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     Following is a question by the Hon Albert Ho and a reply by the Secretary for Constitutional and Mainland Affairs, Mr Raymond Tam, in the Legislative Council today (January 21):

Question:

     Recently, a retired government official was convicted of misconduct in the public office and sentenced to imprisonment for concealing the acceptance of advantages and loans offered by other persons while in service. His legal representative pointed out in court that since 2000, the income of that government official had fallen short of expenditure and he had been heavily in debt, with debts reaching as much as $52 million in 2010. Yet, he could still pass the relevant integrity checking and was appointed as the Chief Secretary for Administration in 2005 and a Member of the Executive Council (ExCo) in 2007. Under the relevant systems of declaration of interests, politically appointed officials (PAOs) and ExCo Members are not required to declare their debts and liabilities. On the other hand, the incumbent Chief Executive (CE) was also alleged to have received, both before and after his assumption of office as CE, a remuneration of nearly $50 million in total from an Australian firm for providing services to that firm, and Article 47 of the Basic Law stipulates that CE, on assuming office, shall declare his or her assets to the Chief Justice of the Court of Final Appeal. In this connection, will the executive authorities inform this Council:

(1) whether, with a view to enhancing public confidence, the authorities will revise the relevant systems of declaration of interests by requiring PAOs and ExCo Members to declare their debts, contractual obligations and assets held through private companies or trusts, and conduct random checks regularly to verify the declarations; if they will, of the details; if not, the reasons for that;

(2) whether the items for checking under the system of integrity checking for PAOs include debts and liabilities; if they do, why the said official could pass the integrity checking and be appointed despite being heavily in debt; if not, of the reasons for that; whether it has assessed if the fact that such a debt-ridden person could pass the integrity checking and be appointed to the post in the top echelon of the Government reflects that the integrity checking system has collapsed; if they have assessed, of the outcome; if not, the reasons for that; and

(3) whether they will consider establishing a system, in addition to Article 47 of the Basic Law, requiring CE to declare his or her assets on assuming office and make such declarations open for public monitoring; if they will, of the details; if not, the reasons for that?

Reply:

President,

     In consultation with the Chief Executive's Office, I am authorised to respond to Member's question on behalf of the relevant departments as follows:

(1) The current declaration system requires Politically Appointed Officials (PAOs) of all ranks to declare their investment, shareholding, direct or indirect interest in any company; their directorships, proprietorships or partnerships in any company; and, if any, the specific details concerning their participation in any private company's affairs. They are also required to declare any investment and interest held by themselves or in the name of their spouses, children or other persons, agents or companies, but are actually acquired on their account or in which they have a beneficial interest.

     According to the requirements of the Code for Officials under the Political Appointment System, investments and interests declared by PAOs of all ranks in the prescribed form are made available on the websites of the respective offices/bureaux for public inspection. Such declarations will be updated annually.

     The Executive Council (ExCo) has put in place a rigorous and well-established system for declaration of interests. This is to ensure that unbiased and impartial advice is offered by ExCo Members to the Chief Executive. The declaration system mainly comprises two parts. The first part is regular declarations. On first appointment and annually thereafter, each ExCo Member should declare their personal interests, including (a) remunerated directorships; (b) remunerated employments, offices, trades, profession, and so on; (c) if the interests in the above two items include provision to clients of personal services which arise out of or relate in any manner to Members' position as ExCo Members, the clients' names; (d) land and property owned by Members in or outside Hong Kong; (e) names of companies or bodies in which Members have, either themselves or with or on behalf of their spouses or children, a beneficial interest in shareholdings; and (f) membership of boards, committees or other organisations. In addition, ExCo Members should declare to the Chief Executive on a confidential basis and in greater detail their financial interests, including shareholdings (irrespective of the amount) in companies as well as futures and options contracts, held by themselves or jointly with their spouses, children or other close relatives. Under the present system, assets held through private companies or trusts are to be declared in accordance with the guidelines issued by the ExCo Secretariat. Generally speaking, substantive controlling interests in private companies or trusts are to be declared. The details of the guidelines have been uploaded to the website of the ExCo Secretariat. The second part of the declaration system is declarations in respect of individual items discussed by the ExCo. It is the personal responsibility of ExCo Members to examine whether they have an interest in any item discussed by the ExCo and declare it before the ExCo discussion.

     The aforementioned systems applicable to PAOs and ExCo members for declaration of interest are very rigorous and the Administration has no plan at present to revise them. In fact, the Independent Review Committee for the Prevention and Handling of Potential Conflicts of Interests (IRC), in its report dated May 31, 2012, considered that the system of declaration of interests and investments concerning PAOs as well as the system for declaration of interests by ExCo members were on the whole satisfactory. The IRC also studied the issue of handling the debts and liabilities of PAOs and ExCo members. Taking into account that PAOs and ExCo Members are already required to disclose their debts and liabilities to the Chief Executive on an ad hoc basis under the present system and bearing in mind privacy concerns, the IRC did not consider it necessary to include the additional requirement to declare debts and liabilities in the regular declarations of investments and interests.

(2) All PAOs need to undergo extended checking. The Government will provide extended checking questionnaires to prospective candidates for nomination to become PAOs. The content of this questionnaire is the same as the one being used in the civil service. The subject undergoing extended checking needs to fill in his/her detailed personal particulars, education background, social activities, employment history, family members, etc. The subject also needs to nominate two referees to facilitate understanding of his/her background, work, family and other relevant situations. The Police are responsible for the checking. Input from other law enforcement agencies will be sought as necessary. The checking comprises interviews with the subject, his/her referees and supervisors as well as record checks. The effectiveness of the extended checking system is based on trust and cooperation of all the parties involved. It is therefore essential to uphold strict confidentiality of the stipulated arrangement or case content, or the relevant detailed information of the checking system.

(3) Article 47 of the Basic Law stipulates that the Chief Executive, on assuming office, shall declare his or her assets to the Chief Justice of the Court of Final Appeal of the Hong Kong Special Administrative Region and that this declaration shall be put on record. At present, we have no plan to establish a separate system.

Ends/Wednesday, January 21, 2015