China to Probe Former Security Chief Zhou Over Graft, SCMP Says

Chinese Communist Party leaders agreed to investigate retired Politburo Standing Committee member Zhou Yongkang on corruption allegations, the South China Morning Post reported, citing people it didn’t identify.

The leaders made the decision because of rising anger inside the party at the scale of corruption and the vast fortune amassed by Zhou’s family, the report said. The probe will examine if Zhou and his family benefited from oil and property deals facilitated by people including his son, Zhou Bin, according to the report.

A probe of Zhou would be the first targeting a current or former Standing Committee member since the 1966-1976 Cultural Revolution, and would follow the corruption-related trial of ousted Politburo member Bo Xilai. It may be a sign that President Xi Jinping, general secretary of the Communist Party, is marshaling power as he seeks to push economic reforms.

“Xi is moving early to demonstrate that he can get anyone,” David Zweig, a professor of political science at Hong Kong University of Science and Technology, said in an e-mail. “The message is that people better get in step with the new general secretary.”

Zhou, 70, retired from the Politburo Standing Committee as part of a leadership handover last year and was considered a Bo ally, according to the newspaper. While on the job, he oversaw China’s internal security forces, whose budget of more than $100 billion surpassed that of the military under his tenure.

According to the SCMP report, Zhou worked behind the scenes last year to have Bo installed as his successor as the top security official.

Party Conclave

The probe, which may not be officially announced until a party conclave in November, will focus on Zhou’s time at state-run oil company China National Petroleum Corp. as well as his tenure in Sichuan province, the report said. Zhou was Sichuan’s party secretary from 1999 to 2002 and served as CNPC’s general manager from 1996 to 1998, according to his official biography.

CNPC was told by the government on Aug. 25 that four top executives were being investigated, in a widening of an anti-corruption campaign begun by Xi when he took over as party general secretary last year. The executives include three heads of units at PetroChina Co., CNPC’s Hong Kong-listed subsidiary.

In December, Li Chuncheng, a deputy party secretary in Sichuan, was put under investigation for “severe violation of discipline,” the official Xinhua News Agency reported.

Bo’s trial on bribery, abuse-of-power and embezzlement charges concluded in the eastern Chinese city of Jinan on Aug. 26. He denied the charges and a verdict will be announced at a later date.

Jiang Zemin, a former president and party general secretary, backed Xi’s decision to probe Zhou, the SCMP said, citing people it didn’t identify. Zhou appeared with Bo at a meeting in March, 2012 at Beijing’s Great Hall of the People and praised his achievements as the top official of southwestern China’s Chongqing municipality. A week later, Bo was removed from that post.

To contact the reporters on this story: Janet Ong in Hong Kong at jong3@bloomberg.net; Michael Forsythe in Hong Kong at mforsythe@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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