By staff reporter Wang Heyan
From Caijing Magazine

Authorities have detained the former head of a special economic zone in Tianjin, Pi Qiansheng, and his daughter in connection with a corruption investigation, Caijing has learned.

Pi, 57, was in charge of the Tianjin Binhai Economic Zone and served on the municipality’s Communist Party committee before being stripped of power in June 2007 on suspicion of illegal behavior.

Caijing learned Pi has been under shuanggui – an extra-legal arrest process for government or party officials – for “economic reasons” since October. His daughter Pi Xiaomeng – reportedly an employee at Citibank in the United States -- was arrested during a trip home in August.

Pi’s detention followed two years of speculation about corruption inside Binhai’s political circle.

“Pi was a high level official” in the economic zone, “which enjoys fairly good revenue flow,” said a source in Tianjin. “He worked here for so long. It was just a matter of time before he fell.”

While the investigation of Pi is still ongoing, his case adds a new chapter to the political turmoil in Tianjin that dates to 2004 when Zhang Wanjun, a former head of greening office for the economic zone committed suicide.

Tianjin’s former chief prosecutor Li Baojin was arrested in 2006; a court has yet to announce his sentence. And in June 2007, Song Pingshun, the former chairman of Tianjin Political Consultancy Committee, committed suicide.

King of the Zone

Pi was born in Henan Province and graduated from Nankai University in 1978 with a degree in economics. He started working in Tianjin in 1982, spending 23 years at the economic zone wearing different hats, ranging from general manager of a state-owned development company to director of the zone management committee.

Pi founded the Binhai zone and enjoyed unequalled power in his kingdom. From a vacant plot of land in the 1990s, Binhai evolved into a modern industrial and business district. Pi tightly held power over planning, land management, real estate and environmental protection decisions.

Pi was open-minded and talkative, officials said, and the economic zone grew rapidly. But he was known for cronyism as well. One of his close associates was Huo Jinyi, who was sentenced to life in prison after being convicted of bribery and corruption in October 2007.

The Huo Connection

Huo had worked under Pi, eight years his elder, since the 1990s. When Pi was promoted in 2000 to the party standing committee and appointed head of the Binhai zone, Huo was named chairman of the state-owned Northern International Trust & Investment Co. Ltd. (NITIC).

The corruption for which Huo was convicted was not revealed to the public. But Caijing confirmed one problematic investment to a company in the Netherlands in 1998 that received a 500 billion yuan loan from the economic zone via NITIC.

The loan was pushed by Huo – with Pi’s blessing. In return, Huo received 100 traveler’s checks worth a total US$ 100,000 from the company’s legal representative, Song Baogui. Song was sentenced to 15 years in prison in 2007 for bribery and embezzling government funds.

Although authorities have not said what led to Pi’s downfall, his connection to the 2005 case involving Huo had certainly raised alarm.

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