A Whistleblower Brings down Shenzhen's Mayor

"A man who doesn't smoke, doesn't drink and doesn't take women to bed is a dead man."

That was one of the favourite sayings of former Shenzhen mayor Xu Zongheng, who was taken away from his home by investigators from the Central Disciplinary Inspection Committee (CDIC) in the early hours of June 5.

The arrest of the mayor of China's showcase city has sent tremors through the government he ran, with more subordinates likely to follow and developers who paid him money taking refuge abroad.

Eager to contain the domestic and overseas fallout, Beijing quickly appointed Wang Rong, the party secretary of Suzhou, to replace Xu. He arrived in Shenzhen on Thursday, accompanied by officials from the Central Organisation Department (COD), which controls state and party appointments.

The outside world has a rare insight into the case because one of the whistleblowers was a close friend of Xu who turned against him and sent damning material to the CDIC; he published some of it on his blog.

Shi Dongbing, 59, is a well-known author who has, since 1970, written more than 20 million words, including biographies of Communist Party and military leaders, giving him an excellent network of connections in Beijing.

The two first met in October 2004, when Xu was a deputy mayor. He asked for Shi's help in Beijing to secure the coveted job of mayor. Shi provided it and, in May 2005, Xu took the post, the first mayor to have risen through the ranks of the city bureaucracy rather than be parachuted in from outside – like Wang.

The two men became close friends. Individuals and companies approached Shi to arrange meetings with Xu. But, when he set them up, he discovered his friend was demanding enormous bribes – 20 million yuan from a developer to approve a change of land use and 8 million yuan from a Hong Kong firm to approve a sewage treatment project.

Even more outrageous was the 'sale' of posts in the government and large state companies – at least 10 million yuan for a post at district level, at least 8 million for a senior job in a state firm and 5-6 million yuan to be bureau chief.

Shi became so disgusted that, in March 2006, he broke off all relations with the mayor. Fearful of what Shi would do with all he knew, Xu took revenge, ordering police to arrest him on April 25 that year and charge him with fraud.

Shi was detained for five months but the police could not find evidence to convince a judge and he was released on September, 2006. Enraged at how his friend had turned against him, Shi sent his evidence to the CDIC. The pen and the connections that had once helped Xu were now working against him.

Among Shi's accusations was that Xu lived the life of a Lothario. Young women who needed his approval for jobs had to sleep with him. He kept a mistress who was a film actress, obtaining for her the right to live in Hong Kong under the 'plan for talent', which aims to increase the city's talent pool. Over the last three years, 1,058 such people have moved from the mainland to Hong Kong under the program.

He gave large amounts of money to his mistress and gave her control of bank accounts in Hong Kong. She helped to arrange favorable coverage for him on China's state television.

He offered to give Shi any money he wanted. "Do you know how much my monthly spending is?" he asked him. "My son is studying in England and costs a fortune. If I told you the amount, you would not believe it." He said the selling of posts was a long-established practice: "In Shenzhen, you cannot arrange anything free of charge."

Shi's testimony was not the only evidence to reach the CDIC.

Other sources reported the bribes paid to developers and the money received from selling posts. Before the Olympics last year, it put him under covert surveillance.

CDIC officials interviewed Xu's mistress who told them of the money she had received from him and her financial dealings in Hong Kong.

The final nail in the coffin came in February and March this year, when thousands of residents of a low-cost housing project in Shenzhen held public protests against the poor quality of their new apartments.

The project, in Taoyuan village, involves investment of 820 million yuan in 2,760 apartments sold at less than market price to workers, farmers, the unemployed and the handicapped. Within a month of moving house in January, the residents found leaking walls, power cuts, unsafe lifts and water pipes that exploded.

It was one of the 10 major projects in Shenzhen in 2008 and part of the government's effort to address the anger of millions of urban residents who cannot buy a home in the open market. The city government was forced to issue a public apology, pay compensation and repair the faulty apartments in this 'soyabean project'.

The developer was a native of Hunan, Xu's home province, who is suspected of paying him a substantial bribe.

Xu was born in 1955 in Xiangtan, Hunan province, to a modest family. He graduated in Chinese literature from Xiangtan University and earned an MBA from an American university, where he stayed for two years. He began his official career as deputy chief of the COD in Hengyang city in Hunan and moved to Shenzhen in 1993.

There he successfully ran a state publishing firm, turning it from loss into profit in two years, and, in June 2000, became head of the city's COD. In 2003, he became a deputy mayor and mayor in May 2005.

He was known as the 'subway mayor' because he ordered the construction of five subway lines at the same time to prepare for the World Student Games in the city in 2011. The event involves a total budget of 4.8 billion yuan. Investigators are now discovering how much of that ended up in Xu's pocket.