September 20, 2000

Central China Television, China’s official state television network, reports that the Ministry of Water Resources has spent up to US$50-million (400 million RMB) of government money earmarked for water conservancy construction programs on luxury cars, stock investments, and commercial office towers (which the Ministry intended to collect rent on). The massive fraud was uncovered as a result of an investigation, just completed, by China’s national auditor. The investigation was launched in 1998 after audit officials became suspicious about the construction of a 30-storey building in Beijing involving the Ministry. The Ministry of Water Resources is responsible for the financial planning and administration of the Three Gorges dam project.