What Happened to Hong Kong?

Hong Kong has long been held up as one of the leading examples of a jurisdiction that successfully tackled systemic corruption. Up until the 1970s, Hong Kong had a reputation as one of the most corrupt cities in the world, with bribes solicited in the open and the police force considered to be “the best force in the world that one could buy with money.” But the creation of the Independent Commission Against Corruption (ICAC) in 1974 marked the beginning of a new era, and dramatically changed the situation after only a couple of decades of sustained anti-graft efforts. In 1996, Transparency International’s Corruption Perception Index (CPI) ranked Hong Kong as the 18th least-corrupt among the 54 countries/regions surveyed, putting it on par with Japan (17th) and the U.S. (15th), and Hong Kong has stayed near the top of those rankings ever since.

But with Hong Kong’s reversion to Chinese sovereignty in 1997, fears began to emerge that a “slow invasion of corruption from across border” would take place. In the first two decades after the handover, not much changed, at least not in the international corruption perception rankings. But in the last few years, such fears have been rekindled. Consider a number of troubling cases:

  • In 2014, it was revealed that Chun-ying Leung, Hong Kong’s former Chief Executive and current Vice-Chairman of the Chinese People’s Political Consultative Conference, had failed to disclose to his cabinet a HK$50 million (US$6.4 million) payment from an Australian engineering company during Leung’s tenure as the leader of the city. Leung claimed that a declaration was not necessary, though the opposition argued that the payment gave rise to a conflict of interest. Both the ICAC and the city’s legislative organ have been probing the allegations, but with little progress.
  • Sam Pa, a mysterious Hong Kong-based entrepreneur, was allegedly involved in multiple bribery and corruption cases in Africa. In 2017, a U.S. jury found that Pa had bribed Guinea’s mining minister, running his scheme through companies in Hong Kong. Pa was reported to have connections to “powerful interests in Beijing.” Since October 2015, Pa has been detained by the Chinese authorities, reportedly for the graft probe into a Chinese governor.
  • Donald Tsang, another former Chief Executive, was sentenced to 20 months’ imprisonment in February 2018 for concealing the fact that he had a rental deal with a major shareholder of a local broadcaster when he approved three license applications from that broadcaster during his term in office. (Tsang is currently appealing the judgment.)
  • Rafael Hui, Hong Kong’s former Chief Secretary who served immediately under Donald Tsang, was sentenced to 7.5 years in prison in December 2014 for, among other things, accepting a bribe of HK$8.5 million (US$1 million) from a property tycoon. Hui’s appeal was dismissed in 2017.
  • Patrick Ho, Hong Kong’s former Home Affairs Secretary, was indicted by the U.S. government for facilitating the payment of US$2 million worth of bribes to Chadian officials on behalf of the the state-owned China National Petroleum Corporation and the Chinese Communist Party (CCP)-linked CEFC Energy Company. Court documents showed that Ho sought help from the CCP Central Committee after his arrest. His trial date has been set for November 5, 2018.
  • Even the highly-praised graft-buster ICAC has been under scrutiny. In July 2016, ICAC chief Simon Peh dismissed the Commission’s top investigator Rebecca Li, citing But it was widely speculated that Li’s exit was due to political pressure stemming from her role as lead investigator in then-Chief Executive Chun-ying Leung’s alleged undeclared assets, noted above. ICAC employees protested the termination decision by boycotting the agency’s annual dinner event.
  • Simon Peh’s predecessor, Timothy Tong, was found in 2013 to have provided lavish official entertainment and expensive gifts to mainland Chinese officials. He was criticized for “tarnish[ing] the reputation” of the ICAC and maintaining “unduly close contacts” with mainland Chinese officials. The prosecution decided in January 2016 that there would be no criminal proceedings or further investigations into Tong.

So, in merely five years, this city has seen businessmen committing foreign bribery and top politicians accepting sweeteners and benefiting from conflict of interests. Even the corruption watchdog has been perceived to be “in a shambles.” What’s going on?

