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China hit by rash of fake officials peddling ‘power’

The Washington Post

He had the swagger and trappings of a senior party cadre, and a natural authority that made him hard to contradict. The walls of his office in the heart of the Chinese capital were adorned with photographs of him next to retired generals and government officials. He drove a top of the range Audi and a Mercedes-Benz, and, in his 50s, had an 18-year-old mistress.

But Li Guangnian was not quite as he seemed. In a country that has perfected the art of imitation, from fake iPhones to a life-size replica of London’s Tower Bridge, from a faux Manhattan financial district to a museum filled with fake exhibits, Li was just another copy: a fake official with a fake organization peddling a false promise — of credibility and contacts, according to people who worked with and encountered him.

All over China, a country where the bureaucracy fills almost every available space with a myriad of organizations and where unimaginable sums of money can be made if you just know the right people, growing ranks of swindlers are peddling the ultimate currency — influence with the political elite.

Some demand bribes in return for favors that are never granted; others pose as central government officials and are treated like kings by sycophantic local officials. A Chinese credit-rating group recently identified more than 100 phony organizations linked to such impostors.

But Li was a cut above your average con man, establishing an official-sounding organization in Beijing and then franchising out the use of that name for large sums of money to hustlers or social climbers around the country, according to interviews with those he dealt with.

He was undone only when his relationship with his young mistress was exposed on the Internet and the Communist Party disowned him.

“Li Guangnian was a Chinese-style swindler who survives within Chinese tradition and in Chinese soil,” said lawyer Yi Shenghua, who met Li in 2011. “In Chinese traditional culture, people have a sense of blind faith, worship and mystery about power and officials.

“It is very difficult for ordinary people to identify swindlers, because officials are estranged from people. The sense of distance between officials and the public is what swindlers live on.”

Li set up an office under the name of the China Dynamic Investigation Committee that pretended to help the Communist Party better understand the concerns of ordinary citizens. Normally, only organizations connected to the central government are allowed to use “China” in their titles.

“China has too big a government, with too much power, and everything relies on the government. Those who can, rely on officials; those who can’t, swindle,” said Zhang Ming, a political science professor at Renmin University.

Dang Jinguo started working with Li in 2010, desperate for the credibility that membership in an “official organization” would bestow as he worked on behalf of farmers in central China. But he said he eventually realized Li had only one purpose: to make money.

“He always used to say, ‘I give you status and identity, and you pay me the management fees,’ ” Dang recalled over lunch while visiting Beijing.

Qiao Xinsheng, a professor at Zhongnan University of Economics and Law, said that for centuries, China has been an excessively centralized state where emperors would dispatch envoys to far-flung corners of their lands to exercise their power.

“This provides fertile soil for political swindlers. There is an information asymmetry that they take advantage of, to swagger and deceive people,” he said. “Anyone who has a connection with central government officials, or even their relatives, will encounter no problems with local governments.”

Despite feeling hoodwinked, Li’s former associate, Dang, still sounds slightly awestruck when he talks about his former boss.

“He looks and behaves very much like a leader,” Dang said. “He is very bold, and no one would dare go against him. When he talks, you can read his prestige between the lines.”

Like a growing number of dishonest officials — or would-be officials — Li was exposed because of his relationship with a young woman. When photographs were posted on an Internet forum in June showing a shirtless Li on a bed beside the doe-eyed teenager, netizens thought they had caught another corrupt and creepy cadre.

Soon, though, the party disowned him and his organization. Disgraced, Li dropped out of sight, his website closed down and his office was shuttered.

It was not possible to reach Li for comment. Emails to his organization brought no response while phone calls either went unanswered or reached people who claimed not to know him. Beijing police did not respond to requests for information, but there was no suggestion that Li had been arrested.

At its peak, the China Dynamic Investigation Committee boasted of 34 branches. It claimed to have the patronage of former President Jiang Zemin — with an example of what was supposed to be the ex-leader’s own calligraphy adorning a wall at the company’s headquarters.

But not everyone was fooled.

Lawyer Yi Shenghua said he met Li in 2011 after a friend had paid Li $500,000 to help free someone from prison. Li had failed to deliver, and the lawyer tried to help his friend recover the money. He visited Li’s office, and quickly saw that something was amiss.

The photos of Li were just too prominently displayed, he said, showing him smiling with officials the lawyer had never heard of. Then there were the files marked “confidential documents,” displayed in glass cabinets instead of hidden away from prying eyes. The website, too, was “arrogant and showy,” according to Yi, not like the bland sites of real governmental organizations.

When he asked to see the organization’s license, he said, Li refused to show him.

“He brags, but not through his mouth. Instead he relies on the group photos with celebrities to brag for him,” said Yi, citing a Chinese saying: “He drapes himself in a tiger skin to intimidate people.”

Yi said he believed that Li did know some officials. But inviting people for dinner or to art exhibitions, and then having your photograph taken, is very different from actually having influence, he said.

In 2012, a television station in eastern China aired an expose of one of Li’s franchise operations. Using a hidden camera, it showed a member of the Shandong branch of the Dynamic Investigation Committee offering government identity cards for sale.

The cards were supposedly issued by the National Bureau of Statistics and instructed “military and government organs, enterprises and public institutions to please grant convenience and assistance to this cardholder.”

The cards were on sale for $1,300 each and would entitle the holder to low-interest loans, the man said, boasting to the undercover reporter that the organization had 50 million members. After the expose was aired, the branch was closed down and its leader jailed for eight years, media reports said.

With stories like Li’s commonplace, the National Credit Institution Association, a credit-ratings group, has issued a list of fake organizations and warned the public to be on their guard. But the fact that some of these phony groups operate under the protection of retired officials means that police are often reluctant to take action for fear of embarrassing powerful people, said Qiao, the professor.

“When the authorities crack down on these illegal organizations, it is like pulling one hair and the whole body being affected,” Qiao said.