By JEREMY PAGE, BRIAN SPEGELE and STEVE EDER
The wife of sacked Communist Party official Bo Xilai made quite an impression when she showed up in Mobile, Ala., 15 years ago with her young son in tow. Denver lawyer Ed Byrne, whom she had hired to represent Chinese companies embroiled in a legal mess in U.S. federal court, was struck by her brains, charm and beauty. Gu Kailai, he says, seemed like the “Jackie Kennedy of China.”
Josh Chin/The Wall Street JournalGu Kailai was close to a British businessman who died mysteriously.
The business cards she distributed carried the name Horus L. Kai—a name she used in various business dealings over the years in the U.S. and U.K. A practicing lawyer in China, she helped chart the winning legal strategy, Mr. Byrne says. When the case was over, she invited her legal team back to China to entertain them in the port city of Dalian along with her husband, who was mayor there.
Ms. Gu, now 53 years old, is at the center of a mysterious affair that has toppled Mr. Bo as Communist Party chief of Chongqing city and thrown Chinese politics into turmoil. The scandal broke when Mr. Bo’s former police chief sought refuge in a U.S. consulate in China in early February. The ex-policeman, Wang Lijun, alleged that British businessman Neil Heywood, who died in Chongqing last year, was poisoned after he had fallen out with Ms. Gu. Mr. Wang claimed that his relationship with Mr. Bo collapsed after he shared this information with him.
In Mr. Bo’s last public appearance before he was ousted last month—a news conference at the National People’s Congress, China’s parliament—he described his wife as a stay-at-home mom who gave up her legal career two decades ago.
But an investigation by The Wall Street Journal shows that Ms. Gu has been involved in business activities spanning China, the U.S. and Britain over the past 20 years. She ran her own company, which she called Kailai in Chinese and the Law Office of Horus L. Kai in English. Horus is the name of the ancient Egyptian god of the sky, war and hunting.
She was involved in, and profited from, a firm called Horas Consultancy & Investment, which advised clients wanting to do business in China as the country’s economy exploded in the 1990s, according to people familiar with the matter. She relied on a small entourage of advisers and friends that included Mr. Heywood, an American businessman named Larry Cheng and French architect Patrick Henri Devillers, all of whom became close to the Bo family in Dalian and Beijing, these people said.
The picture of Ms. Gu that emerges from interviews with lawyers and others who dealt with her, and from accounts that Mr. Heywood’s friends say they got from him, is of a woman whose intellect, drive and penchant for self-promotion easily matched her husband’s.
In recent years, however, she was troubled by depression, fear of betrayal and an increasingly distant relationship with her husband, who had a reputation for working long hours as he strove for what he considered his rightful place in the party’s top leadership, according to several people familiar with the family.
Mr. Heywood had told friends he feared for his safety after falling out with Ms. Gu, who he said had become increasingly convinced that she had been betrayed by someone in the family’s “inner circle” of friends and advisers, according to people familiar with the issue.
Ms. Gu has not been accused of any crime. Party investigators are likely to be scrutinizing her family’s past business dealings and its relationship with Mr. Heywood, according to diplomats, analysts and people close to the party elite.
CFPBo Xilai and his wife, Gu Kailai.
The scandal has crushed the political aspirations of Mr. Bo, who was once considered a front-runner for promotion to the Politburo Standing Committee—the nation’s top decision-making body—in the fall. People close to the party elite say his fate now hangs in the balance, with supporters arguing for him to retain his seat on the 25-member Politburo and opponents pushing for him to be ousted and to face more serious punishment.
Ms. Gu’s future also depends to a large extent on the outcome of the schism in Beijing, described by party insiders as the biggest political crisis since the military crackdown on prodemocracy protesters around Tiananmen Square in 1989.
Like Mr. Bo, whose father was a famous revolutionary leader, Ms. Gu came from party aristocracy. Her father was Gu Jingsheng, a Communist general renowned for his role in fighting Japanese forces in the 1930s. Both Mr. Bo and Ms. Gu attended the prestigious Peking University. He studied world history and journalism, and she, several years later, focused on law and international politics.
Ms. Gu first met Mr. Bo in 1984 while on a research trip to Jin county, near Dalian, where he had taken a post as county party secretary, according to state-run-media reports. “He was very much like my father—that sort of extremely idealistic person,” Ms. Gu told one state-run newspaper in 2006. They married about two years later.
Mr. Heywood, the British businessman who died under mysterious circumstances in November, got to know the couple after he moved to Dalian in the early 1990s and wrote to Mr. Bo seeking business opportunities, according to two of Mr. Heywood’s friends.
Ms. Gu pursued her own legal career, setting up her law firm in Beijing in 1995. She soon had a reputation as one of China’s most successful lawyers, thanks to a book she wrote in 1998 that recounted her role helping several Chinese companies in Dalian win a U.S. legal battle.
