Sharing My 27 years’ Experience in Corruption Control in Criminal Justice
Mr Tony KWOK Man-wai, SBS, IDS,
Former Head of Operations, ICAC, Hong Kong
on the 5th Corruption Control in Criminal Justice Course,
UNAFEI, Tokyo, Japan
Sharing My 27 years’ Experience in Corruption Control in Criminal Justice
I am honoured to be invited by Mr Kunihiko Sakai, the Director of UNAFEI and Professor Yuichiro Tachi, the Programming Officer of the Course to come and share with you my 27 years of experience in fighting Corruption in Hong Kong. I have just retired after having worked in the ICAC for 27 years. I joined the ICAC as an Investigator shortly after its inception in 1975 and was subsequently promoted through a number of ranks to be the first local Head of Operations in 1996, and had successfully led the Operations Department of the ICAC through the historical milestone of the Reunification of Hong Kong with the Mainland China. Having been a pioneer corruption fighter for 27 years and ICAC, being one of the first anti-corruption agencies set up in the world, I have developed a strong passion for anti-corruption mission and it is my intention to offer my voluntary service at the international arena to help fighting this common enemy of corruption, which is recognized more and more these days as a worldwid e problem where no country can be immune. Hence I am most grateful for the opportunity to participate in this most worthwhile course and share with you my experience.
Short History and an Independent Organization
Let me explain briefly about the Hong Kong ICAC which has a particularly interesting history and story to tell. It was established in 1974 at the time when corruption was widespread, and Hong Kong, as a British Colony, was probably one of the most corrupt cities in the world. Corruption was a way of life and there was at that time a particularly close “business” association between law enforcement agencies and organized crime syndicates. Nearly all types of organized crimes, vice, gambling and drugs, were protected. As a taxi-driver, you could even buy a monthly label stuck on your taxi and it would guarantee you from any traffic prosecution. Such was the scale of open corruption in Hong Kong. When ICAC was set up at that time, very few people in Hong Kong believed that it would be successful. They called that “Mission Impossible”. Within three years, we smashed all corruption syndicates in the Government and prosecuted 247 government officers , including 143 police officers, amongst whom some were labelled as “Million Dollar Detective Sergeants” !
- No doubt the fight against corruption in Hong Kong is a success story and has a wide ramification to the change of culture in Hong Kong. In the Year 2000 Millennium public opinion survey, the establishment of ICAC was voted as the 6th most important event in the 150 years of history in Hong Kong. So, what is our secret of success? To me, there are five factors :
- There is top political will to eradicate corruption , which enables us to become a truly independent agency, directly responsible to the very top, i.e. the Chief Executive of Hong Kong. This ensures that we are free from any interference in conducting our investigation. Provided there is reasonable suspicion, we will investigate any person or organization without fear or prejudice.
- The strong political support was translated into financial support. We are probably one of the most expensive anti-corruption agencies in the world. Our annual budget amounted to US$90M, about US$15 per capita. You may wish to multiply this figure with your own country's population and work out the anti-corruption budget that needs to be given to the equivalent of ours! However, looking at our budget from another angle – it represents only 0.3% of our entire Government budget or 0.05% of our Gross Domestic Product (GDP). I think you will agree that such a small “premium” is a most worthwhile investment for a clean society.
- We enjoy wide investigative power. Not only are we empowered to investigate corruption offences, both in the Government and private sectors, we can investigate all crimes which are connected with corruption. We enjoy special investigative power, such as power to check bank accounts, requiring witnesses to answer questions on oath, restraining properties suspected to be derived from corruption, holding the suspects' travel documents to prevent them from fleeing the jurisdiction. I must hasten to add that there is an elaborate check and balance system to prevent abuse of such wide power.
- We strive to be highly professional in our investigation. We are one of the first agencies in the world to introduce the interview of all suspects under video; we have a dedicated surveillance team with over 120 specially trained agents who took surveillance as their life-long career. We have a number of other specialized units such as witness protection, computer forensic and financial investigation.
- We adopt a comprehensive “three-pronged” strategy in fighting corruption, i.e. through investigation, prevention and education. Education is particularly important in mobilizing public support which you all know is an absolute success factor in fighting crime.
Difficulties in Investigating Corruption
Corruption is probably the most difficult crime to investigate, due to the facts that it is by nature a secretive crime, often involves only two satisfied parties. There are normally no eye-witness or scene of crime evidence available. The offenders are often highly educated, professional and high-powered who know how to cover up any trail of their crime and who are often in a position to make others keep the code of silence to abort any investigation. In these days, corrupt offenders often take advantage of the high technology in communication and transfer of funds and in exploiting the loopholes created by cross jurisdictional problems, making investigation even more difficult.
