Archive for the ‘crimes’ Category

China’s Business Corruption: Rags to Riches to Really Big Trouble

December 16, 2008

Billionaire Wong Kwong-yu personifies the journey China has taken since it launched sweeping economic reforms 30 years that transformed the communist country into an economic power.

But as Wong — founder and chairman of the country’s biggest appliance chain — is finding, getting rich in China is still plenty risky.

By ELAINE KURTENBACH, AP Business Writer

Born into poverty, Wong built a fortune selling appliances to a nation of consumers hankering for a modern, affluent lifestyle. Estimates of his wealth vary, but an October report by Shanghai-based researcher Rupert Hoogewerf named him the wealthiest Chinese individual, with assets worth about 43 billion yuan ($6.3 billion).

Last month, however, Beijing police confirmed that the 39-year-old Wong was the focus of an investigation into alleged economic crimes. His whereabouts are unclear. His company, Gome Electrical Appliances Holdings, has released scant information since it suspended its shares from trading in Hong Kong last month.

Scores of Chinese entrepreneurs like Wong have made fortunes by exploiting economic niches neglected by the state-run companies that still dominate many strategically vital businesses, such as banking.

But the loopholes and gray areas that are crucial assets in the early years sometimes come back to haunt those tycoons later — what some in China call the “original sin” problem. And apart from potential entanglement in corruption scandals, wealth inevitably draws unwelcome attention from the authorities. In China, the road to success often runs from rags to riches to, eventually, really big trouble.

“It’s not because the government discourages wealth, but because of the ‘original sin’ problem,” said Ge Dingkun, a professor of strategy and entrepreneurship at the China Europe International Business School in Shanghai.

“Typically, the companies grew when the relevant legal system was lacking and they had to give ‘sweets’ to officials to get anything done that was not clearly legislated at that time, the so-called gray areas,” Ge said.

Read the rest:
http://news.yahoo.com/s/ap/20081216/ap_on_b
i_ge/as_china30_years_tycoon_troubles_1

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Blagojevich: Terrifying; Didn’t Just Fiddle While Rome Burned

December 13, 2008

Taking a page out of the playbook of the Roman emperor Nero, Illinois Gov. Rod Blagojevich has done so many bad things in such a short period of time that some of his worst actions are likely to be swept under the rug. Nero, as even the dimmest schoolchild will recall, is famous for fiddling while Rome burned to the ground — a flamboyantly insensitive gesture that has obscured the fact that he also kicked his pregnant wife to death, murdered his predecessor, masqueraded as a wild beast at gladiatorial events so that he could mutilate helpless captives bound to stakes and diverted himself on evening promenades by disguising himself as a street urchin, stabbing tipsy pedestrians to death and then chucking their bodies into the sewer. 

By Joe Queenan
Washington Post
Sunday, December 14, 2008; Page B01

It just so happens that Nero set fire to Rome not once, but several times, and did so as part of an impromptu urban-renewal project that served no purpose other than to line his own pockets. But because of the sheer impudence of setting the capital of the civilized world ablaze and then amusing himself on a musical instrument, Nero’s other crimes are less well remembered, if they are remembered at all.

Plaster bust of Nero, Pushkin Museum, Moscow.
The only “bust” of Blagojevich was made by police….

It would be a great tragedy if Blagojevich’s crass attempts — as described in juicy detail last week by prosecutors — to auction off President-elect Barack Obama’s Senate seat and shake down the Tribune Co. diverted the public’s attention from his other misdeeds. Politicians are always demanding some kind of payback for favors, and Blagojevich wouldn’t be the first pol to try to get journalists fired because he didn’t like the things they wrote about him. In Illinois, in New Jersey, in Louisiana, this kind of brazen scuzziness is par for the course. Society can deal with it.

What’s far more worrisome is Blagojevich’s bizarre confrontation with the Bank of America. The day before he was arrested on charges of massive corruption, Blagojevich visited a group of striking workers at a North Chicago firm called Republic Windows & Doors. After being laid off the week before, the employees had begun a sit-in, demanding benefits they were still owed by their employer, which said it could not meet their demands because the Bank of America had cut off its financing. At this point, Blagojevich informed bank officials that unless they restored the shuttered window-and-door company’s line of credit, the state of Illinois would suspend all further business with Bank of America. A few days later, the bank caved in and ponied up a $1.35 million loan.

The idea that the governor of a state as prosperous and important and sophisticated and upscale as Illinois would make this kind of threat is terrifying. Even more terrifying is that Bank of America saw no alternative but to give in. Yet even more terrifying is that nobody outside Chicago seems to have gotten terribly worked up about the situation, riveted as they are on the governor’s more theatrical transgressions. But peddling a Senate seat or using scare tactics to shake down a newspaper are nowhere near so serious a menace to society as letting the government arbitrarily intervene in financial transactions between banks and creditors. A crooked governor we can all handle. But a governor who capriciously decides which commercial enterprises a bank must finance and which it can ignore is a scary proposition indeed.

Read the rest:
http://www.washingtonpost.com/wp-dyn/content/artic
le/2008/12/12/AR2008121203299.html