å„èª¿æŸ¥ç§‘åŠ©ç†è™•é•·åŠèª¿æŸ¥çµ„çµ„é•·çš„å ±å‘Š - å»‰æ”¿å ¬ç½²

Through the Branches and Groups -Reports by Assistant Directors andPrincipal Investigators

INVESTIGATIONBRANCH 1INVESTIGATION BRANCH 1 (IB/1)BY TONY GODFREY, ASSISTANT DIRECTOR OFOPERATIONS 1The past year, as the following text will show, has continued to be productive.IB1 has enhanced its expertise in the various fields of corruption inthe government sector i.e. 'A' Group - Police, 'B' Group - Corre c t i o n a lServices (CSD), Immigration, Customs and Excise, and other areas such asFire Services Dept. (FSD), Education, Post Office etc.C Group continues to deal with public sector construction cases and YGroup is now expert in handling cases involving the Food & EnvironmentalHygiene Department, Lands Department and Housing etc.While we have generally seen in the last twelve months a decrease incomplaints as far as some government sectors are concerned - the Police, forexample - we cannot be complacent, as our intelligence suggests and thatthere are some officers, of various ranks, willing to compromise their positionby corrupt malpractice.

I continue to be optimistic for the future, as our younger off i c e r salways impress me with their enthusiasm and dedication. The older officers,including supervisors, have not lost their zeal either and I am confidentthat the next twelve months will be similarly exciting for me in mylast years before retirement.

Group

C o r ruption reports concerning the Hong KongPolice decreased 15% in 2001. In the periodunder re v i e w, 182 investigations were satisfactorily concludedwith 107 individuals arrested. 77 persons were p rosecuted for corruption and connected offences. Thegroup is presently dealing with 159 investigations and fiveoutstanding trials.Investigation into police corruption continues to be achallenging task. The following are cases of interest.Police Constable on bribery and drugchargesIn September 2001, information was received by theICAC that a Police Constable might have conspired togetherwith several security staff of a chain store company tosolicit and accept bribes from a sales supervisor of the chains t o re company as a re w a rd for favourably influencing aninternal investigation against the sales supervisor. Duringthe course of investigation the Police Constable was also suspected to have committed drug trafficking offences. ThePolice Constable and three security staff of the chain storecompany have been charged with corruption offences, andthey await trial at the District Court. A further drug traffickingcharge was also laid against the Police Constableand this case was committed to the Court of First Instancefor trial.Blackmail by legal professionalsDuring the course of civil proceedings, the authenticityof a will became an important issue. When the respon-Unwarranted demands were made through these dent in that case reported that she had been approached bypublic phone boothstwo suspected police officers offering to adduce favourableevidence in the trial, the ICAC began an investigation. Thisculminated in the arrest of a barrister and a practising solicitor.By using privileged information they seized the oppor-tunity to try to blackmail the respondent in the civil case.They were convicted and each received three years' imprisonment.Frustrating police investigationIn January 1994, a serious wounding took placeinvolving triad members. Several persons responsible for

the attack fled to the Mainland. They later succeeded inseeking assistance from the police investigating officers to write off the case by paying bribes. As a result of secre tmeetings held in Shenzhen between these offenders andthe police officers, the police prosecution eventually collapsed.When one of the middlemen was re c ruited as aninformant by the ICAC in early 2000 during a pro a c t i v ea p p roach exercise, the circumstances surrounding thewounding were investigated. With the assistance of thisinformant, two minor role players in the wounding casewere also recruited as informants and revealed evidence insupport of the corruption allegation. Two police off i c e r sand the triads involved were later prosecuted for briberyand convicted in the District Court. This case highlightsthe need for those entrusted with the duty of law enforcementto discharge that duty with unquestioned impartiality. Both police officers were sen-tenced to four years' imprisonment.Offender jailed for falsereport to ICACA remanded prisoner awaitingtrial on a drug trafficking charg elodged a complaint with the ICAC,"Their conduct amounted to a gross breach of their positions: they wereable and did not hesitate to exploit their posts as police officers. Everycase of corruption that involves police is a matter of the deepest concern,striking at the very foundations of our society. The public of Hong Kong isentitled to have full confidence in the integrity of our police force. In manyways it is especially important at this time for the Hong Kong police to beable to be held up as an example to the country as a whole. Every daythe courts in Hong Kong rely on the assertions of police officers: even themost minor examples of corruption, and this matter does not fall into thatcategory, have a tendency to undermine confidence. It is particularly dis -tasteful when persons who have undertaken to uphold the law and pur -sue those who offend against it pervert those ideals for personal gain."HH Judge Alan WrightHKSAR V LAU Kwok & OthersDCCC 381/200131 October 2001alleging that the police officer who arrested him had beenbribed by another person to fabricate evidence against himfor the drug charge. Subsequent enquiries revealed noe v idence in support of his allegation, and established the

prisoner had lodged a false report against the police officerin an attempt to exonerate himself. In June 2001, the prisonerwas charged with an offence of misleading an ICAC offi-cer, to which he pleaded guilty and was sentenced to eightmonths' imprisonment.Partnership approach withpoliceIn tackling corruption, thei n c reased vigilance of ICAC andPolice management is essential toenhance the partnership appro a c h .Close collaboration and co-operationforms an integral part of the overallstrategy in seeking out the existenceof corruption within the force whichmight not otherwise be surfaced.In the period under review, severaljoint ICAC/Police operationsw e re successfully conducted. Arisingf rom the initiative of a junior policeofficer whose assistance was sought inICAC Chief Investigator, Diman MAK (third from right), with fellow coursemembers of the Police Senior Command Course, during a visit to ZengchengPublic Security Bureau, Guangdong Provinceproviding advance warning of impending police action to ab rothel operator in return for monthly bribes, the femaleoperator of a vice establishment was arrested re d - h a n d e d .She was subsequently convicted of bribery and vice relatedoffences.Co-operation between the ICAC and the Police alsoextends to the training of officers. ICAC officers ofInvestigator ranks attend various levels of Police CommandCourses every year.The way forwardIt should be emphasised that the vast majority ofpolice officers are honest, but there is no room for complacency.All members of 'A' group firmly adhere to their com-mitment to optimize our working relationship with the police in order to eradicate police corruption. This is in thebest interests of the public, ICAC and the police.

