Ultimate Penalty in Graft Case

Times Staff Writer

In the end, Yuan Baojing’s wealth couldn’t save his life but merely ensured a less messy execution.

On a windy March morning, Yuan was sentenced to death for his alleged involvement in the killing of a local policeman. Only six months earlier, authorities had given the corporate raider a reprieve after, by some accounts, his wife promised to surrender $6 billion in oil company stock to the state.

Yuan, dressed in white, appeared stunned when the latest verdict was read. “I can’t accept this. I have information to expose others,” the 40-year-old shouted as he was led out of the courthouse by helmeted police and into a black van.

Three miles outside the city, the van pulled into the gates of the Liaoyang Funeral Home, where Yuan was shoved into a police van outfitted with a bed and a computer, according to a person at the scene. Two injections were pumped into Yuan. The first paralyzed him; the second stopped his beating heart.


Just three hours after the death sentence, authorities delivered the ashes from Yuan’s cremated body to his wife, according to the witness and local Chinese media. She also got a bill for $2,500 -- the cost of the lethal injection that replaced the cheaper and more common form of execution here: a bullet to the back of the head.

Legal experts and residents here say Yuan’s execution is a tale of China’s modern-day scourge: corruption.

Chinese President Hu Jintao said June 30 that graft was threatening the Communist Party’s grip on power. Hu called for a renewed crackdown in the wake of several high-level scandals. He decried “continued cases of leading officials abusing power for private gain, engaging in graft, bending the law and falling into corruption.”

In one recent case, Beijing Vice Mayor Liu Zhihua -- who was in charge of the $40-billion building project for the 2008 Olympics -- was fired “because of his corrupt and degenerate ways,” China’s Xinhua news agency reported. In another scandal, Vice Adm. Wang Shouye, a top commander in China’s navy, was stripped of his post and his seat in parliament.


In the last few years, anti-graft enforcers have taken action against thousands of corrupt party officials for accepting bribes from developers and others for land and jobs. China has sought to make examples of some officials by executing them, but corruption remains largely unbridled.


People in this northeastern city say Yuan’s is a classic case of graft.

Many here say Yuan was in league with corrupt officials. The former Liaoyang police officer whom Yuan was accused of conspiring to have killed had alleged that a large state-owned company in the city funneled ill-gotten money to Yuan that allowed him to invest and become rich.


Yuan’s attorney, Wu Ming’an, said he had no knowledge of that. He said his client insisted that he was framed. Weeks before he was executed, Yuan told his lawyer in a tape-recorded session that Liaoyang officials had sought him out a few years earlier for a favor.

Yuan claimed that provincial law enforcement and Communist Party officials were under investigation by the central government for corruption, Wu said, and that they wanted Yuan to use his connections with Beijing to help them.

Wu said Yuan recounted how his troubles began when he refused.

Wu, a prominent criminal attorney in Beijing, said he had prepared files containing these allegations and had given them to Yuan’s wife to submit to the central government. But the lawyer said he did not know whether the claims were investigated.


Here in the northeast, corrupt party officials have a reputation for being more brazen than elsewhere in the nation, partly because the economy has not kept pace with the rest of China. Local media are chock-full of stories about party cadres who take millions of dollars in bribes, officials convicted for selling government jobs and mafia bosses in cahoots with judges.

People still talk about organized crime chieftain Liu Yong, who was spared his 2003 death sentence -- for murder and other crimes -- by Liaoning province’s high-court judges, who gave no reason for his reprieve. Beijing later overturned the ruling and Liu was executed.

No one here can say what role, if any, Beijing played in Yuan’s reprieve and execution. But many people say they were shocked at how quickly authorities executed Yuan.

“If the criminal says he has more information to expose others, usually the execution should be suspended,” said Li Jian, founder of the Civil Rights Defense Net, a human rights group in Dalian in Liaoning province. “The court should at least hear what he wanted to say before the execution. What are we ordinary people to think?”


Indeed, Yuan’s case has raised many questions: Was he as rich as media reports portrayed him? And why did state officials grant him a pardon only to rescind it?

Beijing and provincial authorities declined to talk about the case. Chinese journalists who covered Yuan’s trial say their bosses in the state-run media have ordered them to stop reporting on it.

Yuan’s younger sister, a judge in Liaoyang People’s Intermediate Court, said only that “we could never win this case in China.”

“Please don’t ask. Don’t talk about this anymore,” she told The Times.


Legal experts say Yuan might have been caught up in a wider debate now taking place in China. As corruption has spread across the Middle Kingdom -- and created thousands of new millionaires -- the masses have been clamoring for Beijing to crack down on the wealthy, especially those who owe their riches to corrupt deeds.

Chinese and international organizations say Beijing has had limited success in fighting corruption. Among other actions, Beijing has dispatched investigative teams throughout the land. These squads typically stay in local areas for as long as three months, taking people’s complaints and reporting them directly to the Communist Party’s Discipline Inspection Commission, a 121-member body that is charged with rooting out corruption and malfeasance among party cadres.

In Liaoning province, authorities last year meted out punishment to almost 7,200 officials, including 27 senior members, according to the central government mouthpiece, the People’s Daily. The money involved in these cases totaled $92 million.



Yuan’s arrest by Liaoyang city police in March 2004 generated sensational media reports.