Some blame the integration between Hong Kong and mainland China for allowing the mainland’s “corruption culture” to infiltrate the city. That the head of the anticorruption agency would find it acceptable to wine and dine with mainland Chinese officials could be viewed as an embodiment of such culture. The integration has also appeared to make it more common for Hong Kong people to act on behalf of mainland Chinese enterprises in their overseas operations, as could be seen in Patrick Ho and Sam Pa’s cases. Others questioned whether such integration has introduced political pressure to the equation and undermined the independence of the anticorruption process, as suggested in Rebecca Li’s termination. True, there are those who assert that allegations about Hong Kong becoming more corrupt are “politically motivated criticisms” focusing on “sensational corruption scandals”; these apologists point out that the fact that even the highest officials could be penalized reflects that Hong Kong’s graft fighting mechanisms are still functioning well. Yet this really shows more about the integrity of Hong Kong’s judicial system than it does about the effectiveness of the city’s anticorruption efforts. Moreover, regardless of the outcomes of Donald Tsang and Rafael Hui’s cases, let’s not forget that the investigation of Chun-ying Leung has gone nowhere: the ICAC probe was set back by the suspicious departure of Rebecca Li, and the inquiry launched by the legislature has been stalled due to Leung’s reluctance to cooperate and attempted intervention. Moreover, in 2013, shortly after the Timothy Tong scandal, there was a chilling report about a “confidential study” conducted by Beijing which observed that the ICAC had been “infiltrated by British intelligence” and that many mid-level and senior officers had joined the organ prior to 1997 with “unverifiable” identities and a “political agenda.” The study reportedly concluded that China, “paying attention to the interests of the whole,” had not carried out the “proper and necessary cleansing” at the ICAC. While there is no way to confirm the authenticity of this study, the underlying philosophy that the CCP should maintain control of basically everything tracks President Xi’s recent requests for “absolute loyalty” from the media, military, police, and judges.

What, then, must Hong Kong do to maintain, if not restore, the “cleanliness” and integrity of the city?

  • First and foremost, the ICAC must uphold its independence, which is “absolutely essential” for the agency to go after graft ruthlessly without the fear of stepping on the wrong toes. The removal of Rebecca Li by ICAC Commissioner Simon Peh drew skepticism because the Commissioner, as a “principal official” under the Hong Kong Basic Law, is appointed by Beijing based on the Chief Executive’s nomination. Prior to 1997, the Commissioner was directly appointed by the colony’s governor. The post-1997 appointment arrangement raises questions as to whether the Commissioner could be influenced by Beijing. In light of this, there have been proposals calling for entrusting the Commissioner’s appointment to an independent authority. Alternatively, the Commissioner could be removed from the list of principal officials and be appointed directly by the Chief Executive in a manner similar to how the judges of the courts at all levels in Hong Kong are appointed. However, these changes would entail amending the Basic Law, which could only be done by Beijing—and because such revisions would undermine Beijing’s oversight in an important aspect of Hong Kong’s affairs, such revisions probably do not stand any chance.
  • Because institutional changes might not be feasible, it is important that adequate checks and balances over the ICAC be invoked where necessary to ensure the agency’s independence under the current regime. Of the mechanisms available, the city’s Legislative Council, the ICAC advisory committees, and the Independent ICAC Complaints Committee might all play a role in reviewing the agency’s independence. For example, the Legislative Council has the power to require the ICAC Commissioner to answer questions regarding Rebecca Li’s dismissal. The advisory committees and the Complaints Committee could also launch independent investigations into the decision to remove her. Lawmakers and politicians should set aside their differences and use the available tools to safeguard ICAC’s independence.
  • Last but not least, the ICAC needs to strengthen its education prong. Rigorous education and publicity are essential in cultivating a corrupt-free environment. The antigraft body should not shy away from discussing the corruption risks brought on by the integration between China and Hong Kong. Instead, it should address the issues head-on: refer to Timothy Tong’s case and talk about the wine-and-dine culture in doing business in China and how to avoid improper and extravagant spending when interacting with officials; borrow from Sam Pa and Patrick Ho’s incidents and explain the do’s and don’ts when acting as a middleman for Chinese businesses. The ICAC should also take advantage of the anticorruption campaign that is sweeping across mainland China and cooperate with its mainland counterparts to achieve the common goal of fostering a culture of ethics and integrity.

As the answer to the city’s corruption crisis more than four decades ago, the ICAC has once again become the key factor in shaping Hong Kong’s identity and future. “If the ICAC is finished, Hong Kong is also finished.” Let’s hope that the end is not near.

One thought on “What Happened to Hong Kong?

  1. Pingback: What Happened to Hong Kong? | Matthews' Blog

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