Produced by: Mark Kordich and Kevin Nickels

Corruption and scandal has plagued the multibillion dollar Three Gorges Dam Project, meant to tame China's largest river and achieve the world's largest hydroelectric dam. Most recently, the head of the Three Gorges Development Project Corporation has disappeared and so has 1 billion yuan (U.S.$120 million) of state funds.

Missing is Jin Wenchao, manager of the now bankrupt corporation that was formed to finance and direct the building of the largest dam in the world. In the last two years, instances of widespread theft and embezzlement have surfaced, further tainting the already controversial construction started in December, 1994.

The 60 billion yuan project, approved by the Chinese National People's Congress in April 1992, was invented to prevent the devastating flooding of the Yangtze and generate hydroelectric power to the surrounding regions. Environmental organizations around the world have condemned the project, claiming the dam will cause enormous environmental damage. Located in northeastern China, the dam is being built in Xiling Gorge on the western border of Hubei Province. The dam will create the world's largest reservoir, flooding 22 million acres of land, reaching westward 375 miles.

The attempt to relocate almost 2 million people is just as enormous a task as the construction of the dam itself. More than 30 billion yuan was originally budgeted to achieve the massive resettlement that was scheduled to be halfway accomplished this year.

The International Rivers Network, a nongovernmental agency based in Berkeley, Calif., which has supplied a major voice against the project, claimed that official resettlement figures have been routinely falsified. A field report released by the IRN claimed that reported resettlement success stories have been fabricated by corrupt project officials. Chinese journalists reported that in a press conference in January, county officials claimed 200,000 people had been resettled. Yet reports from senior officials of the Three Gorges Project Resettlement Bureau had conflicting information. The head of the bureau, Qi Lin, was quoted in the Wanxian Daily as saying, "... only about 100,000 have been properly resettled, according to the government's own definition."

Officially, the resettlement involves locating the removed family a new home, new livelihood and compensation for its losses. Relocation has since been at a standstill for the past three months, according to reports from the South China Morning Post.

Investigating specific allegations of corruption, Chinese auditors reported, during a National Audit Work Conference in Beijing in January, that nearly 500 million yuan - 12 percent of the relocation budget - had been embezzled or wasted by local officials. Auditor General Li Jinhua announced he uncovered fraud, official misconduct and waste by nearly all government agencies associated with the project.

Jin's daughter, Jin Jihul, and his son, Jin Jiyuan, were arrested for embezzling more than 300 million yuan, after the collapse of the Zhengzhou trust and investment co-operative. Local protests in the streets of Zhengzhou last year by people demanding their money prompted Premier Zhu Rongji to order an investigation into the collapse of the trust, founded in 1993 by Jin in his home town to help finance the project through local investments. Information and news on the scandal have been slim because of a news blackout ordered by Zhu in 1998.

As details are uncovered, suggesting that the widespread corruption has resulted in a loss of almost a billion yuan, officials of high government positions may also be implicated. Chinese President Jiang Zemin announced in January that, "...there will be no limits on this investigation, and those guilty will be brought to justice no matter how high the office."

More than 1,700 senior officials and state company managers have since been punished or fired, according to a May 13 story in the South China Morning Post. In February, the head of the land management bureau from the province of Fengdu, which is to be partly flooded by the reservoir, was sentenced to death by a Chinese court in Chongqing. Huang Faxiang's death sentence for embezzling 15 million yuan was the first of its kind so far.