Former Lottery Official Under Corruption Probe

A former senior manager in China’s national lottery system is under investigation on corruption allegations amid a years-long sweep in the Ministry of Civil Affairs, which runs the welfare lottery.

Feng Lizhi, former deputy head of the China Welfare Lottery Distribution and Management Center at the Ministry of Civil Affairs, was placed under investigation for alleged graft in lottery management, the Communist Party of China’s Central Commission for Discipline Inspection (CCDI) said Wednesday.

Feng, 59, also served as chairman of Beijing Zhonglottery Online Technology Co., the actual operator of welfare lotteries, before he was transferred from the lottery system to be deputy head of the China Center for Children’s Welfare and Adoption in 2013.

He became the latest of multiple senior lottery managers brought down after a 2015 audit and special inspections in 2016 uncovered extensive lottery corruption.

The audit by the National Audit Office, the largest-ever national audit of the lottery system, found that 16.9 billion yuan ($2.46 billion) out of 65.8 billion yuan in lottery funds handled between 2012 and 2014 had been misappropriated.

Gambling is officially banned in China’s mainland outside the two state-run lotteries, the China Welfare Lottery and the China Sports Lottery. Proceeds from the welfare lotteries are intended to fund social welfare projects, but the audit found some money had been used for other purposes, including property purchases and officials’ expense claims. The sports lottery, managed by the General Administration of Sport, raises funds for public sports facilities and athletic programs.

Last month, Feng’s former boss Wang Suying, former head of the Welfare Lottery Center, was investigated for serious disciplinary violations, including bribery. Wang’s two predecessors, Chen Chuanshu and Bao Xuequan, were also under investigation last year.

Chen, who left the lottery center in 2006 as its chief, was demoted for serious negligence when he was at the center. Bao was expelled from the party for violations including using his position to seek personal benefits, accepting gifts and having “improper sexual relations.” Bao’s deputy, Wang Yunge, was also probed for alleged corruption.

Before that, two former top officials with the Ministry of Civil Affairs received disciplinary punishments for “systematic corruption” in the ministry under their supervision.

Former Civil Affairs Minister Li Liguo was demoted, and his deputy Dou Yupei was put into early retirement.

Despite the state-run lottery’s corruption scandal, sales have continued to rise. September lottery sales were up 15.1% year-on-year, according to data from the Ministry of Finance. In the January-September period, lottery sales rose 7.3% year-on-year to more than 300 billion yuan.