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China arrests official accused of buying real estate using fake IDs

BEIJING, China - A rural bank officer who allegedly obtained fake identity cards and used them to illegally buy dozens of properties worth hundreds of millions of dollars was in police detention Tuesday, weeks after she became China's newest symbol of official corruption.

Police in the central county of Shenmu on Monday arrested Gong Ai'ai, who until recently was the deputy head of the government-run Shenmu Rural Commercial Bank, on suspicion of forging official documents, according to the Xinhua news agency and a local official.

Gong is suspected of misusing her loan-approving power to give loans to mine operators in the county in return for cash or shares in the mines that she then used to buy at least 45 properties worth billions of yuan. Fake identity cards can help hide income, business activities, and circumvent limits on buying houses and apartments in Beijing.

Of Gong's three fake national identity cards, one was from Beijing and two were from Shaanxi, the province where Shenmu is located, reports said. Among the properties she purchased, 41 are in Beijing, where skyrocketing real estate prices have priced many Chinese families out of homeownership.

Even in a country where the public is used to official corruption, the scandal has touched a nerve.

Not only is her wealth stunning, but her ability to circumvent China's identity law, which allows each Chinese one identity card and number, suggests corruption among the police who issue the cards. Local authorities have already detained four police officers on suspicion of helping Gong obtain the fake IDs, the Ministry of Public Security said.

That the money was poured into property has further inflamed outrage among Chinese, who blame speculation by the wealthy and corruption for soaring housing prices.

This "goes to show how state resources and public trust and authority have been excessively abused by those people," said Yang Fengchun, a professor of government and management at Peking University. "They behave as if the country were at their beck and call. Whatever they want, they get."

Gong's case is one of several to emerge in recent months of government officials buying up large numbers of properties beyond the means of their civil servant incomes. They have fuelled public calls for asset disclosure by public officials and have been seen as a test for the newly installed Communist Party leadership, which has warned that corruption threatens the party's legitimacy and has vowed to stamp it out.

Yet Gong's case has stirred a fascination beyond many other reports of corruption. Since details first trickled out in mid-January, the public and state media have followed each development, registering shock as the scale of the alleged corruption grew.

In the days prior to her detention, speculation centred on her whereabouts and why she had yet to be arrested.

News from © The Associated Press, 2013
The Associated Press

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