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Hong Kong Chief Executive Leung Chun-ying (R) with Chief Secretary Carrie Lam and Secretary for Education Eddie Ng earlier this week, after backing down from proposals to introduce compulsory Chinese national education in schools. Leung is also snared in a housing scandal that shining a new light on the island’s elite. / REUTERS / Bobby Yip

Hong Kong–Shortly before his appointment as Hong Kong’s development minister, Paul Chan Mo-po joked about his long-term ambitions, telling media “one day is already a long time in politics.” In hindsight, he had no idea just how right he was.

Chan may have been answering rumors that he would quickly abandon the development portfolio to serve as Hong Kong’s deputy finance minister, but a mere day after entering the development post in late July, the trained accountant found himself under investigation by his own department.

His case was only the latest chip in the Hong Kong elite’s once-pristine image, which has been hard hit at a crucial time for the former British colony. As the island struggles to define its relationship with mainland China, it is also gearing up to directly elect its chief executive for the first time in 2017 and its legislature in 2020.

Chan and his wife Frieda Hui Po-min are suspected of owning and operating illegally subdivided rental apartments, a practice known to expose low-income residents to various health and safety violations.

The newly-elected chief executive C.Y. Leung, who came to power on July 1, had made cracking down on the practice a key election pledge. He tasked the development ministry with prosecuting offenders, putting Chan at the helm. But it is the timing of the affair, rather than Chan’s seeming implication in the very practices he was named to police, that is making the incident so explosive for the new leadership.

“This is a continuation of the series of scandals and conflicts of interest, as well as the controversy over illegal structures, that first began about a year ago,” Dr. Ngok Ma, an associate professor at the Chinese University of Hong Kong told 100Reporters. “A lot of Hong Kong people are growing wary and have now been alerted that senior officers have been engaging in these kinds of activities.”

Chan’s investigation comes just weeks after his predecessor, Mak Chai-kwong, was forced to resign 12 days into his term, after being detained by the Independent Commission Against Corruption (ICAC). He and his wife have since been charged for violating government rental subsidies in the 1980s in collusion with another official and his wife. If guilty, the two couples face up to two years in prison.

Nor does the trail end there. For months, revelations of the close relationship between the city’s politicians and property barons has dominated headlines.

A day after Mak’s detention, two of Hong Kong’s leading property tycoons, brothers Thomas and Raymond Kwok, the co-chairmen of Sun Hung Kai Properties, were officially charged for conspiring to provide Hong Kong’s then second most senior government official, Rafael Hui, with payments and loans totaling some $4.5 million. Two other businessmen with property links are facing 8 charges in the case, expected to commence this month. The Kwoks deny wrongdoing. Hui, the former chief secretary, has declined to comment.

The scandal didn’t dent profits for long. The Kwoks’ company made near-record profits in September, with the brothers openly advertising that they’re back in business.

What is troubling many is that the Kwok controversy and the charges against Chan appear to be “just the tip of the iceberg,” said Ma.

Hong Kong harbors one of the biggest rich/poor divides in the developed world and has seen the gap swell since its 1997 handover to China. Despite Hong Kong’s record as a business haven that places industry needs above social justice, the 7-million strong territory has nonetheless harbored a reputation for clean government.

On average between 2002 and 2011, the corruption watchdog Transparency International has ranked the city 12th globally, just behind Luxemburg, in its Perception of Corruption Index. In contrast, China ranked 75th over the same period.

But Hong Kong’s growing closeness with Beijing–typified in his failed bid to impose a mainland Chinese curriculum in Hong Kong schools this week- has made many citizens nervous, and Leung’s ascendancy has not alleviated concerns.

Seen as unashamedly pro-Beijing, Leung has little support from within Hong Kong’s traditional business circles, and has already proven to be a controversial leader. The day he took office, up to 400,000 people protested, insisting he would muzzle press freedom and civil liberties and turn the territory into “just another Chinese city.”

Elected on March 25 by 689 of 1,200 delegates – selected to represent the city’s various industries, such as tourism or shipping — Leung was the outsider in the race until the last moment, when the campaign of his chief rival collapsed, prompting Beijing to throw its weight behind Leung.

In the dirtiest election Hong Kong has seen since the handover, the pro-business, pro-Beijing front runner, Henry Tang, came under attack, initially for his extra-marital affairs but crucially for building, and then hiding, a colossal luxury basement from inspectors.

At the same time, with just four months left on his term, the outgoing chief executive, Donald Tsang, became the first Hong Kong leader to be investigated by the ICAC. He has since publicly apologized for accepting yacht trips and luxury gifts from developers and for shaking “the public’s belief in Hong Kong’s system.” He has also expressed regrets that property prices doubled on his watch–something his critics say demonstrates the collusion between politics and property.

“This kind of mud slinging is relatively new to Hong Kong and the kind of mud slinging we saw in March and April was truly nasty,” said Alex Lo, a columnist with the South China Morning Post, Hong Kong’s leading English-language daily. He described the current discontent as “more than general outrage at double standards,” adding, “People and the press are seizing on anything they can” to undermine the new chief executive.

Leung has tried to distance himself from this, but even without the development debacles, his leadership has gotten off to a rough start. Five cabinet members have been linked to illegal building works at their homes, while Leung has had to defend the existence of six illegal additions to his home. All public figures had recently pledged to have their properties inspected and to remedy irregularities.

In mid-September, former Democratic Party chairman Albert Ho almost succeeded in getting Leung’s election overturned on the basis that he had knowingly lied the public, although Ho’s case was thrown out October 5.

Part of the outcry over relatively minor irregularities — Leung’s basement is about a tenth the size of Tang’s – can be attributed to what Lo describes as “nit picking” used to demonstrate a new institution-wide diligence and reassure the public that standards have been restored. But, with no one currently seizing the reigns of the crisis, it is uncertain whether Hong Kong’s reputation can emerge unscathed.

Leung’s approval ratings have continued to slip, last month falling to 48.8 per cent while his administration received 46.4 per cent. Residents of Hong Kong do not dish out disapproval lightly; in the final days of his disgraced leadership Tsang received 41.8 in the same Chinese University survey.

“It is very difficult for us to know the extent of the problem, know how many people are taking bribes etc.,” said Ma. “After these scandals and with [a greater degree of] democracy, politicians will have to be much more careful, but it is not easy to say if the situation will improve.”



Diana Jean Schemo
Diana Jean Schemo is co-founding executive editor of 100Reporters and an award-winning former foreign, national and cultural correspondent for The New York Times and the Baltimore Sun.



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