Candidates campaign expenses shed little light on source of funds

With no law forcing political parties to identify the source of their money, the public is kept in the dark about who is truly bankrolling a candidate

PUBLISHED : Friday, 23 November, 2012, 12:00am
UPDATED : Friday, 23 November, 2012, 2:56am

On the bright, sunny morning of September 9, a 60-seat coach trundled to a halt outside a primary school in the New Territories. Its elderly passengers made their slow and steady way to the building - serving as a polling station in that day's Legislative Council election.

Each of them had a sticker in their palms with a number on it, a reminder from the coach's organisers of which candidate they should pick.

Minutes later, they were doing their civic duty, casting their ballots to elect new legislators.

It all looked legitimate enough - but two months on, the election expenses each candidate must submit by law made no mention of the bus, or scores of others like it used to ferry voters to polling stations.

Nor was there any mention of exit polling. Those voters outside the school were accosted by young women with badges identifying them as working for the Hong Kong Research Association as "exit poll helpers". The group, which is known to have ties to the Beijing-loyalist camp, says its polling was used for academic research, although suspicion remains that some exit poll organisers shared information with political parties, allowing them to divert later voters to slates that were in danger of losing.

All 269 candidates who contested in September for the 70 seats in Legco were obliged to submit before last week their campaign expenditure, as well as all details about donations they received - in cash, goods and services - during the election period.

But the expenses claims generated rather more heat than light as to the question of who paid for the posters, billboards and leaflets that were near ubiquitous in the city throughout the summer months.

Much of the funding was simply said to have come from the parties the candidates represent - which, unlike in most democracies, are not required to explain their sources of funding.

Candidates who won more than 5 per cent of the vote could claim a public subsidy of no more than HK$12 per vote, capped at no more than half of the expenses limit for their constituency. The expenses limits varied from HK$1.6 million to HK$2.6 million for geographical constituencies and HK$6 million for "super seats". All candidates who were eligible to do so are expected to claim the subsidy.

One clear and unsurprising fact that did emerge was that parties in the pan-democratic camp were financially outgunned by their rivals in the Beijing loyalist lobby.

Frederick Fung Kin-kee, of the Association for Democracy and People's Livelihood, was the biggest spender among the pan-democrats, pouring in HK$4.6 million for his successful bid to win one of the five newly created "super seats" - elected by a city-wide ballot of 3.2 million voters, who were ineligible to vote in other functional constituencies.

He reported donations of slightly more than HK$1 million, mainly from his party and other individuals, with the rest coming from the government subsidy and his own pocket.

The Democratic Party's James To Kun-sun and Albert Ho Chun-yan, who also ran for the "super seats", spent HK$7.8 million in total. Each received donations of about HK$800,000 - most of it contributed by the party.

And their supporters included some surprising figures.

To, who topped the "super seat" poll, reported receiving HK$20,000 from former Executive Council convenor Ronald Arculli and HK$35,000 from Ocean Park chairman Allan Zeman. Andrew Fung Wai-kwong, who quit the Democrats after applying for a government job, gave HK$50,000.

Some pan-democrats from smaller parties were more heavily reliant on donations from individuals.

Andrew To Kwan-hang, of the League of Social Democrats, spent almost HK$1.4 million on his unsuccessful campaign in the Kowloon East constituency. He declared he had received HK$200,000 from media magnate Jimmy Lai Chee-ying and HK$100,000 from Albert Cheng King-hon, founder of Digital Broadcasting Corporation.

The radical People Power party, known for its leaders' fiery denouncements of both the Hong Kong and Beijing governments, even reported some unlikely donations from establishment circles.

Its slates in Hong Kong Island and Kowloon East, led respectively by Christopher Lau Gar-hung and Ray Chan Chi-chuen, each got HK$75,000 from the I-Sky Group to pay for a Cross-Harbour Tunnel billboard display. I-Sky's chairwoman, To Yuk-fung, is an honorary president of the government-friendly New Territories Association of Societies and has fostered close ties with the central government's liaison office.

