Peter Humphrey (GSK Investigator): Inside the Chinese Gulag…


http://www.thesundaytimes.co.uk/sto/news/focus/article1580337.ece?CMP=OTH-gnws-standard-2015_07_11

Inside the Chinese gulag

A Briton hired to investigate lurid allegations against the pharma giant GSK in China became caught up in a government corruption purge. Jailed with his wife, he endured humiliating interrogations and was denied treatment for a tumour. He tells Michael Sheridan of his ordeal

Michael Sheridan Published: 12 July 2015

Harvey Humphrey attends court in Shanghai for the trial of his father

At 8am on a steamy summer morning exactly two years ago, someone began hammering thunderously on the door of a 22nd floor office suite in the bustling Chinese commercial capital, Shanghai.

Peter Humphrey, a Briton, and his wife, Yu Yingzeng , an American citizen from a distinguished Chinese family, were starting the day’s work inside.

Humphrey was in an inner room. Suddenly its door was ripped from the frame, hitting him in the face and throwing him against the wall, causing injuries that still plague him.

He was temporarily concussed. As he slowly grasped what was taking place, a man held up an ID in his face. Other men flooded into the offices, some of them shooting video.

It was a police raid. The officers identified themselves as the criminal investigation department of the Shanghai Municipal Bureau of Public Security. The title alone was enough to strike fear into the heart of any Chinese citizen. For Humphrey and his wife, it meant disaster.

They ran a fraud prevention consultancy that did sensitive work in China for multinational clients, including global law firms and FTSE-250 companies.

For several months they had been working on an exceptionally unusual and lurid case: investigating a whistleblower and the origins of a “sex tape” featuring a top executive from Glaxo Smith Kline (GSK), the British-based pharmaceutical giant.

Their inquiries had taken them into extremely perilous territory, involving Chinese regulators, allegations of bribery and corruption, and the mysterious whistleblower — apparently a woman with high political connections.

Most dangerously of all, the backdrop to their investigation was the most ferocious Chinese purge in a quarter of a century.

President Xi Jinping, who will be making a state visit to Britain later this year, is strengthening his hold over his vast and increasingly assertive country through an anti-corruption drive that has swept thousands into jail, driven dozens to suicide and created a climate of fear for foreign companies in China.

It has toppled some of China’s most powerful figures, but is also reaching deep into the connections between state officials and rich corporations, both national and foreign.

Humphrey and his wife were about to become casualties of this ruthless campaign. Arrest, humiliation, relentless interrogation and imprisonment awaited them — while their son, a student in England, found himself alone, cut off from his parents.

Humphrey, who is in his late fifties, became seriously ill in jail, suffering from a prostate tumour, but was denied medical help because he refused to sign a confession.

Now free and receiving treatment back in Britain, he is able to reveal his story, which throws a chilling light on the “socialist legal system” under this giant of the world stage.

Peter Humphrey with his wife Yu Yingzeng and the young Harvey

HUMPHREY had no inkling of the nightmare ahead when GSK approached him in 2013 to investigate the crisis into which it had been plunged — the worst scandal for a foreign company in China in recent history.

It is easy to see why GSK hired him, more difficult to understand why it did not tell him the full story from the beginning.

Humphrey is a Chinese-speaking former journalist with the Reuters news agency who in the 1990s pulled off a career change by joining Kroll, the Wall Street corporate investigations firm, and then moving to the blue-chip accountancy firm PwC, heading its investigations department in Beijing.

His language and journalistic skills proved invaluable to foreign companies seeking to do business in the labyrinth of the People’s Republic of China. He also took on harder cases, including a kidnapping, a murder and custodial battles.

In 2003, he went out on his own, setting up a company called ChinaWhys with his wife. As the Chinese government tightened its political grip in the years after the 2008 Beijing Olympics, Humphrey’s firm acquired a reputation for taking on the toughest jobs, garnering a confidential list of blue-chip clients.

In Beijing, Humphrey was known as a stalwart member of the business community and a philanthropist who became president of the Rotary Club and founded the China branch of the Association of Certified Fraud Examiners.

His marriage to “Ying”, as she was known in the family, the daughter of one of China’s leading nuclear physicists, gave the couple many Chinese friends. Their son, Harvey, went to the Beijing branch of Dulwich College, grew up bilingual and won a place at Bristol University to study engineering.

