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### Viewing cable 07GUANGZHOU695, Guangdong Discusses Anti-Corruption Efforts with Visiting

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
07GUANGZHOU695 | 2007-06-15 06:11 | 2011-08-23 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Consulate Guangzhou

`

    VZCZCXRO6056
    OO RUEHCN RUEHGH RUEHVC
    DE RUEHGZ #0695/01 1660611
    ZNR UUUUU ZZH
    O 150611Z JUN 07
    FM AMCONSUL GUANGZHOU
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 6172
    INFO RUEHOO/CHINA POSTS COLLECTIVE
    RUCPDOC/USDOC WASHDC
    RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
    RUEAIIA/CIA WASHDC
    RUEKJCS/DIA WASHDC
    RHHMUNA/HQ USPACOM HONOLULU HI

` `

    UNCLAS SECTION 01 OF 02 GUANGZHOU 000695

    SIPDIS

    STATE FOR INL
    USPACOM FOR FPA

    SENSITIVE
    SIPDIS

    E.O. 12958: N/A
    TAGS: PGOV SOCI ECON CH
    SUBJECT: Guangdong Discusses Anti-Corruption Efforts with Visiting
    USG Delegation

    (U) This document is sensitive but unclassified.  Please protect
    accordingly.

    ¶1. (SBU) SUMMARY: The Guangdong government is targeting its
    anti-corruption efforts in the areas of land transaction and
    commercial development, according to Guangdong officials who met
    with a U.S. delegation from the bilateral Anti-Corruption Working
    Group.  China's largest construction bidding center, located in
    Guangzhou, has strict security procedures in place to insure that
    bid evaluators are not unduly influenced.  American lawyers in
    Guangzhou commented that corruption is still pervasive in the
    Chinese government owing in part to low salaries.  END SUMMARY

    ¶2. (U) During a June 11-12 visit to Guangzhou, U.S. representatives
    to the bilateral Anti-Corruption Working Group met with officials
    from the Guangdong Department of Supervision and the Guangdong
    Procuratorate.  The group visited a construction bidding center, a
    real estate registration center, and a business registration center.
     The group also met with AmCham members to discuss corruption in
    China.  The delegation consisted of David Luna, Director of
    Anticorruption and Governance Initiatives, INL; Cher Iannaccone,
    Financial Investigations Division, ICE, Department of Homeland
    Security; Taryn Nelson, Financial Crimes, TFFC, Department of the
    Treasury; and Joseph Gangloff, Deputy Director, Office of Government
    Ethics.

    Provincial Anti-Corruption Efforts
    ----------------------------------

    ¶3. (U) Qin Tonghai, Deputy Director General of the Guangdong
    Department of Supervision (DOS), said 20,000 officials in Guangdong
    work either directly or indirectly for his office.  Guangdong DOS
    has conducted special campaigns to better regulate land compensation
    for farmers, commercial development, and government procurement.
    Qin said that by the end of 2007, Guangdong will have an electronic
    monitoring system in place whereby DOS can track and evaluate the
    work of government offices in the province's 21 cities in real time.
     Lai Xiangdong, Deputy Director General of the Guangdong
    Procuratorate's Anti-Corruption Bureau, said his office handled
    1,398 corruption cases in 2006: 50 percent involved bribery, 30
    percent involved misuse of public money, 10 percent involved
    embezzlement of public funds, and the remaining 10 percent were of
    varying types.  He noted that approximately 80 percent of the
    Procuratorate's corruption cases end with punitive actions (usually
    prison).

    ¶4. (SBU) Kong Xiangren, Deputy Director General of the Ministry of
    Supervision's Foreign Affairs Department, said China - unlike the
    U.S. - does not require officials to submit financial disclosure
    reports.  DOS and Procuratorate officials use tax records and other
    financial statements in their investigations, and require that
    suspects produce evidence to counter accusations of corruption.
    Kong said China is currently drafting financial disclosure
    regulations that will mirror those used in the United States.

    ¶5. (SBU) In an informal bilateral dialogue, Qin and Kong also
    discussed ways for the PRC to intensify cooperation through possible
    joint workshops (e.g., through the APEC Anticorruption Initiative)
    and technical exchanges with the U.S. Office of Government Ethics,
    MOS, and the newly created state-level corruption agency (announced
    earlier this year by the CPC).  Qin also stated that the innovative
    preventive measures and IT systems that are being developed in
    Guangdong to prevent and detect corruption may become a model for
    the rest of China.

    Visits to Bidding and Registration Centers
    ------------------------------------------

    ¶6. (SBU) The U.S. delegation visited a construction bidding center
    in Guangzhou that handles road, subway, building, electricity, and
    water projects.  The center is the largest in China in terms of
    transaction volume, and handles half of all bids in Guangdong,
    according to the director of the center.  To maintain the integrity
    of the bidding process, computers randomly select evaluators from a
    pool of 4,800 experts (who have outside employment).  If the
    evaluator is unable to take the job, the computer will select the
    next name on the list.  The experts are not allowed to contact
    anyone while they are reviewing bids; cell phones are confiscated
    and cameras monitor the rooms.  If the evaluation takes more than
    one day the evaluators must sleep in beds located at the center.
    The evaluators are paid RMB 500 (USD 65) per day for their service.
    Lin said the center is also developing a review mechanism to check

    GUANGZHOU 00000695  002 OF 002

    prior bids for improprieties.

    ¶7. (SBU) The group also toured a new municipal real-estate
    registration center located in Guangzhou.  The center provides
    services related to land transactions, property registration, and
    auctioning.  Computer modules set up in the center give the public
    access to a real estate database.  The center's director said
    software advances have dramatically increased efficiency.  At a
    separate visit to a business registration center under the Guangzhou
    Administration of Industry and Commerce (AIC), the director said
    applicants can monitor the status of their cases on the internet.
    In response to a question, the director noted that the center's
    database does not link to other registration centers in China nor
    with law enforcement authorities.  (Note: Guangzhou AIC's business
    registration centers were a target of a television news program
    investigation earlier this year that showed officials were charging
    for unnecessary services.)

    American Lawyers Discuss Corruption in China
    --------------------------------------------

    ¶8. (SBU) During a meeting at the offices of AmCham-South China,
    David Buxbaum, an Amcit who has lived in Guangzhou on and off since
    1972 and currently works for an international law firm, said
    corruption in China is "endemic."  To reduce corruption, he said,
    China needs to increase the wages of civil servants (particularly
    judges) and professionalize the bureaucracy.  He said bureaucrats
    have too much discretion in their jobs, particularly those in the
    AIC.  Ultimately, the introduction of free elections beyond the
    village level would have a dramatic effect on corruption levels, he
    added.  Fred Hong, an Amcit who helped found the AmCham in Guangzhou
    and runs his own law firm here, said he is currently handling a
    business dispute case in which the judge has indirectly requested a
    bribe.  He said China is genuinely interested in fighting corruption
    and learning from the U.S. model, and advised U.S. officials take
    adopt a "face-saving" approach to discussions with Chinese
    officials.

    ¶9. (U) This cable has been cleared by INL's David Luna.

    GOLDBERG

`