés of party power broker and retired President Jiang Zemin, who gave his blessing to Xi's ascendance to the top job. Zhou now finds himself at the mercy of an opaque legal system, bereft of due process, that he once wielded against thousands of Chinese citizens he deemed a threat to the Communist regime. He has been under virtual house arrest since late last year, according to sources familiar with the investigation. There is no public information that he has been brought before a court. It is not known if he has a lawyer. He has made no public statements about the probe. And investigators have yet to produce any evidence of wrongdoing. For now, Xi has the upper hand in a power struggle that is roiling elite politics in China. A sweeping purge of Zhou's family and political and business allies is continuing. Zhou's eldest son by his first marriage, Zhou Bin, is expected to be indicted soon on corruption charges, two sources with knowledge of the investigation said. Zhou Bin is in custody and couldn't be reached for comment. For Xi, the public move against Zhou Yongkang is the pinnacle of his campaign to bring down "tigers" and "flies," shorthand for corrupt officials of senior and low rank, in a high stakes war he has declared on official graft. The formal announcement that Zhou is being investigated also confirmed that Xi had marshaled sufficient political support to shatter a party taboo: It has been an unwritten rule that current and retired members of the Politburo Standing Committee are immune from corruption investigations. Zhou, who served on China's most powerful decision-making body at the same time as he was internal security chief, is now the most senior leader targeted for graft since the Communists took power in 1949. Zhou married a China Central Television (CCTV) presenter almost three decades his junior in the year after the car crash that killed his first wife and which investigators are now revisiting. They are also combing through his professional life for evidence of graft or other crimes, according to the sources with ties to the leadership. He is accused of corruption involving family members and political allies as well as accepting bribes to promote officials, the sources say. He is also under investigation for an act that, more than any other, may have landed him in Xi's sights, sources familiar with the probe say. In the midst of the 2012 leadership transition, Zhou made a failed attempt to inject his supporters, including the charismatic Bo Xilai, into the top leadership so he could rule from behind the scenes after his retirement. "It is entirely appropriate that he is being investigated for breaking the law and breaches of discipline," says Chen Guangcheng, a blind civil rights activist who believes the former security chief was personally responsible for persecuting him before he left China for the United States in a highly publicized case in 2012. "But the investigation into Zhou Yongkang is not really progress for China," Chen adds, referring to the lack of judicial protections against illegal arrests, beatings by police and other civil rights violations. Preserving Party Monopoly Once China's top law enforcement officer, Zhou has now become the poster-boy for an anti-corruption campaign that Xi says is essential for bolstering the party's legitimacy and securing its longevity. Ironically, much of Zhou's career was devoted to this very aim—preserving the party's monopoly on power. Two decades ago, that singular focus was on display in his handling of the fallout from one of Communist China's worst fire disasters. It was the winter of 1994 and grief and anger had reached a boiling point in Karamay when Zhou arrived at the frontier oil town in the far northwest. A fire in the Friendship Theatre during a song and dance performance had killed 323 people, 288 of them children. Distraught parents and relatives, many of them employees of the giant state-owned China National Petroleum Corporation, were demanding answers. Why were children ordered to remain seated until local officials had escaped? Why were exits blocked? Why did the emergency services take so long to respond? For Zhou, then number two at CNPC, these questions were secondary. "The top, overriding priority is to maintain stability," he told a grim meeting of company managers at an auditorium in Karamay, two weeks after the December 8 blaze. "I believe all the children that are now in heaven also hope to see stability in Karamay," he added in the speech broadcast by the town's state-run television station. In the aftermath of the fire, bereaved families insisted on face-to-face meetings with senior officials. Zhou refused. He and other top executives agreed it would only inflame tensions, according to the television footage of the meeting where they briefed CNPC managers and local officials. It wasn't that the disaster was swept under the carpet. Local officials were harshly punished for negligence, some serving lengthy jail terms. But Zhou put the interests of the party ahead of all other considerations, an approach he stuck with as he rose through the ranks. In dozens of speeches, public statements and articles in ideological journals, Zhou demanded vigilance from police, judges, prosecutors and party members to preserve the existing order. From Oil to Police Trained as a geophysical engineer at the Beijing Petroleum Institute, now known as China University of Petroleum, where he joined the party as a student, Zhou's first job was at the remote Daqing oil field in 1967. Discovered in 1959, the massive field lay in the sub-zero temperatures of the far northeast. The