China responds to food and drug scandals with a crackdown

A former official's death sentence in a bribery case is a reflection of increasing pressure to keep unsafe products off the market.

By Mark Magnier, Times Staff Writer

By the standards of Chinese corruption cases, the $832,000 that the former head of the State Food and Drug Administration was charged with skimming over a seven-year period was not huge. But the death sentence given in the bribery case Tuesday reflected the growing pressure under which Beijing finds itself in the wake of medical and food scandals that have rattled the nation and spread anxiety abroad.

Dozens of Chinese died during the period that the condemned official, Zheng Xiaoyu, reportedly approved untested medicines. And China has suffered significant loss of face overseas.

The nation's reputation as an export juggernaut recently has been tarnished by a pet food scandal in the United States, disclosures that exported toothpaste contained a chemical used in antifreeze and reports of Chinese medical ingredients being linked to deaths in Panama.

Beijing has responded by dispatching legions of factory inspectors and promising tougher oversight. On Tuesday, it announced its first recall system for unsafe food products as well as the death sentence for the 62-year-old former bureaucrat.

Zheng was tapped to head the state regulatory agency at its inception in 1998 after having worked for more than two decades at state-run drug companies in the prosperous eastern city of Hangzhou.

The government agency saw its clout expand dramatically in 2002, when rules were issued requiring that it approve all drugs. This quickly led to a backlog of applications that Zheng reportedly exploited to solicit bribes for fast-track treatment. Zheng held the top agency post until he was sacked in 2005.

"The Chinese FDA faces huge numbers of approval applications, which creates a big opportunity for the head of the agency to take bribes," said Hao Zhao, associate professor with the Cheung Kong Graduate School of Business in Beijing.

According to the New China News Agency and other state media, Zheng took cash and gifts from eight companies, either personally or routed through his wife and son, for approving fake medicine by using false documents. As the net closed around him, he was expelled from the Communist Party and deprived of his personal and property rights.

Under Zheng's watch, at least 13 babies died of malnutrition in Anhui province in 2004 after they were fed fake milk powder with no nutritional value. And an antibiotic approved by the agency during Zheng's tenure killed at least 10 patients in 2006 before it was taken off the market.

The verdict handed down Tuesday by the Beijing Intermediate Court faces a review by the state supreme court and could be reduced on appeal. The last time China sentenced an official of Zheng's rank to death was in 2003, when a deputy governor from Anhui province was executed for corruption.

"Zheng was supposed to use the power given to him by the state and the people seriously and honestly, but instead he ignored their vital interest," the court said, according to the state news agency. "This has threatened the safety of people's life and health and has caused an extremely bad social impact."

The case against Zheng was heard behind closed doors and concluded in only a week and a half, raising questions about the role of politics in high-profile cases.

China has lobbied foreign governments for years to approve extradition agreements so it can punish corrupt officials who flee overseas with large sums of money. Canada and some Western European countries have balked, however, concerned about China's widespread use of the death penalty and what they consider its inadequate rule of law.

Americans became concerned recently when it was revealed that Chinese-produced melamine scrap was mixed with wheat gluten and rice protein to make pet food, leading to the deaths of dogs and cats and a product recall.

Even as China has promised to redouble its efforts to tackle potentially life-threatening cases of bribery and malfeasance in the food and pharmaceutical industries, its record is not very good on protecting or even listening to whistle-blowers.

Last year, Zhang Zhijian, a former employee of the Kangliyuan Pharmaceutical Co. in China's southern island province of Hainan, reposted an essay on an Internet chat room that discussed the "unnatural relationship" between his company and regulators. He said he didn't know the original author when it was posted from his company computer.

Local authorities with strong ties to the company traced it to him, he said, and he was detained for almost eight months on charges of "damaging the company's reputation."

He was released only after Kangliyuan appeared on a list of companies from which Zheng had received bribes.

According to the reposted essay and other reports, Kangliyuan executives bought a house in Hangzhou for Zheng to use after he retired, and lavished gifts and spent hundreds of thousands of dollars on top regulators.

Kangliyuan reportedly received approval for 120 drugs in 2005, nearly the annual total of all U.S. Food and Drug Administration approvals.

Companies that want to sell drugs in China are required to have a "Good Manufacturing Practices " certificate from the government, but many private companies can't meet the standards, Zhang said in a telephone interview, so a common practice is to bribe officials.

Another tactic for substandard companies is to learn from officials when annual and periodic "surprise" inspections will be conducted.

Since being released from detention in February, Zhang, the former Kangliyuan employee, has applied for jobs at several other pharmaceutical companies. Each one asked him whether he would do the same thing if he saw similar problems in their company, suggesting that these practices are widespread, he said.

"I've had interviews with over 10 companies," he added. "But no job offers. I need a job."

Zhou Huanxi, 48, said she had a similar experience. In 2001, she reported to regulators that her company, Hangzhou Aoyi Baoling Pharmaceutical, was replacing expensive ingredients with inert and largely worthless substitutes in medicine meant to bolster the health of pregnant women.

Although she reported her findings anonymously, her telephone number was traced and reported to the police. She was sentenced to three years in prison on what she says were trumped-up charges of trying to extort the company with harmful information. The company was let off with a slap on the wrist, she said, and since then, the company's technical supervisor has been honored by the government as a model worker.

"It's not surprising that these ingredients get exported, given all the problems in China," Zhou said. "It's sheer greed. And what's the use of the state food and drug agency? They claim to investigate, but they actually help the companies they claim to investigate."

mark.magnier@latimes.com

Yin Lijin in The Times' Beijing Bureau contributed to this report.