Thursday, July 30, 2009
Sunday, July 26, 2009
WUBU, China — For much of his education, Xue Longlong was silently accompanied from grade to grade, school to school, by a sealed Manila envelope stamped top secret. Stuffed inside were grades, test results, evaluations by fellow students and teachers, his Communist Party application and — most important for his job prospects — proof of his 2006 college degree.
Everyone in China who has been to high school has such a file. The files are irreplaceable histories of achievement and failure, the starting point for potential employers, government officials and others judging an individual’s worth. Often keys to the future, they are locked tight in government, school or workplace cabinets to eliminate any chance they might vanish.
But two years ago, Xue Longlong’s file did vanish. So did the files of at least 10 others, all 2006 college graduates with exemplary records, all from poor families living near this gritty north-central town on the wide banks of the Yellow River.
With the Manila folders went their futures, they say.
Local officials said the files were lost when state workers moved them from the first to the second floor of a government building. But the graduates say they believe officials stole the files and sold them to underachievers seeking new identities and better job prospects — a claim bolstered by a string of similar cases across China.
Today, Mr. Xue, who had hoped to work at a state-owned oil company, sells real estate door to door, a step up from past jobs passing out leaflets and serving drinks at an Internet cafe. Wang Yong, who aspired to be a teacher or a bank officer, is unemployed. Wang Jindong, who had a shot at a job at a state chemical firm, is a construction day laborer, earning less than $10 a day.
“If you don’t have it, just forget it!” Wang Jindong, now 27, said of his file. “No matter how capable you are, they will not hire you. Their first reaction is that you are a crook.”
Perhaps no group here is more vilified and mistrusted than China’s local officials, who shoulder much of the blame for corruption within the Communist Party. The party constantly vows to rein them in; in October, President Hu Jintao said a clean party was “a matter of life and death.”
Critics contend that China’s one-party system breeds graft that only democratic reforms can check. But China’s leaders say the solution is not grass-roots checks on power, but smarter oversight and crime-fighting.
Public policy specialists say China is shifting its emphasis from headline-grabbing corruption cases to more systematic ways to hold officials accountable. The government opened an anticorruption hot line last month to encourage whistle-blowers. A few localities require that officials disclose their family assets to the party.
But in Wubu, a struggling town of 80,000 banked by steep hills and coal mines, citizens say that local officials answer to no one, and that anyone who dares challenge them is punished.
“When the central government talks about the economy and development, it sounds so great,” said Mr. Wang, the day laborer. “But at the local level, corrupt officials make all their money off of local people.”
Student files are a proven moneymaker for corrupt state workers. Four years ago, teachers in Jilin Province were caught selling two students’ files for $2,500 and $3,600; the police suspected that they intended to sell a dozen more. In May, the former head of a township government in Hunan Province admitted that he had paid more than $7,000 to steal the identity of a classmate of his daughter, so his daughter could attend college using the classmate’s records.
While not quite as important as in Communist China’s early days, when it was a powerful tool of social control, the file, called a dangan, is an absolute requirement for state employment and a means to bolster a candidate’s chances for some private-sector jobs, labor experts say. Because documents are collected over several years and signed by many people, they are virtually impossible to replicate.
So in September 2007, when one Wubu graduate sought work at a local bank and discovered that his file was gone, word spread fast. For the next two years, his parents and a group of other parents in similar straits said, they sought help at every level of the bureaucracy.
The government’s answer, they said, was to reject any inquiry, place the graduates’ parents under police surveillance and repeatedly detain them. Last February, they said, five parents trying to petition the national government were locked in an unofficial jail in Beijing for nine days.
“We are so exhausted,” said one tearful mother, Song Heping. “Our nerves are about to snap from this torture. The officials who were responsible not only have not been punished, they have been promoted.”
Wubu officials did not respond to repeated inquiries. One Chinese television journalist said they told him they had resolved the matter simply by creating new folders. But families say the folders held nothing but brief, error-riddled résumés that employers reflexively reject as fake.
The parents are uniformly poor: one father drives a three-wheel taxi, earning just 15 cents per passenger.
Xue Longlong’s parents sacrificed even more than most, in the belief that education would lead their children out of poverty. They earn just $450 a year growing dates, and live near a dirt mountain path, drinking well water and cooking over a wood fire.
Longlong, the oldest child, wore secondhand clothes and skipped meals throughout high school. When he won admission to a university in Xian, 400 miles away, his parents borrowed to cover the $1,500 in annual expenses. Initially, it seemed the bet would pay off: Longlong said he had had a chance to work at an oil company with a monthly salary of $735.
But the job evaporated with his dangan. “It was a catastrophe,” he said. Now he earns a base salary of $90 a month as a door-to-door salesman and lives in a tiny, dingy room in a Xian slum.