In the book, which carries a Chinese title that translates as “Winning a Lawsuit in the U.S.,” she says the Dalian justice bureau asked her firm to take the case even though her husband was mayor. She says she handled the case free. In the book, she portrays herself as a fearless, trailblazing lawyer out to protect China’s national interests. “Courage is more important than wisdom,” she says in one passage.
In a photo provided to The Wall Street Journal, Ms. Gu poses near Dalian, China, in 1997.
The case involved a business dispute between Chinese companies and an American business that had filed for bankruptcy protection. A court-appointed bankruptcy trustee had sued the Chinese companies, accusing them of attempting to steal trade secrets and of defrauding the American company. That led to a judgment of more than $1 million against the Chinese companies.
In 1997, Ms. Gu flew to Alabama to advise on and monitor the court proceedings. Mr. Byrne and a group of U.S. lawyers persuaded the court to set aside the judgment. Mr. Bo wrote to congratulate them on what was seen in China as landmark victory.
Mr. Bo and Ms. Gu invited several of the Americans who had worked on the case, along with their families, to visit Dalian. The Bo family hosted them at the “Golden Pebble Beach” golf resort near Dalian, recalled one of the Americans, Robert Schenkein, then a public-relations consultant in Colorado, who had advised Ms. Gu during the case. The guests stayed in two-story New England-style cottages, each with two or three bedrooms.
The same year, the Kailai law firm changed its name to Ang Dao, and Ms. Gu appears to have ceased playing an active role in it, although she is still registered as a lawyer for Ang Dao on the website of the Beijing city justice department. Ang Dao declined to comment for this story.
Ms. Gu’s intellect, drive and penchant for self-promotion easily matched Mr. Bo’s.
Ms. Gu had been spending more time in Beijing, where her son was often looked after by her parents and by Mr. Bo’s father—the famous revolutionary Bo Yibo—who lived in the Zhongnanhai leadership compound, according to people who knew her.
Around 2000, Ms. Gu moved to Britain with her son, Guagua, according to people close to the family. He studied at two private boarding schools, Papplewick and Harrow, between 2000 and 2006, before moving on to Oxford University and then Harvard, where he still is pursuing a postgraduate degree. Mr. Heywood helped to make arrangements for the boy’s U.K. education, according to several of his friends.
It is unclear where Ms. Gu and her son lived. British public records show that in 2000 a Chinese lawyer using the name Horus Kai became a director of a company called Adad Ltd., based in the southern seaside town of Poole. Adad was dissolved in 2003.
One public document has a signature for Horus Kai in Chinese, which is barely legible, but appears to include the final two characters of Ms. Gu’s real name, Kailai. That document gives a date of birth of Nov. 15, 1958—the same as that given for Ms. Gu on the Beijing justice department website—and a residential address in the nearby city of Bournemouth.
Mr. Devillers, the French architect, is listed on other documents as a director of Adad Ltd. Those documents indicate that his current age is 52 and gives his residential address as the same address in Bournemouth as Horus Kai’s. Efforts to locate Mr. Devillers for comment weren’t successful.
The company’s chairman, Larry Cheng, who is also known as Cheng Yijun, said in an interview that he and Ms. Gu had a business relationship in the 1990s and had been involved in helping provide services to foreign companies investing in China. He declined to elaborate.
Mr. Cheng said he moved his company to Shanghai around 2000, and that Ms. Gu wasn’t involved in the new entity. He declined to discuss his firm’s current clients. “I feel it is not the right time to get involved,” he said.
Mr. Cheng said that one of his current company’s major shareholders is Dalian Shide, whose billionaire chairman, Xu Ming, is said to be close to the Bo family. Mr. Xu failed to make a planned appearance at a business conference this past week, fueling reports in the press that he has been detained in connection with the scandal.
Dalian Shide makes building materials from chemicals and owns one of China’s better soccer teams. Company officials weren’t available for comment this past week. Two people close to the company said Mr. Xu had been out of contact for some time.
There is little public evidence of Ms. Gu’s activities since her husband became Commerce Minister in 2004 and Chongqing party chief in 2007. One person who knows her well described her as an artistic type who enjoyed painting and interior design and played a traditional Chinese stringed instrument called a pipa. That person said Ms. Gu had talked a couple of years ago about seeking hospital treatment for depression. Other people familiar with the family said she suffered from the condition.
Mr. Heywood told one friend that Ms. Gu had become increasingly neurotic after she was subjected to a corruption investigation around 2007, and had at one point demanded that people in her “inner circle” divorce their spouses and swear an oath of loyalty. Mr. Heywood said he refused, according to the friend.
—John Emshwiller, Cassell Bryan-Low and James Oberman contributed to this article.Write to Jeremy Page at firstname.lastname@example.org, Brian Spegele at email@example.com and Steve Eder at firstname.lastname@example.org
A version of this article appeared April 7, 2012, on page A1 in some U.S. editions of The Wall Street Journal, with the headline: ‘Jackie Kennedy of China’ At Center of Political Drama.