What began as a scandal involving the mysterious death of
Neil Heywood, the British businessman whose body was found in November in a
Chongqing hotel room, appears to be evolving into a broader investigation into
the wealth of a politically powerful Chinese couple, Bo Xilai and his wife, Gu
Kailai, and their financial interests.
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China Inquiry Widens to Wealth of Powerful Couple
By ANDREW JACOBS and MICHAEL WINES
12 April 2012
What began as a scandal involving the mysterious death of Neil Heywood, the British businessman whose body was found in November in a Chongqing hotel room, appears to be evolving into a broader investigation into the wealth of a politically powerful Chinese couple, Bo Xilai and his wife, Gu Kailai, and their financial interests.
The authorities seem particularly interested in Ms. Gu, 53, a hard-driving lawyer and the daughter of a revolutionary hero who critics say has spent more than two decades turning her husband’s government posts into lucrative business opportunities.
Analysts say that by moving decisively to bury Ms. Gu and her husband, party leaders are trying to send a message to allies of Mr. Bo who are still putting up resistance. “This is why the dog who has fallen into the water is still being beaten,” said Steven Tsang, director of China Policy Institute at the University of Nottingham in England.
The Communist Party has said it will investigate “serious discipline violations” committed by Mr. Bo but has yet to detail them. People’s Daily, the party’s official newspaper, appeared to lay out a list of potential charges on Wednesday that could be brought against Ms. Gu and her husband, who is also the offspring of a revolutionary “immortal” and, like his wife, has long enjoyed the access to power that comes with such a pedigree.
The article said that corrupt party officials have been secretly using children, wives, friends and even mistresses to transfer and conceal ill-gotten wealth overseas. “Some even go through a variety of channels to clandestinely gain a foreign identity or dual nationality,” it said.
A campaign to expose the family’s web of business dealings carries certain risks, given that many members of China’s political elite profit from their connections and often stow their assets outside the country.
Even if the article did not name names, astute readers of China’s opaque political ecosystem said it was probably aimed at Mr. Bo, until recently Chongqing’s party boss, and Ms. Gu, who has spent considerable time abroad and who may hold foreign residency. Under party rules, spouses of senior members are barred from holding foreign passports or residency permits.
The couple’s son, Bo Guagua, 24, could also figure into the mix. A graduate student at Harvard University, Mr. Bo has spent half his life outside China and, until his father’s downfall last month, had been trying to start an Internet business in China. Friends of his say he is shutting down that venture, a social media Web site.
Some critics have questioned how the elder Mr. Bo, with his modest government salary, could afford tuition at a string of expensive private schools in both England and the United States; during a news conference days before he was relieved of his job, Mr. Bo insisted that his son’s schooling was paid for through scholarships. He also said his wife had not worked for a decade.
Then there are members of the extended Bo clan.
On Thursday it was learned that Mr. Bo’s older brother, Bo Xiyong, has for nine years served under an assumed name as executive director and deputy general manager of China Everbright Holdings, a state-owned company that controls one of China’s major banks and an array of other businesses.
Under the name Li Xueming, Bo Xiyong receives a $1.7 million annual salary and holds stock options worth nearly $25 million, according to a profile maintained by Bloomberg Businessweek. Until May 31 he also was deputy chairman of Hong Kong Construction Limited, a Chinese property developer.
Mr. Bo’s ties to Everbright, first reported Thursday by the Hong Kong newspaper Apple Daily, were described by a person familiar with the company who refused to be named because the issue was too delicate.
Two women described by Apple Daily as sisters of Bo Xilai’s wife also show up in Hong Kong corporate records. A check of the records on Thursday showed that one of them, Gu Wangjiang, has been a director of eight privately held companies in Hong Kong and that another, Gu Wangning, has also been a director of one of them.
Gu Wangjiang, Gu Wangning and Bo Xiyong could not be reached for comment.
