946. James Hansen: We Have a Plenary Emergency

NASA Climatologist James Hansen

By Industrial Labor Relations News Center, Cornell University, October 23, 2012

The world's most well-known climate scientist, James Hansen of NASA's Goddard Institute, addressed 75 union leaders and allies at a global trade union roundtable in New York City this month.  

Entitled "Energy Emergency, Energy Transition," the event was convened by ILR's Global Labor Institute (GLI), part of the new Worker Institute at Cornell. The Rosa Luxemburg Foundation's New York City office partnered with GLI in organizing the Oct. 10-12 event.  

"The truth is, we have a planetary emergency," Hansen said. Union representatives from 18 countries listened in silence as Hansen described what is happening to the earth's climate, ice sheets, oceans and weather patterns.

Hansen's presentation can be seen at http://www.youtube.com/watch?v=-dbmqhon5TY.

"The volume of Arctic sea ice has been reduced by 75 percent in just 30 years. Greenland's ice sheet is losing mass at about 300 cubic kilometers per year. Sea levels are going up, and there is a danger that the ice sheets will begin to collapse and we could get several meters (of rising sea levels) in one year – which would be disastrous," Hansen said.  

"The frequency of extreme weather events is changing because the planet is getting warmer. It was exceedingly hot this past summer, and the frequency and area covered by these events are both increasing."

"We have only burned a small fraction of the fossil fuels, but we can not burn all of them. And yet the governments are going right ahead, encouraging even more use of fossil fuels through mountain top removal, tar sands, tar shale, drilling in the Arctic. We can't do that if we want to be fair to our children."

Solutions for the climate problem and for our children's futures are really going to depend on workers understanding the situation, he said.

"It's hard to communicate with people if they feel their job is threatened, but the jobs associated with clean energy technologies would be good jobs. Workers will get much better opportunities. We need to have cooperation and understanding between labor and environmental organizations and people who are concerned about the future of their children."

In an interview following the presentation, Hansen said, "Unions are an important force globally. They represent hundreds of millions of workers and their families. The thought of having them joining in the effort to bring about an energy revolution to fight climate change is very exciting. Stabilizing the climate is a battle for survival that needs everyone involved." Hansen said he was speaking as a citizen, and not a NASA employee.

In his talk, Hansen urged that a price be placed on carbon emissions at source. This, in turn, he said, would unleash the development of clean and renewable energy, energy conservation and next-generation nuclear power, which Hansen regards as an important option in the global effort to reduce global warming pollution.  

Hansen's policy proposals sparked a spirited debate among the attendees. Union representatives from Latin America and South Africa questioned whether pricing carbon should be the main solution, given the capacity of the fossil fuel companies to control the political debate.

Energy unions from Canada, Nigeria, Trinidad and Tobago, and Russia echoed Hansen's call for unions to be part of the solution to climate change and to seize the opportunities to build unions and create jobs.

Others addressing the international group included leading commentator James Gustave Speth, a professor at Vermont Law School; Wenonah Hauter, executive director of Food and Water Watch; and Robert Howarth, a Cornell scientist concerned with the global warming effects of methane leakage from "fracking" for shale gas.

More information about the roundtable, including participants, presentations and trade union statements on climate change and energy, is available at 
http://energyemergencyenergytransition.org/.

945. Extinction from Global Warming: Changing Interactions Between Species May Be More Dangerous Than High Temperatures Alone

By ScienceDaily, October 17, 2012 

A new study, published online Oct. 17, 2012 in Proceedings of the Royal Society B, reviewed 136 case studies to determine the underlying causes of why many populations have gone extinct due to changing climate.

The article, entitled "How does climate change cause extinction?" describes research led by John J. Wiens, an Associate Professor in the Department of Ecology and Evolution at Stony Brook University and by PhD students Abigail E. Cahill and Matthew E. Aiello-Lammens.

According to the authors, extinctions of plant and animal populations from human-related climate change are already widespread, but the causes of these extinctions are very poorly understood.

Contrary to expectations given global warming, the results of the study show that very few populations have gone extinct simply because temperatures got too hot for the plants and animals to survive.

"Instead," said Dr. Wiens, "climate change more often leads to local extinctions and declines by influencing interactions between species, such as reducing prey populations for predators. These shifting interactions may make even small climatic changes dangerous for the survival of plant and animal species. So, for example, many animals may starve to death because of climate change long before the climate gets hot enough for them to die from overheating."

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Story Source:

The above story is reprinted from materials provided by Stony Brook University.

Note: Materials may be edited for content and length. For further information, please contact the source cited above.

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Journal Reference:

1. Abigail E. Cahill, Matthew E. Aiello-Lammens, M. Caitlin Fisher-Reid, Xia Hua, Caitlin J. Karanewsky, Hae Yeong Ryu, Gena C. Sbeglia, Fabrizio Spagnolo, John B. Waldron, Omar Warsi, and John J. Wiens. How does climate change cause extinction? Proceedings of the Royal Society B: Biological Sciences, 2012; DOI:10.1098/rspb.2012.1890 1471-2954

944. Hurricane Sandy Leaves Trail of Destruction in Cuba

Cuban army began clean-up effort in Santiago de Cuba

By Jeff Frank, Reuters, October 26, 2012 

Hurricane Sandy hit Cuba with a surprising jolt on Thursday, slamming the island with winds that reached 110 miles per hour (177 kph) and leaving a trail of destruction, especially in the historic city of Santiago de Cuba.

Cuban television showed fallen trees, damaged buildings and debris-choked streets in the country's second largest city, which took a direct hit when the storm came ashore in the early morning hours.

****************** Insert: Cuba Needs International Solidarity ***********************

Readers of Our Place in the World are urged to contribute to an international aid organization that works in Cuba to provide much needed relief aid.  In the United States where decades old embargo limits American public's ability to visit and learn first hand about Cuba there a few venues available for sending relief aid. One such venue is the U.S. licensed non-profit Global Links that has experience in providing post-hurricane assistance to Cuba.

