In 1994, he founded the Yuanhua Group, the company later alleged to be little more than a front for the smuggling empire he was building. He brought shiploads of contraband into Xiamen from as far away as Cyprus, dodging customs right under the nose (some say with the complicity of) the People’s Liberation Army Navy base in the city. Often, the trick was to declare that containers of cars, cigarettes or alcohol held plainer, and lower-taxed, items such as wood pulp. Other times, the labels on containers that arrived were swapped for those that had already cleared customs. Everyone was paid to look the other way.
Mr. Lai threw money around without hesitation, building the five-star Yunhua International Hotel (now a Sheraton Hotel) in downtown Xiamen, as well as an airport in Jinjiang. He bought a soccer club from away from the rival city of Foshan and moved it to Xiamen, and broke ground on an 88-storey skyscraper that would have been the biggest building in the city. He drove an armoured Mercedes that had belonged to former president Jiang Zemin, and hosted government officials in a seven-storey brothel he called the “Red Mansion.” In Xiamen, they called him The Emperor.
He acted the part. A diminutive man, barely five-feet tall, the hard features in his face he rounded out with success. When entertaining in Xiamen, he made it clear that money was no longer an object for this poor boy from the countryside. He wore designer suits and ordered Hennessy XO cognac, the drink of choice in the late 1990s for China's robber barons.
Mr. Lai’s good fortune started to run out in 1999, when hundreds of anti-corruption investigators from Beijing descended on Xiamen. They had been tipped off by a manager of one of Mr. Lai's companies who, heavily indebted to other Lai associates who had financed his gambling trips to Macau, tried to get out of it by bringing all his creditors down at once.
At first, Mr. Lai thought he could handle the investigators the same way he handled other government officials, but it soon became clear this wasn’t something he could fix by hosting a party in the Red Mansion. He got a warning call that summer from a senior police officer he had cultivated for years. The political winds had changed, he was told, and it was time to leave. Mr. Lai boarded a speedboat the same day and fled down the Chinese coast to Hong Kong (he had obtained a Hong Kong passport several years earlier). Three days later, he and his family were in Canada.
The 12 years he spent living in Vancouver were controversial in Canada, but top-of-the-newscast stuff in China, where propaganda authorities seemed to adore the story’s mix of China chasing a corrupt official while a Western government blocked the effort. As China repeatedly sought Mr. Lai’s extradition, the deputy mayor of Xiamen and its No. 2 police official were charged and convicted with taking bribes from Mr. Lai. Fourteen of his employees got the death sentence – and Premier Zhu Rongji said “if Lai Changxing were executed three times over, it would not be too much” – strengthening the argument by Mr. Lai’s lawyers that he would never get a fair trial in China.
Despite such rhetoric, Chinese government went to remarkable lengths to overcome the Canadian law preventing extradition to a country where a suspect is likely to face execution. At one point, former president Jiang Zemin made a personal intervention with then-prime minister Jean Chértien, vowing China would not seek the death penalty in Mr. Lai's case. (Mr. Lai’s lawyers in Canada highlighted while his brother and his accountant avoided death sentences for their roles in Yunhua, they both died in prison under mysterious circumstances.)
While Mr. Jiang’s guarantee appears to have been honoured, a subsequent promise to allow an “open trial” in practice only meant allowing Canadian diplomats to attend Mr. Lai’s court hearings. No foreign media was present Thursday when the verdict was handed down (the date was kept secret until shortly before the hearing, when police roadblocks were erected around the courthouse in Xiamen), and Mr. Lai’s statement to the court was not shown on Chinese newscasts.
“This is was not a judicial judgment... politics plus diplomacy equals today’s court sentence,” said Zhang Sizhi, one of China’s most prominent lawyers. “The most unpleasant thing about this case is the fact it was not open to the public. A closed trial means there was something that could not be shown.”
Television reports gave only a list of Mr. Lai’s crimes, read out over images of him being physically escorted before the judges by two uniformed police wearing white gloves. Mr. Lai was well attired for his sentencing, wearing a dark suit over a red shirt with a Mandarin collar. But as with Jay Gatsby, when the end came, his powerful friends were long gone.