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Thieving Thieves

Bruce Krasting's picture




 

There was another chapter in the China Kleotocracy story the past week. Western press reported on a fellow by the name of Wang Guoqiang. Wang fled China with $30Mn in his pocket back in April. The problem is that the loot was stolen from the treasury of the city of Fencheng (Pop. 580,000).

The BBC and the Neue Zurcher Zeitung had the story. (I did not see it in the US press.):

 

 

 

Some quotes:

 

More than a million public servants have sent large sums abroad.

A million public servants? That's a lot of crooks.

 

That officials create huge amounts abroad and then flee with their families is so common that the Chinese language has its own term: "Luo guan" literally "bare squad".

It is the practice that corrupt officials get their families out of the country first, hence the term "bare." I think this means that the Chinese are broadly aware that their political leaders are leaving the country with stolen money. It must be hard to govern when even slang language reflects what is happening.

 

In 2011, the Central Bank reported that corrupt officials had transferred more than 120 billion U.S. dollars abroad.

$120Bn? Where is this money going?

 

Popular flight destinations for fleeing officials are the USA, Australia and Canada.

The USA, Australia and Canada? The numbers reported above are huge! let's say 70% of the crooks went to America. This creates an estimate of 700,000 crooks (and their families) that have fled China with $80Bn in stolen money, and are now in the USA. How can so many people with so much money hide in the US without somebody making a a stink?

 

Think of it differently. If the Treasurer for the city of Las Vegas (Pop. 580,000) stole $30Mn of tax payer money and fled to Canada or Australia, the US FBI would have the Aussies and Canucks hunt them down and have them extradited back home. Why aren't the Chinese doing the same thing?

 

The authorities enacted a ban immediately to report on the case, and blocked Wang's name in search engines. However, in blogs, the news spread faster than censors could delete it.

 

Kleptocracy is a very open secret in China. The Chinese leaders must hate the internet, and the fact that secrets can't be kept secret any longer. There has been another story circulating in the Chinese internet the past few days that may be connected to the kleptocracy story.

.

 

 

On 9/29, China Airline flight 981 from Beijing to NYC was ordered returned to Beijing airport. The "official" reason was, "they had received a threatening message." There is some curious information about this:

-The plane was 7 hours into the NYC flight before it turned around. If there was a "threat" on board (bomb?), why didn't the plane make a landing before going all the way back to Beijing? The passengers were not told about the U-turn.

One passenger said he suspected the plane might be flying back because of the route information on the screen in front of him but a flight attendant told him there was "something wrong with the screen."

 

Shortly before landing, there was an announcement that the plane was encountering some turbulence and attendants asked passengers to close all the window shades.

 

"But when we opened the sunshades again, we saw the ground of Beijing," another passenger said.

 

-The initial "official information" was that the report of the threat came from a reliable source; the USA. But that was incorrect. (link)

 

"It could have been forged and released from inside the country", a Beijing airport police spokesman told China Daily on condition of anonymity.

 

Other sources including the country’s civil aviation authority and airport police, declined on Thursday to reveal specifics of the threat.

 

The plane and passengers were searched, nothing was found. The flight took off again an hour later. Of potential interest:

 

Some passengers opted to abandon their trip

 

Abandon trips? Or get arrested?

 

I have no idea what actually happened with flight 981. I do know that the internet speculation in China is that the plane was ordered back because another kleptocrat was on board and trying to escape.

 

A spokesman denied rampant speculation on social-media sites that the flight returned because a wanted corrupt official who was trying to flee the country was on board.

 

Something is brewing in China with the kleptocrats.The Bo Xilai and the murderess Gu Kailai scandal appears to have been a tipping point. Another tipping point for China is the leadership changes that will take place in October.

I wonder if the exodus of the kleptos (and the Chinese internet traffic on this story) can go unchecked for much longer. The question of "when" might be answered after a new government is installed. I also wonder which banks the Kleptos are keeping their loot with. We might get an answer to these question in the not-too-distant future.