Global Links began working in Cuba in 1994 at the request of the Pan American Health Organization. Cuba has one of the most sophisticated public health systems in the hemisphere and some of the strongest health indicators, but the country suffers from a chronic shortage of supplies, made worse by the 50-year blockade imposed by the United States. The lack of even basic items such as sutures, endotracheal tubes, and gloves can force hospitals to cancel surgeries.

Global Links is licensed by the U.S. Government to provide medical humanitarian aid to Cuba. Materials donated by Global Links are received and distributed by the PAHO-WHO office in Havana and the Cuban Ministry of Health to specialty institutes and hospitals in Havana as well as to the regional and community hospitals in the provinces.

In 2008, Cuba was struck by hurricanes Gustav and Ike, incurring billions of dollars in damages and further stressing the country's healthcare infrastructure. Global Links is engaged in long-term hurricane relief efforts to refurnish hospitals in the hardest hit regions, such as the Isle of Youth, Pinar del Rio, Las Tunas and Camagüey.

*********************************************************************************************

"Everything is destroyed in Santiago. People are going to have to work very hard to recover," Alexis Manduley, a resident of the city, told Reuters by telephone.

After striking Jamaica, Sandy strengthened as it crossed warm Caribbean waters and roared ashore just west of Santiago de Cuba, raking the 498-year-old city with heavy rains and wind gusts that exceeded 150 mph (245 kph) in higher elevations.

Santiago de Cuba, 470 miles (756 km) southeast of Havana, is a popular tourist destination because of its large role in Cuban history, its music and its Caribbean ambience.

Its first mayor was Hernan Cortes, who went on to conquer Mexico for Spain, key battles were fought there during the Spanish-American War and Fidel Castro spent part of his childhood in the city.

Castro's rebel army fought from the surrounding Sierra Maestra mountains and on January 1, 1959, he declared victory from a balcony overlooking Santiago de Cuba's main square.

On Thursday, it was a city of half a million people with no power, no water service and little public transportation.

Cuban television showed people walking down the middle of main avenues empty of vehicles, but strewn with broken palm fronds and branches.

Restaurant workers chopped fallen trees with machetes to clear an outside eating area where sun shades were ripped apart and strewn about. Sidewalks were blocked by bricks from fallen walls.

CRUMBLING BUILDINGS

A local television reporter told Cuban state television by phone that many of the city's 300,000 homes were in bad shape before the storm and therefore vulnerable to its powerful winds and rain.

Crumbling buildings are common on the communist island, where money and materials for maintenance have been in short supply for the half century following the 1959 Cuban revolution.

Longtime Santiago de Cuba resident Eduardo Gonzalez said he had walked through much of the city and saw many damaged homes, some almost to the point of complete destruction.

A television reporter described Santiago de Cuba as "a city without trees" after so many were uprooted by Sandy, a major loss in a region where shade provides relief from the hot tropical sun.

"Even a tree that I had in the patio was stripped of its leaves, as if it had been burned. It's where I always sat to rest a while and maybe have a drink," Gonzalez said.

Other Cuban provinces pledged to send work brigades to the city, but those nearby had their own problems.

Officials gave long lists of towns with damage similar to that in Santiago de Cuba and spoke of the need to provide food, clean water and shelter to residents.

In the city of Guantanamo, east of Santiago de Cuba, television showed telephone poles fallen across narrow streets filled with downed cables. Historic buildings in the city center were damaged, reporters said.

Cuban radio reported that one person had been killed in the storm.

Casualties were low, in part because Cuba routinely moves thousands of people out of the way of approaching storms.

Cuban state media said President Raul Castro would likely visit Santiago de Cuba on Thursday as residents vowed to restore the city they affectionately call "Chago."

"We'll have to work hard to make it Santiago again, but we'll do it," said Gonzalez.

943. Geoengineering: Testing the Waters

By Naomi Klein, The New York Times, October 27, 2012

Jacob Escobedo

FOR almost 20 years, I’ve been spending time on a craggy stretch of British Columbia’s shoreline called the Sunshine Coast. This summer, I had an experience that reminded me why I love this place, and why I chose to have a child in this sparsely populated part of the world.

It was 5 a.m. and my husband and I were up with our 3-week-old son. Looking out at the ocean, we spotted two towering, black dorsal fins: orcas, or killer whales. Then two more. We had never seen an orca on the coast, and never heard of their coming so close to shore. In our sleep-deprived state, it felt like a miracle, as if the baby had wakened us to make sure we didn’t miss this rare visit.

The possibility that the sighting may have resulted from something less serendipitous did not occur to me until two weeks ago, when I read reports of a bizarre ocean experiment off the islands of Haida Gwaii, several hundred miles from where we spotted the orcas swimming.

There, an American entrepreneur named Russ George dumped 120 tons of iron dust off the hull of a rented fishing boat; the plan was to create an algae bloom that would sequester carbon and thereby combat climate change.

Mr. George is one of a growing number of would-be geoengineers who advocate high-risk, large-scale technical interventions that would fundamentally change the oceans and skies in order to reduce the effects of global warming. In addition to Mr. George’s scheme to fertilize the ocean with iron, other geoengineering strategies under consideration include pumping sulfate aerosols into the upper atmosphere to imitate the cooling effects of a major volcanic eruption and “brightening” clouds so they reflect more of the sun’s rays back to space.

The risks are huge. Ocean fertilization could trigger dead zones and toxic tides. And multiple simulations have predicted that mimicking the effects of a volcano would interfere with monsoons in Asia and Africa, potentially threatening water and food security for billions of people.

So far, these proposals have mostly served as fodder for computer models and scientific papers. But with Mr. George’s ocean adventure, geoengineering has decisively escaped the laboratory. If Mr. George’s account of the mission is to be believed, his actions created an algae bloom in an area half of the size of Massachusetts that attracted a huge array of aquatic life, including whales that could be “counted by the score.”

When I read about the whales, I began to wonder: could it be that the orcas I saw were on their way to the all-you-can-eat seafood buffet that had descended on Mr. George’s bloom? The possibility, unlikely though it is, provides a glimpse into one of the disturbing repercussions of geoengineering: once we start deliberately interfering with the earth’s climate systems — whether by dimming the sun or fertilizing the seas — all natural events can begin to take on an unnatural tinge. An absence that might have seemed a cyclical change in migration patterns or a presence that felt like a miraculous gift suddenly feels sinister, as if all of nature were being manipulated behind the scenes.

