Former China security chief faces corruption probe: report

BEIJING (Reuters) - China's senior leadership has agreed to open a corruption investigation into Zhou Yongkang, one of China's most powerful politicians of the past decade, stepping up its anti-graft campaign, the South China Morning Post reported on Friday. The reported move against Zhou - a retired member of the Politburo's all-powerful Standing Committee and the former domestic security tsar - follows the five-day corruption trial of ousted politician Bo Xilai, who was widely considered a key Zhou ally. The Foreign Ministry declined to comment on the report when contacted by Reuters. The State Council Information Office, the public relations arm of the government, did not respond immediately to faxed questions about the report. Zhou also could not be reached for comment on the report and Reuters could not independently verify it. He was one rank higher than Bo in the power structure and would be the first Politburo Standing Committee member - retired or sitting - to be investigated for economic crimes since the end of the Cultural Revolution nearly 40 years ago, the Hong Kong-based newspaper said. Citing sources familiar with the leadership's thinking, it said the decision to investigate was made in view of rising anger inside the party at the scale of the corruption problem and the wealth that Zhou's family has amassed. President Xi Jinping ordered officials in charge of the case to "get to the bottom of it", the paper said. Most sources and political analysts have said they doubt Zhou is under investigation because it would risk opening a Pandora's box that could lead to calls for probes into other retired Standing Committee members, including ex-premier Wen Jiabao and his wife and son. The New York Times reported last year that Wen's family had accumulated at least $2.7 billion in "hidden riches", a story China labeled a smear. Earlier this month U.S.-based Chinese news site Duowei said Zhou was being investigated for graft. However, the report was later withdrawn. In a sign Zhou may not be in trouble, the websites of the official People's Daily and China News Service reported on Thursday that Zhou had sent flowers to the funeral of top nuclear scientist Liu Xiyao, as did Xi. State media typically do not report such stories on party figures who have fallen from grace, so the brief news items could be interpreted as a signal he remains in the hierarchy's good books. OIL CONNECTION Chinese authorities revealed this week a probe into China National Petroleum Corporation (CNPC), which Zhou joined as a senior manager in the early 1990s. Four top managers at the company have been named as being under investigation in recent days, including group deputy general manager Li Hualin, who once served as Zhou's secretary. The newspaper said it understood the new probe would center on Zhou's time as a party boss in Sichuan province and at CNPC. In particular, investigators would examine whether Zhou and his family benefited through oilfield and property deals facilitated by his son, Zhou Bin, and other allies, it said. Sources told the newspaper it was too early to say whether Zhou - who controlled legal and law enforcement affairs for 10 years from 2002 - would face public prosecution or an internal party probe. Three other Zhou allies are currently under investigation, including the deputy party boss of Sichuan, Li Chuncheng, who had for many years overseen development of the province's prosperous capital, Chengdu. The South China Morning Post said party investigators typically move against top aides and underlings of a primary target first to weaken their political base. AWAITING VERDICT Zhou was implicated in rumors last year that he hesitated in moving against Bo. Former Chongqing party boss Bo is awaiting a verdict on corruption, bribery and abuse of power charges. The domestic security forces Zhou ran also suffered a humiliating failure when they allowed blind rights advocate Chen Guangcheng to escape from 19 months of house arrest and flee to the U.S. embassy in Beijing, which happened last year too. Such fumbles gave then-president Hu Jintao and his successor President Xi a shared motive to put a growing array of police forces and domestic security services under firmer oversight. Xi has made fighting deeply-engrained graft a central theme of his new administration, and has promised to take down "tigers" - in other words very senior people - as well as "flies" lower down on the food chain implicated in corruption. Zhou would be the most senior person caught up in Xi's dragnet to date. He joined the Politburo Standing Committee in 2007 while also heading the central Political and Legal Affairs Committee, a sprawling body that oversees law-and-order policy. That double status allowed Zhou to dominate a domestic security budget of $110 billion a year, exceeding the defense budget. But the hulking, grim-faced 70-year-old stepped down, along with most members of the Standing Committee, at the 18th Party Congress last November and formally retired in March this year. At the same time, the position he occupied was downgraded, and his successor Meng Jianzhu is only a member of the Politburo, the 25-member body that reports to the elite Politburo Standing Committee. Since the 1990s, China's efforts to stifle crime, unrest and dissent have allowed the domestic security apparatus - including police, armed militia and state security officers - to accumulate power, which worried many within the party. Still, Zhou's time in charge of domestic security saw a huge swelling in the number of "mass incidents" - China's euphemism for public protests - fuelled by frustration at a yawning wealth gap and official corruption, despite the fact that the Party cracks down hard on dissent. (Reporting by Ben Blanchard; Editing by Alex Richardson)