GSK’s troubles began in the autumn of 2012 when a whistleblower contacted the Chinese pharmaceutical regulators alleging massive bribery and corruption by the company’s sales force in China.

Mark Reilly, GSK’s country manager for China, hired Humphrey to investigate the source of the complaints, telling him the allegations were “false and defamatory”.

Reilly suspected a former local member of staff, Vivian Shi. Humphrey soon found she had high-level political connections in Shanghai but she denies any involvement.

In January 2013, the whistleblower cranked up the attack. The first of a sequence of anonymous emails written in fluent legal English began to hit the inboxes of staff at the company’s auditors, PwC.

Signed “GSK whistleblower”, they outlined in detail alleged malpractices in China involving cash payments and free travel for doctors and hospital managers to promote the sales of drugs.

Then the sex tape arrived. It showed Reilly, who was 52 and separated from his wife, in the bedroom of his Shanghai flat with his Chinese girlfriend.

The tape was sent anonymously to Sir Andrew Witty, GSK’s chief executive, and other senior managers. Reilly thought it was meant as a threat. Top GSK managers in London gave him authority to push back. He asked Humphrey to investigate the tape.

But there was one crucial link missing in the chain of information that GSK gave to Humphrey. Not until late in his inquiries did it turn over the “GSK whistleblower” emails to him.

When he read them, he was stunned, quickly concluding that they were “totally credible”. He wrote in a memo that he believed “every word of these allegations”. They contained “voluminous detail” and had been written by someone with a thorough grasp of the bribery scheme.

He realised that, unwittingly, he had been chasing someone who was telling the truth. What he did not yet know was that a Chinese investigation into GSK had already gathered momentum.

British officials later concluded that the whistleblower had alerted the Chinese authorities at a high level through personal contacts.

For the Chinese government, it was a political opportunity too good to miss. Beijing’s “war” on corruption is intended not just to destroy the president’s rivals and sow fear in the bureaucracy but also to frighten foreign companies into making commercial concessions.

In a swift sequence of raids, the Chinese police seized scores of GSK managers and staff, including Reilly. Humphrey and his wife were “collateral damage”, a senior British official said later.

The plainclothes officers who burst into their offices in July 2013 went straight to their laptops and filing cabinets.

“They had clearly got prioritised targets,” said Humphrey last week.

“Within half an hour, one of the policemen came and held up my computer for me to see a page showing a personal data record. ‘Why is this on your computer?’ he demanded. I replied, ‘because we are fraud investigators’.”

That was the moment when Humphrey began to realise what was happening. In free-market societies, collecting data for credit checks and corporate security is a normal, indeed vital, part of a functioning economy.

Companies carry out a process known as due diligence before investing, hiring employees and signing contracts. They also call in private-sector lawyers and investigators when they suspect fraud or technology theft.

Under the Chinese system, all this trespasses on the prerogatives of the Communist party and its obsession with state secrets. One of Chairman Mao Tse-tung’s famous sayings was “seek truth from facts”. But in China, facts are dangerous.

HUMPHREY watched as his offices were ransacked by the chain-smoking officers. “The search was chaotic. They were not inventorising, not systematic nor professional. If this was a crime scene, they were contaminating it,” he recalled. The outlook was ominous.

He and his wife were put in separate rooms. Although they did not know it then, they would not be able to speak to each other again for more than a year.

At last, the police decided they had seized enough. The couple were led away. They were put into separate unmarked police cars and taken through the busy morning traffic to a building known to every Shanghainese as “ba ling san” — 803.

It was the street number of the city’s most feared police station. The cars drove straight into a deep basement that led to corridors lined with interrogation rooms. Questioning began immediately.

For the next 14 hours, late into the night, Humphrey faced relays of investigators. His wife got similar treatment.

Before dawn next day, they were taken to the Shanghai Detention House, a fortified compound in the shadow of the prestigious financial district of Pudong, ringed by watchtowers manned by paramilitary guards.

Here Humphrey was stripped naked, then given shorts and an orange sleeveless prison vest. Guards led him to a barred cell, about 10ft by 15ft, where 12 men were asleep on pink quilts.