Group

Tax related corruptionA tax consultant, who was formerly an AssistantAssessor (AA) of the Inland Revenue Department (IRD),was convicted of various corruption charges at the DistrictCourt and sentenced to 3 years and 4 months' imprisonment.The defendant had, when he was an AA of IRD,solicited and accepted money from a tax payer as a rewardfor showing favouritism to him in the latter's tax disputewith IRD. When he later became a tax consultant, he askedfavours from his former IRD colleagues and in re t u r noffered them advantages. In the same case, a Tax Inspectorwas convicted of accepting advantages and was sentencedto 14 months' imprisonment.Integrity of government officials in doubtIn the past year, several B Group ICAC investigationsresulted in government officials of diff e rent ranks beingcharged and convicted of offences.The first case involved the Deputy Commissioner(DC) of IRD and her husband, who was a senior off i c i a lwith the Civil Engineering Department. They were bothconvicted of offences relating to the DC's dishonest claim ofPrivate Tenancy Allowance, which had misled theGovernment. They were sentenced to suspended prisonterms. The second case involved an Assistant Officer II ofthe Correctional Services Department, who was initiallysuspected to have corruptly supplied drugs to prisonersunder his supervision. He was arrested whilst purchasing a

small quantity of drugs from a street level drug pusher andcharged accordingly. He pleaded guilty and was fined.The third case involved a Clerical Assistant of theTransport Department who was found to have acceptedsmall advantages such as laisees, magazines, and othergifts in return for allocating favourable vehicle examinationdates to garage operators. Together with a garage operator,he was charged with 17 counts of corruption. Both wereconvicted and sentenced to suspended imprisonment termsand fines.The fourth case involved a Customs & Excise (C&E)Officer. He was found to have obtained loans totalling over$100,000 from three unrelated individuals by falsely repre-senting that he was temporarily short of cash to cope with adownpayment in a property transaction. He was chargedwith theft and deception offences, convicted and sentencedto a suspended term of imprisonment.The fifth case involved another C&E Officer who wasfound to have run a counterfeit video compact disc shopwith others. He was sentenced to four months' imprisonment.Human smuggling and false passportcasesInformation was received that a human smugglingsyndicate might have bribed airline staff who would inreturn assist them in their operation. The syndicatemembers would first purchase air tickets from HongKong to the United States (US), then arrange for illegalemigrants to enter the restricted area of the airport wherethey were supplied with the air tickets and false passportsfor landing in the US. In March 2001, eight personsincluding two illegal emigrants were arrested in the airport.They were subsequently charged with false passportrelated offences and conspiracy to defraud. Sevenw e re convicted in November 2001 and sentenced toimprisonment terms ranging from four years to 18A false US passportmonths. The remaining defendant awaits trial at thetime of writing.Arising from the same investigation, three other individualswere arrested in July 2001 whilst purchasing pass-ports. They were convicted at the District Court and

sentenced to imprisonment ranging from three years andnine months to one year.A US businessman wascharged with forgery and deception offences after he was found to havepossessed and uttered forged USGovernment bonds of a high facevalue. He was convicted and sentencedto four years' imprisonment. Investigation revealed that he was aBogus US bondsmember of a syndicate which wasalleged to have bribed bank officers to facilitate their fraudulentpractice. The head of the syndicate fled to the USb e f o re ICAC action and was arrested in New York. He ispresently facing trial.Forged Dependent Travel PassesForged US Governmentbond caseNew World First Bus (NWF) dependenttravel pass scamInformation obtained during an ICAC corru p t i o ninvestigation revealed that a group of individuals had corruptlyobtained samples of dependent travel passes (DTP),issued by NWF to its staff and their family members annuallyas a welfare benefit. They then reproduced the DTPs inl a rge numbers and sold them to unauthorized persons forprofit. Eventually 30 defendants, including an NWF driverand his former colleague, were charged with corru p t i o n ,forgery and fraud offences. With the exception of the NWFd r i v e r, who was found guilty after trial they all pleadedg u i l t y. The former NWF driver and two of his associatesw e re sentenced to 17 months' imprisonment whilst theremainder received suspended sentences or communityservice orders.

TANG Chi-kong, Assistant InvestigatorMr. TANG with the exhibits - forgeddependent travel passesTANG Chi-kong or "Kong Chai", as heis known to his friends, has been with theICAC just 5 years. His dedicated and untiringinvestigation into the New World First Buscase led to the conviction of 12 defendants atthe District Court and 18 at variousMagistrates Courts. He has twice re c e i v e dAssistant Director's Commendations for hiswork. A married man with a Master ofPhilosophy Degree, "Kong Chai" believes that,above all, it is a "sense of justice" which uniteshim and his colleagues in their commitment tofight against corruption.

Group

This is my third and last annual review asPrincipal Investigator C Group. At the time ofthe publication of this re v i e w, I will be the PrincipalInvestigator J Group. During the year 2001, the Group continued in its pursuitof the corrupt in the public sector construction are n a .This resulted in a series of high profile investigations, anumber of which attracted wide publicity in Hong Kong.The following are a few notable ones.The Housing Department Chief BuildingServices Engineer caseAfter months of investigation, this case became overtin early August 2001, and resulted in the arrest of a ChiefEngineer and a number of Housing Department buildingservices contractors and nominated suppliers. It wasalleged that the Chief Engineer accepted millions of dollarsin bribes for awarding government contracts. He now awaits trial on bribery and malfeasance charges.Sub-standard piling works at Tin ChungCourt caseThis investigation was commenced after referral fromthe Housing Department, who suspected corruption at aHome Ownership Scheme development project in Tin ShuiWai. An arrest and search operation was carried out inF e b ruary 2001 and resulted in the arrest of 20 persons,including the registered structural engineer responsible forthe specification of the piles. In September 2001, nine personswere charged with a variety of corruption and fraudo ffences. The venue of trial will be the Court of FirstInstance.Substandard reinforcement steel bars were found to havebeen installed in public housing blockApplication of sub-standard steel bars atvarious Housing Department developmentprojectsThis series of investigations attracted wide mediacoverage, and involved the use of sub-standard steel barsby building contractors in government building pro j e c t swith the alleged corrupt connivance of HousingDepartment staff. Two of the cases have been resolved afterthree persons were convicted of conspiracy to defraud andwere sentenced to terms of imprisonment, whilst two casesare awaiting legal advice.