The woman he hoped to marry left him because her parents said he would never have a stable job. His mother suffered a nervous breakdown, and the family debt ballooned. Longlong’s father, Xue Ruzhan, said he owed more than $10,000 — more than twice what his property is worth.
“What is the point of continuing to live?” the father said. “Sometimes I want to commit suicide. These corrupt officials destroyed all our hopes.”
Including, it seems, the hopes of Longlong’s younger sister, Xiaomei, an 11th grader who once thought she would follow him to a university degree.
No more. “I want to quit,” she said during a school lunch break. “My brother graduated from college. What good did it do him?”
Zhang Jing contributed research from Wubu, China, and Yang Xiyun from Beijing.
Thursday, July 23, 2009
By David Voreacos
July 23 (Bloomberg) -- The mayors of Hoboken, Ridgefield and Secaucus, New Jersey, and five rabbis were among 44 people charged by the U.S. with public corruption and money laundering.
Hoboken Mayor Peter Cammarano, 32, Secaucus Mayor Dennis Elwell, 64, and Ridgefield Mayor Anthony Suarez, 42, all Democrats; Jersey City Council PresidentMariano Vega Jr., 59; State Assemblyman Daniel Van Pelt, 44, a Republican from Ocean Township; and Assemblyman L. Harvey Smith, a Jersey City Democrat, were charged today in an FBI complaint. All except Smith appeared in U.S. court in Newark, New Jersey.
The corruption probe, based in Hudson County, netted many public officials accused of pledging assistance for bribes. A cooperating witness in that probe also infiltrated a “pre- existing money laundering network” that moved “at least tens of millions of dollars through charitable, non-profit entities controlled by rabbis in New York and New Jersey,” according to a release by acting U.S. Attorney Ralph Marra.
“The fact that we arrested a number of rabbis this morning does not make this a religiously motivated investigation,” Weysan Dun, special agent in charge of the Federal Bureau of Investigation’s office in Newark, said at a news conference. “It is not a politically motivated investigation. It is about crime, corruption, arrogance and a shocking betrayal of public trust.”
The roundup of suspects is one of the largest ever in New Jersey, where more than 100 public officials have been convicted of corruption in the past few years. The cooperating witness laundered $3 million through the rabbis and also made bribe payments to public officials, prosecutors said. Investigators made hundreds of hours of audio and video recordings of illicit transactions, according to prosecutors.
The cooperating witness is Solomon Dwek, a real estate developer in Monmouth County, New Jersey, who was charged on May 11, 2006, with scheming to defraud PNC Bank out of $50 million, according to three people familiar with the matter. Dwek is a rabbi’s son who was vice president of the Deal Yeshiva School in West Long Branch, New Jersey.
Cammarano, Hoboken’s youngest mayor, was sworn in July 1. Former state Assemblyman Louis Manzo, 54, a Democrat from Jersey City, and Leona Beldini, a deputy mayor of Jersey City, also were charged. Cammarano attorney Joseph Hayden didn’t immediately return a call seeking comment. Suarez lawyer Henry Klingeman said his client was innocent and would not resign.
The rabbis were Saul Kassin, 87, chief rabbi of Sharee Zion, a synagogue in Brooklyn, New York; Eliahu Ben Haim, 58, the principal rabbi of Congregation Ohel Yaacob in Deal, New Jersey; Edmond Nahum, 56, of Deal Synagogue in Deal; Mordchai Fish, 56, of Congregation Sheves Achim in Brooklyn; and Lavel Schwartz, 57, Fish’s brother.
The rabbis were charged with laundering money that often was sent to Israel. They are members of the Syrian Jewish or Hasidic Jewish communities, Marra said at the news conference. Authorities issued a warrant for Schwartz’s arrest. The other four rabbis were arrested today and appeared in court.
“This case uncovered a web of corruption that spanned the state,” Dun said. “All of the individuals were connected through their illicit activities with the undercover witness.”
Kassin is accused of laundering more than $200,000 through Dwek from June 2007 through December 2008 by accepting “dirty checks” from him and exchanging them for “clean” checks, according to prosecutors.
‘Asserts His Innocence’
“The rabbi asserts his innocence,” said Kassin attorney Robert Stahl after U.S. Magistrate Judge Mark Falk imposed a $200,000 bail bond. “It’s a shame that he’s caught up in some misunderstanding. Despite his difficult circumstances, he remains confident that the system of justice will prevail.”
Falk imposed a $1.5 million bail bond and electronic monitoring on Ben Haim. His attorney, Michael O’Donnell, declined comment. Falk set a $700,000 bail bond on Nahum.
