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August 14, 2009

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Pay-to-play graft trial begins

A FORMER division chief in charge of construction planning approval for the Pudong New Area allegedly accepted 14.85 million yuan (US$2.17 million) in bribes, including 29 property units, a Shanghai court heard yesterday.

Tao Jianguo, 42, ex-head of the construction planning and environmental management department of Pudong's Waigaoqiao Bonded Area, admitted to the Shanghai No. 1 Intermediate People's Court that he had received the properties and cash. But he denied they were bribes, claiming they constituted legal income from running companies and providing advice to real estate developers.

The hearing was scheduled to last through today.

Prosecutors alleged that Tao received 1.06 million yuan in cash and 29 properties valued at 13.79 million yuan from four real estate companies from 1999 to 2008 by taking advantage of his position to approve planning applications for construction land use and building projects. The properties included apartments and small stores.

The largest alleged bribe - 690,000 yuan in cash and all the properties - came from Hong Xing, general manager of Shanghai Shengang Real Estate Co Ltd and Shanghai Xingdu Real Estate Development Co Ltd, the court heard.

Tao allegedly helped Hong obtain government approval on five projects from 2000 to 2008.

The defendant argued at the hearing that all the approvals he was involved in followed the rules. He said he was a partner in Hong's two companies and had deep knowledge about their operations, financial conditions and project development.

Because government officials are banned from running businesses, he remained a behind-the-scenes partner, using his relatives' names as the nominal shareholders for business registration, prosecutors said.

The cash and properties he received from Hong were, in fact, his dividends and shares after Shengang closed in 2006, the court heard.

"Tao has acted against the rules of discipline for public servants, but he didn't commit a crime," said his lawyer, Zhai Jian. "It was impossible for a developer to give a division chief such huge bribes."

Prosecutors cited a previous confession by Tao in which he admitted to bribe taking to prove the defendant was lying to the court. Hong also said in the testimony that Tao had asked for bribes, and he had offered the properties.

As for the other three alleged bribes, Tao said the developers gave him money voluntarily to show their gratitude for his advice.


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