The Open Constitution Initiative Fined for over 1.42 Million Yuan

translated from Xu Zhiyong's blog announcement. Xu is a founder and lawyer of The Open Constitution Initiative.

see the official letter of penalty here.

The Open Constitution Initiative Fined for over 1.42 Million Yuan

Xu Zhiyong

July 15, 2009

July 14, 2009, The Open Constitution Initiative (OCI, aka Gongmeng) received Notification of Tax Fine from both Beijing State Tax Bureau and Local Tax Bureau simultaneously – pending an administrative penalty before July 24^th: Local Tax Bureau drafts a fine of more than 300,000 yuan; State Tax Bureau pursues a income tax payment of more than 180,000 yuan and a penalty of over 930,000 yuan; altogether totals over 1.42 million yuan.

Among these penalties, the Local Tax Bureau penalty is made against the four endowments given by Yale Law School since 2006 and a donation by Mr. Wang Gongquan, an OCI researcher, made in April 2009. As for the Yale Law School’s financial assistance, we have paid due tax by May this year; and Mr. Wang’s donation has just been accounted, and the penalty came before we even had a chance to submit our tax. Likewise, the State Tax Bureau’s penalty is also made against a cooperate project with Yale Law School. We have been trying to explain that the 2007-2008 year cooperation contract was confirmed and finalized in early 2009; and the 2008-2009 project has not been finished yet – the money we got so far was only advance payments. Moreover, all donations OCI received have been used in legal research and legal assistance for the less-privileged. Since we don’t have any remaining income, where does this 180,000 yuan income tax comes from? And how could there could be a penalty of more than 930,000?

The Open Constitution Initiative has always been a non-profit organization. It is only because of administrative reasons that we were registered as a company, but we never cease trying to register at the civil administration departments as a non-profit organization. We understand that there might be oversight in our management, and we are not experts on industrial or commercial tax, so even though we have put great importance on making sure no legal problems would emerge with our taxes, the professional accountants we hired have failed to help us in a timely matter. We have been compliant and cooperative in the investigation of our tax affairs, and voluntarily correct our mistakes, but our efforts were meaningless in front of pure ugliness and hostility. We have paid our sales tax, but we were nevertheless penalized; we have no profits whatsoever, but we got penalties for income tax; moreover, the legal boundary of penalties is a fine between 50% to 5 times, but on every charge, we got the heaviest possible penalties without any reason given by the tax departments.

A 1.42 million yuan fine may mean little to many companies, but to The Open Constitution, it is cruel and evil. It is not a penalty for OCI along, it is a penalty to the baby victims of the poisonous milk powders; a penalty to the young students at migrant workers’ children schools; a penalty to those home owners cheated and mistreated by the property management companies; it is a penalty to those petitioners who speak against injustice and corruption; it is a penalty to tens of thousands of the poor and powerless, those who needs the society’s help most. This penalty is heartless and defies the basic human conscience.

We have been careful in choosing our donors: we have rejected endowments from several foundations to quiet the ungrateful gossips; we chose Yale Law School because they have also given financial assistance to several government departments – I know them well, and they love China. OIC and Yale Law School has several cooperative projects, including: the research on the reform on Beijing’s Huji (identification) system, suggesting permission of Huji to be granted for new migrants; holding discussion meetings on the “nail homeowner” issue , owners who refused to be moved, and Xifeng County party advisor’s action of arresting a journalist in Beijing; advocacy for mistreated homeowners; fight against compulsory moving of schools for migrant workers’ children; legal assistance to extremely unjust cases such as for the innocent citizen in Hebei Chengdu who were sentences to death five times and Du Xuelei, who was beaten to death by the police, etc.; we also propose legal reform advice to NPC members during the National People's Congress and the Chinese Political Consultative Conference. Our endeavors have been rational and constructive; we push forward democracy and justice in our system with all our innocent goodwill at hearts.

The endowment for these cooperative projects has run out. OIC is a team composed of volunteers: our members work and act on their conscience and sense of justice, so aside from a few fulltime workers in our office, most of our members are not paid for their work. We commit every penny of our donation in the pursuit of justice and human conscience. We do not have any profit and do not plan to gain any; what we gain is inspiration and a touch of our heart. Now the tax departments demand OIC to pay such a staggering sum of fine, it will take all of our existing resources, even the donations from friends: 100 yuan, 200 yuan, or 5 yuan, 10 yuan.

This is not possible! As the legal representative of OIC, I would rather accept the criminal penalty of 7 years in jail than to hand in these 5 yuan and 10 yuan donations to those heartless bastards. If they say I, Xu Zhiyong, has committed tax invasion crime; it would be like the police in Linyi who accused me of theft – ridiculous!

Some people might be saying viciously behind our back that OIC has a political purpose; I pity this kind of rhetoric. Our political purpose is clear: it is for the democracy, rule of law, equality and justice in this nation, for the liberty and pursuit of happiness of every individual; not just for the few individuals we lend our hands to, but to help build a healthy system of democracy and rule of law, making it possible for everyone, including those who still harbor hatred towards us, to obtain justice, liberty and dignity.

Some people say OIC is just a trouble-maker in this society. I can almost see those faces distorted by hatred and malevolence, smirking: finally you are caught, I only wish the penalty could come more severely, and those who slightly related to OIC would be penalized too, trouble-makers! I dare you to make troubles again!

We are not trouble makers. Tens of thousands of mass incidents occur each year – we didn’t instigate them. Yang Jia, the young man who murdered the police, was not our product. On the contrary, we try to direct these conflicts into legal channels. We advocate absolute non-violence and hope the countless hatred and conflicts in our society would be resolved by love. We are not just working for the victims of evil and injustice; we are also working for those at high positions – we have a deep obligation to this nation: never again should great upheaval occur in this country so as to cause those in power slaughtered, repeating the tragic history of the past.

Why? Why would such fate occur to us? Because we are just; because we advocate righteousness in politics; because our wish is so pure and beautiful; because we have never given us hope in this nation; and because no matter what happens, our heart still embraces the sunshine of hope.

I’m honored to be a thief again. The first time was in Linyi where I was accused of theft and taken to the police station. My friend, without the presence of a representative, was convicted of intentional property destruction and sentenced to four-year’s imprisonment. He is but a blind man, running around advocating for his villagers. Now in Beijing, I’m accused of evading tax. Ha ha ha… I am a poor man; I am so poor that my faith is the only thing left. Your highness, would you accept my offering of my beautiful faith? You need this faith; you need the ability to have the mercy as I have in my heart – the mercy to look upon the tortured souls of these heartless demons.

I am a poor man; we are a group of poor men; you cannot blackmail us, nor steal our faith away. We do not have anger; we do not have hate; we continue our way with heart filled with mercy. The Open Constitution Initiative will not parish; the hope for the conscience and justice in this nation will not parish.