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Pasadena firm learns China the hard way

January 12, 2009 |  8:53 am

Here's a fascinating piece on how business is done in China by The Times' Shanghai bureau chief, Don Lee. It involves a big Pasadena company with well-known ties to China that now finds itself under federal investigation:

When Pasadena-based Avery Dennison wanted to build its road and traffic business in China a few years ago, it hired people like Lily Tang. The Beijing homemaker had an asset the company craved: political connections.

Tang's husband, Chen Qi, is a senior official at the China Communications and Transportation Assn., a quasi-governmental group led by former ministers. That connection, said current and former Avery managers in China, helped the company win contracts for thousands of dollars' worth of government projects.

In one case, according to interviews and a copy of a signed contract reviewed by The Times, Avery received an order to supply $375,000 worth of reflective safety products for highway jobs in Tianjin, east of Beijing, and paid a commission of about 8% to an enterprise operated by a friend of Chen's.

Chen's friend, Guo Longjun of Beijing, said he had passed the money on to "experts," whom he wouldn't identify.

Such payments may be part of an ongoing federal investigation into whether Avery violated the Foreign Corrupt Practices Act, which prohibits U.S. businesses from bribing foreign officials.

The Times' David Pierson reported two years ago about how Avery Dennison was a leading supporter of the controversial Chinese Olympics Rose Parade float.

--Shelby Grad