ICAC Landmark Case - Senior Government Counsel Bribery Case

A Volcanic Arrest Warrant

On the night of December 29, 1989, the ICAC issued an arrest warrant against the former acting Deputy Director of Public Prosecutions (DDPP) of the then Legal Department (now the Department of Justice) of Hong Kong, who had jumped bail for a suspected offence under the Prevention of Bribery Ordinance (PBO). The news came as a shock to the legal profession and the general public.

The fugitive government counsel, high-up in the top echelon of the Legal Department, was in charge of the Commercial Crime Unit of the department that advised on prosecutions relating to major commercial frauds in Hong Kong. The community was shaken to see the senior official suspected of accepting bribes to sell out justice. The news also raised the eyebrows of the British Parliament members who wrote to express their grave concern over the case and urged the Hong Kong government to ensure that the then Attorney General would handle the case impartially.

Making sure justice had to be done, the ICAC deployed a task force headed by Anthony Robey, Assistant Director of Operations, and five other top investigators full-strength to the investigation. Determined to uphold impartiality, the government appointed an independent lawyer from private practice to provide the ICAC with legal advice and assist in the prosecution of the case. And a two-year long daunting battle for justice was on.

Suspicious Jump in Wealth

Who would ever expect a high-ranking official in the then Legal Department to have taken bribes to fix cases?

“People thought that we were wrong to arrest the former government counsel. They thought that he had done nothing wrong. He was the third most senior official in the then Legal Department and was at the zenith of his career. People simply did not believe he would be corrupt.” ICAC Chief Investigator James Bell recalled how people responded when they knew the former government counsel was under investigation.

According to Mr Bell, the ICAC commenced its investigation codenamed “Jerusalem” in August 1989 after receiving intelligence from an informant nicknamed “Apple”. The ICAC found assets of the former government counsel had jumped by more than HK$1 million in 1986-87 while his annual official income was only around HK$500,000.

After three months’ investigation, the ICAC’s task force decided there was no point in delaying any longer since the former government counsel was handling several major commercial frauds at that time. To stop him from influencing the prosecutions of those cases, the task force arrested him and his accomplices - two private lawyers- on October 27, 1989. Though they were later released on ICAC bail, they were required to surrender their travel documents to the ICAC.

The ICAC applied to the then Attorney General to suspend the former government counsel from duty pending further investigation and issued notices under Section 14 of the Prevention of Bribery Ordinance (PBO) to require him to explain, within 28 days, where his financial resources had come from.

Bell’s recording

A lot of people thought that we were wrong. They thought that the ICAC was acting wrongly. I knew we were right, 100 per cent, not one doubt. When he fled, a lot of people realized that something weird happened. When he came back and pleaded guilty, everyone said “I always suspected that he was corrupt”

Overcoming the Hurdles

“All the former government counsel said to us after his arrest was ‘I am totally innocent of any wrongdoing’. He then remained silent and did not answer any of our questions. Even though we had his passport, he looked relaxed, as if nothing had happened. He even told everybody he would return to his homeland shortly. It seemed he was confident of walking away from this, “ said ICAC Chief Investigator Eric Leung, then a member of the task force.

Mr Leung said the tussle with a bright legal mind was not easy. The former government counsel exhausted every possible means to circumvent ICAC investigation. He even claimed that his arrest was a result of a personality clash with ICAC officers over a case he had handled with them earlier on.

Finding ways to get off the hook, the former government counsel first applied to extend the deadline of explaining his assets to the end of December 1989 (56 days) by claiming that most of his assets were outside Hong Kong. He then applied to the court to get his passport back for returning to New Zealand to spend the Christmas with his family. The court approved his application, but the ruling was overturned after the ICAC filed an appeal to the High Court.

The most difficult task for investigators was to unearth the former government counsel’s assets that had already been transferred out to many different places overseas. The former government counsel even directed his solicitors and banks in New Zealand not to divulge any information relating to his financial status to anybody without his approval. Since the investigations had to be conducted in places that were beyond the jurisdiction of the ICAC, task force members had to overcome many hurdles in gathering evidence.

The Breakthrough

ICAC officers had to race against time to gather sufficient evidence before the expiry of the 56-day deadline. Mr Robey, Mr Bell together with another ICAC investigator shuttled between different areas of New Zealand from November to December 1989 to conduct extensive inquiries.