Most news reports characterize Mr. George as a “rogue” geoengineer. But what concerns me, after researching the subject for two years for a forthcoming book on climate change, is that far more serious scientists, backed by far deeper pockets, appear poised to actively tamper with the complex and unpredictable natural systems that sustain life on earth — with huge potential for unintended consequences.

In 2010, the chairman of the House Committee on Science and Technology recommended more research into geoengineering; the British government has begun to spend public money in the field.

Bill Gates has funneled millions of dollars into geoengineering research. And he has invested in a company, Intellectual Ventures, that is developing at least two geoengineering tools: the “StratoShield,” a 19-mile-long hose suspended by helium balloons that would spew sun-blocking sulfur dioxide particles into the sky and a tool that can supposedly blunt the force of hurricanes.

The appeal is easy to understand. Geoengineering offers the tantalizing promise of a climate change fix that would allow us to continue our resource-exhausting way of life, indefinitely. And then there is the fear. Every week seems to bring more terrifying climate news, from reports of ice sheets melting ahead of schedule to oceans acidifying far faster than expected. At the same time, climate change has fallen so far off the political agenda that it wasn’t mentioned once during any of the three debates between the presidential candidates. Is it any wonder that many are pinning their hopes on a break-the-glass-in-case-of-emergency option that scientists have been cooking up in their labs?

But with rogue geoengineers on the loose, it is a good time to pause and ask, collectively, whether we want to go down the geoengineering road. Because the truth is that geoengineering is itself a rogue proposition. By definition, technologies that tamper with ocean and atmospheric chemistry affect everyone. Yet it is impossible to get anything like unanimous consent for these interventions. Nor could any such consent possibly be informed since we don’t — and can’t — know the full risks involved until these planet-altering technologies are actually deployed.

While the United Nations’ climate negotiations proceed from the premise that countries must agree to a joint response to an inherently communal problem, geoengineering raises a very different prospect. For well under a billion dollars, a “coalition of the willing,” a single country or even a wealthy individual could decide to take the climate into its own hands. Jim Thomas of the ETC Group, an environmental watchdog group, puts the problem like this: “Geoengineering says, ‘we’ll just do it, and you’ll live with the effects.’ ”

 The scariest thing about this proposition is that models suggest that many of the people who could well be most harmed by these technologies are already disproportionately vulnerable to the impacts of climate change. Imagine this: North America decides to send sulfur into the stratosphere to reduce the intensity of the sun, in the hopes of saving its corn crops — despite the real possibility of triggering droughts in Asia and Africa. In short, geoengineering would give us (or some of us) the power to exile huge swaths of humanity to sacrifice zones with a virtual flip of the switch.

The geopolitical ramifications are chilling. Climate change is already making it hard to know whether events previously understood as “acts of God” (a freak heat wave in March or a Frankenstorm on Halloween) still belong in that category. But if we start tinkering with the earth’s thermostat — deliberately turning our oceans murky green to soak up carbon and bleaching the skies hazy white to deflect the sun — we take our influence to a new level. A drought in India will come to be seen — accurately or not — as a result of a conscious decision by engineers on the other side of the planet. What was once bad luck could come to be seen as a malevolent plot or an imperialist attack.

There will be other visceral, life-changing consequences. A study published this spring in Geophysical Research Letters found that if we inject sulfur aerosols into the stratosphere in order to dial down the sun, the sky would not only become whiter and significantly brighter, but we would also be treated to more intense, “volcanic” sunsets. But what kind of relationships can we expect to have with those hyper-real skies? Would they fill us with awe — or with vague unease? Would we feel the same when beautiful wild creatures cross our paths unexpectedly, as happened to my family this summer? In a popular book on climate change, Bill McKibben warned that we face “The End of Nature.” In the age of geoengineering, we might find ourselves confronting the end of miracles, too.

Mr. George and his ocean-altering experiment provides an opportunity for public debate about an issue essentially absent during the election cycle: What are the real solutions to climate change? Wouldn’t it be better to change our behavior — to reduce our use of fossil fuels — before we begin fiddling with the planet’s basic life-support systems?

Unless we change course, we can expect to hear many more reports about sun-shielders and ocean fiddlers like Mr. George, whose iron dumping exploit did more than test a thesis about ocean fertilization: it also tested the waters for future geoengineering experiments. And judging by the muted response so far, the results of Mr. George’s test are clear: geoengineers proceed, caution be damned.

The author, most recently, of “The Shock Doctrine: The Rise of Disaster Capitalism.”

942. India’s Plague, Trash, Drowns Its Garden City During Strike

Trash builds up during a strike in Bangalore

By Gardiner Harris, The New York Times, October 26, 2012

MANDUR, India — Outside Bangalore’s last official landfill, the garbage trucks regularly lined up here for hours, their burdens putrefying in the afternoon sun. A stinking mountain of trash, the landfill has been poisoning local waters and sickening nearby villagers. Another dump site was in even worse shape before it was closed recently after violent protests.

Bangalore, the capital of India’s modern economy and home to many of its high-tech workers, is drowning in its own waste. Last week, local villagers blocked the roads leading to the Mandur landfill on the city’s outskirts even as many of Bangalore’s trash haulers went on strike, saying they had not been paid in months. Some neighborhoods have not had trash pickups for nearly three weeks, and vast mounds of garbage are scattered through what is known in India as the Garden City.

Trash is India’s plague. It chokes rivers, scars meadows, contaminates streets and feeds a vast and dangerous ecosystem of rats, mosquitoes, stray dogs, monkeys and pigs. Perhaps even more than the fitful electricity and insane traffic, the ubiquitous garbage shows the incompetence of Indian governing and the dark side of the country’s rapid economic growth. Greater wealth has spawned more garbage, and the managers of the country’s pell-mell development have been unable to handle the load.

“Bangalore used to be India’s cleanest city,” said Amiya Kumar Sahu, president of the National Solid Waste Association of India. “Now, it is the filthiest.”