The following cases have been resolved since the lastreview, and are worthy of mention.This case, reported in last year's Review, involvedtwo Government Architects accepting bribes in return forexercising lax supervision over government contracts. Botha rchitects were found guilty on all charges and were sentencedto two years' and two and a half years' imprison-ment, respectively.a sentence is the deterrent effect that it will have - not sole -ly on the person being sentenced but upon other public ser -vants who may tend to yield to temptation ...... whilstthose who would depart this standard should know that the consequence will be imprisonment."The Housing Architects caseIn passing sentence on the accused, H.H. JudgeWright said, inter alia,"...... the underlying purpose of the offences was to keepthe Accused 'sweet', to ensure what were called 'harmo -nious relations' on the sites".A Housing Department architect ruined by the corruptprovision of lavish meals, fine wines and the attention ofa dance hostess at a deluxe hotel"...... the hidden cancer of the implicit understanding, theunspoken arrangement, is precisely the danger againstwhich there need be vigilance......""It must be that a very real consideration in imposing suchThe Drainage Services Department shortpiling caseRigged measuring tape used formeasuring shortened pilesDifference between core logs recoveredfrom a shortened pile and an up-tostandardpile

A director of a piling company and two of his sitestaff members were charged with conspiracy to defraud inrelation to the fraudulent construction of shortened piles ata Drainage Services Department project.The site staff members were convicted, and sentencedto 3 years and 3 months' and 2 years and 3 months' imprisonment.The Government Property Agency caseThe convicted former Chief Property Manager, whohad been convicted of an offence of Misconduct in PublicO ffice and sentenced to nine months' imprisonment, applied for leave to appeal to the Court of Appeal whilstthe Secretary for Justice applied for a review of sentence.The Court of Appeal refused the defendant's application.The Honourable Mr. Justice Woo JA in delivering thejudgement said, inter alia,"It is clear from the above authorities that a person holdinga public office would be guilty of a misconduct in a publicoffice if he were not to disclose the particular intere s t swhich he served which would conflict with his duty as suchan office holder but continue purportedly to discharge hisduty ...... "In increasing the sentence of nine months' imprisonmentto one of 30 months on the defendant, TheHonourable Mr. Justice Stuart-Moore V.P. said, inter alia,"...... the offence may not have resulted in theGovernment's financial loss but the Respondent'sfavouritism effectively cut out properly qualified companiesf rom acquiring the contracts, which as a result, will havelost considerably when their tenders for the works wererejected ......" The above remarks by the Court of Appeal were mostencouraging. They also sent a clear and unmistakable warningto the possible corrupt.

Group

I n 2001, Y Group continued handling investigationsinto allegations of corruption made against variousgovernment departments, including Lands Department(LD), Architectural Services Department (ASD) and Food &E n v i ronmental Hygiene Department (FEHD). During they e a r, 213 investigations have been concluded resulting inthe arrests of 117 suspects, of which 63, including 37 governmentservants, have been prosecuted. At the time ofwriting, 22 FEHD Hawker Control Grade Officers, oneFEHD Senior Foreman and one Water Supplies DepartmentInspector are awaiting trial on charges of corruption andrelated offences.The following cases dealt with by Y Group during theyear are noteworthy, not only for the publicity generated, but also in demonstrating the continuing need for vigilancein corruption trends involving Government Servants and members of the public having dealings with governmentdepartments.Records kept by a small house developershowing regular payments to LandsDepartment officersSmall houses under constructionLands Department caseSince 1997, the ICAC has concludeda total of 183 investigationsinto suspected corruption involvingLD officers. The majority of theinvestigations focused on thealleged corrupt collusion betweenLD officials and small house developers.However, all these investigationsfailed to secure any tangibleevidence to prove the suspectedc o r rupt collusion between thealleged perpetrators. This situation changed with an investigationconcerning a group of LD officers suspected tohave corruptly assisted developers in their small housedevelopment projects in the New Territories, resulting ineight LD officers and 16 developers being arrested.Incriminating documentary evidence was seized duringthe operation which clearly shows that regular pay-ments were made by a particular developer to a LandI n s p e c t o r. The Inspector was subsequently charged andpleaded guilty to conspiring with two serving Senior LandExecutives to accept corrupt payments from five developers.At the time of writing, he has been remanded in ICACcustody awaiting sentence. It is anticipated that further LD

officers and developers will be prosecuted at the conclusionof the investigation.This investigation concerned suspected corru p t i o ninvolving a group of ASD Property Services Officers whohad allegedly received advantages from ASD sub-contractorsin return for lax supervision on their ASD maintenanceworks. ASD Property Services Officers caseEnquiries revealed that a Property Services Off i c e rhad solicited and obtained renovation work from sub-contractorsof ASD term contractors through companies inwhich the officer had a financialinterest. In return, theofficer, together with his colleagueswho assisted in the scheme, conducted only cursorysupervision on the workperformed by the sub-con- tractors. Apart from awardingmaintenance works tothese companies, the subcontractorsGovernment quarters inregularly paid fornight-club entertainment and Telford Garden where substandardp rovided prostitution servicesmaterials were usedto the officer and his par-in a ASD renovation projectticipating colleagues. Thecase was turned overt in December 2001 with the arrest ofthe officer and two ASD sub-contractors upon their returnfrom Macau, having attended a night-club there.The following two investigations also attracted particularconcern and wide-spread publicity :-Counterfeit locks caseA subsidiary of a Hong Kong public listed companyis a supplier to the Housing Authority (HA) of re p u t a b l ebranded Japanese door locks. The locks, which had beenincluded in the HA Approved List, were installed on doorsin flats in public housing estates developed by HA.Some of the counterfeit door locks seized during the operationInvestigation revealed that the manufacturers inJapan actually ceased production of the locks in 1997, andthat since then, the HA suppliers had manufactured the

