By Benjamin Kang Lim and Ben Blanchard
BEIJING (Reuters) - President Xi Jinping is likely to promote a corruption whistleblower to China's top military decision-making body to underscore his determination to tackle graft inside the country's rapidly modernizing armed forces, two sources said.
General Liu Yuan, 62, the eldest son of late president Liu Shaoqi, is set to be appointed to the Central Military Commission during a meeting of the Communist Party's elite 205-member Central Committee in October, a source close to the leadership and a second source with ties to the military said.
Security had been stepped up around Liu after he had received death threats for exposing the worst military graft scandal in modern China, which involved the widespread selling of positions in the People's Liberation Army (PLA), three separate sources added.
Xi has made tackling pervasive official corruption one of his top priorities since he took over the party in November 2012. His crackdown accelerated this week when the party said it was investigating former domestic security chief Zhou Yongkang for breaching party discipline, a euphemism for corruption.
Xi has also demanded the military clean up its act and become more combat ready as China asserts itself in the disputed waters of the East and South China Seas, though the country has not fought a war in decades and stresses it wants peaceful ties with its neighbors.
"Liu Yuan will at the very least become a member of the Central Military Commission. He could even become a vice-chairman," said the source close to the leadership, who requested anonymity to avoid repercussions for speaking about elite politics to a foreign reporter without permission.
Xi, who has publicly acknowledged his friendship with Liu on a number of occasions, heads the Central Military Commission, which controls the 2.3 million-strong armed forces, the world's largest. The commission has two vice chairmen.
Liu is currently political commissar of the PLA's Logistics Department.
A vocal critic of graft in the military, Liu's whistleblowing paved the way for corruption charges against retired military commission vice chairman and former politburo member Xu Caihou as well as Lieutenant-General Gu Junshan.
During a closed-door meeting of the country's top brass in 2012, before Xi took over the party, Liu accused Gu and his protectors of corruption and vowed to fight graft even if it meant losing his job, multiple sources have told Reuters.
This led to an investigation and the sacking of Gu as deputy logistics chief later in 2012, those sources said. Xu, one of Gu's main supporters in his rise through the ranks, was then implicated during interrogations of Gu.
China said in June it would court-martial Xu, who retired from the Central Military Commission in 2013, for taking bribes. Gu was charged with corruption earlier this year.
"Liu Yuan has the ability and the guts to fight corruption," said the source with ties to the military.
Liu could not be reached for comment. A relative contacted by telephone declined to comment.
Reuters has not been able to reach either Xu or Gu for comment. It is not clear whether they have lawyers.
GO AFTER THE "DEGENERATES"
China intensified a crackdown on rampant corruption in the military in the late 1990s, banning the PLA from engaging in business. However, the military has conducted commercial dealings in recent years due to a lack of checks and balances, sources say.
The buying and selling of military positions has also been an open secret, but Chinese media have generally avoided the topic. For officers who paid bribes to be promoted, corruption is seen as a means of making a return on their investment.
Indeed, there could be risks for Xi in promoting Liu, said Huang Jing, a PLA expert at the National University of Singapore.
"Because he has been very high-profile on anti-corruption, his promotion could trigger a backlash given the political system," he said, referring to the military's deeply ingrained corruption culture.
"The Chinese leadership would have to be very careful and very prudent if they were to promote him to the Central Military Commission."
Liu has recently led a rhetorical assault on military corruption.
In an article last month in the party's influential journal Qiushi, Liu called for "degenerates" to be expelled from the party, and for party members to take the battle against corruption to the highest levels.
"Dare to criticize, and resolutely dispel fears that come from worrying that criticizing those ranked above you will only cause trouble," he wrote.
Liu first attracted wide attention for a rambling essay he wrote as a preface for a friend's book in 2010.
He called for China to reject imported political models, including Western democracy, and extremes of the left and right. In convoluted language, Liu nevertheless appeared to be suggesting a more open political system that would allow more robust debate without challenging the leadership of the party.
In a late start to a military career, Liu joined the People's Armed Police as a political commissar at 41 before transferring to the army.
He was passed over for promotion at the party's 18th Congress in November 2012, sources have previously said, partly because he was too close to Bo Xilai, a charismatic politician who fell in a divisive scandal following accusations his wife murdered a British businessman in 2011.
(Additional reporting by Megha Rajagopalan; Editing by Dean Yates)