Political Corruption and Anti-Corruption Laws: Hong Kong

Introduction

No one is immune from the power of corruption. Of course there are orders of magnitude, and people can be corrupted in small ways that do not seem to matter — but many times the people who are corrupted are the very ones supposed to be maintaining the public trust. The very people citizens hope are the most incorruptible are, unfortunately, often the most susceptible. Lord Acton famously observed that "Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority: still more when you super-add the tendency or the certainty of corruption by authority."¹ Because these people have power, they tend to believe that they are somehow above the laws they set for others. Society sometimes seems to be made for the politicians and large business owners who control most of the money — or, at the very least, access to it — but that is not the case.

In the modern world, nations have begun to take steps to curb the power of the individual and the ability of the state to abuse the power that the people grant to it. However, there are always methods for defeating any law that one disagrees with. The law, in a republic, is designed to protect the people both from themselves and from one another. In fact, the primary duty of government is the protection of the people. A standing army provides some of this protection because the individual, in his or her freedom, does not have the personal means to defend against invasion by a foreign power, for example. Thus, the government is tasked with providing the individual the protections that they cannot manifest on their own. This is a central premise of republican government dating all the way back to Socrates. American president Ronald Reagan is quoted as saying that "Government's first duty is to protect the people, not run their lives."² The problem is that while the government holds this mandate, it is too often inadequately carried out because the bulk of corruption practices are somehow tied to political officials.

The problem, then, is not with any individual government or the concept of government itself, but with people. Just as children sometimes need guidance, people sometimes have to be told what they can and cannot do. Laws are put in place because some individuals cannot govern themselves and need further direction to do what is right. This paper is concerned with how corruption happens, why it happens, and how it is being managed by different governments. The main focus is on the government of Hong Kong and the corruption that has appeared endemic within that body. Although measures are in place to deal with this corruption, they have had little consequence in some instances. The goal is to determine whether the measures taken by other governments have been more effective, and to see what can be learned from them.³

To open this topic, many questions must be answered. The first obstacle is arriving at a clear definition of what corruption is. The Oxford English Dictionary defines corrupt — of which corruption is a derivative — as: "having or showing a willingness to act dishonestly in return for money or personal gain … evil or morally depraved … made unreliable by errors or alterations … in a state of decay; rotten or putrid … cause to act dishonestly in return for money or personal gain … change or debase by making errors or unintentional alterations … infect; contaminate."⁴

What Is Corruption?

All of these meanings have some bearing on this discussion because they each consider the term from a different standpoint. However, the most apposite is the first. Corruption in a political sense is that which acts "dishonestly for … personal gain." There are, however, other definitions of corruption that better fit the present discussion.

The nature of politics is that politicians seek favor from each other to get a favored bill passed or to garner support for their region. This type of influence peddling is common and is not seen as corruption by many in the political sphere because it stays within the walls of the legislature. An exact definition of what constitutes corruption has been written into code by the United Nations Office on Drugs and Crime, which regards corruption as "the misuse of public power, office or authority for private benefit — through bribery, extortion, influence peddling, nepotism, fraud, speed money or embezzlement."⁵ Thus, if a politician is using influence to genuinely assist the people of his or her district, that does not constitute corruption. These actions become corrupt only when some personal gain is involved. Therein lies the problem, however.

In almost any endeavor involving any of the above, there is some personal gain to be had. A legislator or executive may claim to be seeking something for their constituency, but they are likely to gain something for themselves as well — such as another term in office. Using political office in any way that can be construed as personal gain is wrong. Of course, this can also be taken too far. If a politician honestly believes they are working for the people they represent rather than for themselves, and that can be demonstrated, then they are above reproach. Unfortunately, this type of altruistic behavior seems to be far from the norm. The people discussed in the pages that follow have engaged in corrupt practices because they sought, on some level, something they did not have.

The former Chief Executive of Hong Kong, Donald Tsang Yam-kuen, was not involved in the most recent elections that unseated him, but he was a central figure in what those elections were about. It was found that Tsang "himself had accepted favors from Hong Kong tycoons — from a special seat on their private yachts and jets to a discount price on a lavish penthouse apartment across the border in the mainland city of Shenzhen."⁶ He had been a trusted official prominent in Hong Kong politics for many years, serving as Chief Executive from 2005 until his departure from office. The people of the territory believed he was working in their best interests, although there had been rumors of problems during his tenure. Unfortunately, Tsang fell under the spell of the power he wielded, much as many men and women before him. He was influenced by the lure of money to give special advantage to certain businessmen. The businessmen were cited in a BBC report: "Mr. Hui, the Kwok brothers and two other businessmen face eight charges including conspiracy to offer advantages to a public servant and misconduct in public office."⁷ Primarily, the businessmen were seeking advance information regarding properties in Hong Kong available for speculation, seeking to increase their already vast fortunes by learning what was happening before the general public. The corruption on the part of Mr. Tsang and other government officials was to trade that information for perks from wealthy businessmen.

