Cases
Background Screening - Individuals
(confidential information has been changed to protect privacy)
Background:
During the mid 1980s and up to the early 1990s, China 's People's Liberation Army (PLA) was given a mandate to make engage in Chinas new free market. This essentially meant that the PLA itself became involved profit making enterprises. The result was a culture of corruption and bribery with in the PLA.
Senior officials could smuggle products with the help of the PLA Air Force. This policy was terminated in the 1990s. Since that time the PLA is no longer allowed to be involved in any business.
A Beijing political analyst states that the culture of kickbacks and bribery between the PLA and business leaders has never fully been eradicated even up to the present day.
National security is very important to the Chinese government. They believe that the size and power of a country's army is a measurement of national strength. It is for this reason that such matters are monitored very closely by the PLA.
Despite the fact that Chinas defense industry is heavily guarded, Mr. Joe Lee was able to sell equipment from Greece-based Corporation X that directly affected China's national security. For example, X sold satellite technology to the PLA. Mr. Lee was able to establish relationships with the PLA because of his close family ties their senior officials.
Mr. Lee, besides having an inside relationship with the PLA, is intelligent, educated in Greece , a risk taker, and entrepreneurial. Mr. Lee was a person able to enhance Company X's business through his relationship with the PLA and was able to win the support of his superiors within the Company because he is originally from China and speaks fluent Greek, a PLA source said.
Joe Lee does not currently have a particularly good reputation because although Company X has been profitable in the past it has not performed very well in recent years. The company has been managed inefficiently and has not kept up with the major trends in Research & Development. A Beijing telecommunication analyst confirms Company X has lost a significant share of the market in China .
Historic factors:
Joe Lee did not come from a wealthy background. He joined the PLA in 1969 where he worked in the telecommunications department, according to the telecom analyst.
Mr. Lee received a scholarship to study in Greece and left for Athens in the late 1980s. To make money in college he opened a low cost computer company that imported parts from Asia and assembled the computers in Athens , selling them to local companies. He continued to operate this business until the early 1990s. He was reluctant to return to China due to the political unrest caused by the Tiananmen Square Incident on June 4th 1989, though Mr. Lee was not personally involved.
Lee's computer business in Greece was his initial source of wealth. During his time in Greece he learned to speak Greek, a Shanghai telecommunications investment analyst reported.
Mr. Lee returned to China in the 1990s because he felt the country was more stable politically and he believed there were better business opportunities in China than in Greece . On his return he served as a consultant to technology companies. One of his main clients was the Greece-based Company X.
The Shanghai telecommunications investment analyst stated Mr. Lee developed a strong relationship with this company due to his technical knowledge and ability to speak Greek. His exposure to Company X ultimately allowed him to join the organization as its Vice President in 1999. He worked his way up to the position of President of China Operations.
Negative suppositions:
A Beijing political analyst states that Joe Lee's unusually strong business relationship with the PLA suggests that he has participated in the usual regimen of kickbacks and personal favors to senior government officials that is common in Chinas business community.
Perceived Risks:
A possible risk concerning Joe Lee is the recent performance of Company X. As the company has not done well as of late, he is likely to face pressure from senior executives in Greece who believe the company may need to make management changes in China . The Beijing analyst states that Mr. Lee may have to prove himself again by improving Company X's performance.
Mr. Lees success and position is heavily reliant on Chinas political decisions. Policy changes may directly affect his contacts in the government or PLA. Mr. Lee's success was due to his relationship with the PLA, his business may suffer if the officials he was close with are replaced or retired. This is a serious risk that could manifest itself in various guises and have broad reaching consequences for Company X.
It must be noted that Company X is developing other product lines in such areas as telecommunications (broadband, mobile phone technology). These new products will not be connected with the PLA.