China's corruption goes from covert to overt By Stephanie Wang
CHANGSHA - In a country like China, where official corruption is rampant,
Communist Party and government officials earning a "gray" income is hardly
news. But even China's graft-weary public is outraged by scandals in which
municipal governments have openly admitted taxpayers' funds are being spent on
massages and spa visits for officials.
The first scandal was exposed in Shenzhen, a booming city neighboring Hong
Kong, where the local authority has had a healthy budget surplus in recent
years. On February 27, the Guangzhou-based Yangcheng Evening News reported that
the city's construction bureau had posted, apparently by mistake, an
internal notice on its official website entitled the "2009 Interpretation of
Recreation Arrangements for In-service Officials".
By recreation, it meant massages, foot-baths, spa visits or other leisure
activities available at a designated recreation center.
According to the notice, all officials from the construction department were
eligible for yearly recreation allowances, with the amount differing according
to the rank of the official. For example, the allowance is 2,100 yuan (US$307)
per year for a section-level official and 4,000 yuan for a division-level
official. The bill is paid from the municipality's coffers. Shortly after the
story appeared on the Yangcheng Evening News' website, it was posted on some
100 other websites, prompting thousands of angry comments from the public.
Coincidentally or not, a week later, the national China Youth Daily reported
that in Huainan city in eastern Anhui province, a large number of officials
above deputy-division ranking had each received a "surprise" gift of a gym
membership card worth 2,580 yuan. Again, the municipal government covered the
expenses. According to Huainan Municipal Government's Bureau of Sports and
Physical Exercises, the gift was hoped to encourage officials to take part in
more physical exercise - to set a good example for the general public. And to
boost domestic demand amid the global financial crisis.
But the excuse did not wash with the public, with a growing number of bloggers
have expressing indignation over the issue at popular websites such as
sina.com, calling it a flagrant abuse of public funds.
In today's China, it is no secret that powerful officials enjoy dubious fringe
benefits. Wining and dining is done in the name of business, costly overseas
trips are made in the name of research or study, and government cars with
unreasonably high maintenance expenses are used for private purposes. But at
least there is some attempt to keep the public in the dark.
In comparison, these recent cases highlighted an attempt to "institutionalize"
or "legalize" corruption, said a sociology researcher with the Chinese Academy
of Social Sciences. The municipal government's actions are also illegal, as
according to Chinese law a local government budget must be subject to the
approval and supervision of the local people's congress.
After the strong public reaction to the Shenzhen municipal government's
"Recreation Arrangements", journalists from the Yangcheng Evening News
conducted a follow-up story. It turned out that the recreation center in
question is affiliated to the General Office of the city's Organization
Department, which is in charge of the appointment and promotion of officials.
An official from the local financial department, who did not wish to be named,
confirmed that it was the Organization Department that worked out the
"recreation" budget for officials. At the Organization Department-affiliated
center massages which would normally cost 60 yuan per hour are costing as high
as 290 yuan, meaning that it is turning a healthy profit as a result of the
deal.
Officials at the Shenzhen Construction Department refused to make any comment,
claiming any related information was "classified". But based on public data,
the Yangcheng Evening News estimated that the total cost of the recreation
arrangements for Shenzhen officials could be as high as 6.5 million yuan per
year, or in other words, 6.5 million yuan in revenues for the recreation
center.
The exposures of the two scandals coincided with the main annual sessions of
the National People's Congress (NPC) and the Chinese People's Political
Consultative Conference (CPPCC), which took place last week. So naturally they
drew concern from the two localities' deputies to the country's top legislature
and political advisory body.
Yang Jianchang, a deputy from the Shenzhen municipal people's congress, didn't
believe that such an astronomical expense for officials' recreation was
included in Shenzhen's budget, let alone approved by the local legislature.
A lawyer and Shenzhen CPPCC member, Yang Yiping, said that if the expenses for
officials' recreation were covered by taxpayers' money, they should be subject
to legal proceedings, open to the public and subject to deliberation and
approval by the local people's congress.
Li Hongguang, a Shenzhen entrepreneur, had also read the notice on the website.
She got emotional when talking to this reporter: "In a time of financial
crisis, we entrepreneurs find it especially difficult to accept that taxpayers
have to finance massages for officials."
Last year, at the press conference after the closing of the NPC session,
Premier Wen Jiabao mentioned that one of the goals of China's financial reforms
was to set up a modern public finance system. In essence, that the government's
finances should serve the public's interests and be subject to public
oversight. By this yardstick, the massage bills should not have been included
in the government's budget in the first place.
However, as finance is usually managed by local government officials, their
mentality and morality levels make a great difference as to whether the funds
actually serve the public interest or end up in the pockets of free-loaders.
Not surprisingly, over the years, the administrative costs of some, if not
many, local governments across the country have skyrocketed.
Theoretically, the government's budget is subject to the approval and oversight
of corresponding people's congresses, as pointed out by Yang. Unfortunately,
these are symbolic at best. In practice, they rubber stamp every budget bill
presented by the local governments, and have never vetoed one. Even worse, the
congresses are toothless even on paper. There is no provision in the "Budget
Law of the People's Republic of China" for legal implications if a budget is
rejected by the legislature.
Apparently, without legal and institutional guarantees and some effective
mechanisms, government finance is unlikely to automatically turn into public
finance, so when corruption evolves from covert to overt, China's taxpayers are
sidelined.
Stephanie Wang is a freelance writer based in Changsha, China.
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