A staff member prepares art confiscated from corrupt officials for an exhibition in Anhui Province, on August 15, 2007. Photo: CFP

As the business of bribery gets tougher, officials and those who seek their favor are being forced to find ever more devious ways of enriching themselves at taxpayers' expense.

The art auction scam has become a favorite. It's designed to let officials launder their ill begotten gains, producing huge hordes of cash that appear to be innocently obtained.

Here's how it works: Just before the auctioneer slams his mallet and shouts "sold," a bidder raises the stakes by upping his bid on a calligraphy scroll or painting that is not nearly worth the money. Another bidder raises the stakes again until the price has been jacked through the roof.

It turns out both bidders are in cahoots and their objective is to make the outrageous price they pay seem legitimate. That's because they had earlier given the supposed work of art to the seller, who is a government official.

In one difficult-to-trace maneuver the official has turned what was originally a small gift, perhaps a work from an unknown artist, or a replica of a famous piece that they all know is a fake, into a briefcase full of cash.

The auction "sting" is by no means infallible but experts say it has had an impact on the art world, and on the way bribery is conducted.

Art as a bank machine

Some convicted corrupt officials have been found to be hording art and then using them as a kind of ATM when they need cash. Keeping rolls of calligraphy stashed away until needed also makes them feel secure as fakes and forgeries won't count for much if they are caught..

The collecting of art - real or otherwise, has also turned corrupt officials into pseudo connoisseurs.

Last March, a treasure trove of works of art collected by an official who was later executed was displayed for the media.

Wen Qiang, former deputy police chief of Chongqing Municipality, had amassed a bounty that included nine ancient antiques and 69 rolls of calligraphy and paintings.

Authorities said the collection had been found in Wen's villa.

One piece by the late artist Zhang Daqian had been valued at 3.64 million yuan ($575,120) and had been given to Wen by one of his subordinates Zhao Liming as a gift during Spring Festival, said Chongqing authorities. The painting even came with a certificate of authentication by an appraisal committee from Sichuan Province.

After being evaluated again in Beijing it turns out that the artwork was a forgery and the certificate had been faked. It's not known if Wen had ever sent any of his gifts of art to auction, which would have surely been done anonymously if he had.

Scholar and author Wu Shu has conducted his own investigation into the shady practices of some auction houses and has published several books on the topic.

"They have the power to make any piece of art authentic," said Wu, referring to the practice of giving officials forgeries along with fake certificates of authentication.

Auction law inadequate

Wu's research found that when officials need cash they entrust their art pieces to an agent at an auction house. After several competing bidders bump the price of a work of art and is sold, the auctioneers get their commission, the official gets cash and the bidders are soon awarded a government contract or get their requested favor attended to.

Wu says on the surface it all looks open, transparent and legal.

"All of them are beneficiaries and bound together as a vested interest group. It doesn't matter if the art is genuine or fake, they can all be repackaged and made to look 'genuine,'" said Wu. The law regulating auction houses came into effect in 1997 and Wu says it's totally inadequate. He told the Global Times that auctioneers are under no obligation to ensure the piece they sell is genuine.

"A law isn't a complete law if it doesn't protect the truth and is used to cover up the false, the evil and the ugly," said Wu who believes that some auction houses knowingly sell pieces on behalf of anonymous officials even when they know the art is counterfeit.

Wu says sometimes corrupt officials are the purchasers of real works of art that are sold at auctions. In a prearranged deal, the auctioneer will quickly declare the item sold to the official for far less than it is actually worth.  This gives the official an official receipt for purchase showing that it was a legitimate buy. It also allows the official to make a killing by re-selling the piece for its true market value.

Too sensitive to discuss openly

Few people in China's art circles and auction houses would consent to be interviewed for this article. A number of them said they knew about fake bidding on fake objects, but the subject was too "sensitive" to discuss openly.

An auction house contacted by the Global Times requested a list of questions be e-mailed but never replied. The Public Security Bureau also refused requests for an interview.

"Corrupt officials are becoming more skilled and they are using the system to seek benefits," said Zhu Lijia, a professor with the Chinese Academy of Governance.

The beauty of using art as the conduit to pay bribes is obvious, say experts. It's easily transported, more easily concealed than a car or real estate and there is no requirement to register or license them.

"Paintings and calligraphy are easily convertible. They are absolutely genuine and keep good value at least while a corrupt official is in power," said Wu.

When corrupt officials come under investigation they can also easily hide their tracks.

"They simply declare their art to be fake and virtually worthless," said Wu, adding that who hoodwink the art world are distorting prices, affecting real art collectors and hurting real artists.

"This could be a disaster for the development of art and it hinders the progress or young artists. Traditional collectors might abandon their hobby," said Wu.

Creating their own schlock

Some corrupt officials have also become artists and dabble in calligraphy and painting.

Their goal isn't to create sophisticated pieces that will endure the test of time. They simply want to get their pieces on the auction floor where some sycophant will bid an outrageous amount.

"Everyone is clear about this. Officials are not selling art, they're selling power," said Zhu, adding that some officials even publish poetry or books after landing lucrative publishing contracts.

Zhu says the amateurish, vainglorious tomes by officials who write for a payoff rather than for art or enlightenment are muscling out the works of real scholars who have trouble getting published.

Declaring assets

"Only when the Asset Declaration System is implemented can this be stopped," said Zhu, referring to an anti-corruption program that will force officials to declare their assets. It was initiated in 2009 but hasn't yet been fully implemented.

"Strict supervision will help end officials moving their wealth (to another person to avoid punishment) while they're under investigation," Xin Xiangyang, a research fellow with the Chinese Academy of Social Sciences, wrote in an article published on the website of the National Bureau of Corruption Prevention in June.

He said officials will soon be required to disclose how much cash, securities, property they and their family members own and the vehicles they drive.

It's not clear if works of art will be required to be declared. Zhu told the Global Times that forcing officials to disclose their assets is a step in the right direction but wondered how effective it would be.

"Faced with stricter supervision from leaders and the public, corrupt officials' bribery skills are getting more devious," said Zhu.

Guo Shenggui, former chief of Xicheng District People's Court in Beijing was another art loving corrupt official who received a suspended death sentence after being found guilty of accepting bribes worth 7.97 million yuan. He was an avid collector of calligraphy and paintings and the trickery he used to amass his collection was well known.

Those who wanted to bribe Guo learned to present him with at least two scrolls of calligraphy, one fake and one authentic.

Guo would take the scrolls and disappear for a few minutes. When he returned he would invariably hand back the fake piece and keep the real one.

He had an expert's eye for expensive calligraphy, and many experts are now wondering what has happened to Guo's illicitly gained but historically important collection.

Professor Zhu suggests corruption in the world of art is like a morality play gone wrong.

"When people have no sense of responsibility toward history, the Party and the people, we really are in a predicament," said Zhu.