TODAY   |  May 10, 2012

Murder and corruption scandal rocks China

The murder of an English business man and corruption scandal, involving one of the China’s most powerful men, has gripped the country. NBC’s Ian Williams reports.

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This content comes from Closed Captioning that was broadcast along with this program.

>> story of murder and corruption that is gripping china. it's not a movie or a book but a real-life drama involving one of that country's most powerful men. nbc's ian williams is in beijing this morning. ian, good morning.

>> reporter: matt, it could easily be a script from a hollywood soap, but this story of corruption and murder is for real and strikes at the heart of china's communist party . it begins on the misty banks of the river. he was the hard-line boss of the sprawling city where he peddled maoist nostalgia. he was a rising star at the top and ruthless. he was sent to a labor camp for a year for poking fun at him. bringing neil hayward here in search of opportunity. but last november, the elite british consultant was found dead in his hotel. police said he had drunk himself to death. his body quickly cremated. then the police chief turned up at the u.s. consulate in nearby city fearing for his life. he brought with him the sensational allegation that his high-profile wife had poisoned hayward over a business dispute. the americans brought him back to authorities. he was fired, accused of corruption, his wife arrested on suspicion of murder. until just a few years ago, this whole saga would have been played out behind closed doors . but thanks to the explosion in social media here, it's quickly turned into the talk of china. spread by china's 300 million microbloggers.

>> the chinese are on the front level of the information flow.

>> reporter: then pictures were published of his party-loving son, educated at the most elite schools, oxford in the uk and now at harvard. he responded with an open letter to "the harvard crimson ," denying he had a playboy lifestyle and drove a ferrari. though a massachusetts transport official said he received three traffic tickets driving a black porsche. the accusations against him have just snowballed, that he bugged the telephones of top communist party leaders, and that his wife took massive commissions from businesses looking to set up shop here. much of it has been leaked by his rivals, little substantiated but still damaging.

>> translator: it's a deadly strike to the credibility of the ruling class . nobody believes them anymore.

>> reporter: though as we discovered, he still has supporters who angrily defend him for bringing development to the city. and there are reports of similar infighting at the top of the communist party . a power struggle over key leadership changes due later this year. matt?