In countries where power is closely held and transparency absent, government officials are often able to build family wealth as a result of their position. It happens in small communities and large cities in this country, in Africa, on Native American reservations and in Russia and in Asia, usually where democracy is absent.
According to The New York Times, it is happening in one of the largest and fastest growing economies in the world, in China, and at the highest political level. There, members of prime minister Wen Jiabaos family and a handful of business associates have become wealthy through ownership in a multitude of fast-growing businesses that in some cases have benefited from government contracts.
Wens wife is a noted diamond specialist and has positioned herself as gatekeeper to the diamond import and retail businesses in China. Wens brother has interests in energy and engineering companies, and Wens son has formed private investment companies that have done extraordinarily well. Wens daughter is part owner of a jewelry company, and his daughter-in-law owns part of a telecommunications company. The list goes on to include more family members, and, for example, college classmates of his sons.
The New York Times, in its story last week, estimated the extended Wen family holdings at more than $2.5 billion.
This was not an easy story to compile, even with assistance from outside auditors.
Business reporting in China is limited, and Wen Jiabao family members were not willing to comment.
The Times found layers of companies, one wrapped around another, which obfuscated core ownership and control.
One sign that something might be amiss, however, was that Wens 90-year-old mother has an insurance company investment valued a couple of years ago at more than $100 million.
Meanwhile, Wen has publicly cautioned Chinas leadership against self-dealing. That the countrys elite was growing personally richer has been strongly rumored.
Reporting loopholes are large. China requires that the assets of immediate family members of the party leadership be disclosed, but only to the political party and no further. More distant family members do not have to report.
The Times leaves open the possibility that Wen does not know the extent of his family members wealth and is not involved in any of their business decision-making. But the breadth of the industries involved, many at the heart of Chinas economic growth, the interconnected personal relationships and the amount of money at stake, makes that unlikely.
In Russia, deal-making by the Russian government has made many Russians millionaires and a few billionaires in the transition from socialism. After dark in Havana, high-dollar European sedans travel the streets.
Chinas leadership has been trying to grow the countrys economy without losing political control. A disregard for rural landowners rights and the environment in the desire to create monetary value have shown just how misguided and brazen that political power can be. Reporting about the wealth and business dealings of the Wen Jiabao family could further discredit the Chinese leadership, leading to resentment and a demand for less corruption and more transparency not just from factory workers but from the managerial class.
That would be a very good thing for China and for the rest of the world.