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New details show deeper intrigue in Bo Xilai's home

Gu Kailai, wife of deposed Chinese political leader Bo Xilai, was investigated on suspicion of murdering a former family friend.

A woman at the centre of China's biggest political scandal in two decades, wife of deposed political leader Bo Xilai, had once dressed as a military commander last year in a bizarre episode that shines new light on the collapse of Mr. Bo's inner circle.

Mr. Bo, ambitious former leader of China's biggest municipality, Chongqing, was ousted in March after police began investigating his wife, Gu Kailai, on suspicion of murdering a former family friend, British businessman Neil Heywood, in an argument over money.

News of Mr. Bo's removal and the murder allegation against his wife, who is a lawyer and businesswoman, emerged only a month ago, but new details uncovered by Reuters show the house of Mr. Bo was already in chaotic decline at the time of Mr. Heywood's death.

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The new details, provided by sources with knowledge of the police case against Ms. Gu, include that she is alleged to have poisoned Mr. Heywood after the Briton demanded a 10-per-cent cut for his role in organizing a large, illicit money transfer for her.

A few days after Mr. Heywood was killed in Chongqing, southwest China in November, Ms. Gu strode into a meeting of police officials wearing a military uniform and gave a rambling speech in which she told the startled officials that she was on a mission to protect the city's police chief, Wang Lijun, the source said.

"First she said that she was under secret orders from the Ministry of Public Security to effectively protect Comrade Wang Lijun's personal safety in Chongqing," said the source, adding that she wore a green People's Liberation Army uniform with a major-general's insignia and bristling with decorations.

"It was a mess," he said of Ms. Gu's speech, which circulated among some police and officials. "I reached the conclusion that she would be trouble."

It was not clear to those present why Ms. Gu, who had never served in the military, had put on the army uniform, the source said. The incident, on or about Nov. 20, left the officials even more bewildered about her mental state, he added.

At that time, Mr. Heywood's family had been told that he had died of a heart attack brought on by excessive alcohol consumption. Only later did Mr. Wang begin probing Mr. Heywood's death, treating it as a poisoning and identifying Ms. Gu as chief suspect. He revealed his suspicions to Mr. Bo at an explosive meeting in January, sources said. The police chief then fled to a U.S. consulate in February, hiding inside for more than 24 hours before leaving into the custody of central government officials.

Mr. Wang had been the spearhead of Mr. Bo's anti-corruption drive in Chongqing, a plank in the politician's barely concealed campaign to enter the topmost ranks of the ruling Communist Party.

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Ms. Gu's appearance in the army uniform was part of a cascade of extraordinary events that have led to China's worst leadership crisis since the 1989 Tiananmen Square crackdown, months before the party anoints a new generation of top leaders.

There had been rumours circulating in elite circles that Ms. Gu had been assigned a military rank, but officials dismissed them as an attempt to brandish her authority and background.

Her uniform was of the same rank as her father's, a leader in the People's Liberation Army who fought the Japanese occupation in the 1930s and 40s, and might have been given to her out of "respect for her father," said a second source with knowledge of the incident.

Even if Ms. Gu was somehow entitled to the uniform, which the sources doubted, the civilian setting in which she showed her apparent military rank made her performance disturbing and politically troublesome, they said.

"That was clearly a violation of disciplinary rules, a serious one," said the first source with ties to Mr. Bo and his family, referring to talk among officials that Ms. Gu had assumed a military title. "Even her background gives her no right to do anything like that."

Ms. Gu and the family's 32-year-old aide, Zhang Xiaojun, have been named as the main suspects in the murder of Mr. Heywood, whose body was found in a Chongqing hotel room on Nov. 15. Chinese authorities say he was poisoned.

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Mr. Bo, who was suspended from the elite Politburo last month, could later face a police investigation as well. Neither Mr. Bo nor Ms. Gu has been allowed to answer the accusations in public. Mr. Heywood's family has also declined to comment.

Chinese government ministries have not responded to written questions about the case against Ms. Gu.

A source citing details from Mr. Wang's testimony to investigators said Ms. Gu became angry and increasingly distrustful with Mr. Heywood after he demanded "at least 10 per cent" to move a large sum abroad for her.

Sources had previously said Mr. Heywood demanded an unspecified proportion of the deal that Ms. Gu considered too large.

"It was a large amount, probably from a dirty deal, and Heywood was also nervous about handling it," said the source. He said he did not know the size of the offshore transaction.

It remains unclear how Mr. Heywood might have helped Ms. Gu shift money offshore. Chinese citizens are only allowed to transfer $50,000 out of the country each year.

Long before Ms. Gu's alleged falling out with Mr. Heywood, Mr. Bo voiced misgivings about her involvement in business, according to another British businessman who had dealt with Ms. Gu and Mr. Heywood.

"He hated what she was doing," said Giles Hall who dined with Mr. Heywood and the Bo family on a visit to China a decade ago, recalling a heated conversation overheard between Mr. Bo and Ms. Gu.

"There was an agitated conversation going on. There were a few threats being made. We were a bit nervous. We were in this restaurant. We said [to the interpreter]'What's the problem?' and the interpreter said 'Her husband does not like her business dealings.' So he wasn't happy with it."

Mr. Hall, who was trying to tempt Mr. Bo to set up a tourism venture involving a hot-air balloon, said Ms. Gu showed a ruthless streak.

"You couldn't [cross her]that was for certain. She said to me 'You cross me – never come to China, you'll never get out of jail'. There was no mucking about."

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