Fall from grace

When Her Majesty dished out her final round of Birthday Honours before the handover of Hong Kong in June 1997, Donald Tsang topped the local list. Then financial secretary, and the first ethnic Chinese to run the colony’s economy, he was knighted by Prince Charles on the eve of Hong Kong’s return to China.

Sir Donald Tsang opted not to use his title, however, as he judged it might hinder his fortunes under Chinese rule. Five years later he was awarded the Grand Bauhinia Medal, the closest thing to a British knighthood in post-colonial Hong Kong. Few others in the territory have been similarly dual-decorated, reflecting trust and esteem from both Beijing and London. And in the case of the Chinese, this helped Tsang greatly when he became Hong Kong’s chief executive in 2005.

The post – which equates to serving as mayor of a very large city – comes with one fundamental requirement: to maintain Hong Kong’s prosperity under the “one country, two systems” constitutional set-up. In layman’s terms that means keeping everyone happy – by combining an ongoing integration with China alongside the protection of Hong Kong’s existing political and legal system. Unfortunately this has proven to be a thankless task and both Tsang’s predecessor (Tung Chee-hwa) and his successor (Leung Chun-yin) saw their popularity plunge in office (Leung’s single term in charge ends in July).

The problem? Hong Kong’s economic dependence on its mainland parent is growing by the year, but many Hongkongers are increasingly unhappy about the closer ties.

Running the city often looks like an exercise in squaring circles, but until quite recently no one would have questioned the integrity of the men in charge.

That changed definitively this week when Tsang was jailed for 20 months after being found guilty of misconduct during a corruption probe. The 72 year-old will go down in history as the highest-ranking official from Hong Kong to be imprisoned. Sadly, say some, the verdict reveals the city might be becoming a bit more like its mainland peers in less savoury ways (jailing errant officials is a frequent event across the border).

The miserable end to Tsang’s career also casts a long shadow over the election to pick Hong Kong’s fourth chief executive next month.

A failure of leadership?

Tsang was born in 1944 to a junior officer of the Royal Hong Kong Police. Having failed to get into the University of Hong Kong, he worked briefly for American drug firm Pfizer before joining the colonial civil service in 1967. That’s why the devoted Catholic once described himself as a “lonely salesman” who worked his way up to become Hong Kong’s political boss (Tsang’s younger brother became the head of the police force in 2001).

Having spent 45 years in public service, Tsang was the longest-serving senior official in the Hong Kong government. He also ran Hong Kong’s economy for nearly a decade and in 1998 he won plaudits for his role in defending Hong Kong’s currency peg to the US dollar. Under Tsang, Rafael Hui (his top aide) and Joseph Yam (head of Hong Kong’s quasi-central bank), the government splashed more than $15 billion to prop up stock prices and fend off currency speculators.

What has Tsang done wrong?

During an interview with China’s state broadcaster CCTV on becoming chief executive in 2005, Tsang was asked how he would like the public to remember him when he retired (he would do so seven years later). “I want them to remember me as an incorruptible official,” he answered. “I want them to remember me as a good Hong Kong chai (which means ‘boy’ in Cantonese) who has dreamed a very good Hong Kong dream.”

Now he seems more likely to be remembered alongside Taiwan’s former president Chen Shui-bian as a disgraced leader (Chen got a 20-year sentence for corruption). In fact, Tsang’s legacy was already tainted by scandal before his trial. His close friend and ally Rafael Hui – who Tsang appointed chief secretary in 2005 – was arrested by graft-busters in 2012 just a week after Tsang’s successor was elected.

Hui’s crime was also misconduct, in his case involving a leading property developer. He is currently behind bars after getting a seven-year sentence in late 2014. The pair might now reunite in the same prison in the Stanley area of Hong Kong.

Things began to go wrong for Tsang in February 2012, as the race to pick his successor commenced. (At the time Beijing was undergoing a leadership transition too and its game-changing moment also happened that same February, as Chongqing boss Bo Xilai’s top aide Wang Lijun made a shocking dash to the US consulate in Chengdu. Bo, who was thought to be vying with Xi Jinping for China’s top job, was later arrested, see WiC138.)

The 2012 election campaign in Hong Kong was mired in lower-grade scandal, most notably a row over an illegally-built basement in the luxury home of Henry Tang, the candidate widely thought to be Beijing’s choice for the top post. No one knows the identities of the whistleblowers but the floor plan of Tang’s 2,200-square-feet cellar found its way into local newspapers. Hong Kong media then moved quickly to another property-related scandal, and this time the dirt was thrown at Tsang, still chief executive at the time, and his plan to retire to a luxury penthouse apartment in Shenzhen (see WiC140).