This would be home. The wooden floor was always damp. The lights were always on. There was no furniture. Each prisoner received food in a metal bowl, like a dog’s, three times a day. Breakfast was lukewarm rice gruel with pickled turnip. Lunch and dinner consisted of a ladle of rice and a ladle of fried vegetables.

Although nobody in the cell had been convicted of a crime, all were ordered to memorise a rule book governing how the cell was kept and even how its inmates ceremonially faced one another in a row for meals. The white plaster walls were peeling. The communal lavatory, a hole in the corner of the cell, stank.

Over the following months the pattern was always the same. “The warder came along with a notice summoning me to the interrogation wing of the detention centre,” Humphrey said.

“He ordered me to squat meekly outside the cell door. It’s part of the humiliation process. I refused to do so. The whole set-up is designed to crush the human spirit and prevent you from making a proper defence. You are treated as guilty from day one and subjected to a punishment regime.”

Even so, on the first day a policeman whispered to him: “I’m sorry to put you in handcuffs. I don’t think we should be doing this, but we have orders from high up in Shanghai.”

The warder would lead Humphrey, in handcuffs, through several corridors to an interrogation room. “Inside there was a metal cage, a podium opposite it with three chairs, and closed-circuit-TV cameras. So they take me into this room, lock me into a metal seat inside the cage and then lock the cage door. Then the questioning begins.

“Typically there were three members of the team. The lead questioner, his assistant and a police interpreter, who was usually hopeless. So we proceeded in Chinese most of the time. Usually the sessions went on for one to two hours. I reckoned they would often schedule them for the afternoon so that they could claim a meal on expenses on the way home.”

It was almost always the same, well-dressed, team. The lead interrogator was “Mr Ding”, a slim, chain-smoking man in his early forties who liked to munch pastries as he questioned his prisoner. “He posed as the ‘good cop’, telling me I would soon be released if I co- operated. He talked about being able to write my memoirs, or going fishing in Hebei province, or going home for Christmas. These were his usual promises.” Humphrey believed “Mr Ding” knew that his company’s private-sector detection work was good for the business community, but that did not matter. This was a political case.

A colder fish was “Mr Zeng”, a younger man who spoke some English and tapped away on a computer. “I sensed he was jealous of the high professional level of our product,” Humphrey recalled.

Then there was “Mr Bao”, who was in charge of interrogating Humphrey’s wife but occasionally switched roles. “He wouldn’t let me answer a question before firing the next one. Maybe he was doing it deliberately or maybe he was just f***** up. He had serious communication issues,” said Humphrey.

When he was escorted to bathroom breaks, more subtle communications emerged. “The interrogator would talk about how poor they were, with broad hints of how they could help,” he said. The guardians of “socialist legalism” were fishing for bribes.

Sometimes a more sinister questioner “from another department” was on hand. “He would ask me about a list of names, all British and American, some based in China, and what was our relationship,” said Humphrey, who recognised all the names. The implication was espionage, but after a while the interrogators seem to have decided this was a dead end.

Humphrey’s mother after her arrest

AFTER months in limbo, initially allowed no contact with British or US consular officials, Humphrey and his wife learnt that they would be prosecuted for “illegally obtaining citizens’ information” and “illegal business operations”, a vague charge frequently used to incriminate people when there is an absence of concrete evidence.

Meanwhile, the police paraded Humphrey on state television, wearing a prisoner’s orange vest, supposedly to express his contrition before he had even been put on trial. “This was completely against my will. I was put in a cage with the video rolling. It was all staged,” he said.

In July 2014, the couple met for the first time in more than a year when they were put on a van together to go to a pre-trial hearing. They hugged.

Three weeks later they faced their trial.The day began in grief. Humphreys had been told in prison that his wife’s beloved elder brother, Yu Hezeng, had died of cancer. He had been led to believe by his captors that she knew. So when the two met in a corridor, he said how sorry he was.

It was the first she heard of it. The news had been kept from her. Overwhelmed with grief, she managed to keep her composure while answering prosecution questions in the courtroom.

The trial was just one day, the verdict a foregone conclusion. Chinese defence lawyers play allocated roles in the “socialist legal system”. They can only see evidence selected by the police, there is no right to cross-examination, and no defence witnesses are allowed. Prosecution and defence serve to generate a “correct” verdict ordained by the Communist party.