locks in their own factory in mainland China, falsely claimingto HA that they were of Japanese origin.Following advice from the Department of Justice, theChairman, his five Directors and seven employees, includingtwo Japanese, have been prosecuted for conspiracy todefraud the HA. An ICAC informant reported that a former PoliceConstable (PC) was able to obtain subscriber details of telephonelines from two telecommunication companies forpayment of $1,000 for each transaction.In March 2001 five employees of each of the telecom-munication companies were arrested as they were conductingchecks on subscriber details of telephone numbers thathad been supplied by the informant, under the instructionof the ICAC. The former PC, a middleman and the twotelecommunication staff were subsequently charged witho ffences under the Prevention of Bribery Ordinance and Crimes Ordinance.Unauthorised disclosure of subscriber details caseMisconduct in public officeDuring the year, Y Group also concluded a number of investigations involving government servants taking unauthorisedleave and making false attendance records to coverPress coverage - The their absences. It would appear that the general perceptionUnauthorisedof some government servants had been that such misconductwas not criminal but would be dealt with by discipli-Disclosure ofSubscriber Details casenary sanction by their own department. This perc e p t i o nwas found to be incorrect when the Department of Justiceadvised to prosecute three FEHD officers for such conduct.All three were subsequently convicted resulting from theirguilty pleas or after trial. In passing sentence, the three separatepresiding magistrates all commented that the offenceswere serious and warranted deterrent punishment.

CHEUNG Sin-yee, Judy, Assistant InvestigatorJudy joined the ICAC as an Assistant Investigator in 1997. Oneof the first cases she was assigned to investigate involved the systematictheft by employees at a crematorium of valuable property placedin the coffins of deceased persons by their relatives for religious purposes.Bribes paid to a supervisor at the crematorium ensured that thethieves' activities were not interfered with - until the ICAC came onthe scene. Judy was awarded a Directorate Commendation for herwork on the case. She was recently selected by the ICAC'sCommunity Relations Department to feature as the main character inthe "ICAC Investigation Series" on the ICAC website.

INVESTIGATION BRANCH 2INVESTIGATION BRANCH 2 (IB/2)BY RYAN WONG SAI-CHIU, IDS, ASSISTANT DIRECTOROF OPERATIONS 2I took over Investigation Branch 2 (IB/2) in November 2001 overseeinginvestigation of corruption cases concerning the private sector. Personally, Isee this as an interesting and welcome challenge as before that I have beentaking charge of IB/1 for two and a half years dealing with government sectorcorruption, and IB/3 for three years dealing with corruption investigationconcerning public bodies and a wide range of operational and supportduties. The new posting will no doubt benefit me in broadening my perspectives,enabling a thorough comprehension of the corporate strategies and prioritiesin our fight against corruption both in the public and private sectors.Although new to the post, I am impressed that IB/2, under the leadershipof my predecessor Gilbert CHAN and the four Principal Investigators of

D, E, F and Z Groups, has had another year of remarkable success. I havegreat pleasure to be a part of the team, looking forward to building on theircontinued success.Looking ahead, I see one of the priorities as further enhancing ourcase management within IB/2, given the sustaining high caseload arisingf rom increased corruption reports and the Government's EnhancedProductivity Programme. We shall also work towards an even better andcloser "partnership" with the commercial sector, in particular the pro f e s-sional industries, in promoting "zero tolerance" policy towards corruptionand corporate governance.

Group

D Group continues to have the specific responsibilityfor investigating complaints of corru p t i o ninvolving transportation and related services, by land, seaand air, in addition to various "non-charter" private sectorinvestigations. This has meant the past year has seen officerswithin the group being involved in a variety of cases,some of them being worthy of particular mention.This year has seen a number of instances where theintegrity of medical practitioners could easily have beenundermined. A spate of cases where the signatures of doctorshave been forged on sick leave certificates werebrought to our notice after those certificates had been usedby various individuals to claim wages for days not worked.Initially, suspicion of being involved fell on those doctors as the original allegations suggested they had received monetaryrewards for issuing the certificates. It transpired that ineach case the certificates had been stolen, in one case actuallyby the doctor's assistant, for use by others. This resultedin suspended terms of imprisonment for those involvedhaving been convicted for offences under the Prevention ofBribery Ordinance of using documents to deceive theiremployers.The well known 'red taxis' of Hong Kong waiting forpassengers at Chep Lap Kok International AirportMisuse of system not infectiousUnfair school feesSometimes it is found that the corrupt target the morevulnerable in our society. This was so in the case of a caretakerof a school where various domestic helper gro u p srented parts of the premises for meetings outside normalschool hours. In addition to the official school hire fees thecaretaker solicited extra money from each group in order toe n s u re their continued use of the premises. The care t a k e rnot only lost his job but, after trial for soliciting advantageson a number of separate occasions, was also sentenced to aterm of imprisonment.A taxi-ing problemIt is not unusual for any service industry to attractcomplaints. The important passenger transport facility providedby taxis in Hong Kong is no exception and competitionbetween drivers to secure passengers, particularlythose to and from Chep Lap Kok International Airport,runs high. As a result complaints alleging corrupt arrange-