Bangalore’s garbage crisis grew directly out of its stunning success. Technology companies started settling in Bangalore in the 1980s. As they grew, many created pristine campuses hacked out of urban chaos, supplying their own electricity, water, transportation and a rare sense of tranquillity.

But the dirty secret of these campuses and the gated enclaves where their executives built their houses is that they had nowhere to put their trash. Many hired truckers to take the mess out of the city, careful not to ask where it went. The truckers found empty lots or willing farmers and simply dumped their loads.

The city soon followed the companies’ lead. Its door-to-door trash pickup program, started in 2000, was seen as a model in a country where comprehensive municipal trash systems are still rare. But few — including city officials — knew where the trash was taken or, after landfills opened, how it was disposed of.

“We never followed scientific landfill practices,” Rajneesh Goel, Bangalore’s chief civil servant, said in an interview.

As Bangalore’s population exploded with the success of its technology industry, the stresses in the waste system came close to a breaking point. Now, with Bangalore’s last landfill here in Mandur about to close permanently and the city running out of abandoned quarries to quietly divert a day’s load, the system may simply collapse.

“All that groundwater contamination is going to come to us; more than 300 of our lakes are already gone,” Dr. Goel said at a recent public meeting where he pleaded for help. “The problem is getting out of hand, and eventually it will swallow us up. We have to do something.”

The choice facing Dr. Goel is stark: find a new place to dump 4,000 tons of garbage a day, or make that garbage somehow disappear. Since the city’s atrocious oversight of past landfills has made new ones all but impossible to secure, he is now trying to create — almost from scratch — one of the most ambitious recycling programs in the world.

Dr. Goel conceded that success was far from certain.

“I’m trying to give you a very rosy picture, but don’t get taken in,” he said after outlining his plans. “It’s a 50-year-old story, and there are certain constraints in the system.”

In the past, private sector companies grew like gangbusters in part by shutting out the rest of India and avoiding interactions with a dysfunctional and corrupt government. But top executives here now say they can no longer turn their backs on the chaos that surrounds them. “Building these islands, or expanding them to become the whole of India, I don’t believe will work,” said S. Gopalakrishnan, executive co-chairman of Infosys, India’s leading technology giant. He gestured out the window at his company’s immaculate campus, which included a glass pyramid, food courts, basketball courts and gardens. “At some point, the resistance from the outside world will overwhelm them.”

Indeed, India’s dysfunction is now taking a toll on Infosys’ well-known productivity, Mr. Gopalakrishnan said. His employees’ commutes are longer, their fights with schools more intractable. “If you have just 100 employees, the impact is not so much,” he said. “But with 150,000 employees, more and more the environment affects us as individuals, and, yes, it slows things down. At some point, you can’t shut your mind to what is happening around you.”

Few expect Bangalore’s municipal government to solve the problem itself. Instead, a network of nonprofit groups has sprung up to carry out recycling schemes; these nongovernment organizations have embraced the thousands of rag pickers who daily paw through the city’s garbage to retrieve valuable refuse like paper, glass and certain plastics.

“We already have an informal system of 15,000 waste workers, and you have N.G.O.’s that can empower them,” said Kalpana Kar, who has served on the city’s waste management advisory council for more than a decade. “Let us make them all part of the formal system.”

For that system to work, however, households in Bangalore must separate their trash into wet food waste, dry recyclables like plastics and paper, and medical waste. Ms. Kar now spends much of her time trying to persuade Bangalorians to do just that. On a recent day, she stopped just outside her door and pointed to a servant leaving an expensive home nearby.

The servant carried two buckets of trash across the street and dumped them in an empty lot. Stray dogs and a feral pig soon came to feed but left behind the plastic and other garbage.

“What are you doing?” Ms. Kar yelled at the servant.

He shrugged and pointed at his employer’s house. Ms. Kar had tried many times to dissuade the servant from dumping the house’s garbage in the increasingly disgusting lot, she said, but his employer had dismissed her concerns. “People in India think that if their own house is clean, the problem just goes away,” she said. She is nonetheless optimistic that Bangalore will be able to recycle nearly all of its waste, which would be a remarkable accomplishment for a city of eight million. “The city is at its knees,” she said with a shrug. “We don’t have a choice.”

Just outside of Bangalore, a growing number of pig farms are picking up food waste from the city’s hotels and restaurants. At one farm, enormous pigs squealed in excitement when a truck arrived packed with barrels of discarded food. Workers dumped the cucumber skins, watermelon rinds, uncooked sausage, watery lentils and more into a concrete pen where a barefoot woman waited. Using one hand to hold her sari, she used the other to pick out plastic bags and ice cream cups. She was soon covered in slop. Eventually, another worker shoveled the food into pig pens, and the pigs snorted in happy gluttony.

For Vankatram, a pig farmer with just one name, the price of getting this discarded food was that he had to haul away the hotels’ dry waste, giant bags of mixed plastic and paper. Such waste could be recycled, but Mr. Vankatram instead burned it. Spot trash fires are common in India and contribute to choking air pollution.

“I hope in the next 10 years that India will become cleaner,” said Mr. Sahu of the national garbage association. “But right now, it’s really bad.”

941. Industrial Fishing: Scraping the Bottom of the Ocean Smooth

The following is the New York Times October 22, 2012 editorial. Two elements are missing from it. First, that industrial fishing is a capitalist industry driven by insatiable drive for profits. Second, that it should be phased out.  Otherwise, it points to a massive problem facing anyone who cares about biodiversity and health of oceans.  KN

A trawler at the bottom of the sea

*     *     *

It is hard to grasp just how industrialized commercial fishing has become. You may know about the problems inherent in fish farming. You may have read some of the stunning accounts of work aboard the factory ships that catch, process and freeze fish. But there is no better way to grasp the scale of industrial fishing than to consider the impact of bottom trawling.

According to a new study published in Nature, trawlers are doing more than catching fish. Because they drag huge, heavy nets across the ocean floor, they are reshaping the bottom contours of the busiest fishing grounds. It is the equivalent of plowing a cornfield, with this difference: a farmer plows his own field once a year, but trawlers cover “the same grounds year round on a daily basis.” By disturbing sediment, they are, in essence, smoothing out the sea bottom and reducing its value as habitat. This is occurring, the authors say, not just on relatively shallow continental shelves, but on continental slopes as well.

