Free Jude Shao
By Chuck Hoover
Wall Street Journal, p. A18
April 18, 2006
COMMENTARY
When he graduated from the Stanford Graduate School of Business in
1993, Jude Shao anticipated many anniversaries in his personal and
professional life. But the one he will celebrate next month was unexpected. May 8
will mark the completion of Mr. Shao's eighth consecutive year of unjust imprisonment by the Chinese government on false charges of tax
evasion.
Readers of this newspaper may have some familiarity with Mr. Shao and
the facts of his case, as he was profiled in a front-page story in 2002 and
two subsequent stories in 2003 and 2005. Mr. Shao, a naturalized U.S.
citizen, founded China Business Ventures (CBV) in 1993 to export medical equipment
to China from the U.S. Four years later, his business boasted 15 employees
with offices in San Francisco and Shanghai.
In July 1997, local tax auditors arrived at CBV's Shanghai office to
conduct a "special tax audit" and immediately confiscated the company's
accounting records. Mr. Shao was twice solicited for a bribe to stop the
investigation, but he refused to pay. In April 1998, on returning to China from a trip
to the U.S., Mr. Shao was arrested and told by police that they were asked
by the local Shanghai tax auditor to "teach him a lesson." He was held incommunicado for the next 26 months.
In June 1999, a trial was held in the Shanghai No. 1 Intermediate Court,
but Mr. Shao was unable to prepare a meaningful defense since he was not
allowed to meet an attorney prior to the start of the trial. Neither Mr. Shao
nor his attorney was allowed to review the evidence against him.
Unsurprisingly, in March 2000, the court issued a ruling convicting Mr. Shao of two
tax crimes and sentencing him to 16 years in jail -- one of the longest sentences issued to a foreigner for an economic crime.
After his conviction, using accounting records recovered from his San Francisco office, Mr. Shao was able to prepare evidence that demonstrates that his company had paid all the VAT owed and therefore conclusively
proves his innocence. In April 2003, six prominent Chinese legal experts at
the Center for Research in Criminal Legal Science in China's People's
University reviewed Mr. Shao's case and his exculpatory evidence and concluded that
he deserved a retrial. In March 2004, the Guang Hua Certified Public Accountants in Shanghai reviewed the accounting records on which he
based his exculpatory evidence and concluded the records were valid.
Despite evidence that in any impartial judicial process would have set
Mr. Shao free in November 2004 -- almost three years after his initial appeal -- the Supreme People's Court rejected Mr. Shao's appeal and affirmed the
lower court decision. All options in the Chinese legal system have thus
been exhausted.
The promise of China's booming economy has been a siren call for many American businesses that have been willing to navigate unfamiliar
waters, including questionable business and legal practices that do not conform
to international standards. But what has been particularly egregious in
Mr. Shao's case is that there have been at least nine serious violations
of Chinese law -- not to mention violations of his rights as an American citizen.
For all of the talk of its conformity with international treaties,
Mr. Shao's case demonstrates that China has failed to meet its WTO
commitments to bring transparency and predictability to its legal system. Aside from
the personal risks this implies, such practices raise the cost of doing
business in China for all U.S. businesses and effectively shut out smaller
companies -- like CBV -- that cannot bear the cost of fighting possible extortion,
nor rely on the Chinese legal system to enforce their rights.
Eight years in a Chinese prison have taken their toll on Mr. Shao. He
has developed a heart condition that prison doctors are unable to treat. In
June 2004, Mr. Shao's family filed a petition for medical parole, and the
U.S. Embassy in Beijing sent a diplomatic note in support of it. U.S.
Ambassador to China Clark Randt visited Mr. Shao in prison last June and said he
was "deeply concerned about Mr. Shao's medical condition." Still, there has
been no response from the Chinese government.
In the Chinese legal system there is precedent for parole when a
prisoner has served half of his sentence. Given the lengthy sentence already
served for crimes not committed, the evidence that proves his innocence, and
his worsening medical condition, Mr. Shao clearly deserves immediate
parole. Hopefully, Chinese President Hu Jintao's visit to the U.S. this week
will signal the start of a new anniversary for Mr. Shao: The day he was
released from prison.
Mr. Hoover, an alumnus of the Stanford Graduate School of Business, is
a
leader of the Free Jude Shao Campaign, www.freejudeshao.com.
