Mistress-Driven Anticorruption in China: Study Says 15% of Accusers Are Lovers

October 17, 2013, 6:30 AM

Mistress-Driven Anticorruption: Study Says 15% of Accusers Are Lovers

In the early days of Chinese President Xi Jinping’s drive to clean up the Communist Party’s image, disciplinary authorities benefited from the work of a group of accusers with particularly intimate knowledge of corrupt bureaucrats’ nefarious activities: their extramarital lovers. A district party chief in the southwestern mega-city of Chongqing, a police chief in the northwestern region of Xinjiang and the former deputy head of China’s top economic planning body all were removed from office thanks in part to their illicit sexual activities.The string of scandals has fed enthusiastic discussion online of the efficacy of ernai fanfu, or “mistress-driven anticorruption,” but there has never been hard data to back up the breathless praise of jilted lovers as a weapon against official graft in China.

Until now.

China’s official Xinhua news agency reported Tuesday that mistresses served as accusers in 15% of corruption cases recently exposed online.

The Xinhua report was based on a study conducted by the Center for Public Opinion Monitoring at the government-backed Legal Daily newspaper and was based on an analysis of 26 allegations of corruption made online between January and September. The study found that merchants made up the biggest share of accusers at nearly 27%. Others included businessmen, journalists, other officials and ordinary Internet users. The study didn’t say how many of the allegations were proven to be true.

Most of the cases examined were exposed through popular social media, like Sina Corp.’s Twitter-like Weibo microblogging platform, according to Xinhua. In every case, the tipsters used their real names.

The notion of using mistresses to expose corrupt officials is not new, but researchers say the advent of social media has given it new currency. The government has been of two minds about the phenomenon, acknowledging its efficacy in some cases while also expressing reservations about relying on informants whose motives aren’t always noble.

One of the most notable cases, cited in the Legal Daily study, was that of Liu Tienan, the former deputy director of the National Reform and Development Commission whowas removed from office in May for “serious discipline violations” after his mistress ran to a journalist with stories of fraud. The journalist, Caijing magazine editor Luo Changping, subsequently aired the allegations on Sina Weibo (in Chinese).

Mr. Liu has been unavailable to comment on the allegations.

An editorial published in the Communist Party flagship newspaper People’s Daily shortly after Mr. Liu’s ouster argued that China should be wary of relying on such sources in its effort to identify dirty officials.

“Even though, for a variety of reasons, mistresses will turn around and report corrupt officials, both basically have the same motive, which is to satisfy each other’s greed,” the editorial warned (in Chinese).

Exposing corruption can also be risky business: According to the Legal Daily study, 23% of informants who used their real names were later either detained or listed as wanted by police on suspicion of spreading rumors or causing trouble.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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