In March this year, CNR reported: following real-name reports by members of the public and on-site visits by journalists, it was found that in Dongkou County, Shaoyang City, Hunan Province, several shantytown renovation projects that should have been completed as early as 2015 and 2016 had in fact not been implemented, with no sign of any renovation on site; and that in some cases the area covered by a project had just undergone commercial real estate development before the shantytown renovation was declared.

Recently, the website of the Hunan Provincial Discipline Inspection and Supervision Authorities published the results of the investigation into fraudulent and falsified shantytown renovation projects in Dongkou County, holding 88 public officials suspected of disciplinary and legal violations seriously accountable, including placing 14 public officials suspected of duty-related crimes under detention; and the public security authorities, in accordance with the law, opened investigations into 9 private business owners suspected of illegal and criminal acts and imposed criminal coercive measures on them.

Investigation found:

◆ From 2012 to 2017, the principal leaders of the Dongkou County Party Committee and County Government made irregular decisions in pursuit of short-term political achievements, and public officials from multiple departments, together with private business owners, jointly plotted long-term, organized falsification, falsely reporting, fraudulently obtaining and misappropriating national shantytown renovation subsidy funds by fabricating resettlement compensation households, falsely reporting completed commercial real estate projects as shantytown renovation projects, and carrying out surrounding supporting construction under the guise of shantytown renovation.

◆ Fourteen public officials, including Ai Fangyi, former Secretary of the Dongkou County Party Committee; Zhou Lebin, former Deputy Secretary of the Dongkou County Party Committee and County Mayor; Sun Lizhi, former Member of the Standing Committee of the Dongkou County Party Committee and Executive Deputy County Mayor; and Zhang Jianyun, former Deputy County Mayor of Dongkou County, were placed under review and investigation and subjected to detention measures on suspicion of duty-related crimes.

◆ Another 74 public officials from the Shaoyang Municipal Party Committee and Municipal Government, the Dongkou County Party Committee and County Government, and relevant functional departments, who bore important or direct responsibility for the fraudulent and falsified shantytown renovation projects, were given Party disciplinary and government sanctions.

◆ At the same time, 29 responsible units, including the Shaoyang Municipal Party Committee and Municipal Government, the Dongkou County Party Committee and County Government, the Hunan Provincial Department of Housing and Urban-Rural Development, the Provincial Development and Reform Commission, the Provincial Department of Finance and relevant departments, were ordered to make profound self-examinations and carry out effective rectification.

◆ Nine private business owners involved in the case, including Chen Lixin, legal representative of Dongkou County Lixin Property Development Co., Ltd., and Xiao Dong, legal representative of Dongkou County Diran Real Estate Co., Ltd., were suspected of the crimes of bid rigging, fraud, accepting bribes through influence, and offering bribes, and have been subjected to criminal coercive measures by the judicial authorities in accordance with the law.

While seriously investigating and handling the fraudulent and falsified shantytown renovation projects in Dongkou County, Hunan Province, led by the Provincial Department of Housing and Urban-Rural Development, organized a province-wide screening and rectification of similar problems. Discipline inspection and supervision authorities across the province incorporated the special rectification of urban shantytown renovation into the key focus of the intensive campaign against misconduct and corruption affecting the people, strengthened the handling of leads, and thoroughly investigated the corruption and dereliction of duty behind them, ensuring that the major decisions and arrangements of the Party Central Committee are implemented. As of the end of August, the province had sorted out 2,630 problem leads, filed 1,275 cases, imposed Party disciplinary and government sanctions on 889 people, transferred 191 people to judicial authorities, and recovered and returned over 370 million yuan in funds involved in disciplinary and legal violations.

File photo of Ai Fangyi

It is reported that Ai Fangyi, who was named in this notification, was born in October 1962 and is a native of Shaoyang County, Hunan Province. He previously served as a member of the Standing Committee of the Dongkou County Party Committee, head of the Publicity Department, head of the Organization Department, and Deputy Secretary of the County Party Committee; Deputy Secretary of the Longhui County Party Committee; and Deputy Secretary of the Shaodong County Party Committee and County Mayor. In April 2012 he was appointed Secretary of the Dongkou County Party Committee, was removed from office in April 2021, and in September of the same year was expelled from the Party and removed from government office.

Investigation found that Ai Fangyi seriously violated the spirit of the Central Eight-Point Regulation by accepting gifts and cash in violation of regulations; violated organizational discipline by using the influence of his position to seek improper benefits for relatives in cadre recruitment work and failing to truthfully report his personal property; violated integrity discipline by using his authority to seek benefits for others while his relatives accepted property from others; violated life discipline; and used the convenience of his position or the favorable conditions created by his authority and status to seek benefits for others and illegally accept property from others. In April 2022, the Hunan Provincial Discipline Inspection and Supervision Commission notified the issue of Ai Fangyi's irregular acceptance of red envelopes and gift money: from the end of 2012 to 2021, Ai Fangyi irregularly accepted red envelopes and gift money totaling 441,180 yuan from management and service targets.