Methods to Investigate Corruption
Investigating corruption can broadly be divided into two categories:
a. Investigating past corruption offences
b. Investigating current corruption offences
Investigating Past Offences
The investigation normally commences with a report of corruption and the normal criminal investigation technique should apply. Much will depend on the information provided by the informant and from there, the case should be developed to obtain direct and circumstantial evidence. The success of such investigation relies on the meticulous approach taken by the investigators to ensure that “no stone is left unturned”. Areas of investigation could include detailed checking of the related bank accounts and company ledgers, obtaining information from various sources to corroborate any meetings or corrupt transaction etc. When there is a reasonable suspicion to act upon, the suspects' home and office should be searched for further evidence and they should be properly interviewed.
Investigating Current Corruption Offences
Such investigation will enable greater scope for ingenuity. Apart from the conventional methods mentioned above, a proactive strategy should always be preferred, with a view to catch the corrupt red-handed. Surveillance and telephone intercept should be mounted on the suspects and suspicious meetings monitored. A co-operative party can be deployed to set up meeting with a view to trap the suspects. Undercover operation can also be considered to infiltrate into a corruption syndicate. The pre-requisite to all these proactive investigation methods are professional training, adequate operational support and a comprehensive supervisory system to ensure that they are effective and in compliance with the rule of evidence.
One unique feature of corruption investigation is that the investigators must not be contended with obtaining evidence against one single offender. Corruption is always linked and can be syndicated. Every effort should be explored to ascertain if the individual offender is prepared to implicate other accomplices or the mastermind behind. In Hong Kong, there is judicial directive to allow a reduction of 2/3 of the sentence of those corrupt offenders who are prepared to provide full information to ICAC and to give evidence against the accomplices in court. The ICAC provides special facilities to enable such “resident informants” to be detained in ICAC premises for the purpose of de-briefing and protection. This “resident informant” system has proved to be very effective in dealing with syndicated or high-level corruption.
Corruption and Organized Crime
Corruption rarely exists alone. It is often a tool to facilitate crimes and it appears that criminals cannot do without it. Over the years, ICAC officers have investigated a wide range of organized crimes facilitated by corruption. Law enforcement officers have been arrested and convicted for corruptly assisting drug traffickers and smugglers of various kinds; bank managers for consummating bank fraud and money laundering; bank and retail staff for perpetuating credit card fraud. The close association between corruption and organized crimes is best illustrated in the following ICAC investigations.
Illegal Passport & Money Laundering Syndicate
ICAC smashed an international illegal passport and money laundering syndicate in recent year. The syndicate members include a Customs Senior Inspector, two Immigration Officers, a Principal Immigration officer who was the head of Immigration of an African Country, a bank manager and casino operator. This syndicate arranged illegal passports, including diplomatic passports from various foreign countries for sale to people who wanted to emigrate to the US. The syndicate could also assist in laundering illegal money. We succeeded in infiltrating into the syndicate through an ICAC officer acting as undercover. At the critical stage, we also enlisted the assistance of a Russian speaking undercover officer from an US law enforcement agency to pose as a member of Russian organized crime. All the key figures were apprehended and subsequently convicted. This is a classic example of international co-operation, and the mutual assistance that should be developed in undercover operations.
Counterfeit Credit Cards (CCC) - HK Joint Operation with Tokyo/Seoul
Counterfeit credit card (CCC) fraud continues to be a lucrative source of revenue for organized crime groups. In 1992, Hong Kong was responsible for 32% of the world's credit card fraud. Now we are only responsible for 2% of the fraud. This type of fraud is often facilitated by corrupt retail staff who steal the genuine credit card information from customers and pass them to the syndicate for making counterfeit cards. In 2000, ICAC assisted the Tokyo Metropolitan Police Department in eradicating a crime syndicate from Hong Kong which uttered CCCs in Japan. Tokyo Police, in appreciation of the ICAC efforts, had presented us with a Certificate of Appreciation. In March 2001, information was received that four members of a CCC syndicate were organizing a trip to Seoul, South Korea, where they intended to utter CCCs manufactured with data they captured in Hong Kong and elsewhere. A team of ICAC officers travelled to Korea to assist the Seoul Metropolitan Police in the identification of the suspects. The criminals were arrested in Seoul. In Hong Kong, simultaneous actions were taken, resulting in the seizure of credit card data and computer software used in the manufacture of CCCs. The leader of the syndicate was charged with CCC offences in Hong Kong and sentenced to a term of imprisonment. These two cases were typical international syndicate with operation stretching through a number of jurisdictions. In recognition of the ICAC's success in CCCs investigation, an ICAC Chief Investigator was awarded “Law Enforcement Officer of the Year” by the International Association of Financial Crime Investigators in America. This is another example of successful international co-operation.