ments between groups of taxi drivers and hotel staff arereceived on a regular basis. One such complaint, allegingoperators of a taxi calling station were accepting advantagesfor diverting passenger calls to selected drivers,resulted in a joint operation with the Office of theTelecommunications Authority (OFTA). As a result, illegaltransmitting and receiving equipment was found at thecalling station and, although no one was dealt with for corruptconduct on that occasion, several individuals wereprosecuted by OFTA.False document brings bank manager toaccountIt has been very satisfying to see continuing positivep ro g ress in our liaison with Mainland authorities. Thisincludes the ability to more frequently introduce documentaryevidence before the courts which, this year, has includ-ed a range of documents including such items as falseMainland road toll receipts and public records. In one particularcase this involved official re c o rds held by the Guangzhou Industry and Commerc e A d m i n i s t r a t i o n B u reau (the Bure a u )being admitted asevidence in court.This was by way of acertificate signed bythe Chief Secre t a r yfor Administration,Hong Kong, whichallows for such documentsof a publicn a t u re from otherA sample of forged Mainland road toll receiptsjurisdictions to bereceived and admittedas evidence. TheA Certificate of the Chief Secretary forAdministration required when producing public case itself concernedrecords from other jurisdictions a bank manager alleged to have been corruptly involved with a director andmanager of an investment company in the issue of a bankreference letter which contained false information. The lette r, signed by the bank manager and falsely indicatingsound financial status of the investment company, was

used to satisfy the re q u i rements for registration of a jointv e n t u re in the Mainland. The individuals were sentencedto terms of imprisonment of between 15 months and 21months for conspiring to defraud the Bureau. In dismissingtheir appeal, the Appeal Court Judge commented this conductcould have dealt a serious blow to the reputation ofHong Kong as an international commercial city and financialcentre.Supply creates demandThere will always be strong competition in the privatesector between suppliers of similar commodities in theirendeavours to effect sales. This healthy competitivenessbecomes more intense in difficult economic times when survivalof the fittest can lead to buying agents taking advantageof an opportunity to demand kick-backs in return forplacing orders. However, occasionally the roles arereversed, where it is the supplier who has the upper handin the transaction. This was so in one particular case wherethe sales manager of a company acting as the exclusiveHong Kong agent for the supply of computer componentparts corruptly used his unique position. He solicited fromthose companies who were unable to obtain supplies fromelsewhere a percentage of the value of goods ordered. Thesales manager and others are presently awaiting trial, havingbeen charged with corruptly offering/soliciting advantagesamounting to over $5 million.

Group

En d e a v o u r, Enthusiasm and Energy continued tobe essential elements re q u i red by officers of EGroup during 2001.160 defendants, an average of over three a week, werebrought before the Courts during the year by E Group officersfor corruption and associatedoffences.The Charter of E Group is very diverse with a responsibilityfor investigating allegations of corruption againstvillage re p resentatives and in the travel, tourism, hotel,insurance, security guard, press, media and printing industries.The general increase in corruption reports wasreflected in a much heavier case load for the officers of EGroup.A number of investigations were successfully concludedduring the year and the following are just a smallsample of the type of cases dealt with by the Group.Three persons convicted over corruptionfacilitated phone smuggling The smuggled contraband - mobile phones andbatteriesIn an earlier EG roup operationICAC officers intercepteda securitycompany armoure dvehicle at the ManKam To bord e rc rossing and arre s t-ed the crew of thevehicle and, subsequently,a number ofother persons.Concealed insidethe vehicle were 950mobile phones andThe corruption/smuggling ambush928 phone batteries valued at $2.78 million, which werebeing corruptly smuggled to the Mainland. The driver ofthe security vehicle and the vehicle crew commander pleadedguilty at the District Court to corruption and smugglingo ffences and were sentenced to two years' imprisonmentand ten months' imprisonment respectively. The owner ofa mobile phone trading company who was convicted ofsimilar offences, after trial, received a sentence of thre eyears and three months.

Ex Gurkha lieutenant jailed for bribery A former Gurkha lieutenant of the British Army wassent to prison for corruption. Whilst employed as a securitysupervisor for a security company he accepted bribes inreturn for assisting Nepalese men, many of whom were formerGurkha soldiers, to obtain employment as securityguards at construction sites. Nine Nepalese guards werealso convicted of paying bribes to the supervisor in order tosecure employment.Following an investigation into allegations thatbribes had been paid to facilitate the inflation of costs relatingto computer training courses in order to deceive theERB, the former head and project manager of the HolyCarpenter Church Community Centre were each sentencedat the District Court to two years' imprisonment for deceivingthe ERB of $160,000 in allowances and tutor fees.Claims that a girlfriend and the mother of one of the defendantshad taught retraining courses and were entitled totutors fees were false.Following investigation into an allegation that a formerinsurance agent had accepted bribes to facilitate falseto be taken into consideration before being sentenced toterms of imprisonment. A bonesetter was also jailed. 25other persons were additionally prosecuted for involvementin the numerous false claims submitted, or in the dis-bursement of funds obtained.Employees Retraining Board (ERB) caseDoctor and bonesetter jailed for medicalinsurance fraudinsurance claims, a medical practitioner and a fre e l a n c einsurance agent pleaded guilty at court to 21 counts of conspiracyto defraud. They each asked for 44 other offencesEx senior executive of a travel agency admitsaccepting advantagesThe former assistant general manager of a travelagency pleaded guilty to accepting advantages for recommendingan Australian tour provider to the travel agency.

Two years' imprisonment for cheating insurancecompanies with claims for bogus accidentson the MainlandA painting worker who cheated insurance companiesby making claims using false medical certificates, hospitalexpense receipts, discharge summaries, and accident andhospitalisation claim forms to purport that he sustainedbrain injuries following an alleged traffic accident in FujianP rovince, was jailed for two years. The ICAC obtainedassistance from Mainland authorities in this investigation,which emanated from a complaint that an insurance agenthad accepted bribes for processing false insurance claims.Two witnesses from a hospital in the Mainlandattended court in Hong Kong to give evidence. Themagistrate found their evidence to be reliable andhonest, and convicted the accused.An investigator addressing the Conference on Professional Ethics forthe insurance industryIn addition to their duties as investigators, officersare also required, from time to time, to give presentationson the work of the Operations Departmentas part of our strategy of proactive liaison and partnershipwith industries. Two investigators spoke ateach of the two ICAC organised conferences on professionalethics for the insurance industry. Theirtopic, "Tackling Corruption in the InsuranceIndustry" included examples of the nature of corruptpractices encountered by ICAC Operations Departmentofficers when investigating corruption within the world ofInsurance. The two conferences aimed, re s p e c t i v e l y, atinsurance managers and agents, were an opportunity forrelevant aspects of the prevention of bribery laws to beexplained. All involved were able to participate in anexchange of ideas, knowledge and experience.Life as a busy investigator has to be suitably balanced.At the E Group annual training camp held inN o v e m b e r, officers had an opportunity to discuss mattersaffecting their work. They participated in an orienteeringexercise in the New Territories to enhance their team-building,problem solving and leadership skills. This was verychallenging and totally different from their normal duties.I have recently been transferred from E Group toanother post. I have enjoyed the past two years in E Group and wish all members every success in the year to come. Iknow they will continue to be a highly professional team.