File photo of Zhou Lebin

Another person involved, Zhou Lebin, was born in February 1963 and is a native of Longhui County, Hunan Province. He previously served as a member of the Standing Committee of the Suining County Party Committee and head of the Organization Department, and as a member of the Standing Committee of the Shaodong County Party Committee and head of the Organization Department. From April 2013 to April 2021 he served as Deputy Secretary of the Dongkou County Party Committee and County Mayor, and later as a member of the Party Leadership Group and Deputy Director of the Standing Committee of the Shaoyang Municipal People's Congress. In April this year it was officially announced that he was under investigation.

Over five years, shantytown renovation funds

were misappropriated through collusion between multiple public officials and private business owners

Since the beginning of this year, members of the public have continuously reported that several shantytown renovation projects in Dongkou County have problems such as unauthorized alterations in project implementation and partial misappropriation of funds.

During interviews in Dongkou County, journalists found that multiple problems existed in various stages of the implementation of some local shantytown renovation projects.

— Unauthorized changes to project implementation methods deviated from the original purpose of shantytown renovation.

It is understood that the 10 shantytown renovation projects most frequently reported by local residents commonly had the problem of unauthorized changes to implementation methods. The original resettlement housing construction and monetary compensation were changed in practice to comprehensive environmental improvement.

Several residents of Zhonghe Community in Gaosha Town, Dongkou County, reported that some wooden houses along the street were dilapidated and had not been repaired. Some residents within the scope of the shantytown renovation projects reported that they had not received shantytown renovation subsidies when renovating their own old houses.

An old wooden house in Zhonghe Community, Gaosha Town, Dongkou County.

A review of relevant materials by journalists found that from 2015 to 2016, Dongkou County, without going through approval and filing procedures, arbitrarily adjusted 2,077 households for resettlement housing and 1,296 households for monetary resettlement out of the 5,079 households in 10 shantytown renovation projects to comprehensive environmental improvement, and invested project funds in the construction of infrastructure such as roads, streetlights, and sewage pipe networks in shantytown areas.

Local officials responded to journalists that in practice, because the county finance could not provide matching funds, the projects were changed to comprehensive environmental improvement. Taking the shantytown renovation project in Zhonghe Community, Gaosha Town, as an example, the original plan was to renovate 1,500 households, including 300 households under monetary resettlement and 1,200 households with resettlement housing construction. However, according to the demolition compensation standards and construction costs at the time, the county finance needed more than 100 million yuan in matching funds, which local financial resources could hardly bear, ultimately leading to alterations and discounting.

— Irregular use of funds, including misappropriation and irregular lending.

In the use of shantytown renovation project funds, there were problems such as changing purposes, misappropriation, and even irregular lending. The former Dongkou County Housing Authority used superior-level fiscal subsidy funds and central budget investment supporting infrastructure funds totaling 12.705 million yuan to build 150 units of shantytown renovation resettlement housing. However, on-site visits by journalists found that these resettlement housing units were not used to resettle shantytown households, but were rented out externally as public rental housing.

— Irregular project management, lacking transparency and oversight.

In addition to the implementation stage, problems of irregular management also existed in the declaration and acceptance stages of local shantytown renovation projects. A review of relevant materials by journalists found that some projects had missing declaration materials, started construction in violation of regulations without going through procedures, and had incomplete acceptance records and testing materials, while the construction process lacked effective oversight.

Competent departments "gave the green light"

and problematic projects passed acceptance

Journalists' interviews found that behind the fraudulent and falsified shantytown renovation projects in Dongkou County was a pattern of making decisions on impulse, engaging in falsification during implementation, and giving the green light during acceptance, treating livelihood funds as a piece of meat to be carved up.

A review of relevant materials by journalists found that, taking the shantytown renovation project in Zhonghe Community, Gaosha Town, as an example, central and provincial special subsidy funds amounted to 12.456 million yuan, but the county finance needed more than 100 million yuan in matching funds. For the 10 shantytown renovation projects most frequently reported by residents, the central and provincial special shantytown renovation subsidy funds in place amounted to 82.496 million yuan, while the matching funds required locally were even larger.

Knowing that there was such a huge funding gap, why still "slap one's face swollen to look fat"?

Some cadres admitted to journalists that when declaring shantytown renovation projects, counties competed with one another over the number and amount of projects, without starting from the actual needs of the people or effectively conducting necessity surveys, which led to some areas that did not need shantytown renovation being included as well: "If everyone else applied, we would fall behind if we didn't."

They sought visible achievements when declaring projects and made decisions on impulse, while engaging in large-scale falsification when implementing them.

It was verified that during the implementation of shantytown renovation projects, public officials from multiple departments and private business owners jointly plotted long-term, organized falsification, fraudulently obtaining and misappropriating national shantytown renovation subsidy funds by fabricating resettlement compensation households, falsely reporting completed commercial real estate projects as shantytown renovation projects, and carrying out surrounding supporting construction under the guise of shantytown renovation. Competent departments "made alterations" and "gave the green light" when accepting projects, causing some obviously unrealistic "problem projects" to pass.

At the same time, fake project works operated in an almost "closed" environment. During visits in Dongkou County, journalists saw that most project sites had no public notice boards for shantytown renovation projects, and residents knew nothing about project content or progress. Some residents in shantytown renovation areas reported that they did not know where the shantytown area was and had not seen actual housing renovation.

A street in Zhonghe Community, Gaosha Town, Dongkou County.