Heavy trawling takes place all around the world, including off the coasts of the United States. In the scientists’ study area — the Mediterranean Sea near Spain — bathymetric mapping shows the smoothing caused by the steady sifting of sediment, and underwater photographs clearly depict trawler drag marks. In fact, trawlers are shifting as much sediment as naturally occurring underwater landslides. Trawlers working on continental slopes alone cover about half the area of the United States. Globally, trawlers working on all continental shelves and seamounts cover about five times that area.

These estimates are conservative. As the authors note, the regulations governing deep-sea bottom trawling are very weak, and there is a great deal of illegal and underreported fishing going on. Marine life flourishes in complexity, which bottom trawling destroys. It will take strong international regulation, a reduction in European fishing subsidies and heightened consumer awareness in order to limit, if not halt, this disastrous scraping of the seafloor.

940. Billions in Hidden Riches for Family of Chinese Leader

Wen Jiabo

By David Barboza, The New York Times, October 25, 2012

BEIJING — The mother of China’s prime minister was a schoolteacher in northern China. His father was ordered to tend pigs in one of Mao’s political campaigns. And during childhood, “my family was extremely poor,” the prime minister, Wen Jiabao, said in a speech last year.

But now 90, the prime minister’s mother, Yang Zhiyun, not only left poverty behind — she became outright rich, at least on paper, according to corporate and regulatory records. Just one investment in her name, in a large Chinese financial services company, had a value of $120 million five years ago, the records show.

The details of how Ms. Yang, a widow, accumulated such wealth are not known, or even if she was aware of the holdings in her name. But it happened after her son was elevated to China’s ruling elite, first in 1998 as vice prime minister and then five years later as prime minister.

Many relatives of Wen Jiabao, including his son, daughter, younger brother and brother-in-law, have become extraordinarily wealthy during his leadership, an investigation by The New York Times shows. A review of corporate and regulatory records indicates that the prime minister’s relatives, some of whom have a knack for aggressive deal-making, including his wife, have controlled assets worth at least $2.7 billion.

In many cases, the names of the relatives have been hidden behind layers of partnerships and investment vehicles involving friends, work colleagues and business partners. Untangling their financial holdings provides an unusually detailed look at how politically connected people have profited from being at the intersection of government and business as state influence and private wealth converge in China’s fast-growing economy.

Unlike most new businesses in China, the family’s ventures sometimes received financial backing from state-owned companies, including China Mobile, one of the country’s biggest phone operators, the documents show. At other times, the ventures won support from some of Asia’s richest tycoons. The Times found that Mr. Wen’s relatives accumulated shares in banks, jewelers, tourist resorts, telecommunications companies and infrastructure projects, sometimes by using offshore entities.

The holdings include a villa development project in Beijing; a tire factory in northern China; a company that helped build some of Beijing’s Olympic stadiums, including the iconic “Bird’s Nest”; and Ping An Insurance, one of the world’s biggest financial services companies.

As prime minister in an economy that remains heavily state-driven, Mr. Wen, who is best known for his simple ways and common touch, more importantly has broad authority over the major industries where his relatives have made their fortunes. Chinese companies cannot list their shares on a stock exchange without approval from agencies overseen by Mr. Wen, for example. He also has the power to influence investments in strategic sectors like energy and telecommunications.

Because the Chinese government rarely makes its deliberations public, it is not known what role — if any — Mr. Wen, who is 70, has played in most policy or regulatory decisions. But in some cases, his relatives have sought to profit from opportunities made possible by those decisions.

The prime minister’s younger brother, for example, has a company that was awarded more than $30 million in government contracts and subsidies to handle wastewater treatment and medical waste disposal for some of China’s biggest cities, according to estimates based on government records. The contracts were announced after Mr. Wen ordered tougher regulations on medical waste disposal in 2003 after the SARS outbreak.

In 2004, after the State Council, a government body Mr. Wen presides over, exempted Ping An Insurance and other companies from rules that limited their scope, Ping An went on to raise $1.8 billion in an initial public offering of stock. Partnerships controlled by Mr. Wen’s relatives — along with their friends and colleagues — made a fortune by investing in the company before the public offering.

In 2007, the last year the stock holdings were disclosed in public documents, those partnerships held as much as $2.2 billion worth of Ping An stock, according to an accounting of the investments by The Times that was verified by outside auditors. Ping An’s overall market value is now nearly $60 billion.

Ping An said in a statement that the company did “not know the background of the entities behind our shareholders.” The statement said, “Ping An has no means to know the intentions behind shareholders when they buy and sell our shares.”

While Communist Party regulations call for top officials to disclose their wealth and that of their immediate family members, no law or regulation prohibits relatives of even the most senior officials from becoming deal-makers or major investors — a loophole that effectively allows them to trade on their family name. Some Chinese argue that permitting the families of Communist Party leaders to profit from the country’s long economic boom has been important to ensuring elite support for market-oriented reforms.

Even so, the business dealings of Mr. Wen’s relatives have sometimes been hidden in ways that suggest the relatives are eager to avoid public scrutiny, the records filed with Chinese regulatory authorities show. Their ownership stakes are often veiled by an intricate web of holdings as many as five steps removed from the investments, according to the review.

In the case of Mr. Wen’s mother, The Times calculated her stake in Ping An — valued at $120 million in 2007 — by examining public records and government-issued identity cards, and by following the ownership trail to three Chinese investment entities. The name recorded on his mother’s shares was Taihong, a holding company registered in Tianjin, the prime minister’s hometown.

The apparent efforts to conceal the wealth reflect the highly charged politics surrounding the country’s ruling elite, many of whom are also enormously wealthy but reluctant to draw attention to their riches. When Bloomberg News reported in June that the extended family of Vice President Xi Jinping, set to become China’s next president, had amassed hundreds of millions of dollars in assets, the Chinese government blocked access inside the country to the Bloomberg Web site.

