Olympic Greed
How crooked Chinese officials have cashed in on the 2008 games
An opulent villa stands on a plot of farmland just north of the Chinese capital, close to where the Beijing Olympics will be held next August. The villa's architecture mixes classical Chinese features with modern steel and glass elements. But the real surprise is inside. The bedrooms are decorated in warm, soft tones that appeal to the residents--a group of young, attractive women chosen by the vice mayor of Beijing. They are his personal concubines, paid for by building contractors.
Before he was fired last year and subsequently imprisoned, Vice Mayor Liu Zhihua was directly responsible for the construction of the city's Olympic venues. He oversaw projects worth $35 billion, more money than was spent on all previous games together going back to the Montreal Olympics in 1976. Using the power of his office, Liu collected kickbacks that he used to set himself up in regal splendor. "Liu had more than one mistress," wrote the Wen Hui Bao newspaper in Shanghai. "He had a secret pleasure palace for himself to have fun." His fall was triggered not by Chinese associates aware of his lavish lifestyle but rather by a foreign businessman who reportedly found Liu's payoff demands for a real- estate deal so outrageously steep that he complained to the authorities.
Liu's case draws attention to the Achilles heel of China's economic boom: corruption. Last year alone, some 100,000 members of the Communist Party were censured for graft, a number that still understates the extent of the problem. Almost no major business transaction gets done in China without a cash payment under the table, long-term observers say. Liu's only mistake was that he became too greedy, and his behavior was too conspicuous. Other officials continue to collect bribes.
The most recent allegations involve Zhou Liangluo, leader of Haidian district in northern Beijing, bordering the Olympic village. He was fired from official posts in June after rumors of his bribe-taking became so widespread that officials were forced to take action.
Yet individual sackings such as this do little to solve the wider problem. Corruption is endemic in China and could sully the reputation of the games. "American companies who sponsor the Olympics are unlikely to be damaged by this directly," said Robert Kapp, a former president of the U.S.-China Business Council. "But there is a general danger that public perceptions in America will turn against China."
In 2001, when Beijing won the right to host the games, the Chinese capital was drab and sleepy. Even as construction has boomed and a thousand new cars a week worsen the already bad urban air pollution, the government has worked hard to improve living conditions for the city's 15 million residents. New parks and grassy patches are sprouting, and public transportation is expanding. Forgotten are the tricks employed when Beijing was competing with Paris to host the games, such as spray-painting concrete surfaces green to make them look like parks.
Urban amenities. Expecting 2 million visitors during the two-week games next summer, the government has dug deep into official coffers to show itself worthy of Olympic honors. In record time, it has tripled the size of the city's subway system. Where there were once narrow and congested residential streets, out-of-town traffic now flows on elevated highways. Foreign visitors will be landing at a new airport, designed by Norman Foster, the British star architect. Near Tiananmen Square, they will find a highly innovative opera house shaped like a giant egg sitting in its own lake designed by Paul Andreu, who built Paris's main airport.
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