The problem? Between 2010 and 2012, Tsang was in talks with Bill Wong, negotiating a rental contract for the afore-mentioned Shenzhen penthouse. (It was built by Wong’s property firm.)

Also at that time, the Hong Kong government was in the process of vetting applications for three digital radio broadcasting licences, one of which was eventually awarded to Wave Media, partly-owned by Wong.

After a six-week trial that concluded this month, Tsang was found guilty of misconduct in public office for failing to disclose a conflict of interest when he and his cabinet approved Wave Media’s licence application.

The nine-person jury couldn’t reach a majority ruling on a more serious charge against Tsang of accepting an advantage while he was chief executive. But since the jury was hung, he will have to face a retrial later this year and the possibility of a lengthier sentence if he is found guilty of that crime.

How did the media react?

Tsang’s trial put the retired politician firmly back in the international spotlight. Foreign media outlets, understandably, have reported that Hong Kong’s civil service took pride in its largely graft-free image prior to 1997 and that the corruption scandals more recently have tarnished the reputation of the territory’s officialdom.

“Many worry that the city’s tradition of transparent rule of law may be giving way to how business and politics are conducted in mainland China,” the New York Times opined.

The Financial Times notes that all three of Hong Kong’s leaders since 1997 have seen their careers end badly.

Tung Chee-hwa, the territory’s first chief executive, stepped down in 2005 (citing health concerns) after half a million people took to the streets to protest against his government (especially a planned new law against subversion that Beijing was pushing for).

CY Leung, the incumbent, announced unexpectedly last December that he would not seek a second term due to family reasons, although another factor is that anti-mainland sentiment has seen his approval ratings drop to record lows.

Interestingly, the Chinese media has kept pretty quiet on Tsang’s case. On Wednesday, Xinhua used just 267 Chinese characters to report the news (less than a third of its account about the exploits of China’s ladies’ curling team) and it didn’t even mention the 20-month sentence that Tsang received.

Although the Global Times wrote a slightly longer story summing up the reactions of Hong Kong newspaper to Tsang’s fate, it was cautious in tone as well.

One reason? WiC suspects that the mainland media wanted to avoid the awkwardness of discussing how Hong Kong had punished its former leader for behaviour that many of its own politicians wouldn’t even count as criminal.

On social media there was no such embarrassment, although many netizens sounded bemused by Tsang’s trial. “His crimes look like peanuts compared to what our officials have done,” one contributor claimed on the weibo of CBN, a local newspaper. “The advantage Tsang has taken certainly looks small but we shouldn’t just look at the evidence presented to the court. There must be something else behind the scenes,” another speculated.

The coverage in Hong Kong was even less restrained, including the city’s Oriental Daily which described Tsang’s imprisonment as “the most inglorious page in Hong Kong’s history”.

“Tsang should have been a legend and an inspiring story for all Hong Kong chai. A classic Hong Kong dream,” Ming Pao, another newspaper, wrote in an editorial. “His case has exposed once more it is vital for politicians to use their power properly.”

And perhaps the most damning verdict came from the man who sentenced Tsang on Wednesday. “Never in my judicial career have I seen a man fallen from so high,” presiding judge Andrew Chan said, as the former leader stood forlornly in the dock.

Checks and balances…

By bringing its most powerful official to justice, many would argue that Hong Kong has demonstrated that the rule of law is strong in the city. But Albert Cheng, a close friend of Tsang and a shareholder of Wave Media, has taken a different line. “This is very unfair to Tsang. This is in fact a political prosecution,” he told Apple Daily after Tsang was found guilty.

British businessman Simon Murrary concurred, writing to the South China Morning Post that the trial resonated with “triviality and revenge”, and said that in the Hong Kong system no one person takes sole responsibility for granting a licence. He added “This current government will be remembered for many faults but among the most serious will be the mindless persecution of Donald Tsang.”

Indeed, the evidence offered by Tsang’s prosecutors makes his misconduct look relatively minor compared with the myriad acts of more spectacular corruption in mainland China.

Take Xu Zongheng, who was appointed mayor of nearby Shenzhen in 2005, the same year that Tsang got the top job across the border in Hong Kong. Xu was convicted of taking Rmb33 million in bribes in 2011 and he was sentenced to death with a two-year reprieve (mainland media did more digging and reported Xu had helped himself to more than Rmb2 billion over the years).