“In the senior leadership, there’s no family that doesn’t have these problems,” said a former government colleague of Wen Jiabao who has known him for more than 20 years and who spoke on the condition of anonymity. “His enemies are intentionally trying to smear him by letting this leak out.”

The Times presented its findings to the Chinese government for comment. The Foreign Ministry declined to respond to questions about the investments, the prime minister or his relatives. Members of Mr. Wen’s family also declined to comment or did not respond to requests for comment.

Duan Weihong, a wealthy businesswoman whose company, Taihong, was the investment vehicle for the Ping An shares held by the prime minister’s mother and other relatives, said the investments were actually her own. Ms. Duan, who comes from the prime minister’s hometown and is a close friend of his wife, said ownership of the shares was listed in the names of Mr. Wen’s relatives in an effort to conceal the size of Ms. Duan’s own holdings.

“When I invested in Ping An I didn’t want to be written about,” Ms. Duan said, “so I had my relatives find some other people to hold these shares for me.”

But it was an “accident,” she said, that her company chose the relatives of the prime minister as the listed shareholders — a process that required registering their official ID numbers and obtaining their signatures. Until presented with the names of the investors by The Times, she said, she had no idea that they had selected the relatives of Wen Jiabao.

The review of the corporate and regulatory records, which covers 1992 to 2012, found no holdings in Mr. Wen’s name. And it was not possible to determine from the documents whether he recused himself from any decisions that might have affected his relatives’ holdings, or whether they received preferential treatment on investments.

For much of his tenure, Wen Jiabao has been at the center of rumors and conjecture about efforts by his relatives to profit from his position. Yet until the review by The Times, there has been no detailed accounting of the family’s riches.

His wife, Zhang Beili, is one of the country’s leading authorities on jewelry and gemstones and is an accomplished businesswoman in her own right. By managing state diamond companies that were later privatized, The Times found, she helped her relatives parlay their minority stakes into a billion-dollar portfolio of insurance, technology and real estate ventures.

The couple’s only son sold a technology company he started to the family of Hong Kong’s richest man, Li Ka-shing, for $10 million, and used another investment vehicle to establish New Horizon Capital, now one of China’s biggest private equity firms, with partners like the government of Singapore, according to records and interviews with bankers.

The prime minister’s younger brother, Wen Jiahong, controls $200 million in assets, including wastewater treatment plants and recycling businesses, the records show.

As prime minister, Mr. Wen has staked out a position as a populist and a reformer, someone whom the state-run media has nicknamed “the People’s Premier” and “Grandpa Wen” because of his frequent outings to meet ordinary people, especially in moments of crisis like natural disasters.

While it is unclear how much the prime minister knows about his family’s wealth, State Department documents released by the WikiLeaks organization in 2010 included a cable that suggested Mr. Wen was aware of his relatives’ business dealings and unhappy about them.

“Wen is disgusted with his family’s activities, but is either unable or unwilling to curtail them,” a Chinese-born executive working at an American company in Shanghai told American diplomats, according to the 2007 cable.

China’s ‘Diamond Queen’

It is no secret in China’s elite circles that the prime minister’s wife, Zhang Beili, is rich, and that she has helped control the nation’s jewelry and gem trade. But her lucrative diamond businesses became an off-the-charts success only as her husband moved into the country’s top leadership ranks, the review of corporate and regulatory records by The Times found.

A geologist with an expertise in gemstones, Ms. Zhang is largely unknown among ordinary Chinese. She rarely travels with the prime minister or appears with him, and there are few official photographs of the couple together. And while people who have worked with her say she has a taste for jade and fine diamonds, they say she usually dresses modestly, does not exude glamour and prefers to wield influence behind the scenes, much like the relatives of other senior leaders.

The State Department documents released by WikiLeaks included a suggestion that Mr. Wen had once considered divorcing Ms. Zhang because she had exploited their relationship in her diamond trades. Taiwanese television reported in 2007 that Ms. Zhang had bought a pair of jade earrings worth about $275,000 at a Beijing trade show, though the source — a Taiwanese trader — later backed off the claim and Chinese government censors moved swiftly to block coverage of the subject in China, according to news reports at the time.

“Her business activities are known to everyone in the leadership,” said one banker who worked with relatives of Wen Jiabao. The banker said it was not unusual for her office to call upon businesspeople. “And if you get that call, how can you say no?”

Zhang Beili first gained influence in the 1980s, while working as a regulator at the Ministry of Geology. At the time, China’s jewelry market was still in its infancy.

While her husband was serving in China’s main leadership compound, known as Zhongnanhai, Ms. Zhang was setting industry standards in the jewelry and gem trade. She helped create the National Gemstone Testing Center in Beijing, and the Shanghai Diamond Exchange, two of the industry’s most powerful institutions.

In a country where the state has long dominated the marketplace, jewelry regulators often decided which companies could set up diamond-processing factories, and which would gain entry to the retail jewelry market. State regulators even formulated rules that required diamond sellers to buy certificates of authenticity for any diamond sold in China, from the government-run testing center in Beijing, which Ms. Zhang managed.

As a result, when executives from Cartier or De Beers visited China with hopes of selling diamonds and jewelry here, they often went to visit Ms. Zhang, who became known as China’s “diamond queen.”

“She’s the most important person there,” said Gaetano Cavalieri, president of the World Jewelry Confederation in Switzerland. “She was bridging relations between partners — Chinese and foreign partners.”

As early as 1992, people who worked with Ms. Zhang said, she had begun to blur the line between regulator and businesswoman. As head of the state-owned China Mineral and Gem Corporation, she began investing the state company’s money in start-ups. And by the time her husband was named vice premier, in 1998, she was busy setting up business ventures with friends and relatives.

The state company she ran invested in a group of affiliated diamond companies, according to public records. Many of them were run by Ms. Zhang’s relatives — or colleagues who had worked with her at the National Gemstone Testing Center.

In 1993, for instance, the state company Ms. Zhang ran helped found Beijing Diamond, a big jewelry retailer. A year later, one of her younger brothers, Zhang Jianming, and two of her government colleagues personally acquired 80 percent of the company, according to shareholder registers. Beijing Diamond invested in Shenzhen Diamond, which was controlled by her brother-in-law, Wen Jiahong, the prime minister’s younger brother.

