SHANGHAI, Sept 25: Chinese President Hu Jintao on Sunday sacked the Communist Party boss of Shanghai for corruption, toppling the highest leader so far in his drive to root out abuse and enforce loyalty.
Chen Liangyu was involved in misusing social security funds in China’s financial hub and helped enrich crony companies and relatives, Xinhua news agency reported, citing a Communist Party Politburo decision.
His fall, coming after months of speculation about his future, was viewed as a sign of Mr Hu’s tightening grip on power, as he uses graft investigations and personnel changes to discipline wayward officials before a crucial party congress next year.
Mr Chen had ‘created malign political effects’, the agency said, citing the central leadership’s decision and sending a warning to other potential targets.
“Whoever it is, no matter how high their position, anyone who violates party rules or national law will be severely investigated and punished.”
Mr Chen was removed from the politburo, the party’s powerful 24-member leadership council, the announcement said. It did not say whether Mr Chen also faces criminal charges, as well as dismissal.
Mr Chen was the first politburo member to be sacked since 1995 when Beijing party chief Chen Xitong was purged and jailed. His picture and details were promptly erased from the city government Web site.
More than 100 central government investigators have descended on Shanghai in recent months to investigate money reportedly drained from the city’s 10 billion yuan ($1.25 billion) social security fund for illicit loans and investments.
A Beijing political source said two weeks ago investigators notified Mr Chen, his driver and a domestic helper that they were to be questioned. The official announcement said Mr Chen had protected staff involved in ‘grave law-breaking’.
One of the Shanghai officials already dismissed in the corruption scandal had previously served as an aide to Mr Chen.
“I think that this is intended to increase political legitimacy and reclaim public trust in the government,” He Zengke, an expert on corruption at the China Centre for Comparative Politics and Economics, a party think tank, said of Mr Chen’s sacking.
“Corruption is the political issue that most concerns ordinary Chinese, and the party needs to address it to calm public concern.” 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.
President Hu’s ability to orchestrate anti-corruption investigations in both Beijing and Shanghai — the nation’s political and commercial centres — demonstrated his growing muscle, a source said before Mr Chen’s dismissal.
“He is able to fight a campaign on two fronts,” the source said.
Mr Chen’s fall comes as Mr Hu prepares for the 17th Party Congress, due late next year, when he is widely expected to recast the central leadership and install potential successors.
Until now, Shanghai has been considered a fiefdom of officials loyal to Mr Hu’s predecessor, Jiang Zemin, who handed over reins of power in Nov 2002.
The Shanghai corruption probe had already implicated two senior city government officials and three prominent executives in real estate, private investment and a utility firm.
Mr Chen, 60 next month, would be temporarily replaced as city party boss by Shanghai Mayor Han Zheng.
On Monday evening, Chinese state media signalled a campaign to erase Mr Chen’s influence while reassuring Shanghai officials. Xinhua reported that Mr Chen had been denounced by local officials during the probe into misused pension funds.
“Chen was the top guy in Shanghai, and for Shanghai officials to report on his problems entailed no small risk,” it said.
Chinese financial markets were largely unmoved by the political upheaval. But several Shanghai-focused property stocks tumbled out of concern that the news may herald a crackdown on real estate investment and lending.
Lang Hsien-ping, a Taiwan-born economist who said his Shanghai talk show was closed in February by officials who feared his exposure of corruption, said that Mr Chen’s tenacious resistance to graft inquiries underlined the need for greater accountability.
“If any party leader or official suppresses the public’s right to know, they should be replaced,” he said.—Reuters