The couple were convicted of illegally obtaining private data. Humphrey was sentenced to two and half years and his wife got two years. They were fined about £35,000.

A month later, a court convicted Reilly and other GSK staff of bribery. It handed Reilly a suspended three-year prison sentence and he was deported from China. Unlike Humphrey, he did not endure the privations of China’s legal archipelago.

The government fined GSK about £300m. In a statement, the company said it “sincerely apologises to the Chinese patients, doctors and hospitals, and to the Chinese government and the Chinese people”. It also agreed to locate more research and development in China — a goal which many business people think may have been the government’s real agenda all along.

In March this year, GSK is reported to have sacked 110 out of its 7,000 employees in China for misconduct.

Humphrey was serving his sentence in a cellblock for foreigners in Qingpu prison in the Shanghai suburbs, his wife in the nearby Shanghai women’s prison.

He found there were still 12 prisoners to a cell. Here, though, they had metal bunks. His cellmates included rapists, drug traffickers and fraudsters.

“There were constant distractions, because they were in your face all the time, both the guards and the inmates,” he recalled.

“But all the other prisoners had been told not to speak to me because they had been told I was a British spy. The guards ordered two prisoners to be my minders and to stop me talking.”

Friends sent him more than 140 books. “During my entire time in captivity, one of the things that kept me sane was reading,” he said.

He got through War and Peace, all but one volume of Marcel Proust’s Remembrance of Things Past, and all the novels of the Japanese writer Haruki Murakami. Meanwhile, his wife read nine Shakespeare plays, Bill Clinton’s autobiography and Stephen Hawking’s A Brief History of Time.

But a new shadow had fallen on them. Early on, a prison doctor had found a problem with Humphrey’s prostate gland. In addition, he had disorders of the spine and joints, most likely caused in the raid when the door had smashed into him. The prostate condition was getting worse.

“In the prison I asked every week for medical help for the prostate condition. But every time, the two officers in charge of me — their names were Wei and Zhao — refused, because, they said, I had not signed a confession.”

Finally, last April, after intense pressure from the British government, more tests were carried out. They found that Humphrey had a tumour. He was transferred to a prison hospital.

“Suddenly, things seemed to move,” he said. Officer Wei was reprimanded. A whirlwind of meetings with hitherto remote senior prison officials ensued.

“Essentially, they wanted to negotiate a compromise so that they could release me on the grounds of good behaviour,” he said. The prisoner and his jailers began haggling over the wording. It could not be a confession, he insisted. A final text was agreed on May 16.

On June 9, Humphrey and his wife were formally released. But the Chinese system had one more episode from Kafka in store.

Awaiting deportation, they were driven to a hotel that is unlikely to star in the Shanghai listings on TripAdvisor. It was another place of confinement. They were installed in a room with barred windows. All the rooms around them were occupied by police officers.

“We spent a week trying to recover some of our belongings, but I was confined to the room and only Ying could go out, under police escort,” he said. “It was just a slightly more comfortable prison.”

They were kept incommunicado. And until the last moment, the Shanghai authorities kept the British and American governments, who were seeking news of their citizens, in the dark.

Finally, on June 16, the police escorted the couple in a convoy to Shanghai’s showpiece Pudong airport, where a host of plainclothes men awaited.

“They whisked us through security and passport control to a private room,” Humphrey said.

“Then as the final call for the flight to London was made, they pulled out a bill for our ‘hotel stay’ for about £200 and asked us to pay it. We only had enough money for the air tickets. So I signed an IOU!”

The police took them to the door of Virgin Airlines flight VS251. “It was only at that moment that I felt we were free,” said Humphrey. “The crew pampered us and the flight manager was delightful. He got the pilot to radio ahead to London that we were on board.”

Twelve hours later, the Boeing 787 Dreamliner touched down at Heathrow. The couple were led to the front and the cabin door was opened.

Four beaming British policemen, armed to the teeth, stood waiting. “Welcome home Mr Humphrey,” said one, “we’re here to help you.”

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2 comments

  1. The Evidencer

    Thanks for posting this. I look forward to the time when he spills the beans. God forbid an MD would boycott GSK and tell patients why. Except they’d have to boycott all these crooks.

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