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LYNN NEARY, HOST:

China is in the grips of a scandal - a tale of murder, betrayal, and political intrigue, and it could threaten the stability of the entire nation. At its heart is the death last November of a 41-year-old British businessman, Neil Heywood. This scandal has brought down a high-flying Chinese politician, Bo Xilai and his wife. NPR's Louisa Lim reports on the events that caused the scandal and Beijing's uphill attempts at damage control.

LOUISA LIM, BYLINE: The death of an Englishman overseas has rarely had such fallout. In the British Parliament yesterday, Neil Heywood's death was raised by foreign secretary William Hague.

The U.S. too has been drawn in, since the scandal first broke when Bo Xilai's former police chief sought asylum at a U.S. consulate in early February. He was bearing details of the murder. He was refused asylum and is now in Chinese custody.

UNIDENTIFIED WOMAN: (Foreign language spoken)

LIM: Then last week, this stunning official announcement on Chinese television. Neil Heywood, it said, had been murdered. Named as a prime suspect was the woman dubbed China's Jackie Kennedy, Gu Kailai, the wife of Bo Xilai. It said she'd been close to Heywood but they'd had a conflict over economic interests. She and a family retainer are being held by the authorities, highly suspected of murder.

So who was Neil Heywood? Kerry Brown, a China expert at Chatham House, met him several times over a decade. He sees Heywood as a consultant, effectively selling access to the Bo family.

KERRY BROWN: Yes, I mean, I think he did refer to Bo Xilai, but not particularly in detail. He was working on very specific networks. He kind of kept his business to himself. And I suppose it's become clear as this story has grown and grown how few people really did know much about what he was doing.

LIM: Heywood was murdered for threatening to expose plans to transfer money overseas, according to a leak from the Chinese investigation reported by Reuters. Rumors of cyanide and poisoned drinks have been flying. But none of it, even the most sensational allegations, is a surprise to Chinese journalist, Jiang Weiping. He works for the state-run media but spent five years in prison for reporting on Bo's corruption. He now lives in Canada. He told NPR how Bo and his wife operated back in the '80s. Then Bo Xilai ran Dalian's propaganda office which oversaw cultural activities. His wife started a Folk Customs Culture Research Institute.

JIANG WEIPING: (Through Translator) The heads of the Authors Association and the Artists Association etcetera were chosen by his wife. You had to give her gifts before you would be promoted. She got millions from entrepreneurs sponsoring her institute. She used this to throw parties, give favors and line her own pockets.

LIM: As her husband rose through the ranks, Gu, who's a lawyer, set up a legal firm, which Jiang believes fulfilled the same function. Jiang alleges the pair used family members to hide their wealth. Gu's sisters have companies worth $126 million, according to Bloomberg. And Bo's brother is reportedly vice chairman of a state-run company, using a pseudonym, with stock options worth $25 million.

NPR has even found a reference to Bo's real estate interests in a leaked U.S. diplomatic cable dating from 2009. Jiang Weiping says Bo used real estate to buy support from the children of high officials, known as princelings.

WEIPING: (Through Translator) To make sure he got promotions, Bo Xilai used all his powers as Dalian mayor to bribe other princelings. He gave them land deals, financial projects and overseas trade opportunities to build connections.

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LIM: Bo Xilai was the rock star of Chinese politics, a contender for the highest leadership body. Now, China's press is stressing this scandal has not touched off any political struggles. Few believe that.

UNIDENTIFIED MAN: (Foreign language spoken)

LIM: In recent days, party members and the military have had to swear loyalty oaths to China's current leadership.

Zhang Ming, a political scientist at Renmin University, says this raises suspicions.

ZHANG MING: (Through Translator) There can only be one explanation for the military's oath of loyalty: Bo Xilai tried to mobilize the army, something like a rebellion. He went too far.

LIM: The government has firmly denied any coup attempt, arresting six people for spreading such rumors. Bo Xilai is now under investigation for serious disciplinary offenses. Jiang Weiping predicts more details of Bo's fast-living lifestyle will emerge, including his philandering.

WEIPING: (Through Translator) He was very powerful. He had girlfriends himself, and he also used women as a commodity to give to other officials.

LIM: The real problem is that Bo Xilai himself is a product of China's political system. The son of a Communist hero, he used his revolutionary bloodline to accrue untold wealth and privilege. This case opens a window on a princeling oligarchy, as far away from true Communism as can be imagined. The very legitimacy of China's Communist Party could be at stake. Optimists hope this scandal will lead to political reform; the alternative, they say, is unthinkable.

Louisa Lim, NPR News, Beijing.

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