Mr Bell recalled how he witnessed the New Zealand police and the ICAC task force members obtaining the most important clue: “With the help of the New Zealand police, we went to the culprit’s orchard to search for evidence. On our arrival at the orchard, we found the culprit’s parents had already burned all the bank statements, documents and correspondence of the culprit, leaving a huge area of burnt grass at the back of the orchard. We thought we would find nothing. But in one corner of a drawer of his parent’s bedroom, we managed to find a cheque stub written with ‘Berry Export’ and a code. With the stub, we could then follow a trail of illegal assets covered up by the culprit.”

Berry Export turned out to be a shell company used by the former government counsel to conceal his ill-gotten wealth. It was through this company he transferred, to Singapore, his first bribe to a bank account opened under the maiden name of his mother. With this crucial piece of evidence in hand, the ICAC task force was able to follow the asset trail. After a 3-week stay in New Zealand, the task force confirmed the former government counsel was in control of suspicious financial resources amounting to some HK$6.3 million.

A Circuitous Escape

“The discovery of Berry Export was a breakthrough in collecting evidence against the former government counsel. That was where the whole investigation turned. The former government counsel learnt from his family we had this piece of information in hand. He then realised he could not fool around any more nor could he cover up his corrupt practices. Maybe that was why he fled Hong Kong,” Mr Bell said.

Having concluded the probe in New Zealand, ICAC officers returned to Hong Kong on December 21, 1989 as the former government counsel was scheduled to explain his financial resources on the following day. The former government counsel did not show up. He was last seen by his maid on December 21, 1989 and had spread words that he would spend the Christmas on Cheung Chau Island. ICAC officers believed he had jumped bail and left Hong Kong.

Subsequent ICAC investigation revealed the former government counsel, with the assistance of a private lawyer who was an auxiliary police chief inspector, had fled to Huizhou on the Mainland via Macau. He then used a false passport to sneak back to Hong Kong from Guangzhou, and then flew to Manila. There was no extradition agreement between Hong Kong and the Philippines.

Life on the Run

Failing in his last-ditch attempt to cover up his ill-gotten gains, the former government counsel decided to dice with his life and went on the run.

Passage to Macau

“The first leg of his escape was passage on a fishing boat to Macau, where he was received by a Hong Kong solicitor, who was also an auxiliary police chief inspector,” recalled ICAC Chief Investigator Eric Leung who reconstructed the way the former government counsel fled.

“The lawless pair had no contrition and regrets about what they were doing. They even found it amusing that an auxiliary police officer was aiding a government counsel to jump bail and abscond!

“Taken up the Pearl River in a sampan later, they were whisked to Huizhou and ended up in a Guangzhou hotel where they spent some time wining and dining.”

Ticket Trouble

After hiding in Guangzhou for a while, the solicitor decided to help the former government counsel flee to the Philippines using a forged passport. It was figured he could sneak back to New Zealand from there.

As they had to fly back to Hong Kong to take a flight to the Philippines, the solicitor called his staff in Hong Kong to buy airline tickets one day prior to leaving Guangzhou. But when the two staff members of the legal firm reached the airport, the airline counter was about to close, all computers were off and the airline staff was about to leave. The two men then made up the excuse that the tickets were urgently needed to help those who took part in the student movement on the Mainland and begged the airline staff to issue the tickets. Their scheme worked. The airline staff at last agreed to issue two tickets - hand-written.

The solicitor and the former government counsel picked up the tickets on the following day while they were in transit at Kai Tak airport before boarding a flight to Manila.

“Both of them thought they could evade the law. They had no idea that we could still hunt them down. They did not realise the airline staff would never forget how desperate the legal firm’s staff were for the tickets. And the hand-written tickets were unique pieces of evidence,” Mr. Leung said.

Lies Versus Evidence

On his return to Hong Kong after being recaptured in Manila, the former government counsel realised he had no choice but to admit what he did, while the solicitor maintained he was innocent.

The ICAC gathered sufficient evidence to prove that solicitor had aided the former government counsel to flee Hong Kong, including the bills for accommodation, meals and nightclub entertainment, and the dates and destinations on the solicitor’s travel documents matched those of the former government counsel. Though the solicitor could not deny he had accompanied a Westerner to those destinations, he claimed that he did not know he was a man wanted by the ICAC.