 

Note:

My interest in the kleptocracy story was peaked when I read John Hempton's article on this topic. (Link).

 

 

 

 

 

 

 

 

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Tue, 09/04/2012 - 10:44 | 2760223 hustler etiquette
hustler etiquette's picture

you have to respect their hustle

Wed, 09/05/2012 - 02:37 | 2763528 Davalicious
Davalicious's picture

>you have to respect their hustle

They, and other scammers from asian countries, have managed to go to the US and Canada. Now both countries have stringent rules to stop people emigrating there using "black" money. Somehow they got around those rules.

Basically, they cut a deal with the Jews that rule us. Expect bad news to come to Asia as a result of treachery.

Tue, 09/04/2012 - 12:10 | 2760674 Bananamerican
Bananamerican's picture

respect?

"attendants asked passengers to close all the window shades. "But when we opened the sunshades again, we saw the ground of Beijing," another passenger said.


This is why they flee.

The Bullshit™. 

But you need funds to flee....

So you join the Bullshit™, make your nut and Escape™ the Bullshit™.

It's a Made in China economic miracle!

 

Tue, 09/04/2012 - 10:38 | 2760181 robertocarlos
robertocarlos's picture

The kids are busy crashing their Ferraris and causing political upheaval. The Chinese people are asking, how do the sons of politicians afford $788k Ferraris.

Where are my two naked girls and my Ferrrari?

Tue, 09/04/2012 - 10:21 | 2760105 Non Passaran
Non Passaran's picture

Flight 981, you say?
Well in that case here's a very important historic record right here on YT
https://www.youtube.com/watch?v=QgCAbTMC3Qg

Tue, 09/04/2012 - 11:32 | 2760495 kaiserhoff
kaiserhoff's picture

Holy shit cakes.  This should be head-line news.

Tue, 09/04/2012 - 10:07 | 2760046 carbon
carbon's picture

i remember, was end it, president Nixon, who started that open *china thing* 

Tue, 09/04/2012 - 11:23 | 2760435 Panafrican Funk...
Panafrican Funktron Robot's picture

Funny how Bruce Krasting spends a ton of time criticizing China over $120 billion in fraud, yet considers Libor/Fed Funds manipulation "no big deal".  Bruce, your anglocentric apologetics are getting a bit absurd.  I know you made a pretty great living being a part of the machine, but articles like this tell me you're still fully integrated within it.  Break free.  Open your eyes.  I promise the light you are seeing and "exposing" is merely a reflection on the cave wall.  Turn around, see the real light, and get the fuck out of the cave.

Tue, 09/04/2012 - 09:39 | 2759961 Lokking4AnEdge
Lokking4AnEdge's picture

Here is a "hint" where the money goes:

In a small town in Arizona called Casa Grande there is a huge industrial complex being built-it is financed by over 300 Chinese individuals that each must invest a minimum of $1.0Million and they all get in return green cards....

I am sure there are more "arrangements" like that....

Tue, 09/04/2012 - 08:59 | 2759842 ThisIsBob
ThisIsBob's picture

EB-5 Investors, welcome to America!

Tue, 09/04/2012 - 07:36 | 2759628 New_Meat
New_Meat's picture

"The plane was 7 hours into the NYC flight before it turned around."

Dang, that's like 1/2 way to JFK.  Then turn around, then actually make the trip.  Fricken' trip sucks enough as it is.  Almost like water-boarding.

- Ned

Tue, 09/04/2012 - 04:43 | 2759529 ebworthen
ebworthen's picture

China doesn't have much on the U.S.S.A. and Wall Street/CONgress.

Bailouts, Mozillo, Corzine, etc., etc.

Tue, 09/04/2012 - 05:34 | 2759549 williambanzai7
williambanzai7's picture

It's all greasy kid stuff compared to crony Amerika.