Despite their best efforts to obscure such arrangements, senior Communist Party officials often use their connections to help relatives secure well-paid jobs at state-owned companies.
When it comes to harnessing family ties, Mr. Bo’s wife is thought to have done particularly well, according to those who have followed her career.
In the early 1990s, when her husband was mayor of the seaside city of Dalian, Ms. Gu established a law firm, and later a consultancy, that helped ease the path for businessmen seeking to develop property in the city — a process that her husband essentially controlled.
Jiang Weiping, a Chinese journalist who worked in Dalian during Mr. Bo’s tenure there, said Ms. Gu’s firm flourished by serving as a gatekeeper to her husband and his powerful government associates. “Bo Xilai and Gu Kailai really didn’t have separate careers,” said Mr. Jiang, who spent six years in jail after he wrote a series of unflattering articles about Mr. Bo and now lives in Canada. “They operated like a single unit.
“His career was devoted to power; hers was to money.”
In 1995, Ms. Gu moved her firm to Beijing and began accruing an impressive roster of clients, many of them state-owned enterprises in Mr. Bo’s power base of northeast China. At one point, the firm had offices in several Chinese cities.
In 1997, the Dalian government sent Ms. Gu to Mobile, Ala., for a legal case involving three firms that had been defrauded by an American chemical company there. The case, which was decided in the Chinese company’s favor, turned Ms. Gu into something of a legal celebrity, leading to a book and a fictionalized television series.
Although Mr. Bo has said his wife has long since set aside her career to become a homemaker, he also told People’s Daily in 2010 that she provided legal advice for his anticrime crusade in Chongqing that critics say often skirted legal procedure and led to a number of speedy executions. “Her knowledge of the law has helped me a lot in Da Hei,” he said, using to the Chinese name of the campaign, which drew plaudits among Chongqing residents but angered his enemies in Beijing.
Details of the relationship between Ms. Gu and Mr. Heywood, the British man, remain a mystery but friends of his said it was most certainly anchored by business. In announcing the accusations against Ms. Gu this week, Xinhua, the official news agency, described the crime as arising from a “conflict over economic interests.”
In the early years of that relationship, the friends said, Mr. Heywood helped her son gain admission to Harrow, the $55,000-a-year British boarding school that Mr. Heywood once attended.
Ms. Gu is thought to have spent considerable time in the England during the years her son was in school there; records show that in 2000 she started a company, Adad Limited, which cryptically lists its purpose as providing “other service activities,” according to records. The company, since dissolved, was registered in Dorset, on the south coast of England, not far from where the Heywood family lived.
Those who have met Ms. Gu over the years said her charisma and determination rivaled that of her husband. An aficionado of Chinese landscape painting and a master debater, she is especially fond of the pipa, a traditional stringed instrument, and revels in her command of English.
Edward O. Byrne, a Colorado lawyer who represented the Dalian companies in Federal District Court in Mobile, said the entourage of Chinese officials who accompanied Ms. Gu to the United States described the couple as “the Kennedys of China.”
“I was very impressed with her, and she was fun to be around,” he said.
After the legal victory, and a $1 million judgment in their favor, Ms. Gu invited the American lawyers and their families back to China for an all-expense paid visit to Dalian and Beijing that included lavish banquets and meetings with Mr. Bo.
The case led to a book a year later detailing her experience with the American legal system.
Titled “Winning a Lawsuit in the U.S.,” and written in a breezy style, the book disparaged certain aspects of the United States legal system. “They can level charges against dogs and a court can even convict a husband of raping his wife,” she wrote. By contrast, she said, China’s court system was straightforward and judicious. “We don’t play with words and we adhere to the principle of ‘based on facts,’ “ she wrote. “You will be arrested, sentenced and executed as long as we determine that you killed someone.”
Andrew Jacobs reported from Beijing and New York, and Michael Wines from Beijing. Keith Bradsher contributed reporting from Hong Kong, and John F. Burns and Ravi Somaiya from London.
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