HK Tycoons Go Ivy with Harvard Gift
|Willard||Sep 12, 2014|
Hong Kong property tycoon Ronnie Chan Chi-chung and his brother Gerald have made international headlines with their record-breaking US$350 million donation to Harvard University’s School of Public Health.
The gift is from the Morningside Foundation, the philanthropic arm of the brothers’ corporate empire. As a result the school will be renamed the TH Chan School of Public Health after the father of Ronnie, a graduate of the University of Southern California; and Gerald Chan, who earned a master’s degree in medical radiological physics and a doctorate in radiation biology at the School of Public Health in the 1970s.
The gift is another illustration of the immense influence that Chinese money is having over US institutions – and indeed those of other countries such as the UK and Australia. Officially these never carry political conditions – though the Beijing-sponsored Confucius Institutes that have proliferated at US colleges certainly do, requiring adherence to a “One China,” policy that compromises Taiwan and Tibet and other territories acquired during the Qing dynasty.
In the case of the Chans, there are specific reasons why Americans might be concerned about their gifts. Ronnie, who heads the family property business, the Hang Lung group, has long been the family’s public face. He regularly expresses his views on all manner of political and economic issues to the Hong Kong media, as well as in his capacity as chairman of the Hong Kong branch of the Asia Society, a US institution that aims to develop cultural relations with Asian countries.
But almost forgotten in all this is how Ronnie got away scot-free from his role in the collapse of Enron, the energy trading giant that went bust in 2001 at huge cost to investors – the company had had a stock market value of US$60 billion.
Chan was not just a dozy non-executive director making easy money from fees and cheap stock options while basking in the limelight of being on the board of a major US company. He was a member of its audit committee and hence had responsibility for some of the false accounting that lay behind the collapse.
Some Enron executives were found guilty of criminal offenses and accounting giant Arthur Andersen collapsed as a result of its failure to audit Enron accurately.
Chan not only escaped without a scratch but the Asia Society allowed him continue in his high profile role as head of the Hong Kong branch. He is also now co-chair of the group’s Executive Committee at its New York headquarters. It would appear that the power of the Chan money trumps the fact that Chan is a pro-Beijing Chinese ethnic nationalist who has long made a habit of attacking fundamental American principles of liberty and democracy.
In Hong Kong he is a firm backer of the anti-democracy stance of Chief Executive C.Y. Leung, whose appointment in 2012 he supported against that of rival Henry Tang.
Chan successfully used his influence among the Hong Kong elite to procure from the government an historic site for the Asia Society in the very heart of Hong Kong, part of the former British military barracks, and a huge grant from the Hong Kong Jockey Club to develop it into a lecture and exhibition place.
This offer of a public asset to a private entity and its financing by a charity supposedly dedicated to social and educational welfare was viewed by many as typical of the insider string pulling at public expense at which Hong Kong’s property tycoons are masters.
Chinese money also appears to give a particularly Chinese emphasis to the activities of the Asia Society in the US compared to other Asian regions, particularly Southeast and South Asia.
The Chans of Hang Lung do not rank very high on the tycoon list. According to Forbes magazine, they are only the 17th richest in Hong Kong in a list consisting almost entirely of developers who have, with plenty of help from the government, been gouging the rest of the citizenry for decades.
The description of the Chans as “entrepreneurs” is also inaccurate. They owe their wealth entirely to their father, and to the developer-friendly policies of government officials. However, they again illustrate how much of Hong Kong’s wealth is concentrated in a very few hands, mostly developers with close ties to officials.
Ronnie’s Teflon status also allowed him to emerge unscathed from the SARS epidemic in Hong Kong when Amoy Gardens, a middle class housing development, became the epicenter of infection with 321 cases and several deaths. The high number of cases in this one location was attributed to poor maintenance of water pipes. Hang Lung was the developer of Amoy and managed the buildings.
Teflon also covers other Hong Kong tycoons who get on big name US company boards. Bank of East Asia’s David KP Li, one of Hong Kong’s most aristocratic business leaders, was a member of the Dow Jones board when he leaked the news of Rupert Murdoch’s 2007 bid for the company to a friend who traded on it. Li escaped criminal prosecution but paid a civil penalty of US$8.1 million.
The Hong Kong mega-rich brushed off this serious breach of integrity as a minor incident. They, like the Communist Party, assume there are different rules for the elite.