Cigarette Smuggling Case
We carried out a protracted investigation which lasted for three years from 1993 to 1996 into a cigarette smuggling syndicate. Its members include ex-customs officers, senior manager of an international tobacco company, a number of established cigarette traders and senior triad members of Wo On Lok Triad Society. The investigation revealed bribe payments of over US$4.2M (HK$33M) paid by the syndicate to the senior manager of tobacco factory to ensure unlimited supply of cigarettes to facilitate smuggling into China. During the course of investigation, a key member of the syndicate, who had earlier agreed to assist ICAC in the investigation, was found brutally murdered and dumped in the harbour in Singapore. His murder was suspected to be carried out by five members of the Wo On Lok Society. In the end, three members of the syndicate were convicted of bribery, murder or perverting the course of justice charges. Three persons are still wanted on warrant. This is one of the most serious organized crime cases investigated by ICAC.
Hong Kong Jockey Club Race Fixing Case
Horse racing is a very popular game in Hong Kong and the total amount of bets placed by punters at each race meeting is in the tune of tens of million of dollars, one of the highest in the world. Hong Kong Jockey Club is keen to maintain the integrity of racing.. In a joint investigation with the Jockey Club, we succeeded in unearthing a case of race fixing involving a number of jockeys who were bribed by an off-course betting syndicate with triad background. The total amount of bribes paid to riders for not letting their mounts run to the best of their ability exceeded US$180,000 (HK$1.4 million) in a single race. This amount of money is only a drop in the ocean compared to the revenue the syndicate gets in illegal bookmaking. Seven persons were prosecuted and three jockeys and two civilians were subsequently found guilty of bribery and gambling offences, and sentenced to substantial terms of imprisonment. Unfortunately, we were not able to get to the head of the syndicate simply because there was a missing link with no one preparing to provide the necessary evidence against the head. This is the difficulty of investigating organized crime groups.
Soccer Match Fixing Case
Betting on soccer match results is illegal in Hong Kong, although there are a lot of discussion in recent months on whether soccer betting should be legalised. ICAC has investigated a case involving an illegal international soccer bookmaking syndicate. The syndicate involves in illegal soccer betting on international matches and also ‘fixed’ the outcome of local football matches. This was achieved by bribing key players in the team. A corrupt police sergeant was bribed to assist the illegal operation in Hong Kong. This was a particularly difficult case to investigate. To begin with, no aggrieved individuals came forward to complain. Secondly, the syndicate's operation is transnational. Bets accepted in Hong Kong were then placed with a major bookmaker in Malaysia through a middleman in Singapore, and all financial transactions were conducted through an ‘underground’ banking system. To add to the complexity of the case, all bets were recorded on a sophisticated computer programme which was capable of total erasure through a push of button on the keyboard. We carried out a strike operation on the first day of the World Cup Final in 1998 and we managed to break into the premises so swiftly that the operator was so shocked and that he was unable to push the crucial button on time. Nonetheless, it still took a long process of computer forensic to retrieve the evidence from the computer and had them admissible in evidence in court. This investigation resulted in the arrest and conviction of eight individuals in Hong Kong. Five footballers were sentenced to terms of imprisonment ranging between 12 and 22 months, the police sergeant was jailed for four years, and the head of the syndicate and his ‘lieutenant’ were each sentenced to two years' imprisonment. The need to upgrade ourselves in information technology is obvious if we want to tackle sophisticated organized crime.
My Suggested Set-up of an Anti-corruption Investigation Department
To investigate corruption cases properly, there is a need for a professional and well resourced investigation department. My proposed establishment of the department is that it should consist of a core number of Investigation Sections, each consisting of 1 Chief Investigator, 4 Senior Investigators and 4 Investigators. From my experience, this is an ideal formula for an investigation unit in that each Senior Investigator can pair with an Investigator and form a close partnership. They can be allocated individual cases or aspects of a case to work together and the Senior Investigator will be given clear responsibility as case officer, under the direct supervision of the Chief Investigator. During search operations and interviews, they can also work in pairs, and the Senior Investigator should also act as a mentor and be responsible for the performance and training of the Investigator.
