Ministerial scandals prompt calls for reform of background checks

Questionable activities by ministers raises questions about the process by which background checks are carried out on candidates for high office

PUBLISHED : Monday, 20 August, 2012, 12:00am
UPDATED : Monday, 20 August, 2012, 5:32am

To lose the services of one ministerial colleague to scandal may be unfortunate. To lose the minister's replacement in similar circumstances seems like carelessness on the part of Chief Executive Leung Chun-ying's administration.

In response to the embarrassment, Leung has insisted the government's vetting of candidates for high office is sound, but the resignation of Mak Chai-kwong - who is now the subject of a criminal investigation - and the growing pressure on Mak's successor, Paul Chan Mo-po, to resign has thrown the system into doubt.

Since colonial times, the civil service's vetting system has consisted of three levels of checks - questions at the time of a candidate's recruitment, an initial round of checking conducted by civil servants and a round of extended checking conducted by officials including the police and the Independent Commission Against Corruption (ICAC). The latter checks take over a task performed in colonial times by the police force's Special Branch.

According to the Civil Service Bureau, the highest level - extended checking - is carried out only on candidates for the most senior civil service posts or those seeking appointment to a post that requires a high degree of trust and integrity, including roles beyond the directorate grades. It has been described as a "black box operation" which gives investigators "absolute freedom".

Candidates for political appointment also have to pass the third level of scrutiny, which involves filling in forms and police interviews, a process initiated by the chief secretary at the request of the chief executive.

The forms seek information about a candidate's personal particulars, education background, social activities, employment history and family members. Two referees are also needed for any record checks.

The police - and possibly the ICAC - will then follow up by verifying the details, including interviewing the appointee.

The system was considered comprehensive enough, but that was before it was reported that Mak - who had been in government for more than 30 years and undergone at least five extended integrity checks before being appointed as Leung's development minister - had abused his government housing allowance.

Mak may now face criminal charges, and is out on ICAC bail. He and his wife, along with assistant highways director Tsang King-man and his wife, are suspected of claiming housing allowances for flats they leased to each other in the 1980s.

Lawmaker Regina Ip Lau Suk-yee, herself a former civil service minister, said that under the current system, potential scandals could only be discovered if the candidates confessed to them.

"After completing the form, police would then verify the information and schedule meetings with the interviewee," said Ip, who is chairwoman of the New People's Party. "At the end of the interview the interviewer would ask the appointee: 'Do you have anything that would cause embarrassment to the government?' So it really depends on the interviewee to judge whether they have anything that could cause 'an embarrassment'."

She has proposed requiring officials to declare on oath that their records are complete, on pain of criminal prosecution if this turns out to be false. Mak was supposed to have filled in a form for directorate-grade civil servants - called GF200 - that covers even the spouses of the civil servants' siblings.

His alleged "misconduct" was nevertheless overlooked as the checks did not focus on possible corruption within the government, Ip said.

Background checks on civil servants who become ministers are "already much simpler", but it was "very difficult to scan an outsider recruited from the public sector", she said, referring to Chan, a veteran accountant who had owned his own firm.

Chan's integrity was called into question after he admitted the sales agreements for three blocks of flats bought by Harvest Charm Development when he and wife, Frieda Hui Po-ming, were directors, allowed sub-leasing. This contradicted their earlier claim that neither knew about the rental arrangements.

Various reports have also suggested that Chan, whose ministerial responsibilities include policing unauthorised alterations to buildings, had been active in the property market.

Chan was the lawmaker representing the accountancy functional constituency, and Nelson Lam Chi-yuen, the lawmaker destined to replace him in this sub-sector, pointed out: "It was known four years ago, when he was running for the Legco seat, that he was an experienced property investor."

Time is another factor that can lead to oversights, according to Ip, but that should not have created a problem in Chan's case. Although his appointment would have involved scrutinising a tremendous amount of information, given his involvement in the private sector and the property market, it could have been finished within a fortnight as he was appointed on July 30, 18 days after Mak stepped down.

However, he had also been widely tipped to become deputy financial secretary, a new post under Leung's government restructuring plan. This appointment now appears to have fallen victim to pro-democrats' filibustering in Legco, but this did give ample time for prior screening.

Ip would not say whether she thought Chan should resign, but said "there is a serious credibility problem".

Trade unionist Leung Chau-ting said the scandals had sent a strong signal to the government that the vetting system needed to be tightened.

"The system's effectiveness really depends on the judgment of the appointees. Mak Chai-kwong never thought he had committed anything wrong in the cross-leasing and purchases deal, since that was a common practice back then [in the 1980s]. But apparently this not what the public thought," said Leung, chairman of the Federation of Civil Service Unions.

"The police are already empowered to dig deeper, based on the information provided by the appointees, who are asked to sign an authorisation form giving police the authority to conduct further checks," said Leung. "For example, the police's commercial investigation bureau can scrutinise companies' records if the appointee has ever owned a company."

The scandal involving Mak and Chan is by no means the first involving incomplete declarations offered by holders of public office.

Late last year, doubts were raised about the vetting system's effectiveness after defeated chief executive candidate and former chief secretary Henry Tang Ying-yen admitted - and apologised for - extramarital affairs, which were believed to have occurred during a nine-year period when he held various senior government posts.

In 2010, former Executive Council member Lau Wong-fat, chairman of the Heung Yee Kuk rural organisation, was found to have failed to declare three property transactions that allegedly constituted a conflict of interest with his cabinet role.

Lau was backed by then-chief executive Donald Tsang Yam-kuen, who said Lau's failure to declare property transactions as well as his huge land portfolio were due to "ambiguities" in the system.

Almost two years after the scandal, Exco announced tighter rules in June, requiring members to disclose any interest they had in land or property held through a shelf company.

Despite the government requiring Exco members to declare any changes in their interests within 14 days, Chief Executive Leung and the current members of Exco updated their information only 42 days after their appointment, according to the Exco website.

Eight of Leung's 14 ministers appointed on July 1 (except Paul Chan) and eight of 14 non-official members failed to report their interests within 14 days after the appointment.

Tsang also saw himself overwhelmed by public anger for not reporting his acceptance of advantages from his tycoon friends. But he insisted he had not broken any rules as there were none requiring him to declare interests.