Among the successful undertakings was Sino-Diamond, a venture financed by the state-owned China Mineral and Gem Corporation, which she headed. The company had business ties with a state-owned company managed by another brother, Zhang Jiankun, who worked as an official in Jiaxing, Ms. Zhang’s hometown, in Zhejiang Province.

In the summer of 1999, after securing agreements to import diamonds from Russia and South Africa, Sino-Diamond went public, raising $50 million on the Shanghai Stock Exchange. The offering netted Ms. Zhang’s family about $8 million, according to corporate filings.

Although she was never listed as a shareholder, former colleagues and business partners say Ms. Zhang’s early diamond partnerships were the nucleus of a larger portfolio of companies she would later help her family and colleagues gain a stake in.

The Times found no indication that Wen Jiabao used his political clout to influence the diamond companies his relatives invested in. But former business partners said that the family’s success in diamonds, and beyond, was often bolstered with financial backing from wealthy businessmen who sought to curry favor with the prime minister’s family.

“After Wen became prime minister, his wife sold off some of her diamond investments and moved into new things,” said a Chinese executive who did business with the family. He asked not to be named because of fear of government retaliation. Corporate records show that beginning in the late 1990s, a series of rich businessmen took turns buying up large stakes in the diamond companies, often from relatives of Mr. Wen, and then helped them reinvest in other lucrative ventures, like real estate and finance.

According to corporate records and interviews, the businessmen often supplied accountants and office space to investment partnerships partly controlled by the relatives.

“When they formed companies,” said one businessman who set up a company with members of the Wen family, “Ms. Zhang stayed in the background. That’s how it worked.”

Late one evening early this year, the prime minister’s only son, Wen Yunsong, was in the cigar lounge at Xiu, an upscale bar and lounge at the Park Hyatt in Beijing. He was having cocktails as Beijing’s nouveau riche gathered around, clutching designer bags and wearing expensive business suits, according to two guests who were present.

In China, the children of senior leaders are widely believed to be in a class of their own. Known as “princelings,” they often hold Ivy League degrees, get V.I.P. treatment, and are even offered preferred pricing on shares in hot stock offerings.

They are also known as people who can get things done in China’s heavily regulated marketplace, where the state controls access. And in recent years, few princelings have been as bold as the younger Mr. Wen, who goes by the English name Winston and is about 40 years old.

A Times review of Winston Wen’s investments, and interviews with people who have known him for years, show that his deal-making has been extensive and lucrative, even by the standards of his princeling peers.

State-run giants like China Mobile have formed start-ups with him. In recent years, Winston Wen has been in talks with Hollywood studios about a financing deal.

Concerned that China does not have an elite boarding school for Chinese students, he recently hired the headmasters of Choate and Hotchkiss in Connecticut to oversee the creation of a $150 million private school now being built in the Beijing suburbs.

Winston Wen and his wife, moreover, have stakes in the technology industry and an electric company, as well as an indirect stake in Union Mobile Pay, the government-backed online payment platform — all while living in the prime minister’s residence, in central Beijing, according to corporate records and people familiar with the family’s investments.

“He’s not shy about using his influence to get things done,” said one venture capitalist who regularly meets with Winston Wen.

The younger Mr. Wen declined to comment. But in a telephone interview, his wife, Yang Xiaomeng, said her husband had been unfairly criticized for his business dealings.

“Everything that has been written about him has been wrong,” she said. “He’s really not doing that much business anymore.”

Winston Wen was educated in Beijing and then earned an engineering degree from the Beijing Institute of Technology. He went abroad and earned a master’s degree in engineering materials from the University of Windsor, in Canada, and an M.B.A. from the Kellogg School of Business at Northwestern University in Evanston, Ill., just outside Chicago.

When he returned to China in 2000, he helped set up three successful technology companies in five years, according to people familiar with those deals. Two of them were sold to Hong Kong businessmen, one to the family of Li Ka-shing, one of the wealthiest men in Asia.

Winston Wen’s earliest venture, an Internet data services provider called Unihub Global, was founded in 2000 with $2 million in start-up capital, according to Hong Kong and Beijing corporate filings. Financing came from a tight-knit group of relatives and his mother’s former colleagues from government and the diamond trade, as well as an associate of Cheng Yu-tung, patriarch of Hong Kong’s second-wealthiest family. The firm’s earliest customers were state-owned brokerage houses and Ping An, in which the Wen family has held a large financial stake.

He made an even bolder move in 2005, by pushing into private equity when he formed New Horizon Capital with a group of Chinese-born classmates from Northwestern. The firm quickly raised $100 million from investors, including SBI Holdings, a division of the Japanese group SoftBank, and Temasek, the Singapore government investment fund.

Under Mr. Wen, New Horizon established itself as a leading private equity firm, investing in biotech, solar, wind and construction equipment makers. Since it began operations, the firm has returned about $430 million to investors, a fourfold profit, according to SBI Holdings.

 “Their first fund was dynamite,” said Kathleen Ng, editor of Asia Private Equity Review, an industry publication in Hong Kong. “And that allowed them to raise a lot more money.”

Today, New Horizon has more than $2.5 billion under management.

Some of Winston Wen’s deal-making, though, has attracted unwanted attention for the prime minister.

In 2010, when New Horizon acquired a 9 percent stake in a company called Sihuan Pharmaceuticals just two months before its public offering, the Hong Kong Stock Exchange said the late-stage investment violated its rules and forced the firm to return the stake. Still, New Horizon made a $46.5 million profit on the sale.

Soon after, New Horizon announced that Winston Wen had handed over day-to-day operations and taken up a position at the China Satellite Communications Corporation, a state-owned company that has ties to the Chinese space program. He has since been named chairman.

The Tycoons

In the late 1990s, Duan Weihong was managing an office building and several other properties in Tianjin, the prime minister’s hometown in northern China, through her property company, Taihong. She was in her 20s and had studied at the Nanjing University of Science and Technology.

Around 2002, Ms. Duan went into business with several relatives of Wen Jiabao, transforming her property company into an investment vehicle of the same name. The company helped make Ms. Duan very wealthy.