Authorities said Yuan enlisted his older brother and cousins to kill Wang Xing, a stoutly built man whom he first met in 1985 on the train to Beijing. The two men became friends. When Yuan struck it rich, Wang quit his police job to join the entrepreneur’s payroll, said Wu, Yuan’s lawyer.

Wang had tried to blackmail Yuan over his alleged involvement in an attempted murder that occurred in 1996, Wu said. Wang claimed that Yuan sought to have killed a Sichuan province man whom Yuan blamed for millions of dollars in losses in commodity futures trading.

The murder attempt failed, but in the ensuing years Wang constantly threatened to expose the plot unless Yuan paid him off, Wu said.


On Oct. 4, 2003, after Wang had finished playing mah-jongg near a mosque in Liaoyang, the 45-year-old neared the entrance of his pale-yellow apartment building. From the dark, two men emerged. One of them blasted him in the chest with a double-barreled shotgun, according to interviews with area residents and state media.

Wu said two of Yuan’s cousins confessed that they had plotted the ambush. There was some evidence that Yuan’s brother, Yuan Baoqi, had paid the cousins about $22,500 to carry out the killing, according to Wu and media reports.

During their investigation, Wu said, Liaoyang police arrested Yuan and held him in a dog-training facility for four months.

“He showed me gray, black marks on his leg where he was kicked,” Wu said. “That detention was illegal.”


Wu said police extracted vague statements from the businessman but no confession.


Yuan was born into a family of five children in this old rust-belt city where Russian and Japanese soldiers battled in 1904. His parents were poor factory workers.

Yuan’s former teachers recounted how he worked hard at school so that he could enter the prestigious China University of Political Science and Law in Beijing.


Fan Zhongxin, a former classmate of Yuan’s who now teaches law in the central Chinese city of Wuhan, recalled how Yuan put himself through law school by reselling vegetables at construction sites from his three-wheel cycle.

After graduating from law school in 1989, Yuan found work in the securities department at China Construction Bank in Beijing, a huge state-owned institution that paid modest salaries. But in the early 1990s, Yuan somehow secured enough money to snap up state-owned companies being cast off as part of Beijing’s economic reforms.

Yuan’s company, Jianhao (which is Chinese for “genius power”), acquired one state-owned enterprise after another, using a sophisticated stock-purchasing method that enabled it to leverage assets, according to media reports.

Within a few years, Jianhao had 60 subsidiaries in industries as varied as pharmaceuticals and hotels, with assets totaling $350 million. Newspaper reports saluted Yuan for donating $1.25 million to establish a scholarship for university students. The boy who was known in school for having a single, dirty Mao jacket was traveling around Beijing in a chauffeured Audi limousine.



In January 2005, after a daylong public hearing, Liaoyang City Intermediate People’s Court sentenced Yuan to death. On Oct. 9, Yuan’s sister learned unofficially that her brother would die five days later, according to Beijing news media.

But when that day came, a court order halted the execution. Yuan was described as jubilant. He was seen at Liaoyang detention center, smiling as he chatted with his wife and their only child, a 3-year-old boy.

Within a few days, Chinese media began reporting that Yuan had escaped death because his wife -- Zhuo Ma, a famous Tibetan dancer and a professor at Central University for Nationalities in Beijing -- had agreed to donate shares in an Indonesian oil field controlled by Yuan’s Hong Kong company.


The first article appeared in a widely distributed news magazine, VIP Weekly. It claimed that the shares were worth $6 billion. Other media reports followed with similar stories, saying Yuan had bought his freedom. Soon, Internet chat rooms were buzzing.

“I cannot breathe. Our law is so pathetic,” said one online participant.

Said another: “Kill him! If such a guy is not killed, they cannot soothe the wrath of the masses.”

Hong Kong public records show Yuan’s company that reportedly owned the oil field shares in question, Hong Kong Huazhi International Co. But the records contain no information about the company’s holdings, its ownership or value.


Before Yuan was executed, Rupert Hoogewerf, founder of a research firm in Shanghai that publishes reports about China’s wealthy, said he looked into Yuan’s background. Hoogewerf said he never included Yuan in his annual China Rich List because he could never confirm how much he was worth.

“If it was true” about his oil field shares, Hoogewerf said, “he was the richest man in China.”


Yuan’s lawyer said he didn’t know whether China’s highest court in Beijing had reviewed Yuan’s case. The provincial high court can carry out a death sentence without Beijing’s consent.


“The evidence was inadequate. Yuan shouldn’t have been executed,” said Mo Shaoping, a well-known criminal lawyer in Beijing who did not know Yuan but was familiar with his case.

Fan, Yuan’s former classmate who is now a law professor, said that by executing the businessman, authorities took the pragmatic approach. Even if Yuan was allowed to report government corruption, the masses would have believed “that rich people are special and that they can buy life with money,” he said.

“When news of the $6-billion donation was released, I knew he was doomed to die,” Fan said. “The government decided that for the general social stability, it should bribe the masses by giving him the death penalty.”

On March 11, Yuan was executed along with his brother and a cousin.


After the sentencing, family members including Yuan’s wife, Zhuo, pleaded that the men be executed by injection, not gunshot. Thanks to a fleet of specially equipped police “death vans,” authorities sometimes grant that final wish, especially when the convicted person’s family can afford the lethal cocktail.

Since the execution, Zhuo has gone into hiding. When contacted by The Times through an acquaintance, she sent a terse message: “Thanks, but forget it.”