Chinese vase frenzy: bribery and the auction house
As the Chinese government pays ever more attention to the country’s pervasive corruption, art auctions have become the latest ruse for those giving or soliciting bribes.
By Malcolm Moore, Shanghai
12:30PM GMT 25 Mar 2011
Auction houses on the Chinese mainland are poorly-monitored, according to Li Ling, a law lecturer at Northwest University in Xian, and present a useful forum for people to pass bribes to each other.
The Chinese vase frenzy: Bribery and the auction house
The vase came from the collection of Dai Run Zhai, a Chineseman who became New York’s most distinguished art dealer after moving to America in 1950
The practice helps to explain some of the hugely-inflated prices that have been paid for Chinese art in recent years, although there is no suggestion that international auctions are also being exploited by grafters.
A typical scenario would see the person who wants to be bribed putting an artwork or antique of little value up for auction. The briber then buys the agreed piece for a huge sum, according to Ms Li in a research paper, ‘Performing Bribery in China.’
Sometimes, the auction house is not even required.
In one case discovered by prosecutors in the eastern city of Nanjing, a property developer bought two paintings directly from a government official. The appraised value of the paintings was 3,000 yuan (£284), but the developer paid more than 333 times as much.
The sly arrangement, and the role of the auction houses, has become the subject of a quasi-autobiographical bestseller by Hu Gang, a Chinese author and former auctioneer.
Mr Hu was convicted in 2003 for bribing three judges with 490,000 yuan in exchange for commissions to carry out auctions of court-seized property. He wrote “Celadon”, a novel about a corrupt auctioneer, from his jail cell.
In the book, a protagonist called Mr Zhang bribes a judge in a remarkably circuitous way.
First Mr Zhang arranges for a tutor to teach the judge’s son Chinese calligraphy. Then, he discreetly auctions the son’s calligraphy at his auction house, and instructs his friend to bid for it. As the auctioneer, he then hands an envelope of cash to the judge, even subtracting the auction commission from the total.
“It can stand any investigation,” Mr Zhang reassures the judge.
Mr Hu has confirmed that while the book is fiction, it is an accurate reflection of real life. The book has become wildly popular in China as a manual of how to practice the delicate, and often underhand, art of cultivating business relationships.