Leveraging the Internet to combat corruption in China: http://www.lantiancorruption.net
In 1998, three of my colleagues and I started on an ambitious journey. After a number of years of working in China, I decided to launch a small Chinese joint venture focused on providing mineral water to Xi'an, the ancient capital of China and the terminus of the famed Silk Road.
For five years, I had been providing guidance to a Chinese joint venture soybean factory in Lasntian County, one of the six counties surrounding Xi'an. Local officials approached me about assembling an investor group to help exploit the county's mineral water resources. Our initial group was international, two Americans, one Japanese and one Chinese with investors in Japan and the U.S..
After eighteen months of drilling a well and testing its water, we began operations. At that time, corruption in China, although evident, was minor. Occasionally, our trucks would be stopped and given bogus tickets. In perhaps the funniest incident, I had to fire off a letter to the mayor of Xi'an when a group of thugs invaded one of our nine retail shops and held our staff hostage demanding some money.
From the beginning, our investor group has refused to pay bribes. Beginning about five years ago, the environment in Lantian (the next county over from the terra-cotta warriors) began to shift. Organized crime began emerging.
In the past three years, we've been locked in a struggle with organized crime syndicate, headed by the former deputy police chief in the county. They have been using fraudulently issued documents to confiscate our factory property. The reason is simple. By converting industrial property to residential development, the gangsters can make a lot of money. In the county over the past two years, 17 factories have been torn down. By our reckoning, the criminal gang has netted between $6 million-$7 million. They want our factory because of its location. As one of the first industrial propoerties in Lantian, we sit on a prime piece of land with easy access to the highway into Xi'an.
Beginning three years ago, the criminal gang approached our Chinese joint venture manager to try to negotiate their way into our Joint Venture. We have steadfastly refused even to meet with these gangsters.
Last July, I travel to the factory and recorded how the gangsters had physically cut off the factory from the road, all in an effort to squeeze us out of business. I even took a video of one of the thugs as he tried to push me off our Joint Venture property. To complain, I went to the police station around the corner from our factory. Again, I had the video in hand. The police, fearing exposure, scattered.
My visit bought our factory some time to continue to try to negotiate and seek assistance from local government officials.
That time has now run out.
In the past two or three weeks, the pressure from the gangsters has increased. They threatened to tear down our factory. About a week ago, I recorded a video appeal to the mayor of Xi'an and posted on our website, where I'd been collecting documentation of what's been taking place.
We really have quite an extraordinary story. For the first time that I'm aware, we have detailed inside information about how a Chinese criminal gang works. We have this knowledge by virtue of the fact that over the past 12 years we've built up an extensive network of good and honest people and former officials. They are our eyes and ears on the ground.
We are posting what we learn to this web site:
Three weeks ago, when it appeared that our battle was just about over and the gangsters would win by tearing down our factory, we moved into high gear and alerted everyone we knew about the challenges we faced.
I'm not sure how it happened yet, but the dynamic is shifted. Four days ago, the Xi'an mayor summoned the Lantian mayor (where our factory is located) to a meeting about our factory. Subsequently, the Lantian mayor convened an extraordinary evening meeting with his vice mayors and department heads to discuss our joint venture.
The next day, a deputy mayor called our factory manager and scolded him for taking our dispute to the Chinese Foreign Ministry.
(Interestingly, we have not yet made a formal complaint to the Chinese Embassy, but we are preparing one.)
Our factory manager, a very smart and tough young man (who sleeps with an iron par under his bed in case he's attacked by the gangsters), did not waver. He blamed the local government for colluding with the gangsters. He told them that none of this would have happened if the local government had responded to our calls for help.
On the next day, we learned that the barricade around one of our factory gates would finally be opened. We are waiting to see whether the other barricades are taken down.
On Monday, our lawyer will be going to the local Land Management Bureau to file a formal application to reestablish our property rights, which have been confiscated through the fraudulent documents issued by this office.
In preparation for these meetings I have prepared three letters. I will be posting them on our project website, but I include them here as well.
The only thing I can attribute our change in fortune to is the Internet. By publishing facts about our case, including video recordings, we are effectively combating corruption in China. We have not yet won our case, and we have suffered tremendous damages. Yet, we are shining in the light on the underbelly of the Chinese economy, and the picture is not pretty.
In practical terms, we are striking a blow for many of the good people that we know in this rural county. Over the past four years to criminal gang has severely beaten over 20 peasants who have protested the criminal gang's takeover of the county's economy. When I visit, my meetings with these good friends are held in safe places. My driver is a former police official from Xi'an.
We will continue to push hard. Our China joint venture manager and our factory manager, as well see other people who work with us, are extraordinarily courageous and determined to save this county.
We just did not know fully the power of the Internet in our hand.
P.S.: Pass this post on, if you think you can help.