Tsang’s ultimate undoing also stemmed from events in Shenzhen. But Hong Kong Economic Journal reckons that the difference between the two systems in Hong Kong and China was a minefield for Tsang from day one. The elephant in the room during his trial was the Hong Kong property market, which surged to stratospheric levels during his time at the helm, largely as a result of closer integration with a booming China whose increasingly enriched citizens rushed to the city to buy apartments. Tsang did nothing to hinder this process and his administration stopped sales of subsidised housing during his time in office too. This led to a view that Tsang favoured the interests of Hong Kong’s powerful property developers and made him increasingly unpopular. Indeed, it is legitimate to speculate whether this perception coloured the jurors’ thinking. (In early 2012 the media also ran scathing reports about Tsang taking free rides on a private jet and accepting hospitality on a luxury yacht, both of which went down badly with the public and further fuelled the view he was too close to the super-rich.)

Another court case that split Hong Kong…

Regular WiC readers will be familiar with the political rows that have been dividing Hong Kong in recent years. The conflict culminated in a 79-day pro-democracy demonstration in 2014 known as Occupy Central (which saw activists block several main roads in an act of civil disobedience, see WiC244); and subsequently the snubbing of Beijing’s proposals for electoral reforms in Hong Kong a year later (see WiC287).

Aside from Tsang’s trial, another court case has taken on political overtones too. It involves seven policemen who were jailed for beating an activist after he was arrested during the Occupy Central movement. They received two-year prison sentences on the same day Tsang was found guilty.

Supporters from the pro-democracy camp (who are more likely to be anti-mainland China) thought the sentence appropriate, but the verdict astonished the city’s pro-Beijing camp, who thought the sentence was far too harsh.

The Global Times agreed, jumping in with a simmering article that criticised the judge presiding at the policemens’ trial (David Dufton).

“The Occupy Central movement led to great losses for Hong Kong. Many participants committed illegal acts. However, the heaviest penalty was given to the seven police officers… For those who disrupted the order of Hong Kong and assaulted police officers, they were spared or received only short prison sentences. It seems that Dufton’s sentence is influenced by political factors and will have real political impact,” the newspaper complained. “Hong Kong’s legal system has long been one of the city’s most competitive sectors. However, as the system is influenced by the city’s colonial history, it lacks loyalty to the Chinese Constitution and the Basic Law.”

Who dares to be Hong Kong’s next boss?

The goal of “reuniting” Hong Kong is a recurring theme for the candidates trying to become the next Chief Executive. So who are the brave hearts trying to follow in the faltering footsteps of Tung, Tsang and Leung?

The election will take place on March 26. A former judge as well as a pro-democracy legislator (better known as “Long Hair”) have said they want to run but the duo will find it difficult to solicit the required 150 nominations from a 1,200-strong election committee.

For the time being Carrie Lam, the chief secretary in CY Leung’s government, seems to be the favourite as she has secured the support of a number of pro-Beijing groups. Lam’s campaigning commitments include the recently announced plan to build a tech park at Hong Kong’s border and a Summer Palace museum in West Kowloon. Political observers says the projects might help to bridge the Hong Kong-China divide (see WiC351).

Regina Ip, who was CH Tung’s security chief, is also in the running. According to Apple Daily, she is considered to be Beijing’s backup option to Lam.

John Tsang, former financial secretary and a close ally of Donald Tsang (they aren’t related) is the dark horse candidate. Tsang, who also served as the personal secretary of former Hong Kong governor Chris Patten, doesn’t seem to have Beijing’s blessing (the link to Patten probably doesn’t help: memorably the Chinese government once labelled Patten “a sinner for a thousand years”). Nevertheless, the anti-Beijing Apple Daily says Tsang is backed by a number of influential tycoons locally and could be the “least evil” option when it comes to defending Hong Kong’s autonomy.

Perhaps there’s still time for Lam to lose the race. Five years ago, Henry Tang was considered as a shoo-in for the top job until he stumbled into the scandal over his unauthorised basement. The election turned into a rancorous and gaffe-plagued campaign (see WiC144).

But front runner Lam has already secured pledges for almost two-thirds of the votes she needs to win. That means Hong Kong politics could experience another first in four weeks time. In February it got the first jailing of a former Chief Executive. And in March it could get its first female leader.

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