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Exit Through the Gift Shop

Corrupt officials are resigning or retiring early to evade prosecution, and the long arm of the law is still reaching for a solution

By Zhou Qunfeng Updated May.1

At the end of 2022, the CPC Central Commission for Discipline Inspection (CCDI) published the year’s top-10 catchphrases involving anti-corruption. One of them stood out – “resignation escape” (taoyishi cizhi).  

According to the CCDI, the term refers to officials who resign or retire early to evade punishment, especially in cases of bribery. The CCDI designates such behavior as a new form of corruption.  

“Those officials don’t really want to resign, but rather want to escape punishment or to prepare for future corruption... They continue to use their power and take bribes...” read an article from December 17, 2022 by China Comment, a political news journal under the State-run Xinhua News Agency.  

“Officials can resign for many reasons, such as lack of ability, personality conflicts or illness, but some retire early or resign to engage in corruption... We have to pay close attention to the harm of such hidden corruption,” Mao Zhaohui, director of the Anti-Corruption and Incorrupt Governance Policy Institute under the Renmin University of China in Beijing told NewsChina. 

‘The Revolving Door’ 
The term “resignation escape” first appeared in reports published on the CCDI’s website in 2022. Cited officials had either allegedly tried to evade investigation or took bribes after they resigned.  

Shen Shuhuan, 44, falls in the first category. The former Party committee member with the State-owned China Export & Credit Insurance Corporation in Ningbo, Zhejiang Province resigned after he allegedly extorted money from businesses through government policies meant to encourage foreign trade, causing huge losses in assets, according to a CCDI report from November 2022.  

Bank executives were also targeted. Jia Leng with the Agricultural Development Bank of China allegedly took bribes from enterprises before his retirement. Jiang Chuanbao with the Provincial Rural Credit Cooperative of Jiangxi Province was accused of approving loans to enterprises for bribes. Jia and Jiang stepped down soon before their retirement. Both were investigated in early 2022.  

The CCDI also found officials had resigned or retired early to take high-paying jobs in sectors connected to their career posts.  

Huang Xi, 54, left China Construction Bank in 2018 after 32 years as a general business manager. One month later, Huang joined a real estate group as a deputy president in charge of capital management. An investigation launched in May 2022 found that Huang had been on the payrolls of some enterprises she had given loans to before she retired. The CCDI describes such corruption as a “revolving door,” where officials move to private enterprises after they resign or retire for high salaries as payback for helping them while they were still in power.  

The “revolving door” scenario is common in finance and banking. China Comment quoted an anonymous county-level official as saying that some officials working in these sectors resign in their 30s and continue using their power and influence to help enterprises and individuals access loans they would otherwise be unqualified for, or engage in other illicit deals. 

‘Deferred Bribes’ 
Li Huochun, deputy director of the No.8 investigation office of the Municipal Discipline Supervision Committee of Hangzhou, Zhejiang Province, used the term “deferred bribes” to describe corruption that occurs after an official’s resignation or retirement. “Some officials changed the way they take bribes,” he said. “We should trace and investigate corruption no matter whether the officials involved have resigned,” he added.  

Hangzhou Television reported on such a case. An investigation into Qiu Ping revealed how he expanded his power and influence while serving as an official with the Hangzhou Public Security Bureau. After taking charge of a division at the bureau’s internet supervision department, he maintained very close relationships with a number of enterprises. If incriminating information was discovered on their servers, Qiu warned them.  

Companies had previously offered Qiu “commissions” for his early warnings, but Qiu was wary to accept. In 2012, he retired early at 54 years old. Six years later, he even proposed giving up his pension and social welfare fund for retired officials in need. That is partly because he took a job as a legal consultant for an enterprise in his former jurisdiction that paid him 1 million yuan (US$148,300) a year.  

“I didn’t need to work in the office or really do anything, she [his employer] paid me every month, and I took it for granted,” Qiu told investigators.  

The investigation showed that Qiu also received more than 3.2 million yuan (US$470,000) in “consultation fees” from several other enterprises after he retired, and between November 2017 and May 2021, Qiu received 740,000 yuan (US$109,742) from an internet service provider for “wages and bonuses.”  

In May 2022, Qiu was sentenced to five years in prison for taking bribes.  

The CCDI warned that some officials make investments soon after resigning or retiring to launder bribe money.  

Jiang Tingxian, former Party secretary and director of the Tourism Bureau of Jiulongpo District, Chongqing, said the general manager of an aluminum company approached him to invest in a waste aluminum recycler. According to Jiang, the manager surnamed Xia promised him 500,000 yuan (US$74,150) a year plus a 6-percent stake in the project.  

“What he proposed was rich and generous, and I thought I could input the bribes I’d gotten into his project and make a fortune from it in my later years,” Jiang told China Discipline Supervision News.  

Jiang retired in 2016 when he was 51 years old. He joined a large ecotourism company, where he tried to launder the bribes he had received. Meanwhile, he continued to take bribes, deferring them until he finally stopped work.  

Jiang was arrested in June 2022. 

Specifics Needed 
According to China’s Law on the Administrative Punishment on Government Employees, resignation and retirement do not exempt officials from punishment. To prevent such cases, the CCDI issued a document in March 2022 proposing to clamp down on “revolving doors” and other corruption involving early resignation or retirement. Two months later, the Communist Party of China (CPC) Central Committee released a document that barred retired or resigned officials from profiting from the influence of their former post.  

The same year, Beijing municipal government launched a thorough investigation into such cases. Hangzhou government said it would work on a restriction list for retired and resigned officials to prevent them from using their power to illegally benefit businesses.  

But all who spoke with NewsChina said there is still a long way to go.  

“It is very hard to supervise retired and resigned officials, especially if they enter a family business or an enterprise run by former classmates, hometown friends or relatives,” a discipline supervision official in Nanjing, capital of Jiangsu Province, told NewsChina on condition of anonymity. “I think departments should set up an archive of officials for regular follow-ups and supervision,” he added.  

Yang Shaohua, a professor at the China Executive Leadership Academy in Jinggangshan, Jiangxi Province, commented on the Hangzhou document: “Officials still maintain influence and power well after they resign, so we have to further detail regulations and set limits on their subsequent employment... [resigned or retired] officials should be barred from joining certain industries and enterprises,” he said.  

The central government rolled out a document in 2013 that prevents officials from working with enterprises in or related to their former jurisdictions for at least three years after their retirement. After the three-year period, they must register with their former organizations before they begin such work.  
There are similar rules in China’s Law of Government Employees, which took effect in April 2005. Based on the recent crackdown, however, it seems these measures were not implemented well. 

“We have to stay vigilant against officials who become agents or representatives of powerful groups after they resign or retire. It’s a new and organized form of corruption that is harder to crack down on,” Mao told NewsChina.  

Mao said supervision is key to preventing post-resignation corruption, suggesting increased audits of officials set to retire and their business dealings. He believes those who are already under investigation or stand accused should not be allowed to resign or retire before investigations conclude.  

Mao proposed setting up a database that registers the work status, awards and punishments of serving officials to facilitate follow-up supervision after they quit.  

China’s Law of Government Employees states that any official found to have illegally worked with a related enterprise following their resignation or retirement faces dismissal, while the enterprise that employs these officials face fines up to five times the amount they paid them.  

Mao believes the punishment is not enough to deter potential violators, and neither the 2022 CPC Central Committee document nor the law has clearly detailed supervision measures. “We need to revise and improve our Law of Government Employees,” he said.