By staff reporter Cao Haili

"The political damage I’ve done to the country is far more costly than the economic losses," said Bi Yuxi, a former top communications and highway official in Beijing .

The political and economic losses may cost Bi his life. Charged with taking bribes and embezzling state funds, he was sentenced to death with a two-year reprieve on March 16 by the Beijing No. 1 People’s Intermediate Court . Such sentences are usually commuted to life in prison.

Bi, 63, was born in a village in former Tongxian County , now Tongzhou District of Beijing. He served for many years in Tongxian County government before being transferred to the Beijing Municipal Bureau of Communications in 1992.

Two years later, he was named deputy director of the bureau. In September 1999, the state-owned Beijing Capital Highway Development Company (CHD) was formed to coordinate highway construction, operations management, financing and development of related industries in Beijing .Bi was appointed as board chairman.

The company took out bank loans and issued corporate bonds to pay for building and operating highways and expressways, marking a significant breakthrough in financing urban infrastructure construction.

As local governments are not allowed to issue bonds, the Beijing municipal government was unable to finance urban infrastructure projects. With Bi at the helm, the CHD pushed forward the construction of Beijing ’s highway system.

In 2002 alone, the construction of more than 100 kilometers of highway was finished in Beijing , and the construction of another 100 kilometers was begun. By November 2003, Beijing had completed construction of its fourth-ring, fifth-ring, and sixth-ring highways as well as some crucial expressways linking the capital city with other major cities.The success of the CHD in building roads, however, has now been overshadowed by controversy.

In last August of last year, Bi was arrested. Media reports identified crimes related to the construction of the fifth-ring road as the reason for arrest. According to the media, the government’s supervision department found that some projects were overpriced, incurring huge losses for the government.

More recently, prosecutors accused Bi of two crimes related to construction of the fifth-ring road. First, he assisted a Beijing company in winning a contract to supervise and consult for many projects from 1999 to 2004. Bi took bribes valued at about 172,300 yuan (US＄20,800) in return for his help.

Secondly, between 2002 and 2003, Bi helped a Beijing lighting installation company with contract bidding for a project to provide lighting for part of the fifth-ring road. In return, Bi took US＄10,000 from Liang Huipao, the legal representative of the company, and later asked for an additional 40,000 Hong Kong dollars (US＄37,700) from Liang to cover gambling expenses in Macao .

From 1993 to May 2003, prosecutors say, Bi helped others win contracts for highway and real estate construction projects. From 1999 to February 2004, Bi took bribes totaling 10.04 million yuan (US＄1.2 million). Bi was also charged with taking bribes after assisting with job transfers, promotions and personnel appointments. Insiders say all the charges are based on confessions Bi made during interrogation. The indictment did not mention overpricing of fifth-ring road construction projects.

Yuan Wei, Bi’s defense counsel, tells Caijing that Bi’s detention before the arrest had nothing to do with the construction of the fifth-ring road or any other projects Bi managed. Instead, he was detained because of issues related to the purchase of commercial insurance for some of CHD’s employees.

Prosecutors say that in June of 2001, following discussions by the corporate leadership, Bi used state funds to purchase commercial insurance worth 3 million yuan (US＄362,300) for 15 veteran employees. Yuan Wei says this purchase was the original reason for Bi’s detention and all bribery charges are based on confessions made by Bi before judicial departments started investigating.

Insiders say Bi cooperated with the judges during the court hearing and did not raise any objections to the prosecutors’ accusations. The defense counsel appealed one of the 15 major bribery charges concerning the embezzlement of State funds. The defense counsel argued that the 3 million yuan was not embezzled by individuals but used to purchase insurance for employees. "Purchasing insurance does not violate the law," said Yuan Wei.

Moreover, Bi’s purchase was based on a decision following a discussion by the company’s leadership. Yuan Wei says that some of CHD’s employees have transferred from government agencies out of fear that they may lose many of the benefits enjoyed by government employees. To ease their concerns, CHD’s leadership decided to buy commercial insurance for them. Bi was not a policyholder.

The defense counsel also argued that the purchasing fund might have come from tax rebates and therefore the use of the fund is an accounting irregularity, not a criminal offense. Since 1997, dozens of communications and highway officials have been arrested across China for taking bribes.

Analysts say the concentration of power in the hands of one person, as Bi’s case has shown, provides an environment ripe for corruption. During the court proceedings, Bi said he deserved the penalty and apologized to the country and the Chinese people.