Harvard professor and China expert Roderick MacFarquhar had an insightful op-ed in today’s New York Times, where he talks about why the Chinese elite are stashing their assets overseas and sending their children abroad for schooling. It’s not pure greed, he says, but fear.
China’s Communist leaders cling to Deng Xiaoping’s belief that their continuance in power will depend on economic progress. But even in China, a mandate based on competence can crumble in hard times. So globalizing one’s assets — transferring money and educating one’s children overseas — makes sense as a hedge against risk. (At least $120 billion has been illegally transferred abroad since the mid-1990s, according to one official estimate.)
Such massive asset transfers are happening not just from China, but other places as well, such as Russia and the resource-rich states of Africa, where the acquisitiveness of political leaders have earned some global notoriety. But is it really just fear that motivates the accumulation and transfer of wealth? Is it also not the sheer enjoyment of what money can buy? Read the rest of this entry »
It’s hard to find assets squirreled away in Swiss banks or buried in an offshore company in the Bahamas. Houses, however, are difficult to hide. As anyone who owns a house knows, a real-estate purchase leaves a trail of public records. That’s why they provide relatively easy pickings for investigative journalists. Reporters may not be able to find evidence of bribery or of other corrupt acts, but with some real-estate sleuthing, it’s possible to trace where the proceeds of crime or corruption went. Following the houses, therefore, can be as productive as (and sometimes easier than) following the money.
It helps that land records are publicly available in most places – if not online, in public registers accessible to citizens. The New York Times’ recent piece on Russian billionaires gobbling up $1-billion worth of the fanciest real estate in Manhattan and elsewhere in the United States was made possible in part by the availability of real-estate records stored in online databases throughout the U.S.
In New York, it’s possible to search ACRIS, the city’s online property registry, by party (owner) name or address. Last year, my students were looking into investments made by a shadowy Chinese company in Guinea.
I didn’t know much about real estate until 2000 when my colleagues and I at the Philippine Center for Investigative Journalism were checking out rumors that then President Joseph Estrada — a former movie actor famous for his boozing and womanizing — was building fabulous houses for a string of mistresses. It turned out that the houses were just the most visible manifestations of the deep-seated corruption that was taking place during Estrada’s reign.
Since then, I’ve become house-conscious and have kept an informal tally of officials around the world whose crimes and misdeameanors have come to light because of their mania for mansions (cars are a close second, especially Ferraris and Bentleys, followed by private jets and yachts). Whether in the United States or Nigeria, South Africa or Bosnia, public officials have a penchant for using the people’s money to acquire real property. It wasn’t just Imelda Marcos who suffered from a publicly-financed edifice complex. (See my photo collection, Mansion Mania, on Pinterest.)