Tue, 09/04/2012 - 08:14 | 2759702 jldpc
jldpc's picture

Considering all of the heat we take worldwide about the number of firearms in the USA, and the magnitude, er.. popularity... of thieving bankers and politicians - almost like 1930's pop culture bank robbing gun toting criminals, how come there are so few asassinations of them by any of the ripped off masses? Real mystery. Consider all of the places on the planet where daily shootings, bombings, and deadly mayhem are so common; why so little here? Aside from the rare psycho shooting of persons mostly unknown to them, why are the ones who got away with the major loot not targeted here, or even talked about - like addresses and phone numbers - at least for crank calls. Don't they deserve something; the government has failed to put any of them in jail. Oh yeah the private hedge fund guys go to jail, if and when caought mostly from there own excesses and stupidity - certainly not from any of our entrepid regulators -, but what about the banksters and politicians? I find this a major sociological question of our time. Personnally I abhor one on one violence; and do not recommend it as a solution to any interpersonal problem. And how about the size and cost of our armed forces? Wars here there and most everywhere, deployed American troops all over the place, truely staggering massive arms industry supplying most of the world with weapons from primitive to super advanced. Only thing I have come up with is hypocrisy, er ...., double talk. Who are we anyway? It is so surreal! So much evil and so little comeupance.

Tue, 09/04/2012 - 09:35 | 2759952 ebworthen
ebworthen's picture

Because at some point in some way the bad guy got what was coming to him on a television show or movie screen.

Tue, 09/04/2012 - 03:34 | 2759507 DeltaDawn
DeltaDawn's picture

Finally, a career path I can recommend to my kids, "Chinese bounty hunter." The poor citizens in China will be left with only U. S. treasuries in the public coffers.

Tue, 09/04/2012 - 09:15 | 2759886 Joe Davola
Joe Davola's picture

Just don't name them "Dog", lest they get taken by Barry for a wok.

Tue, 09/04/2012 - 06:29 | 2759577 lamont cranston
lamont cranston's picture

No doubt that "Wang - Imperialist Running Dog, Adverse February Current Bounty Hunter"  will be the newest hit show on Discovery. With English subtitles. 

Tue, 09/04/2012 - 06:30 | 2759579 magpie
magpie's picture

Well, didn't they invent the Human search engine

Tue, 09/04/2012 - 02:50 | 2759478 Cosimo de Medici
Cosimo de Medici's picture

There is a struggle within the palace, but both sides of the battle have the same overall goal:  getting as much loot as possible out of the country before the Second Cultural Revolution opens to a packed audience of 1.3 billion.  The two sides are tripping over each other's suitcases of money, and there are multiple corrupt dibs on the same funds.  Think of it as kind of a Chinese Re-hypothecation.

The Gu Kailai faux-trial and suspended sentencing was a kind of compromise in a matter where one side had temporarily gained the upper hand.  Remember that her case---and Neil Haywood's murder---came about over differences of opinion over the size of the commission Haywood would get for getting Bo and Gu's money out.

Note this week's senior party change, which was a blow to Hu Jintao.  The battle rages on.

To quote Mr. T, pity the fool.  The "fools" are those bureaucrats who stay a day too long, those who have a less solid marital relationship than hubby (who is staying behind for a while) thinks, and especially those foreigners dumb enough to think that when the SHTF foreigners won't be crucified.  (For those still in the Middle Kingdom, find some photos of Port Arthur after the Japanese sunk the Russian Fleet, then book the trip home before you become somebody's performance art.)

People look at China of the last decade and think that is the real China.  In reality, for most of the last 2500 years China has been its own worst enemy and shot itself in the foot so many times all its toes are gone. 

Fear the reversion to the mean.

Tue, 09/04/2012 - 07:39 | 2759630 rufusbird
rufusbird's picture

It's all good. Gu will be free in a couple of years. After all, it was only a "foreign devil" that she killed.

Tue, 09/04/2012 - 02:50 | 2759477 Peter Pan
Peter Pan's picture

I don't know about casinos elsewhere, but a recent outing to the casino in Sydney left me stunned by the number of Chinese people there. Well over 80% would have been Asian.

In the last decade they also bought a serious amount of real estate at top prices. A lot of it left vacant.