It is not known whether Ms. Duan, now 43, is related to the prime minister. In a series of interviews, she first said she did not know any members of the Wen family, but later described herself as a friend of the family and particularly close to Zhang Beili, the prime minister’s wife. As happened to a handful of other Chinese entrepreneurs, Ms. Duan’s fortunes soared as she teamed up with the relatives and their network of friends and colleagues, though she described her relationship with them involving the shares in Ping An as existing on paper only and having no financial component.

Ms. Duan and other wealthy businesspeople — among them, six billionaires from across China — have been instrumental in getting multimillion-dollar ventures off the ground and, at crucial times, helping members of the Wen family set up investment vehicles to profit from them, according to investment bankers who have worked with all parties.

Established in Tianjin, Taihong had spectacular returns. In 2002, the company paid about $65 million to acquire a 3 percent stake in Ping An before its initial public offering, according to corporate records and Ms. Duan’s graduate school thesis. Five years later, those shares were worth $3.7 billion

The company’s Hong Kong affiliate, Great Ocean, also run by Ms. Duan, later formed a joint venture with the Beijing government and acquired a huge tract of land adjacent to Capital International Airport. Today, the site is home to a sprawling cargo and logistics center. Last year, Great Ocean sold its 53 percent stake in the project to a Singapore company for nearly $400 million.

That deal and several other investments, in luxury hotels, Beijing villa developments and the Hong Kong-listed BBMG, one of China’s largest building materials companies, have been instrumental to Ms. Duan’s accumulation of riches, according to The Times’s review of corporate records.

The review also showed that over the past decade there have been nearly three dozen individual shareholders of Taihong, many of whom are either relatives of Wen Jiabao or former colleagues of his wife.

he other wealthy entrepreneurs who have worked with the prime minister’s relatives declined to comment for this article. Ms. Duan strongly denied having financial ties to the prime minister or his relatives and said she was only trying to avoid publicity by listing others as owning Ping An shares. “The money I invested in Ping An was completely my own,” said Ms. Duan, who has served as a member of the Ping An board of supervisors. “Everything I did was legal.”

Another wealthy partner of the Wen relatives has been Cheng Yu-tung, who controls the Hong Kong conglomerate New World Development and is one of the richest men in Asia, worth about $15 billion, according to Forbes.

In the 1990s, New World was seeking a foothold in mainland China for a sister company that specializes in high-end retail jewelry. The retail chain, Chow Tai Fook, opened its first store in China in 1998.

Mr. Cheng and his associates invested in a diamond venture backed by the relatives of Mr. Wen and co-invested with them in an array of corporate entities, including Sino-Life, National Trust and Ping An, according to records and interviews with some of those involved. Those investments by Mr. Cheng are now worth at least $5 billion, according to the corporate filings. Chow Tai Fook, the jewelry chain, has also flourished. Today, China accounts for 60 percent of the chain’s $4.2 billion in annual revenue.

Mr. Cheng, 87, could not be reached for comment. Calls to New World Development were not returned.

Fallout for Premier

In the winter of 2007, just before he began his second term as prime minister, Wen Jiabao called for new measures to fight corruption, particularly among high-ranking officials.

“Leaders at all levels of government should take the lead in the antigraft drive,” he told a gathering of high-level party members in Beijing. “They should strictly ensure that their family members, friends and close subordinates do not abuse government influence.”

The speech was consistent with the prime minister’s earlier drive to toughen disclosure rules for public servants, and to require senior officials to reveal their family assets.

Whether Mr. Wen has made such disclosures for his own family is unclear, since the Communist Party does not release such information. Even so, many of the holdings found by The Times would not need to be disclosed under the rules since they are not held in the name of the prime minister’s immediate family — his wife, son and daughter.

About 80 percent of the $2.7 billion in assets identified in The Times’s investigation and verified by the outside auditors were held by, among others, the prime minister’s mother, his younger brother, two brothers-in-law, a sister-in-law, daughter-in-law and the parents of his son’s wife, none of whom is subject to party disclosure rules. The total value of the relatives’ stake in Ping An is based on calculations by The Times that were confirmed by the auditors. The total includes shares held by the relatives that were sold between 2004 and 2006, and the value of the remaining shares in late 2007, the last time the holdings were publicly disclosed.

Legal experts said that determining the precise value of holdings in China could be difficult because there might be undisclosed side agreements about the true beneficiaries.

“Complex corporate structures are not necessarily insidious,” said Curtis J. Milhaupt, a Columbia University Law School professor who has studied China’s corporate group structures. “But in a system like China’s, where corporate ownership and political power are closely intertwined, shell companies magnify questions about who owns what and where the money came from.”

Among the investors in the Wen family ventures are longtime business associates, former colleagues and college classmates, including Yu Jianming, who attended Northwestern with Winston Wen, and Zhang Yuhong, a longtime colleague of Wen Jiahong, the prime minister’s younger brother. The associates did not return telephone calls seeking comment.

Revelations about the Wen family’s wealth could weaken him politically.

Next month, at the 18th Party Congress in Beijing, the Communist Party is expected to announce a new generation of leaders. But the selection process has already been marred by one of the worst political scandals in decades, the downfall of Bo Xilai, the Chongqing party boss, who was vying for a top position.

In Beijing, Wen Jiabao is expected to step down as prime minister because he has reached retirement age. Political analysts say that even after leaving office he could remain a strong backstage political force. But documents showing that his relatives amassed a fortune during his tenure could diminish his standing, the analysts said.

“This will affect whatever residual power Wen has,” said Minxin Pei, an expert on Chinese leadership and a professor of government at Claremont McKenna College in California.

The prime minister’s supporters say he has not personally benefited from his extended family’s business dealings, and may not even be knowledgeable about the extent of them.

Last March, the prime minister hinted that he was at least aware of the persistent rumors about his relatives. During a nationally televised news conference in Beijing, he insisted that he had “never pursued personal gain” in public office.

“I have the courage to face the people and to face history,” he said in an emotional session. “There are people who will appreciate what I have done, but there are also people who will criticize me. Ultimately, history will have the final say.”