The video was exposed by microbloggers, with pictures being posted on the Chinese Twitter-like web service, Weibo.
The case highlights the growing influence of China's social media in pursuing local officials, and as Del Irani reports, it comes at a time when the Communist Party's new leaders have vowed to continue the work of their predecessors by stamping out corruption.
Correspondent: Del Irani
Speakers: Zhu Ruifeng, anti-corruption activist; Jeremy Goldkorn, founder; Kerry Brown, Director of the China Studies Centre at the University of Sydney.
IRANI: It's a tale of sex, bribery and blackmail. And at the centre of it all is a former Chongqing district party chief, Lei Zhengfu.
The 51-year old was, quite literally, caught with his pants down, after a secretly-filmed video of him having sex with a 18-year old mistress, was uploaded online.
The video was made 5 years ago, when former Chongqing chief Bo Xilai was still in power , but like Mr. Bo, the downfall of Mr. Li has been disgraceful.
Anti-corruption activist, Zhu Ruifeng is the one who exposed the scandal.
ZHU RUIFENG: "I published some pictures and part of my research (on Lei Zhengfu) in my blog. People like Ji Xuguang (a renowned journalist) re-posted it, and then it went viral on the internet."
IRANI: It was this online reaction that ultimately led to Mr. Lui's downfall.
Jeremy Goldkorn is the founder of a website and research firm that studies Chinese media and internet. He explains.
GOLDKORN: Although it was a very short video or tape, it was fairly explicit. He looked, not particularly attractive, one could say. So just watching the video was something that people did in huge numbers right from the beginning and then you started to see people making jokes about it. So they were making jokes about the fact that he didn't have very much stamina in bed, people were making cartoons, they were photoshopping photos of him.
IRANI: Mr. Lei was in charge of approving construction projects in the Beibei district of Chongqing.
He was a wealthy man with a weakness for young women and so its believed this was part of a set-up.
GOLDKORN: His enemies I suppose, real estate developers who wanted something from him that they couldn't get from bribe him decided to blackmail him so they set a bunch of mistresses upon him and got them to tape their activities and use this as leverage against him.
IRANI: But if you think this sex scandal has shocked China, think again.
GOLDKORN: I think many people sort of assume that once you get a certain amount of power in the system, one of the perks, I suppose is a mistress. Its slightly different from a sex scandal in a Western country in a way, because I think there is a widespread assumption that everyone in power is kind of engaging in this kind of activity and this just happens to be one sucker who got caught.
IRANI: While the scandal may not have generated shock and awe, its timing is questionable.
Kerry Brown, Director of the China Studies Centre at the University of Sydney explains.
BROWN: I guess the striking thing about this is that there is plenty of documentary evidence about his mistresses and one mistress in particular, and now that he has been exposed, that has caught the press in China. And I suppose it captures the mood at the moment the leadership in Beijing, they explicitly said that corruption has got to be addressed. I suppose that is part of that campaign, that corruption has got to be addressed.
SFX: China Congress Sounds
IRANI: At China's 18th Communist Party congress less than a month ago, newly inducted Chief, Xi Jinping, pledged to stamp out corruption.
XI JINPING: There are many issues that need to be solved in the Party. Especially the issues of corruption among some officials and party members.
IRANI: It was these words of the Communist Party leader that anti-corruption activist, Mr. Zhu says inspired him to expose the scandal.
But this sex tape was made five years ago and its sudden release has led many to believe there may be more to this scandal. Jeremy Goldkorn explains.
GOLDKORN: He was the party secretary of the district of Chongqing, which is the city who's former party secretary, Bo Xilai fell in a very dramatic fashion earlier this year after this police chief tried to defect and then his wife was later accused and found guilty of murdering the englishman Neil Haywood. So there's already a bit of a stink around Chongqing, and there are many people who think that this is one of the things that is the fall-out of that affair and perhaps if Bo Xilai hadn't fallen maybe this tape would not have emerged.
IRANI: But the tape did emerge and Kerry Brown says, this underscores the growing influence of Chinese microbloggers.
BROWN: The power of social media has gone up, there's over half a billion people using social media, so we call this phenomena flesh circuits or public lynchings.
IRANI: And while the power of microbloggers in China may be growing - Mr. Goldkorn also points out there is more to it...
GOLDKORN: But against that...you also have to look at China's vast, sophisticated and extremely effective Internet and media censorship system, which means the type of official corruption that gets opposed tens to be local officials, never central government, senior leaders and its often cases where the person has already been thrown under the bus.. And to allow the netizens to get in a froth over Mr. Lei's sexual peccadillos is something that the Chinese government is more or less comfortable with.