Muddy waters

PUBLISHED : Monday, 13 August, 2007, 12:00am
UPDATED : Monday, 13 August, 2007, 12:00am

Every democracy has its scandals and follies. In the US, commentators and bloggers had a field day over presidential candidate John Edwards' US$400 haircut, paid out of his campaign funds, and over Senator Hillary Rodham Clinton's rare display of cleavage on the Senate floor. As a society in transition, we have our fair share of ballyhoos about our politicians and quasi-politicians. During Chief Executive Donald Tsang Yam-kuen's electoral campaign he was criticised for using his official car. More recently, at the official ceremony to install the chief executive and principal officials, questions were asked about why Mr Tsang's son, Simon Tsang Hing-yin, was seated on the front row. Did the American public ever object to president Jimmy Carter's daughter, Amy, or president Bill Clinton's daughter, Chelsea, sitting at the front during the inauguration ceremony?

More seriously, legislators are ringing alarm bells over an alleged potential conflict of interest on the part of newly appointed Secretary for Financial Services and the Treasury Chan Ka-keung, arising from his wife's position as a senior member of staff at an American investment bank. Lawmakers are concerned that the minister who oversees the financial sector might inadvertently leak important, market-sensitive information to his wife.

Does this mean that principal officials not only need to divest themselves of pecuniary interests where there is a potential conflict, but also that their spouses need to quit their jobs to make the couple appear 'whiter than white'? Would Professor Chan, or any other candidate, have agreed to take up the post if this was the price that had to be paid?

Some lessons may be drawn from the world's most powerful democracy, the United States. Rules under the Hatch Act restrict federal government employees from engaging in most political activities in their official capacities. Under these, Mr Tsang's use of official transport during his campaign activities could be treated as a security arrangement exempt from reimbursement through his campaign funds. The US Senate recently gave its final approval to a new package of ethics and lobbying rules aimed at better policing the relationship between lawmakers and lobbyists, but there does not appear to be any legislation punishing or preventing conflicts of interest arising from a spouse's work or investments. The US Congress is replete with examples of potential conflicts of interest as a result of such work. For example, Senator Ted Stevens is currently under investigation for potential corruption involving oil companies. His wife is a lobbyist. Senator Stevens' spokesman stressed that he 'has a long-standing policy that staff members' spouses or his spouse is not to lobby him on any issue'.

More troubling is the fact that Senator Dianne Feinstein was leader of the Military Construction Appropriations Subcommittee when it awarded multibillion-dollar contracts to two major defence contractors owned by her husband. The only conflict of interest provision in federal legislation relating to a married couple is that their joint income must be declared, but disclosure is subject to privacy considerations. Thus, it is possible for the media, and other watchdog organisations, to pore over such information and blow the whistle on anything that seems suspicious.

Investigative journalist Peter Byrne's reports on the scandal surrounding Senator Feinstein and her husband set off a flurry of media activity. In its wake, Senator Feinstein resigned from the subcommittee, thus putting an end to the ethical dilemma.

This proves that the best weapons against conflicts of interest are not rigid rules requiring spouses to give up their careers in case of potential conflict, but openness, transparency and a vibrant civil society dedicated to upholding ethical standards. Disclosure of a spouse's investments and income helps the media and watchdog organisations identify anything untoward. As the Chinese saying goes: 'There are no fish when the water is [too] clear.' We don't want to scare away potential lawmakers or ministers because the rules are too harsh or rigid, but there is a good chance that, where ethical issues arise, patient, fact-based inquires and media scrutiny will save the day.

Regina Ip Lau Suk-yee is chairperson of the Savantas Policy Institute