As mentioned above, corruption is one of the most difficult crimes to investigate. The corrupts are often intelligent and knowledgeable and take advantage of the high technology to cover up their corrupt acts. In my view, apart from the core investigation sections, there should be strong operational support sections, and the following are essential for the reasons given :
as a central point to collect, collate, analyze and disseminate all intelligence and investigation data, otherwise there may be major breakdown in communication and operations
a very important source of evidence and intelligence. In the Hong Kong ICAC, we have a dedicated surveillance unit of over 120 surveillance agents and they have made significant contribution to the success of a number of major cases
Technical Services Section
provide essential technical support to surveillance and operations
Information Technology Section
it is important that all investigation data should be managed by computer at the start, or extra resources would be required for future computerization, which is a matter of time. In this modern age, most personal and company data are stored in computers and ICAC must possess the ability to break into these computers seized during searches to examine their stored data. Computer forensic is regarded as vital for all law enforcement agencies worldwide these days
Internal Investigation and Monitoring Section
To have the public confidence and support, ICAC must maintain a clean internal image. In Hong Kong, the ICAC officers are expected to be “whiter than white” and are subject to a stricter code of ethics than their counterparts in the civil service. To maintain such internal integrity, it is essential to set up this section to take up the responsibility in vetting new recruits, investigating internal complaints and carrying out monitoring on suspected employees
Conclusion and Recommendations
In the cases quoted above, it is pretty obvious that corruption and organized crimes are difficult to investigate. There are at least three unique features : -
Firstly, the corrupt and the criminals of organized crime have no national boundaries at all.
Secondly, criminals have gone high tech. Information technology can be a useful tool for investigation but at the same time a threat to law enforcement officers.
Conventional methods of investigation is not good enough to tackle organized crime. More sophisticated methods such as undercover operation and professional financial investigation should be adopted. I have three more observations on this subject:
Firstly – I recommend a strong partnership approach
The ICAC see great value of a strong partnership approach with other local law enforcement agencies, including the Police, Customs, Immigration and Correctional Services in Hong Kong. In the old days, when ICAC arrested a government official, this might not be welcome by his head of department, who blamed ICAC for bringing scandal to his department. “Don't wash your dirty linen in public” is outdated and can only encourage corruption. If the dark days of corruption teach us anything, it is that turning a blind eye to corruption simply will not do. The problem will only grow bigger. I am pleased to note that heads of departments, particularly the law enforcement agencies, today have changed that attitude and are taking a proactive strategy to tackle corruption. Indeed, many of the ICAC's most successful cases originated from their proactive approach or as a result of joint investigations. Therefore, as a food for thought, all law enforcement agencies should adopt a more positive and proactive approach to corruption. The Interpol took lead in this direction. With the blessing of Interpol General Secretariat, an ‘Interpol Group of Experts on Corruption’ was formed in 1998 with a mandate to develop and implement new anti-corruption initiatives. ICAC is a member of this group and it is hoped that this Expert Group will co-ordinate different national and regional approaches to a united front to fight against corruption.
Adequacy of the Criminal Justice System
In a corrupt dealing, the offeror and the acceptor of bribe are willing parties and they will not give up each other. We call this a ‘satisfied customer’ situation. The present system in Hong Kong which basically follows the old UK one, allows the suspect to remain silent when questioned under caution. If they have a lawyer, the first thing the lawyer will advise them is to maintain his right of silence. In the absence of other corroborative evidence, our investigation often concludes with no result when everyone involved in the case refuses to say anything! Under the new UK caution system, the suspects are now warned that any delayed response to questions may prejudice their defence in subsequent legal proceedings. The new caution read like this, “You do not have to say anything. But it may harm your defence if you do not mention when questioned something which you later rely on in court. Anything you do say may be given in evidence.” I believe this new caution strikes a better balance between the human rights of suspects and the public interest to investigate crime. We should consider a change in legislation along a similar line.
Consideration should also be made in introducing new legislation to protect whistle blower, witness protection, and allowing greater degree in entrapment to facilitate successful undercover operations, and in the admissibility of intercept evidence.
Mutual Investigative Assistance in Criminal Matters
We all appreciate that organized crimes this day have no boundary and international co-operation is vital. However, at present, we rely heavily on mutual legal assistance which have restriction on areas of co-operation and at the same time lay down strict judicial procedure which is often a time consuming and complicated process. We need to act faster than criminals and there should be a more efficient mechanism amongst law enforcement agencies to call for and obtain assistance at short notice. The United Nation is now in the process of drafting an U.N. Convention on Fighting Corruption. I hope that it would enable closer international co-operation amongst anti-corruption agencies. I believe time has come for an international association of anti-corruption agencies to be formed under the U.N.'s auspices to enhance international liaison.