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Chinese bribes: Better to give than to receive

The recipients may face death. The sources live to grease another palm.

August 10, 2007|Mark Magnier | Times Staff Writer

BEIJING — Zheng Xiaoyu, the former head of China's food and drug agency, was executed last month for accepting $850,000 in bribes from pharmaceutical companies trying to fast-track approvals. But if history is any judge, those who dished out the bribes and saw their companies profit handsomely will suffer a great deal less.

Bribe-givers tend to get off relatively easy in China, according to legal experts, government statistics and media accounts. This not only leaves them free to bribe another day, critics say, but also sends a signal that a little money can get you around even the toughest rules and regulations.

"Those who give and take bribes should be punished equally," said Ren Jianming, vice director of the Anti-Corruption and Governance Research Center at Beijing's Tsinghua University. "I've repeatedly voiced my views on this, but realistically, little has changed."

Zheng's sentence, harsh even by Chinese standards, comes as Beijing finds itself under extreme pressure to show results after a series of health and safety scandals rocked confidence, spread fear and tarnished the "Made In China" label at home and abroad.

China's Cabinet announced late last month that it was drafting new rules aimed at boosting responsibility and increasing penalties for illegal activities. No details about the regulations, which would affect producers and local governments, were released. Toxic food and pharmaceutical ingredients from China have been blamed for dozens of deaths in Panama and a large number of pet deaths in the United States, spurring import restrictions and stepped-up inspections globally. Among the items under scrutiny are seafood, toothpaste, toys, tires and food additives.

On Thursday, China banned exports by two toy manufacturers whose products were subject to major recalls in the United States.

Although there are many complex legal, structural and cultural factors underlying China's product-safety troubles, bribery is believed to be a key component.

An estimated 150,000 new drugs were approved during Zheng's 1998-2005 tenure as head of China's State Food and Drug Administration, leaving investigators with much to examine. So far, six have turned out to be fakes cited in the deaths of at least 10 people. By comparison, the U.S. Food and Drug Administration generally approves fewer than 150 new drugs each year.

Most of the eight pharmaceutical companies named in legal documents appear to be thriving.

"Yes, we can supply Injection Oxymatrine in big volume," said a sales official at Jilin Huayang Pharmaceutical Co. Ltd., referring to a hepatitis B and C treatment made by northeast Jilin province's China Maoxiang Group, which is accused of paying Zheng $14,000.

The website of the Shanghai Double-Dove Co. still boasts the coveted "Famous Chinese Brand" government seal of approval it has received.

Double-Dove's disposable sterile syringe and infusion device was reportedly fast-tracked for approval after Zheng's wife received a used luxury vehicle and property in Shanghai valued at about $36,000.

And the "Buchang Brain and Heart Capsule" is still listed as a top seller on Xianyang Buchang Pharmaceutical Co.'s website. The company, which reportedly gave $10,000 to Zheng, advertises the capsules as a near cure-all for strokes, coronary heart disease, muscular weakness and cerebral vascular disease.

Officials with the eight named companies declined to comment, had unlisted numbers or were unavailable.

"I don't know anything," said a deputy general manager surnamed Mei at Double-Dove, before hanging up on hearing the name of the executed Zheng.

All eight companies linked to the scandal are based in China, though two have links with U.S. companies.

The Hainan Poly Pharmaceutical Co. Ltd., which according to state media gave Zheng $14,000, has a development agreement to produce vitamin C products for Cura Pharmaceuticals based in Eatontown, N.J. And Double-Dove has a contract to produce syringes for Retractable Technologies Inc., based in Little Elm, Texas.

China's operating philosophy on bribery -- that it's better to give than to receive -- is institutionalized in law and practice. Although the maximum penalty is death for those who pocket bribes of more than $13,400, the worst penalty most face is life imprisonment.

The starting point is also different. Those who take bribes face criminal charges for taking a cent more than $665. Those who give bribes can hand out as much as $1,300 before facing prosecution.

In practice, experts say, the disparity is even greater. Bribers are rarely the object of corruption investigations and most are let off if they confess. No briber has ever gotten life imprisonment and even sentences of 10 years are rare, Ren said, even though officials at all levels have been executed.

China's legal system encourages prosecutors to rely on bribers for most evidence. There is little protection for whistle-blowers and no codified system of plea bargaining.

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