Shangcai County Exposes Financial Black Hole; Former Party Secretary Detained (中文)
Former county party secretary Yang Songquan and many other officials detained, Yang’s case involves around RMB 10 million, much of it “Anti-AIDS”-related funds
Officials in Henan's Shangcai County, infamous in China for its outbreak of AIDS, were stunned by the detention of former county party secretary Yang Songquan by the Procuratorate of Zhumadian. Yang was later moved to Kaifeng, and the investigation is ongoing. Previously the county Construction Bureau director Qiu Shui and Health Bureau director Zhai Liuguo had been arrested for their involvement in the case. The detention of Yang Songquan has shaken Shangcai County and Henan Province.
Investigators have confirmed that Yang Songquan was involved in the embezzlement of RMB 10 million, a large portion of the funds earmarked for HIV/AIDS prevention work. Investigators state that the majority of the problem occurred during Yang's five year term in Shangcai County, and is related to the buying and selling of government offices, dereliction of duty, and malfeasance.
County Construction Bureau director Qiu Shui and Health Bureau director Zhai Liuguo were key figures related to Yang, and were instrumental in helping Yang embezzle funds via monies earmarked for construction, HIV/AIDS prevention and medicine.
After news of the HIV/AIDS epidemic in Shangcai County was made public, the Henan Provincal Party Commission and Government invested heavily in the '6+1 Project', designed to build a hospital, school and roads in all villages afflicted by HIV/AIDS, and to drill wells, build community centers and orphanages in the villages. However, investment in these areas became an opportunity for Yang and others to get rich. Yang channeled contracts to his brother and cousins via Qiu Shui. One of the contracts was originally for RMB 2.5 million, but was later inflated to RMB 4 million.
After the HIV/AIDS cases were revealed in Wenlou Village in Shangcai County, higher authorities earmarked RMB 10 million for a new hospital to be built in the county, in order to help with the treatment of HIV/AIDS patients. The original hospital director was stripped of his position when the hospital construction was completed in the first half of 2001, however, and Yang Songquan issued construction contracts to his relatives and appointed Zhai Liuguo as the new hospital director. According to an internal hospital report, by 2004 RMB 24 million had been spent on the hospital construction, almost three times the original amount budgeted. A report from the county Procuratorate stated that an official appraisal of the costs revealed that only RMB 14.82 million of the RMB 19 million was in fact spent on construction.
The greed of officials was rekindled after a special national fund was set up to cover the medical costs of HIV/AIDS patients in Shangcai County. During the period when Zhai Liuguo was director of the county hospital, the Shangcai County People's Hospital purchased medicine exclusively from a single supplier from Haozhou, Anhui Province. The medicine purchased from the Shangcai County People's Hospital alone accounted for 18% of the supplier's profits. A senior physician at the Shangcai County People's Hospital told Caijing that, “The monies budgeted by the national government are fixed, so they inflated the prices of medicine, making off with the difference. As a result the amount of free medicine provided by the state was a pitiful amount.” The receipt of a local AIDS patient showed that the price of Chinese thorowax (type of medicine) had been inflated from its normal price of RMB 25 to RMB 160.
The local Procuratorate confirmed to Caijing that Yang Songquan's downfall was precipitated by an incident involving the Jintu Taxi Company. In February, 2005, the Shangcai County's Construction Bureau signed a contract with the Zhengzhou City Jintu Taxi Company, granting the latter a 20 year monopoly, and giving jobs to about 300 landless peasants and relatives of HIV/AIDS patients. Later the Shangcai County Party Commission suddenly shut down the company, causing many of the taxi drivers to petition for grievances in the provincial capitol, and Beijing. The Henan Daily reported that, “The real reason that the Jintu Taxi Company was shut down is because the leadership of the County Party Commission received a kickback of RMB 500,000 from another company!” Inspectors confirms that Yang Songquan was involved in the kickback scheme.
Yang Songquan was stripped of his position as Party Secretary last August 19, and was put under investigation as of April of this year by the Party.
Shangcai County is well-known nationally-listed poor county. After the outbreak of HIV/AIDS, funding for HIV/AIDS prevention has been flowing in from various sources. When Yang Songquan was transfered to Shangcai, he told friends privately that he, “never thought that I would have so much power, or control so much money.”
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