But while the figures for the pan-democrats offer a few hints on who is funding their campaign, the city's largest party gave away nothing.

The Democratic Alliance for the Betterment and Progress of Hong Kong won 13 seats after putting up 14 slates. Ironically, its only failure was also its biggest spender, party vice-chairman Lau Kong-wah, who shelled out almost HK$5 million to win a "super seat" - the most expensive campaign in Legco's history.

But Lau has little to worry about, at least financially - his party had pledged to cover every cent its candidates spent.

In total, the DAB forked out HK$22.4 million - roughly equivalent to the price of a 1,500 sq ft luxury apartment at Residence Bel-Air in Pok Fu Lam. Like any other party, it is under no obligation to disclose its sources of funding, although media reports a fortnight ago suggested it had raised more than HK$20 million in its annual dinner.

Other Beijing loyalist candidates claimed to have run the campaign from their own pockets, without any donations from individuals or the party.

They included all the candidates from the Federation of Trade Unions, in which Chan Yuen-han, who won the "super seat", spent HK$4.4 million. She might be able to recoup about HK$3 million from government subsidies but still had to pay HK$1.4 million - equivalent to 17 months of a lawmaker's salary - from her own pocket, according to her submission.

So where did all the money go? Across the political divide candidates spent the bulk of their expenses on promotional material, from billboards and banners to posters and handbills. Some also bought newspaper and minibus advertising. In total, this made up between 50 and 90 per cent of each candidate's expenses. Other costs included staff salaries and election office rent.

One employee who worked for a candidate from the pan-democratic camp said the declaration of campaign expenses and donations was "extremely detailed" and "trivial" - yet there were plenty of ways to get around the rules. "If a mega-rich tycoon wants to avoid making public his financial support to a certain candidate, he can first donate to the party," the employee said. "It is perfectly within the rules to have donors' names concealed." None of the candidates would admit to splashing out on the coaches that took elderly people to the ballot stations.

"It could mean a confession to breaching the bribery law," the employee said. "Furthermore, the coaches could have been arranged by some groups [friendly to the candidate or party] and the candidates could claim they know nothing about it."

In the 2008 election, Charles Mok lost the functional constituency seat for the information technology sector to rival Samson Tam Wai-ho and spent the next four years pursuing an election petition to have the result overturned because Tam had spent HK$220,000 promoting himself as an "IT expert" on television shortly before nominations began. The petition was rejected by the Court of Final Appeal in May, although Mok had the last laugh when he defeated Tam for the same seat in September. He claims the case is evidence of a flaw in the system.

"Some candidates have since made use of the ruling in this election to buy ads on minibus or taxis to promote themselves a few months before they announced their candidacies. These were not counted as election expenses," he noted, as they were taken out before the official election period began in July.

But Mok said little could be done to close the loopholes without a proper campaign finance law. "The current system in Hong Kong, at its best, might deter a candidate from spending blatantly over the cap and maintain a relatively fair competition," he said.

For example, a comprehensive campaign finance law in the United States regulates both private and public funding of parties - for example, no individual can contribute more than US$2,500 to a candidate's campaign.

Corporations and unions are barred from donating directly to candidates.

Dr Ma Ngok, an associate professor of politics at Chinese University, said the financial strength of the Beijing-loyalist camp was apparent not just during the election period, but way before the poll.

"It could require more than HK$22.4 million to maintain a strong neighbourhood network during the non-election days," he said. "It was an advantage that no pan-democratic parties could match."

Ma called for a law to regulate the donations received by political parties. In Hong Kong law, political parties are not recognised as a distinct group of organisation. Most of them are registered under the Company Ordinance or the Societies Ordinance, which do not require them to disclose the sources of their income.

"Transparency is the key principle. Voters should have the right to know the source of funding of the candidates as it might affect their policy stances," Ma said.