How did the ICAC prove that the solicitor was lying?

Mr Leung said: “The former government counsel’s case was always on the news headlines. His photo and the wanted warrant issued by the ICAC had all been featured in the newspapers. The legal circle was small and well aware of the case. To prove that he was lying we confirmed that the solicitor’s office had not only subscribed to Chinese and English newspapers but also had them circulated and clippings made. We searched his office and seized many news clippings related to the case for submission to the court. The clippings were accepted by the court and the jury as material evidence against the solicitor. He was finally found guilty.”

III-Gotten Gains

While task force members were still pondering over ways and means to bring the fugitive counsel back, they were confronted with yet another challenge from the counsel’s accomplices. The barrister and solicitor, who were suspected of bribing the former government counsel, were applying for a judicial review of the search warrant issued by the ICAC against them. They asserted that the warrant was too wide-ranging and attempted to convince the court to disallow ICAC investigators to search their offices for evidence.

“It was a massive legal battle right from the beginning. Nearly every step taken by us was challenged judicially,” said Mr Bell. In response, ICAC officers worked closely with the independent legal advisor appointed by the Legal Department to hold their ground. After two months’ hearings on the judicial review, the ICAC won and was able to search the two lawyers’ offices.

At this point, the six-man ICAC task force split into two teams - one dealt with the two lawyers in Hong Kong and those who had helped the former government counsel flee Hong Kong. The other, led by Mr Robey, carried out extensive investigations in New Zealand and Singapore.

Investigation revealed that the former government counsel had assets of more than HK$16 million, including bank balances of NZ$2.4 million, three lots of land in New Zealand and an orchard. The official emoluments in the 15 years he worked in the Legal Department came to about HK$4.8 million. The way he covered up the ill-gotten gains was to bury the money in more than 25 bank accounts in different countries under the names of relatives and Berry Export. The money was believed to have included the backhanders paid by the two lawyers in private practice in order to secure assistance from the former government counsel in getting their clients acquitted.

Return of the Infamous Gains

Knowing there was no extradition agreement between Hong Kong and the Philippines, the fugitive government counsel was confident that he could remain free and then sneak back to New Zealand. Such smug calculations worked for only a while since the Immigration Department of the Philippines had already amassed sufficient information to plan the counsel’s arrest.

The fugitive counsel, who had been lying low in the hills of Manila, was seen frequenting a bar in the city. The Philippines’ Immigration Department, with the help of Manila police, arrested him at the bar on March 29, 1990.

Since the Philippines’ Immigration Department was authorised by law to deport any person who entered the country with a false passport, the fugitive counsel was sent back to Hong Kong the day after his arrest.

When the fugitive counsel arrived at Kai Tak Airport on March 30, 1990 under the escort of Philippine Immigration Officers, he was immediately arrested by Mr Robey, who handcuffed the fugitive counsel to himself and took him to the Central Magistracy under high security. He was then charged for failing to explain his source of income in accordance with the PBO and was put under ICAC custody pending a trial.

Guilt Confessed

“The former government counsel seemed to have finally realised he could by no means evade justice. Weighed down by three months on the run, he looked relieved on his return to Hong Kong. He was very co-operative right from the day he was back. He told us the entire truth of how he received bribes and how he absconded. I spent almost every day writing down his corrupt activities,’’ said Mr Bell who visited the former government counsel in the ICAC’s Detention Centre four hours a day to take statements. The manuscript of more than 100 pages culminated in a 68-page detailed statement for submission to the court.

Mr Leung said: “He thought at the beginning he could escape justice. But he never knew that we could bring him back even though our connection with overseas law enforcement agencies was not that well-established at the time. We got hold of sufficient evidence and he had no other choice but to admit what he did.”

Owing to the additional evidence collated by the task force, the former government counsel was charged with possessing financial assets disproportionate to his present or past official emoluments, contrary to Section 10(1) (b) of the PBO. The total assets under his control were worth about HK$16.1 million, including about HK$2.3 million he held for a corrupt third party. Excluding loans and the official emoluments, the value of the unexplained assets came to more than HK$12 million.

Wanting to reduce his imprisonment, the former government counsel pleaded guilty and agreed to give evidence against other defendants as a tainted witness.