struggle to develop it became a symbol of Maoist China's determination to become a self-sufficient industrial power. By 1985, Zhou had reached the rank of oil industry Vice Minister and in 1996 he became CNPC chief. It was in the final decade of his career that Zhou made the switch to police work, as Minister of Public Security between 2002 and 2007. He then became secretary of the party's Politics and Law Commission, giving him sway over China's courts, prosecutors, police, the paramilitary People's Armed Police and the civilian intelligence agency. While he ran a security apparatus that was ruthless in crushing dissent, Zhou wasn't impervious to public sentiment. In May 2009, Deng Yujiao, a waitress working at a bathhouse in the central province of Hubei stabbed to death a drunk local official, Deng Guida. The two were not related. Deng Yujiao later surrendered to police. The court verdict following her trial said that Deng Guida had shoved and verbally insulted Deng Yujiao and had twice pushed her down onto a sofa. Fighting back, she stabbed him in the neck, arm, chest and shoulder with a fruit knife, according to the verdict carried by Xinhua. There was an outpouring of sympathy for Deng Yujiao when the case became public. Zhou chaired a closed-door meeting in the days after the stabbing where legal experts argued that the waitress should be sentenced to death for murder, a source with access to the meeting's proceedings told Reuters. But Zhou disagreed. The following month, Deng Yujiao was convicted of intentional assault with disproportionate force rather than murder. She walked free. On Zhou's watch, the internal security apparatus expanded, and consumed a budget that exceeded the official figure for military spending. He routinely warned of the danger from a wide array of enemies, including hostile foreign forces, underground churches, political dissidents, separatists, terrorists, religious extremists and groups like the Falun Gong spiritual movement, branded an evil cult by the authorities. "The tree craves calm but the wind will not subside," Zhou said in speech published in the official People's Daily in April 2012. Targeting Family and Allies Now, Zhou himself has become an enemy of the party. To neutralize him, more than 300 of his relatives, political allies and business associates have been arrested, detained or questioned over the past two years, according to sources briefed on the investigations. Chinese authorities have seized assets worth at least 90 billion yuan ($14.5 billion) from these people, the sources said. Some of Zhou's closest family members, including his son Zhou Bin, expanded their business interests while he was a senior leader in Beijing. A Reuters review of Chinese company filings reveals that his relatives and associates set up or invested in at least 20 companies in Beijing between 2002 and 2011, and one in the northwestern province of Qinghai. Some of these companies are involved in energy-related businesses, including the supply of equipment or services to the CNPC group that Zhou Yongkang once headed. Others are engaged in property development or trading, business descriptions filed with the companies registry show. The companies had a combined registered capital of about 616 million yuan ($100 million), according to corporate records reviewed by Reuters. Apart from Zhou Bin, relatives now in custody include Zhou Yongkang's wife, former television reporter Jia Xiaoye, and his younger brother, Zhou Yuanqing. Reuters has uncovered no evidence that Zhou Yongkang or Jia acted improperly or that Zhou exploited his influence to assist his relatives in business. Zhou Yuanqing's wife, Zhou Lingying, controls or has stakes in nine of the 20 Beijing companies, a Reuters review of corporate documents reveals for the first time. Her investment in companies include the wholly owned Beijing Honghan Investment Co Ltd, which in turn holds 43 per cent of Beijing Hongfeng Investment Co Ltd. Beijing Hongfeng had total assets of 697 million yuan ($113 million) at the end of June 2011, according to the most recent publicly available filings. Zhou Lingying has also been detained, according to people familiar with the investigation. The whereabouts of Zhou and these relatives are not known and so they could not be contacted for comment. It is also not known if they have legal counsel. 'Rule by Law' While Zhou is the most senior politician in Xi's crosshairs, the crackdown goes far beyond what the Hong Kong Chinese-language media has dubbed the "Zhou family gang." By the end of August, 48 officials of vice ministerial rank or higher had been investigated, according to reports in the state-controlled media. The official Xinhua news agency reported on August 14 that 23 of these officials had been charged. Many of them have no apparent link to Zhou. Still, defanging a "tiger" of Zhou's stature remains a key focus for Xi. The statement that Zhou was being investigated coincided with an announcement that the party's Central Committee would meet in October to study "rule by law," seemingly a reference to strengthening the role of the legal system to ensure all Chinese citizens are treated equally. "They are afraid nabbing Zhou Yongkang will be perceived as the outcome of a power struggle," says Bo, from the East Asian Institute. "So when they announce the probe, they also say they want to carry out the rule of law." Reporting by Benjamin Kang Lim, Charlie Zhu and David Lague. The post China Turns Up Heat on Ex-Security Chief With Crash Probe appeared first on The Irrawaddy Magazine. |
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