HK Graftbusters Raid Influential China Critic

The raid Thursday morning on properties of media tycoon Jimmy Lai Chee-ying in Hong Kong by the Independent Commission Against Corruption represents a new and disturbing development in the growing standoff between democracy advocates and the Establishment in Beijing and its allies in the territory.

The ICAC, founded in 1974 at the behest of Sir Murray MacLehose, then the British colonial governor, was given the role of cleaning up deep corruption in the Hong Kong government, particularly its police force. It has remained assiduously independent of both politics and the Hong Kong Civil Service, with a reputation as one of the most incorruptible such agencies anywhere in Asia.

However, the search of four properties belonging to Lai or his US-born aide, Mark Simon, appears to be the first time the ICAC has been used in such a blatantly political fashion, critics say. Lai is the owner of the Next Media Group, which publishes the rambunctious Apple Daily, a regular and biting opponent of both Beijing and the government of Chief Executive Leung Chun-ying in Hong Kong. The alacrity with which the ICAC has gone after Lai contrasts vividly with lackadaisical probes of former Chief Executive Donald Tsang Yam-kun and others, the critics say.

The raid also comes at a time when Beijing is tightening the screws on Hong Kong over the method of selecting the city’s chief executive in 2017. (See related story).

“The raid is unprecedented,” said a longtime political observer who asked to remain nameless. “It was obviously political, not just in the target but in the timing.”

The ICAC habitually refuses to answer questions on all investigations. In a prepared release, it said only that four premises had been searched during the day after the agency obtained warrants from the Court of First Instance.

The New York-based Human Rights Watch called attention to the raid on Lai’s property and home, saying in a prepared statement that “the investigation was triggered by complaints from pro-Beijing politicians after information about these donations was stolen by hackers from Lai’s computer systems and leaked to the media.”

Although Lai’s company, Next Media, reported the hacking attack to the police, according to Human Rights Watch, the status of that investigation is unclear. But it leads to the question of whether Hong Kong’s authorities are a lot more interested in leaning on Lai than in finding out who rifled his computer and those of his aide.

In addition to Lai’s home and Simon’s flat, the agency also searched the home and office of Lee Cheuk-yan, a lawmaker who received Lai’s donations. Up to now, the harassment of Lai and his newspaper and associates has largely been unofficial. He has been threatened and the paper has been hit by massive directed denial of service attacks while banks and other top businesses have been intimidated into withdrawing advertising from Apple Daily, the most popular media organization among the city’s 16 newspapers.

The involvement of the ICAC is particularly worrisome. The agency has been credited for transforming what was once one of Asia’s most corrupt police forces, arresting dozens of police officials and granting amnesty to far more to get rid of them. At one point in its early history, regular police charged the ICAC office, throwing punches in an attempt to intimidate them. It is considered one of the major forces in transforming Hong Kong into an international city where fair and largely incorruptible government officials and the judiciary allow for the sanctity of contracts and the rule of law, and bribery is at a comparatively low level.

Since 1997 and the handover of the former British colony to Beijing, the ICAC commissioner has been appointed by the State Council of the People’s Republic of China, based on the Hong Kong chief executive’ recommendation. In 2013, former ICAC commissioner Timothy Tong was accused of becoming far too close to mainland officials after it was discovered that he had spent more than HK$720,000 on gifts to them.

Thus the visits by ICAC officials to search Lai’s home have the tincture of political influence about them. The raids were based on a complaint by a pro-Beijing group called “Voice of Loving Hong Kong” against five lawmakers whom they say received donations from Lai that they did not report.

Legislative Council rules require benefits exceeding 5 percent of annual pay or one-off handouts over HK$10,000 to be officially disclosed. The “Committee on Members Interests” headed by another pro-Beijing legislator pledged a hearing to determine if an investigation was warranted.

The Apple Daily owner is known to have provided funds for the Democratic Party and Civic Party that would have been used to promote their candidates. But they are considered to have been entirely legal. Disclosure of the source of funds to political parties is not required in Hong Kong – the pro-Beijing parties receive huge donations from local businesses and from the local arms of Chinese state enterprises.

According to the New York Times, a person who identified himself as a shareholder of Next Media, sent the trove of leaked documents to Hong Kong newspapers last month, including images of banking receipts. They indicated that Simon had directed more than US$1.3 million to several pro-democracy groups and individuals.

In earlier conversations with Asia Sentinel, Simon indicated that the contributions were legal and it would be no problem to prove it. However, he was unreachable on Friday, as was Lai. Simon told the New York Times his home was searched on Thursday morning while he was in Taiwan. Officers spent hours searching his apartment and going through files on his computers, he said, but they didn’t take away any item or data aside from his daughter’s old computer, which couldn’t be started. He declined to comment further.

In June, The New York Times reported that HSBC and Standard Chartered had ended longtime advertising relationships with Apple Daily late last year at the request of the Chinese government, raising worries that Beijing was increasingly using its influence to stifle opposing voices in Hong Kong.

John Berthelsen is the editor of Asia Sentinel