“He had no involvement in any scheme as alleged and certainly looks forward to the opportunity to clear his name,” Nahum attorney Justin Walder said. “There’s no profit, no involvement in any international scheme.”
Nahum was implicated by “a person who obviously has his own problems and tried to limit his exposure” to criminal charges, Walder said.
Fish, Schwartz and two other defendants used a charitable, tax-exempt organization called BCG, which was associated with Fish’s synagogue, to launder money by using money transfers, according to the FBI.
“We are confident that the transfers referred to in the complaint will be explained to a jury in a manner that will result in Mr. Fish’s vindication,” saidMichael Bachner, his attorney. He said Dwek “used his closeness and the sterling reputation of his family to manipulate individuals who believed that he would never be involved in illegal conduct.”
Levy-Izhak Rosenbaum, 58, of Brooklyn, was accused of conspiring with others to acquire and trade human organs for use in transplantation. Rosenbaum, who was “purportedly” involved in real estate, was approached by a cooperating witness and an undercover FBI agent about buying a human kidney from a human organ broker, according to the complaint.
Rosenbaum said it would cost $150,000, with half payable up front, according to the complaint. Rosenbaum said some of the money would go to the donor and some to doctors in Israel, according to the complaint.
‘Illegal to Sell’
“One of the reasons it’s so expensive is because you have to shmear (meaning pay various individuals for their assistance) all the time,” according to the complaint. “It’s illegal to buy. It’s illegal to sell.”
Rosenbaum attorney Alan Vinegrad didn’t immediately return a call seeking comment. Attorneys for the other suspects either couldn’t be identified or couldn’t be reached for comment.
Prosecutors charged the men in a series of criminal complaints detailing the allegations. Ben Haim was accused of laundering $1.5 million through the undercover witness, who said he “was engaged in illegal businesses and schemes including bank fraud, trafficking in counterfeit goods and concealing assets and monies in connection with bankruptcy proceedings,” according to an FBI criminal complaint.
Before his 2006 arrest, Dwek deposited two $25 million checks from another account of his, which had a zero balance, prosecutors alleged. Dwek then wired $22.8 million out of PNC, falsely assuring bank officials that he would forward funds to cover the overdraft, according to prosecutors.
Dwek posted a $10 million bond, secured by $3 million in equity in the homes of his mother-in-law and sister-in-law. Dwek was never indicted, instead receiving 17 extensions from a judge to continue the period in which his case had to be presented to a federal grand jury.
More than 300 agents of the FBI and the Internal Revenue Service arrested the suspects and executed search warrants this morning, according to Dun.
Agents arrested 37 suspects today, two surrendered, and three, including Smith, are expected to surrender tomorrow. Authorities issued arrest warrants for two other suspects.
Agents also searched the house of Joseph Doria, a former Democratic assemblyman and the commissioner of the state Department of Community Affairs. He hasn’t been charged. They also searched the offices of the president of St. Peter’s College, a school in Jersey City, as well as a synagogue in Deal, Dun said.
“Any corruption is unacceptable -- anywhere, anytime, by anybody,” New Jersey Governor Jon Corzine, a Democrat seeking re-election against Republican Christopher Christie, the former U.S. attorney in New Jersey, said in a statement.
‘Cannot Be Tolerated’
“The scale of corruption we’re seeing as this unfolds is simply outrageous and cannot be tolerated,” Corzine said.
Doria resigned today at Corzine’s request, the governor’s spokesman said.
The arrests today emerged from an investigation that spans a decade and has led to two earlier roundups.
“New Jersey’s corruption problem is one of the worst, if not the worst, in the country,” FBI supervising agent Ed Kahrer said. “Corruption is a cancer that is destroying the core values of this state and this great nation.”
Wednesday, July 15, 2009
Friday, July 10, 2009
By Lyubov Pronina
July 10 (Bloomberg) -- Russian President Dmitry Medvedev illustrated his call for a supranational currency to replace the dollar by pulling from his pocket a sample coin of a “united future world currency.”
“Here it is,” Medvedev told reporters today in L’Aquila, Italy, after a summit of the Group of Eight nations. “You can see it and touch it.”
The coin, which bears the words “unity in diversity,” was minted in Belgium and presented to the heads of G-8 delegations, Medvedev said.
The question of a supranational currency “concerns everyone now, even the mints,” Medvedev said. The test coin “means they’re getting ready. I think it’s a good sign that we understand how interdependent we are.”
Medvedev has repeatedly called for creating a mix of regional reserve currencies as part of the drive to address the global financial crisis, while questioning the U.S. dollar’s future as a global reserve currency. Russia’s proposals for the G-20 meeting in London in April included the creation of a supranational currency.