The Chinese fight against bribery and corruption took an interesting twist earlier this month, when it was announced that the former head of the national oil company, Sinopec, was being investigated for bribery and corruption in the securing of contracts in Angola. If this investigation continues it could open a new and very different phase of China’s fight against corruption.
We have seen the Chinese prosecute Chinese officials for accepting bribes for business in China, under Chinese domestic law. We have seen the Chinese prosecute at least one western company for paying bribes in China (GlaxoSmithKline), once again under Chinese domestic law. We now are seeing an investigation for Chinese paying bribes outside of China to non-Chinese government officials, although which Chinese domestic law may be involved isn’t clear.
The investigation goes to the highest levels of Sinopec, involving the former chairman, Su Shulin. It involves payments of bribes to receive concessions to oilfields in Angola from 2007 to 2011. Most interesting was the funding mechanism for the bribery scheme; the Wall Street Journal reported that using a “follow the money” approach, Chinese investigators were looking into the contract prices paid by Sinopec and whether these prices suggested possible corruption.
Additionally—and employing an often-seen Chinese investigative tactic—Shulin was detained by Chinese officials, but has not been seen or available for contact since his apprehension. Also detained was another Chinese national, Sam Pa, who according to the WSJ “is under scrutiny in the same investigation.” Once again, Pa is not been heard of since his detention on Oct. 8.
This new phase of the Chinese anti-corruption push may make things very uncomfortable for a new and different group of Chinese businessmen. Previously the Chinese government appeared to focus on bribe receivers. In the case of Shulin and Pa, however, it appears the government is now focusing on the bribe giver. While it is not clear what assistance the U.S. government may be providing to the Chinese government in this investigation (if any), Sinopec is reported to have offices in the United States. Certainly this might get the attention of U.S. regulators as well.