China uncovers misused funds worth $34 bn in govt accounts

Written by Bloomberg | Updated: Dec 31 2009, 05:02am hrs
Chinese prosecutors have uncovered 234.7 billion yuan ($34.4 billion) of misused funds in government accounts, as auditors stepped up their scrutiny of state finance to curb wastage and stop graft, according to the National Audit Office.

About 5% of misused funds, or 10.7 billion yuan, was due to the direct fault of senior officials, the audit office said, citing its inspection of more than 20,000 officials working in 99,000 state-owned companies and public institutions during the first 11 months of 2009. As many as 1,068 people were prosecuted in connection with 863 cases, 67 of them classified as senior officials, Chinas Auditor General Liu Jiayi said during a Beijing conference on Monday

Lius speech underscores the push by Chinese president Hu Jintao to restore public confidence in a one-party state where official fiat isnt challenged by a separation of power. The state has sacked scores of high-ranking officials including Shanghai Communist Party chief Chen Liangyu, Shenzhen Mayor Xu Zhongheng and deputy police minister Zheng Shaodong.

Cheng Kejie, the former vice-chairman of Chinas Parliament, was put to death in 2000 after he was found guilty of accepting $4.8 million of bribes, the highest-ranking Communist Party cadre to be executed for corruption.

Corruption costs China as much as $86 billion a year and poses one of the most serious threats to the nations economic and political stability, the Carnegie Endowment for International Peace said in a 2007 report.

Bribery, kickbacks and theft account for about 10% of government spending and transactions, even though the state has more than 1,200 laws and directives against corruption, the Washington-based policy study group said in its report. China, the worlds fastest-growing major economy, ranks No 72 in Berlin-based Transparency Internationals 2007 Corruption Perception Index of 180 countries.