Why Didn’t the HK Vetting System Find Raphael Hui?

The Hong Kong High Court delivered a landmark ruling Tuesday that brought an end to a chapter of one of the highest-level corruption trials in the city's history with the conviction of former Chief Secretary Raphael Hui for bribery, along with the two executives who bribed him. But one serious question lingers.

Hui was handpicked by then Hong Kong chief executive Donald Tsang to return to the civil service as chief secretary. Why didn’t the background checks turn up what was obviously a grotesquely opulent lifestyle?

The 131-day high-profile trial involving Hui, effectively the number two in the Hong Kong government hierarchy, and two tycoons of Sun Hung Kai, the world’s second-most valuable real estate company according to Bloomberg, drew effective closure with Hui receiving seven and a half years behind bars for five charges including taking HK$8.5 million (US$1.1 million) in bribes from Sun Hung Kai co-chairman Thomas Kwok, who was given a five-year sentence and fined HK$500,000 for conspiring to corrupt the former chief secretary.

But who would have dared to oppose Hui’s appointment during the vetting process if Tsang wanted him? Apparently nobody. And shouldn’t Tsang be held responsible for overlooking Hui’s (known) vices? Shouldn’t the system have counted on the chief executive as the last line of defense to be absolutely clean?

If pre-employment background checks found a lavish opulent lifestyle and a high-spending propensity that were well known among Hui’s peers, who cast aside the potential red flag as merely a private and personal matter? Wasn’t it a colossal mistake that nobody asked the very simple question, If he was spending well beyond his means, where was he getting the money? Who then should be responsible for the gross oversight?

Details of Hui’s high life, including the showering of expensive gifts on his high-maintenance young mistress, came to light during the trial but it also emerged that his tilt towards the material world was no secret among his associates.

In light of Hui’s case, the government has defended its system of background checks, insisting there were adequate checks in place prior to slotting civil servants into their appointments. That defense highlights one gross, systematic problem, such as pre-employment background checks, in both the civil and commercial sectors alike: a check-the-box mentality instead of a serious investigation.

Pre-employment background checks are an exercise to ensure someone is properly, thoroughly and systematically vetted before an official undertaking, such as employment or appointment, to the extent that the person doesn’t become a potential liability and cause embarrassment sometime down the way.

These checks have both quantitative and qualitative elements. On the quantitative side, the checks include paper trials to confirm (thus the tag “check-the-box”) personal details, educational background, career history and highlight any potential conflicts and red flags found – for example, any record of bankruptcy, insolvency, sanctions, political affiliations, criminal history, etc.

In the civil service, all those checks extend to the subject’s next-of-kin. In commercial background checks (for example, banks in some jurisdictions are required to conduct these checks on all new hires), any personal stake and interest in other companies would also be material information.

The qualitative checks refer to efforts to find, as the wording suggests, any non-quantitative (i.e. non-documented) facts that could potentially cause trouble. In some commercial checks I have done for my clients, for example, someone found to have a high gambling propensity, or another with a history of sexual harassment in the workplace, were duly noted and accounted for in the process. In the political sphere, for example, anyone found to have employed undocumented immigrants would be promptly flagged in the United States and has been, ending the careers of several high-level appointees.

The check-the-box exercise underscores the very bureaucracy of the civil service as these background checks are designed to be “on the safe side,” documenting only those facts that are “traceable and reliable,” according to a source, a former senior Hong Kong government official familiar with the background checks and vetting processes within the civil service.

Beyond these quantifiable facts, the source told me any adverse comments – such as reports of one’s character, much like Hui’s high life – would rarely be passed on in the reports because they would be easily challenged. In several instances, troubles emerged later precisely because these omitted qualitative red flags came back to haunt both the employers and the newly employed.

The point then is, so what if Hui is known to have those vices? The government can boast all they want about their rigorous system of checks, including having two referees to evaluate the candidate but what use is it when the referees were appointed by the candidates themselves?

In Hui’s case, he was handpicked by Tsang to return to the civil service as chief secretary. But it has been widely reported that Tsang himself could face criminal prosecution on charges of improper conduct in office although the city’s anti-graft body – the Independent Commission Against Corruption (ICAC) – only says its investigation is still underway.

So, was it not a colossal mistake by the civil service to assume poor Hui and companies wouldn’t be singing Christmas carols behind bars, this and several more Christmas ahead?

Vanson Soo is a Hong Kong-based consultant specializing in risk migitation. His Shhh-cretly blog appears on the bottom right corner of Asia Sentinel s homepage.