Another scandal involved the hand-picked successor of Mr. Tsang, Henry Tang Ying-yen, who was also influenced by wealthy individuals who wanted his assistance in deals they were considering. Tang was "favored by the business community" and he "confessed to marital infidelity during the campaign and admitted to building a massive illegal structure, dubbed an 'underground palace,' beneath one of his homes."⁸ The transfer of power from Tsang to Tang never occurred because the people voted for an alternative candidate who ran a campaign based on ensuring incorrupt government.

It may seem from the above definitions and examples that corruption is inherent in certain people, but it appears to be something that grows in those who become corrupted rather than an innate character flaw. One of the dictionary definitions discusses corruption as a type of decay — used more often in a medical sense, but lending itself to this discussion, because people who become corrupted were not always that way. They became corrupted because of the atmosphere in which they lived. This means that the political atmosphere in which Tsang and Tang found themselves enabled the corrupting influence, rather than there being some corrupting trait they inherited. This is important because corruption often appears to be a natural character flaw. The truth is that many people who might otherwise have been honest throughout their entire lives somehow find themselves in situations that foster corrupt behavior.

The primary point of this paper is that corruption exists in government and that it happens in every corner of the globe. In Hong Kong, as already illustrated, there are forces that work to corrupt political allies for financial gain. Hong Kong is by no means alone in this particular brand of corruption. The fact that corrupt dealings with political entities have occurred in many other countries is the subject of this section.

A History of Corruption

The United States has long been a nation envied by the rest of the world for its economy, but its government has also been the victim of a long list of economic malfeasance. It came as little surprise to many that the nation would experience a national economic downturn — which quickly became a global issue — because of the governance of its financial system. Wall Street, as the financial district in New York is known, is home to large brokerage houses and major stock exchanges. The financial sector speculated heavily on mortgages, which in part led to a partial collapse of the economy. Part of the problem was that financial institutions and the United States government operated in a corrupt fashion together, believing that the housing boom they had been experiencing would never end. Unfortunately, it did end, and that exposed the government to a great deal of scrutiny from the rest of the world.

The problem is that the government did not work hard enough to correct the problems at the root of the financial crisis. This has been addressed by an international financial policing body, the FATF, of which the United States is a prominent member. Recently, the FATF issued directives that would oblige financial institutions to identify customers who are domestic political figures and to treat those that pose "higher risks" of corruption in the same manner as their foreign counterparts. In such cases, the FATF recommends getting senior management approval for the accounts, determining the source of the account-holder's funds, and monitoring their accounts closely.⁹

This effort is aimed at eliminating some of the corruption in the political realm by policing not only the politicians who could be involved in shady dealings, but also by examining the financial transactions of family members to see if they are suspect. The issue here is that a family member could influence the politician to conduct business with someone who would draw them into corrupt practices.¹⁰

Canada seems to be a country where very low levels of political corruption take place, given its relatively small population and comparatively limited international influence. However, when it comes to corruption that directly affects ordinary citizens, it is no different from many larger nations known for political malfeasance. In an article for The Whig, Duff Conacher wrote that "Beyond the recent contracting scandals in Ontario and Quebec, loopholes in laws across the country allow secret and unlimited donations of money, property and services to political candidates (as long as they don't use the donation for their campaign)."¹¹ Canada has three main political parties that have ruled at different times in the recent past — much like Great Britain. The system remains very British, as does that of Hong Kong, and Canadians have only recently started to deal with the corruption that seems to be inherent in the system. One of the major problems the country is currently confronting is the idea of political parties being influenced by wealthy donors who may wish to curry favor. This proves that politicians are watched both for what they are doing and for what they may do. The goal is to ensure there is not even the appearance of impropriety. Influence peddling through election contributions is one of the most widespread problems in this realm.

Another Western-style democracy, Australia, has a history that speaks directly to corruption. The country was first established by Great Britain as a penal colony, and government officials were generally sent there as punishment as well. One group of researchers found that "Australia … inherited the world's first electorally successful working-class mass party in a political culture where 'mateship' ideology probably facilitated various forms of favoritism."¹² The theory in Australian politics is that because of the prevailing camaraderie in the culture, politics were designed to follow the same pattern. People in the culture, especially men, were geared from childhood to form close relationships. These friendships continued into adulthood, and whatever business or political ventures the "mates" aspired to, they called upon each other for help. This established a form of cronyism — such as was first fostered in the United States by President Andrew Jackson — within which mates dispensed and accepted favors for help in campaigns and administration.

