CHINA: Shanghai party chief sacked for graft

The Communist Party boss of Shanghai has been sacked for corruption, state media announced on Monday (September 25, 2006), toppling the highest leader so far in national party chief Hu Jintao's drive to root out abuse and enforce loyalty. Chen Liangyu was involved in misusing Shanghai's social security funds, and helped enrich crony companies and relatives, Xinhua news agency reported, citing a Communist Party Politburo decision on Sunday. His fall, coming after months of speculation about his future, was viewed as a sign of Hu's tightening grip on power, as he uses graft investigations and personnel changes to discipline wayward officials ahead of a crucial party congress. Chen had "created malign political effects", the agency said, citing the central leadership's decision and sending a warning to other potential targets. Chen was also removed from the Politburo, the party's powerful 24-member leadership council, the announcement said. It did not say whether Chen also faces criminal charges, as well as dismissal. Chen's picture and details were promptly erased from the city government Web site, www.shanghai.gov.cn. More than 100 central government investigators descended on Shanghai in recent months to investigate money reportedly drained from the city's 10 billion yuan (1.25 billion U.S. dollar) social security fund, for illicit loans and investments. One of the Shanghai officials already dismissed in the expanding corruption scandal had previously served as an aide to Chen. In June, Liu Zhihua, a Beijing vice-mayor who oversaw construction for the 2008 Olympics, was dismissed after being accused of corruption and dissolute behaviour, and a succession of provincial officials have also faced dismissal or jail. Chen's fall comes as Hu prepares for the 17th Party Congress, due late next year, at which he is widely expected to recast the central leadership and install potential successors in key positions. Until now, Shanghai has been considered a fiefdom of officials loyal to Hu's predecessor, Jiang Zemin, who handed over power in November 2002. The Shanghai corruption probe had already implicated two senior city government officials and at least three prominent executives in real estate, private investment and a utility firm. Corruption is the political issue that most concerns ordinary Chinese. "It is a shame. It is a big loss to our country. It costs a lot to groom such a high-ranking official. I think now that corruption happens all the time, the government should do something serious about it," said 23-year-old Zhao Jie. "It is always very difficult for us ordinary people to do something. After all, government officials are our supervisors. We have to ask them for help. Therefore, we need to have inside track or give them money. The society has become so complicated due to those people involved in embezzlement and corruption," said 24-year-old Yan Cheng. Chen, who is 60 next month, will be temporarily replaced as city party boss by Shanghai Mayor Han Zheng. Chinese financial markets were largely unmoved by the political upheaval on Monday. But several Shanghai-focused property stocks tumbled out of concern that the news might herald a crackdown on real estate investment and lending.

ITN Source | September 25, 2006

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