A fugitive to Australia faced trial in Hong Kong eventuallyEven corrupt people sometimes have a guilty conscience.A property manager of a listed company in HongKong felt remorse after he accepted $2.6 million commissionfrom two estate agents as a reward for recommendingA former executive was returned from Canadathem to handle the redevelopment of several of his employer'ssites. He informed his employer of his guilt and made full and frank admissions when interviewed by ICAC officers.He pleaded guilty and received 18 months' imprison-ment in the District Court.A man falsely represented to a debt collector that hehad connections with some government officials and that hecould secure an acquittal in the debt collector's forthcomingtrial. He solicited a reward of $300,000 to be deposited intoa bank account in the Mainland, which he deceptivelyopened, using a name identical to the Secretary for Justice.The man was subsequently convicted of attempting toobtain property by deception and sentenced to 16 months'imprisonment.Returning to face justice in Hong KongBy 2001, the HKSAR Government had signedextradition agreements with thirteen countries.In last year's Review I mentioned certain protracted extraditionproceedings which we continued to pursue. We werethen actively seeking the return of an ex-employee of acomputer company who left Hong Kong in 1995 and wasarrested in Toronto, Canada, in 1998 for offences of corruptionand false accounting relating to the sale of computerhardware, valued at $2.9 million. We were also seeking thereturn of an architect who dishonestly obtained over $3 millionfrom his employers by falsifying accounts. He leftHong Kong in 1994 and was arrested in Sydney, Australia,in April 1999. Both fugitives vigorously fought extraditionby all legal means but were finally returned to Hong Kongafter all avenues of appeal were exhausted. Both were convictedin Hong Kong courts in 2001.A guilty conscienceA display of fameZero down paymentAs a result of a corruption allegation, enquiriesrevealed that a number of unscrupulous property agents inthe New Territories falsely inflated in the Sales and Purchase agreements the selling price of village houses by

up to 30% to facilitate the prospective purchasers' fraudulentlyobtaining mortgage loans to fully cover the actualselling price. Consequently, the purchasers were notre q u i red to raise the 30% down payment, which the bankwould not lend to them, in accordance with the regulatedlending policy. 96 persons were arrested, including propertyagents, property purchasers and a solicitor's clerk, foro ffences involving over 69 transactions, totalling $20 million.Unusual cyber crimeA major international computer software companyo ffers training courses on IT skills and administers pro f i-ciency examinations. On the Internet, a Hong Kong basedweb site offered for sale questions for these examinations,and it was alleged that the operator of the web site hadobtained the questions by corrupt means. An ICAC officer,posing as a customer, purchased questions via the Internet.It was established that they were not genuine questions,and the suspect was eventually traced and arrested.The Guangnan casesThis matter has beenreported in pre v i o u sReviews. The investigationcommenced in late 1998involving the senior managementof Guangnan(Holdings) Ltd., a HongKong listed company, inc o r ruption related fraudtotalling over $1.8 billion.Separate trials in the Courtof First Instance and theDistrict Court have re s u l t-ed in the conviction of 12defendants who were sen-to terms of impris- tencedGuangnan Case - The pursuit of fugitivesonment ranging from twocontinuesto nine years. Four trialsawait hearing in the Court of First Instance. 28 arrest warrantsare outstanding for other senior executives ofGuangnan and their associates, including the former chairman.

Martin TSE Yuk-sing, Assistant InvestigatorAfter graduating from Hong Kong University of Science and Te c h n o l o g y,Martin worked as an electronics engineer in the semiconductor industry. Duringthis time, he also served as an auxiliary police officer for two years prior to joiningthe ICAC as an Assistant Investigator in May 1996.Of his career with the Commission, Martin says: "Although six years is not along time, I consider these years to have been the most remarkable, enjoyable andchallenging period of my life. Shortly after I joined the Commission, I became anArms Issued Officer (AIO) and have been involved in various operations, varyingfrom witness protection to raids on illegal bookmaking centres. In May 1998, I hadthe honour to be chosen to attend a two-month Physical Training Instructor (PTI)course at the Hong Kong Police Training School. During the course I gained botht h e o retical and practical experience in physical training and made a number offriends, both in the police service and in other government departments. Being oneof only two qualified PTIs in the ICAC, I am involved with providing physicaltraining for both AIOs and new recruits, in addition to my busy daily investigativework. The Commission provides me with excellent training and job opportunities.I am very proud to be part of it."

