Hong Kong Anti-Graft Watchdog Under Threat

The march of Beijing into the core institutions that make Hong Kong a separate place continues. Last week saw the sudden dismissal of the head of investigations at the renowned Independent Commission Against Corruption (ICAC). This is arguably the ICAC’s single most important position, being held by a long serving investigator while the top job, that of commissioner, is rotated through the ranks of the upper bureaucracy.

Dismissed without a word of official explanation was veteran investigator 53-year-old Rebecca Li Bo-lan who had been in the position for only one year. The action can only have been the work of the Chief Executive, CY Leung, who makes this appointment, or the Operations Review Committee, which oversees its activities.

The ICAC is a storied institution, established in 1974 by then Colonial Governor Sir Murray MacLehose to clean up the territory’s deeply corrupt civil service. It has since become a model, with varying degrees of success, for anticorruption agencies throughout Asia. That includes Indonesia, where the Corruption Eradication Commission has played a major role in attempting to clean up government, and in Malaysia, where the Malaysian Anti-Corruption Commission, which hasn’t been particularly effective, was defanged in 2015 when it attempted to investigate Prime Minister Najib Razak’s financial affairs.

In Hong Kong, the ICAC has been increasingly politicized although the latest episode is particularly disturbing. The Democratic Party legislator Albert Ho Chun-yan, a lawyer with a reputation for being precise and cautious, claimed that the dismissal of Rebecca Li relates to the ICAC’s attempt to get information from the chief executive about whether he disclosed a payment of HK$50 million from an Australian company, UGL. The payment was made while he was Convenor of the government’s Executive Council, prior to becoming Chief Executive in 2012.

The payment was a curious transaction, on which Leung paid no tax, from UGL supposedly to compensate him for loss of earnings from the Asian arm of the group when the property agency DTZ Holdings, of which he was a shareholder, was acquired by UGL. At the time, the company, London-listed DTZ Holdings, was deeply in debt having expanded too rapidly. However, there were also suggestions at the time that it could have been sold at a higher price for the benefit of creditors, but for the payoff to Leung.

Although the issue is now four years old, the ICAC has a reputation for being slow but thorough. It brought a prosecution against former Chief Executive Donald Tsang, and the former number two in the administration, Raphael Hui. Tsang has been charged with two counts of misconduct in public office in relation to receipt of favors, and is now on bail. Hui was given a seven-year sentence for corruption in 2014. It began investigating Leung back in 2012 but the matter was apparently still not closed.

Thus Leung could well have had a motive for dismissing graft-buster Li, to bring further investigation of the UGL affair to a halt. She has been replaced by an officer who had previously been sidelined to the ICAC’s Community Relations Department, normally a sign of not being bright and tough enough to head investigations.

The other person involved in Li’s sacking would have been the chair of the Operations Review Committee, Maria Tam Wai-chu. Tam used to cultivate the colonial rulers, being appointed a Legislative councillor back in 1981. She then did an about turn before 1997 to act as mouthpiece for Beijing and later became a member of the National People’s Congress (NPC) and serves on multiple Beijing-friendly bodies.

Tam is notorious not merely for doing the bidding of whoever is in power, but of abusing her position. In colonial times she chaired the government’s transport advisory committee but never reported a conflict of interest – a large investment in taxi licences, itself an oligopoly. (No new licences have been issued since 1994 thus delivering windfall gains to the likes of Tam).

Given her record, her appointment to this important committee raised eyebrows when announced in 2014. It was seen as likely to undermine the ICAC’s independence from both the local government and from Beijing. The Li dismissal appears to confirm that fear.