A Mercedes in Sydney dealer tells me that Asian buyers are by far the biggest buyers of Mercs.

The members of the Politburo in China leave the congress members in the USA for dead in terms of wealth.

I am sure there will be plenty more stories to come in the future.

The only question is whether the Chinese leadership will go back to shooting the wrongdoers and sending the bill for the bullet to the family.

Tue, 09/04/2012 - 04:35 | 2759527 wintermute
wintermute's picture

I went into a major casino in Sydney in 1986 and the first thing I noticed was that it was stuffed full of Asians, mostly Chinese.

This was before most of Deng Xiaoping's reforms in China - when the country was still broke.

Not sure these anecdotes prove much...

Tue, 09/04/2012 - 09:58 | 2760025 Paul E. Math
Paul E. Math's picture

Another anecdote is that Toronto is in the grips of a massive condo-building boom.  We have 3x more condo units under development than NYC.

I asked a realtor who the buyers of all these condos were and she said 'the Chinese'.

I know there are a lot of people in China but how can there be so many that have an extra $1M to buy a condo that is never occupied?

My brother in Vancouver tells the same story of entire buildings that are sold out but virtually vacant, owned by Chinese 'investors'.

Our greatest Canadian cities will soon be full of parasite kleptocrats from China who have bid up the price of everything so high that we can no longer afford to live there ourselves.

I'm actively hoping for a crash.

P

Tue, 09/04/2012 - 11:00 | 2760305 falak pema
falak pema's picture

Canada must seem like an empty country to them.

Could the chinese be the new europeans of the next american age?

Tue, 09/04/2012 - 02:09 | 2759457 Bear
Bear's picture

A million? Seems a stretch ... let's assume that three people on every flight out of China is a kleptocrat. It will take 330,000 flights to get them all out of the country ... a little hard to believe

Tue, 09/04/2012 - 07:21 | 2759615 Bruce Krasting
Bruce Krasting's picture

Agree. The numbers blew me away. But these are estimates from the Central Bank of China. That being the case, you would think it is understated.

Also, the 1m # is for politicians and state workers. There is also the private sector crooks. They must be sucking money out of the country too.

The scale of this is what worries me. It's too big. China Inc. will have to do something about this. Soon....

Tue, 09/04/2012 - 11:06 | 2760342 falak pema
falak pema's picture

think big Bruce, think Mongol. Ghengis had so many offspring. They are planning a new exodus. Canada, Australie, Spain, you name it. 

What's to stop a million chinese to occupy real estate in Spain, Portugal, greece and Canada?

Piece of cake. Use your ill earned money well. Say Sayonara in chinese to father land and take Air Singapore where you want to go.

I predict a boom in chinese  take aways in all these countries as niche market! 

Tue, 09/04/2012 - 14:13 | 2761195 Almost Solvent
Almost Solvent's picture

First off, the all you can eat buffet model is much more profitable than the "to go" market.

 

Second, every time someone says "take away" it takes me back to a small shop in Edinbourgh where the person behind the counter was trying to say "do you want this take away" but it was so horribly mangled that I though he was saying "do you want anything else today". So of course we went back and forth forever until I figured out what that poor bloke was trying to say. 

Tue, 09/04/2012 - 02:06 | 2759456 dondonsurvelo
dondonsurvelo's picture

They are just repatriating the money back to the US.

 

Tue, 09/04/2012 - 01:57 | 2759449 williambanzai7
williambanzai7's picture

It's all in the timing. They peddle influence and take their loot while in office. Our kleptocrats peddle influence but defer loot gathering activities until they get to Goldman Sachs or K Street.

Tue, 09/04/2012 - 10:04 | 2760039 Joe Davola
Joe Davola's picture

I'd hate to see how much Harry Reid has deferred considering how well he's done while in office.

Tue, 09/04/2012 - 01:44 | 2759445 Dogbark
Dogbark's picture

Guoqiang is a small fish. Ben is ready to print 600 Bln out thin air. Is this a bigger thievery?