Needle in a haystack

Judgment of the Court

“When I first heard about this case, I was rather shaken. It had attracted a lot of attention at that time. News about the former government counsel buzzed through the community.” Ti-Liang Yang, then Chief Justice of Hong Kong who presided over the case, recalled the strong public feelings towards the case.

The former government counsel pleaded guilty when tried in the Central Magistracy on June 20, 1990. Because of the seriousness of the case, he was transferred to the High Court for a verdict to be given by Mr Yang.

In view of the grave public concern about whether the Legal Department would remain impartial in the prosecution and trial of a senior official who formerly worked for it, the government appointed a counsel from Britain to act as the prosecutor in the trial.

Mr Yang said in the verdict that the case should rank as one of the worst of this kind of offence, particularly regarding the senior position the defendant held as head of the Commercial Crime Unit of the Legal Department. The former government counsel’s misdeeds had caused damage to the reputation of Hong Kong as a commercial centre.

“It is difficult to imagine a case worse than this. He ought to receive the maximum sentence,” Mr Yang said.

The defendant was sentenced to eight years’ imprisonment and was ordered to repay HK$12 million to the Hong Kong government in restitution. In Mr Yang’s views, it was deplorable that a man, who was once in the third most senior position in the Legal Department and ought to know the law better than anyone else, became corrupt and ended up in jail.

Tougher Battle Ahead

The battle for justice had yet to be won. Mr Eric Leung recalled how task force members had to tackle an even tougher challenge while assisting the prosecution against the other defendants in the case: “It was a pitched battle. The defence counsel challenged the credibility of the former government counsel who had turned into a tainted witness. The first thing they challenged was the way we treated the witness in the ICAC’s Detention Centre. They claimed we had provided him with favourable treatment, such as buying him fitness equipment and lavish meals. They also attacked the law points we put forward, our ways of carrying out investigations and the evidence given by the witness. In short, almost anything we put up was challenged judicially. But we had prepared for this.”

That was the first time a defendant was kept in the ICAC Detention Centre for a prolonged period to give evidence. The ICAC task force had foreseen the possibility that this arrangement would be challenged, so it had taken every preparation for this eventuality. Before the former government counsel began to serve his sentence in the centre, the task force carried out a detailed comparison between the detention regulations and facilities of the Correctional Services Department (CSD) and that of the ICAC, and took all precaution to ensure the treatment of the former government counsel was the same as that of inmates at CSD prisons.

In June 1992, after an almost 2-year court battle, the barrister and solicitor were finally convicted of bribing the former government counsel with intent to influence the trial of court cases. They were sentenced to seven years’ imprisonment. After an appeal, the barrister was further sentenced to an additional 2 years’ imprisonment while the solicitor’s sentence was remitted to 5 years.

Another solicitor, who had received the former government counsel in Macau and assisted him in his escape, was charged with helping the counsel avoid arrest and prosecution. Convicted of perverting the course of justice, the solicitor was sentenced to 4 years’ imprisonment. The former government counsel was then sent to Siu Lam Prison on February 20, 1993 to serve the rest of his sentence. He was given a 1-year remission of imprisonment by the then Governor.

The Life Behind Bars

Photo from New Evening Post

Post-script

Determined to plug the loopholes identified in the course of the investigation, the ICAC reviewed and amended content of search warrants issued under the PBO. Officers from the Corruption Prevention Department of the ICAC meanwhile gave advice on how to apply corruption preventive measures to the work procedures of the Legal Department.

As Ti-liang Yang said, this case demonstrated the determination of the government in the fight against corruption and upholding the integrity of the judiciary. Regardless of how senior a defendant in his official position and whatever his nationality, the case will be dealt with impartially.

On November 29, 1994, the former government counsel was discharged from Siu Lam Prison and, because of threats against his life, was taken under high security by helicopter to the airport for a New Zealand-bound flight.

Less than a week later, however, he was found to have received HK$5 million bribe money for making a false affidavit in a Hong Kong appeal case while he was serving sentence. In May 1996, he was arrested by the New Zealand police and brought before the court. In August he pleaded guilty to perverting the course of justice and in September was sentenced to 2-1/2 years, imprisonment and the bribe money was confiscated. The ICAC hence cancelled its arrangement to extradite the defendant to Hong Kong.

The Last Detail