A Chinese real estate billionaire is facing extradition to the United States from London for allegedly paying bribes to obtain permits for a construction project in San Francisco.
Zhang Li, 69, a former official of the Guangzhou Municipal Government, is a co-founder and CEO of Guangzhou R&F Properties, which once ranked as one of the top 10 developers in China. The company’s sales revenue in 2020 exceeded 130 billion yuan (around $17.98 billion).
The Mohammed Nuru Corruption Case
Zhang was arrested in connection with a corruption case involving Mohammed Nuru, the former head of the San Francisco Department of Public Utilities, in 2020, according to Chinese state media China Business Network.An indictment disclosed on the U.S. Department of Justice website on Dec. 17, 2021, revealed that Nuru was in charge of public contracts, permits, and construction projects in San Francisco and had accepted bribes from contractors and developers multiple times.
Nuru admitted to accepting free trips, gifts and benefits from R&F Properties. In exchange, Nuru helped the developer obtain necessary approvals for its large, multi-million dollar mixed-use project in San Francisco.
The indictment also shows that in 2018, Nuru traveled to China and stayed in five-star hotels during the entire trip, with all expenses paid by R&F Properties. He was also invited to visit the private residence of R&F’s founders and received $2,070 worth of wine and some stones, which were suspected to be uncut diamonds, but Nuru did not report them as required by law.
Zhang denied all the allegations, saying that it was just Chinese hospitality to invite a business partner to China for business trips, and that no bribery was involved.
Foreign Bribery and Foreign Corruption
Chinese state-owned enterprises have a long history of bribing foreigners. In May 2015, Wang Zhiluo, director of China’s Ministry of Commerce Research Center, admitted at a seminar that 12 state-owned enterprises were on the World Bank’s corruption blacklist.These enterprises were banned from undertaking World Bank-funded projects for a certain period of time due to suspected fraud and bribery. These include Daqing Oilfield Road and Bridge Engineering Company, China Communications Construction Company Limited, China Geological Engineering Group Corporation, and China Construction Company Ltd.
Chen Jiangang, a Chinese human rights lawyer who is now a visiting scholar at Washington College of Law at the University of Michigan, posted on his blog bribery cases he has personally handled in his career. The information shows that the Chinese Communist Party (CCP)-controlled companies have engaged in bribery and corruption in many countries in Southeast Asia and Africa. Chen noted that China-linked corruption cases were particularly serious in Africa.
State Media Intimidate Wealthy Chinese
About 10,000 high-net-worth Chinese families have made plans to emigrate to other countries this year, bringing with them an estimated total of $48 billion, according to “Henley & Partners,” an immigration consulting company.Chinese news portal Sina reported Zhang’s legal case on Dec. 13, warning that Zhang’s experience “served to remind the wealthy Chinese that foreign countries are not safe.”
“In China, inviting someone to a meal and giving someone a bottle of wine worth $2,000 will definitely not lead to the arrest of company owners, but such things can happen in foreign countries,” the article said. “It is not safe at all for wealthy Chinese to go live in the UK, as shown in Zhang’s case.”
Pang Jiulin, director of Beijing Chunlin Law Firm, posted a blog article saying that using China’s customs to evaluate U.S. laws is obviously a lack of understanding of the U.S. Foreign Corrupt Practices Act (FCPA).
In the United States, it is a crime to invite an official to have meals, pay for his hotel stay, or reimburse his air tickets, and violators will go to jail, Pang wrote.