Group

"He who ascends to mountain tops, shall find The loftiestpeaks most wrapt in clouds and snow ......" ( Lord Byron,1788-1824) Y ear 2001 commenced with a tune of success as wehad a number of enquiries satisfactorily completedin the previous year and some of us, being mere l yhuman, inclined to consider ourselves having achieved themountain tops. This comfort however did not last long. Ittook no time for us to realize that we would have to fightthe remaining clouds and snow, and perform even betterthis year. I am truly grateful to the officers in Z group whodeal with complex enquiries in the banking and financialsectors, and respect them for their determination to achieveand courage to face challenges.A skimmer of match box size used to capturecredit card data for counterfeitingBribery & counterfeit credit cards(CCCs)In the area of CCC and related corru p-tion, we have had successful prosecutions formany years. Our previous successes causedcriminals in this area to adopt a high level ofalertness and precautions, thus making it mored i fficult for us to detect these crimes.However, the professionalism of ICAC investigatorsspecialized in this area pro d u c e di m p ressive results and MasterCardInternational presented them a certificate ofappreciation in June this year.Appreciation shown byMasterCard International toICAC officers for their successful In March this year, information wasdetection of credit card counterfeitingactivitiesreceived that four members of a CCC syndi-cate were organizing a trip to Seoul, SouthK o rea, where they intended to utter CCCs manufacture dwith data they captured in Hong Kong and elsewhere. A team of ICAC officers travelled to Korea to assist the SeoulM e t ropolitan Police in the identification of the suspects.The criminals were arrested in Seoul. In Hong Kong, simultaneousactions were taken, resulting in the seizure of creditcard data and computer software used in the manufactureof CCCs. The leader of the syndicate was charged withother CCC offences upon his return to Hong Kong afterserving a prison sentence in Seoul.Courts are now gravely concerned about crimes andc o r ruption involving CCCs. During the year, two defen-

dants were sentenced to 15 months' imprisonment. Inanother case, three defendants were jailed for two yearsand six months, three years and four years.Eighteen sales persons of a fitness centre werecharged this year for misleading their employer with false documents, contrary to Section 9(3) of the Prevention of Bribery Ordinance. They abused the procedures of a businesspromotion program and awarded "walk-in" applicantsto the centre with rebates to which the applicants were notentitled, on the pretext that these applicants had been introducedby existing members. This scheme enabled them toearn more commissions. Ten of the defendants pleadedguilty and the remaining eight were bound over for a periodof threeyears. Other significant cases :Tax loan scamFive persons applying for tax loans totalling about $1million from a foreign bank with false supporting informationwere convicted in August this year. The defendantswere sentenced to imprisonment from six to 20 months.Corruption-related fraud in a fitness centreA serious case of perverting the course of publicjusticeDuring the trial of a construction foreman for falseaccounting offences in October 2000, ICAC investigatorssuspected that the main prosecution witness might havebeen interfered with. It was later proven that the defendanthad sent an intimidator to threaten the witness so thathe would not give unfavorable evidence against the defendant.The defendant was acquitted in the original trial butICAC investigators pursued the threat aspect and successfullyproved it. The intimidator and the construction foremanwere both convicted of perverting the course of publicjustice. They were respectively sentenced to 12 and 18months' imprisonment.A director of two PVC manufacturing companies wasjailed for corruption facilitated fraud offencesCorruption involving PVC manufacturing companiesA company director of two PVC manufacturing companiesand two partners of a machine supplying companywere convicted of conspiring to defraud the PVC manufac-

turing companies by causing them to purchase machineryat inflated prices between 1994 and 1996. The dire c t o rreceived $3.3 million in unlawful rebates. He was furtherconvicted of deception offences for inflating purchase pricesof PVC materials by a total amount of $1.5 million whenordering materials for his employers. The defendants weresentenced to imprisonment for three years and thre emonths, two years, and one year and nine months, respectively.A general manager of a building management companywas convicted at the District Court of having offered$150,000 to the chairman and a member of the IncorporatedOwners of two industrial buildings in Kwai Chung with aview to obtaining a renovation contract. The trial judgesentenced him to imprisonment for two years and thre emonths. The sentence sent a timely message in view of therising trend of corruption complaints concerning buildingmanagement.Important operations :Bribery in building managementLargest cash seizure in thehistory of the ICACIn Febru a r y, cash and valuables amounting to about$20 million were seized duringan operation. In this case, twod i rectors of a travel agencyw e re suspected of corru p t i o nby forging a business contractLargest cash seizure in the history of the ICACwhich allowed a finance companyto claim from the travel agency $30 million compensa-tion when the finance company was only entitled to $2.5million. The two directors of the travel agency were not inHong Kong during the operation and, at the time of writing,warrants of arrest are being sought against them. Twodirectors of the finance company were arrested.Money laundering & bribery (ICAC/Police jointinvestigation)In September, our overt operation on a money launderingsyndicate disclosed that, over the past five years, adaily average of $50 million cash had been moved to Hong

Money brought across the border into Hong Kong by amoney laundering syndicatesought on preferring corruption charges against the bankmanager.In October, an arrest/search operation was conductedin respect of suspected bribery of the sole sourcing agentof a worldwide broadcasting corporation. It is alleged thatthe directors of the sourcing agent solicited and acceptedunlawful rebates amounting to $13 million from local suppliers.Two directors of the sourcing agent and a seniorexecutive of the broadcasting corporation who was suspectedto have had a share of the rebates were arrested.Kong across the border from the Mainland by couriers.The total amount involved is believed to be around $50 billiondollars. A bank manager is suspected of corruption inassisting the syndicate to conceal the source of money. 39persons were arrested in this case.As offences under the Organized and Serious CrimesO rdinance (OSCO) were disclosed in addition to the corruptionaspect, a joint investigation team comprising ICACand Hong Kong Police officers was formed in November2001 to deal with the OSCO issues. Legal advice is beingBribery of a broadcasting corporation sourcingagent suspected

Sarah LAU Wai-kuen, Assistant InvestigatorSarah joined the Commission in February 1999 as an Assistant Investigator,and is currently involved in the investigation of corruption in the banking sector.She recently travelled to the United States in connection with an investigation,and found the experience interesting and challenging." Without doubt," Sarah says of the experience, "the three-week overseasduty visit was very good exposure and most educational for me as a junior officerwith limited experience. Working together with foreign law enforcment agents,meeting with directors of multinational financial institutions, and interviews witha variety of foreign nationals were all distinct platforms for broadening my perspectivesas an investigator and establishing liaison contacts for the future. TheICAC provides me with excellent training and job opportunities. I am very proudto be part of it."