The small city-state of Singapore is closer in context to Hong Kong than any of the countries already mentioned, because although Hong Kong had its beginnings in the British system, the Asian culture is far more prominent than the Western one. Singapore has the same sort of dichotomy in its politics. Singapore has been identified by Political and Economic Risk Consultancy and Transparency International as the Asian country with the lowest amount of political corruption among the developed Asian nations. The reason Singapore has received this distinction is that during the colonial period, there was rampant corruption within the political body. Eventually, political parties that had allowed the corruption to continue were ousted by the people, and new leaders were installed with a mandate to eliminate the corruption inherent in the system. These reforms will be detailed in a later section.¹³

Another well-known instance of political corruption occurred in the Philippines. Ferdinand Marcos used the presidency of the Philippines as a money-making venture. One researcher stated that "Marcos, of course, took corruption to unprecedented heights through the systematic plundering of the Philippine economy. Members of the Marcos family and key associates accrued tremendous wealth from bribe-taking and kickbacks from crony monopolies. They also diverted government loans and contracts into their own pockets, made fortunes from profits on over-priced goods and construction projects, and directly skimmed from the public trough."¹⁴

Ferdinand Marcos, along with his family, plundered the treasury for personal gain while their people starved. The further issue here is that they did this with the knowledge of the United States and other Western powers, and were allowed to continue unchecked for many years. Sometimes the reason corruption is permitted to continue by relatively blameless parties is that those perpetrating the corruption are able to provide something that others need. In the case of the Philippines, Marcos was able to provide a stable Eastern government that Western powers could use as a base of operations. Eventually, the corruption became too egregious for these powers, and they helped to institute reforms in the country.

The primary issue of political corruption in South Korea is very similar to a political situation that was the mainstay of U.S. politics until the latter part of the twentieth century. In Korea, "those who sought political office must have offered sizable amounts of money to their party boss. The bosses were the three Kims in the 1960s to 1990s: Kim Dae-jung, Kim Young-sam and Kim Jong-pil, who long controlled their regional political grounds: Jeolla Province, Gyeongsang Province and Chungcheong Province respectively."¹⁵

Until the advent of primary elections in the 2000s, this was the system under which Korea operated. The U.S. had a more subversive party boss system in many parts of the country, but in Korea this was a widely known and accepted practice. The corruption happened both because it was the established custom and because it appeared to function for the country. The main issue was that this system did not put the people of the country first and therefore did not fulfill the basic premise of a democratic republic — the form of government that Korea was attempting to emulate. The party bosses and politicians worked together to ensure the system continued as it always had because it benefited them. Again, this is a case that fits the United Nations' definition precisely.

The final comparison country is Taiwan. According to Bruce Jacobs (writing for The Economist), corruption has always been a part of politics in Taiwan and it is only recently, with the switch to democratic government some twenty years ago, that this has begun to change. Recently, Chen Shui-Bian, a former president, was indicted on corruption charges including money laundering and nepotism, and was led through the streets of Taipei in handcuffs. Critics of these events noted that Mr. Chen may have been the victim of circumstance — because his rights were violated in the arrest and imprisonment, Chen may have a case for being a political pawn of the new ruling party. The government stated it was trying to develop a system that punishes corruption rather than tolerates it, and Chen's imprisonment and trial were seen as positive steps in this direction by the majority of the people in the country.^{16, 17}

From these few examples, it is easy to see that political corruption comes in many forms and involves many different groups of people. Nepotism occurs when the family of a political leader is given preference for jobs and other favors that would otherwise go to candidates from a broader pool of qualified applicants. Voter fraud has been occurring ever since votes were taken; reports of ballot stuffing and similar practices have been documented for centuries. Voting is a right that is sacred for every member of a democratic nation, particularly because so many people around the world lack that privilege. Fraudulent voting practices allow a single party to control an election against the will of the people. Accepting money, gifts, or influence in exchange for favors may be the most common form of corrupt practice. Many of the above examples involve people willing to ensure their own security at the expense of the nation. The following section discusses how nations control and punish such infractions, along with a final comparison of Hong Kong law to that of other democratic nations.

Conclusion

The most elemental piece of information that can be taken from this research is that governments are working toward transparency in their actions, but it is a process. The problem is that people are always devising new ways of cheating the system, so the response must follow the commission of a crime. Hong Kong, despite having one of the best groupings of anti-corruption laws in the world, has found that there is always a niche that was not previously explored. A corrupt official can always find some way to skirt the law.