Tue, 09/04/2012 - 06:51 | 2759587 Dr. Sandi
Dr. Sandi's picture

Ben prints it, then these guys bring it back.

Fetch!

Tue, 09/04/2012 - 07:30 | 2759623 rufusbird
rufusbird's picture

Bravo! First good belly laugh I have had in days...! Still laughing...

Tue, 09/04/2012 - 00:34 | 2759412 mendigo
mendigo's picture

Why is this worthy of note?
Has this not been true basically forever?
And also for the Indians and Russians?

Tue, 09/04/2012 - 00:10 | 2759386 Clowns on Acid
Clowns on Acid's picture

The Chinese kleptocrats have seen that kleptocrats like Jon Corzine do not get prosecuted in the US. Therefore, steal USD in China (based on exports to the US), contribute to Obama campaign, and then walk free.

Surprised that there has not been more.

Tue, 09/04/2012 - 00:33 | 2759396 Eireann go Brach
Eireann go Brach's picture

Who flung dung?

Tue, 09/04/2012 - 03:07 | 2759489 Uchtdorf
Uchtdorf's picture

Nut on the Barbwire by Wan Hung Low

Tue, 09/04/2012 - 00:23 | 2759395 Eireann go Brach
Eireann go Brach's picture

Easy answer Bruce! The Chinese money is going into US real estate, via the free pass money laundering rules offered by NAR!

Chinaman wike weal estate and wike bwonde calfownia giwls, but they don't like your 2 inch weiners chinky boys!

Tue, 09/04/2012 - 10:03 | 2760037 Paul E. Math
Paul E. Math's picture

Not to be the PC police but you undermine your cause when you insult an entire race whereas it is the parasites from China who are culpable.

What you have done is equivalent to lumping your brother, the honest auto mechanic, in with the likes of Jon Corzine.

P

Tue, 09/04/2012 - 21:56 | 2762985 Crisismode
Crisismode's picture

Jon is a Financial Mechanic

Honest?

Hmm . . . methinks not.

Someone's brother?

Hmm . . .  methinks yes.

 

 

Tue, 09/04/2012 - 00:07 | 2759382 Number 156
Number 156's picture

Think of this differently:

If the Treasurer for the city of Las Vegas (Pop. 580,000) got wind that a Chinese citizen was arriving in Las Vegas with yuan equivalent to $100,000,000 in his possession, will immediately have a limousine dispatched to pick him up at the gate and driven straight to the Bellagio. Its what you call a 'Whale'.

Tue, 09/04/2012 - 00:09 | 2759385 jonjon831983
jonjon831983's picture

China version is trip to Macau.  Enormous profits for American casino interests for nothing.

Tue, 09/04/2012 - 00:07 | 2759378 jonjon831983
jonjon831983's picture

If there are - it is the usuals that you hear about chinese buyers...

 

Companies, gambling, art/collectibles/jewelery, real estate, financial instruments (stocks/insurance policies/fx/etc), offshore account, family transfer w/ living spaces, schooling, cars, ... etc.

 

The whole shebang.

Tue, 09/04/2012 - 00:00 | 2759375 otto skorzeny
otto skorzeny's picture

Bruce's stuff is the best on ZH. He seems like a good guy to shoot the breeze with- not like most moron soccer dads in my 'hood that only wanna talk about dumb shit like sports.

Mon, 09/03/2012 - 23:41 | 2759342 spooz
spooz's picture

Maybe those kleptocrat's dollars are propping up our luxury housing market.  How nice.

http://www.usatoday.com/money/economy/housing/story/2012-04-03/us-homes-lure-chinese-buyers/53977638/1

Mon, 09/03/2012 - 23:06 | 2759311 Hulk
Hulk's picture

Hmm, I'm beginning to see that lying and thieving appears to cross all racial boundaries...

Mon, 09/03/2012 - 23:33 | 2759337 StychoKiller
StychoKiller's picture

Hulk:  SMASH!!

Mon, 09/03/2012 - 22:40 | 2759277 Stuck on Zero
Stuck on Zero's picture

Behind every great fortune is a great crime.

 

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