INVESTIGATION BRANCH 3 INVESTIGATION BRANCH 3 (IB/3)BY GILBERT CHAN TAK-SHING, IDS, ASSISTANTDIRECTOR OF OPERATIONS 3I took over Investigation Branch 3 (IB/3) in November 2001 to overseeG, H, R and X Groups. To me, the transfer is like home-coming because myfirst posting as a young Investigator in 1977 was in G Group, dealing withintelligence gathering and informant handling. In the mid-'90s, as a PrincipalInvestigator, I supervised X Group investigating corruption concerning publicbodies and public elections. As re g a rds H and R Groups, they pro v i d eoperational support to other Investigation Branches, including surveillance,intelligence analysis and witness protection.Compared with the past, the purview of IB/3 nowadays is much morediversified, the strategies more proactive and the modus operandi moresophisticated. The new post as AD/3 offers me a welcome challenge and Ihope IB/3 will also benefit from a new pair of eyes.

Group

The work of G Group, often sensitive, sometimesd a n g e rous, always challenging, presents its off i- cers with considerable demands. 2001 saw significantdevelopments and successes in the G Group charter areas ofintelligence gathering, informant handling, underc o v e roperations, and operational liaison with the Mainland andoverseas law enforcement agencies.Intelligence gathering and informanthandlingThe Informant Development Programme (IDP), establishedin early 2000, provides a systematic approach to the evaluationand, where appropriate, subsequent recruitment andhandling of potential informants. G Group currently maintainsa pool of informants recruited from all walks of life.Intelligence gleaned from this source is analysed in the contextof existing intelligence and, where viable, either dis-seminated to investigators to assist in ongoing investiga-tions or used proactively to generate new corruption inves-tigations. Sophisticated and recently enhanced IT network-ing enables G Group to share intelligence with frontlineinvestigators in a timely and efficient manner.As an example of the value of informant-generatedcases, one such investigation in 2001 led to the conviction offour defendants, including a police constable, a retired seniorpolice constable and two of their associates on conspira-cy charges. Evidence revealed that the police officers hadaccepted a bribe of $45,000 in return for their assistance insecuring the release of a suspect in a wounding case. Thedefendants were sentenced to terms of imprisonmentbetween three and four years. This case was a typicalexample of the "satisfied customer" syndrome, which wouldnever have come to light but for the information suppliedby the informant.Another informant-generated case during the yearunder review resulted in four trials at the Court of FirstInstance. In one trial three defendants were convicted ofdrugs-related charges and sentenced to imprisonment termsranging from four years to six years and eight months. Atthe time of writing the remaining three trials are ongoing, asis the original corruption investigation which led to theseprosecutions.

O fficers of G Group's Undercover Unit, who haveu n d e rgone comprehensive and professional training, specialisein undercover operations. In 2001, eight officers ofthe Unit, including the Chief Investigator in charge, visitedtheir counterparts in Australia and the United Kingdom forfurther training and experience-sharing purposes.Overseas undercover operatives also visited the ICAC on areciprocal basis.Undercover operationsIn-house undercover trainingIn June 2001, G Group conducted its 3rdInformant Handling and Under-cover Course.Participants, totalling 20, comprised 14 ICACofficers and six delegates from law enforcementagencies from other jurisdictions: the MacauCommission Against Corruption, theMalaysian Anti-Corruption Agency, theS i n g a p o rean Corrupt Practices InvestigationB u reau and the Singapore Police Force. Inaddition to providing training in informanthandling skills and undercover tactics, the twoweekcourse was designed to foster experiencesharing and liaison networking between participants.Visiting Director of the Anti-Corruption and Anti-Bribery Bureau,Guangdong Provincial People's Procuratorate, Mr. XU Tianxiang withICAC Head of Operations, Mr. Tony KWOK Man-waiLiaison with the MainlandThe Mutual Case Assistance Scheme operated by theICAC and the Mainland People's Procuratorates to assistinvestigations in each other's jurisdiction continues to yieldvaluable results. During 2001, the ICAC interviewed a totalof 31 witnesses in the Mainland, while at the request of theMainland authorities a total of 68 witnesses were interviewedin Hong Kong in connection with Mainland investi-gations. The table at Appendix A p rovides re l e v a n tdetailed statistics. By way of general liaison, Mainland government officialsfrequently visit the ICAC, where they are briefed on our work. On a reciprocal basis ICAC officers at a varietyof levels periodically visit Mainland law enforcement agenciesand government organisations. We have found thesecross-boundary exchanges to be of particular value in termsof enhancing mutual understanding.

International liaisonSince January 2000, the ICACInternational Anti-Corruption Newsletter hasbeen published on-line on a quarterly basis.It can be accessed on the ICAC official website:h t t p : / / w w w. i c a c . o rg . h k / n e w s l . h t m l .The Newsletter is a "cyber- f o rum" for internationallaw enforcement agencies and otherinstitutions to exchange information ands h a re experiences with a view to combatingcorruption internationally.The Commission continues to hostoverseas visitors on a regular basis - a task coordinatedby G Group's International LiaisonVisiting Minister of State, Tanzania, The Hon Wilson M. Masiling, with ICACHead of Operations, Mr. Tony KWOK Man-waiSection. A breakdown of such visits during2001 can be found at Appendix B. Appendix C summarisesthe various international conferences and training coursesattended by ICAC officers during 2001.In essence, G Group performs a dual role. Whether inthe field of intelligence, informant handling, underc o v e rwork, training or liaison, the Group provides essential operationalsupport to the Department's investigative workforce,while at the same time forging and maintaining vitalcommunication channels, both within the Department andwith other law enforcement agencies. The dynamicsinvolved in these tasks are complex and challenging, butthe results speak for themselves. G Group officers, past andpresent, can justifiably claim to have made a significant contributionto establishing the reputation of the ICAC as oneof the world's leading protagonists against corruption.Visiting FBI Section Chief, Mr. Thomas Fuentes, withICAC Head of Operations, Mr. Tony KWOK Man-waiVisiting Acting Deputy Commissioner, AustralianFederal Police, Mr. Denis McDermott, with ICACDirector of Investigation, Mr. Francis LEE Chun-sang

Appendix B - Overseas Visitors to ICACDateCountryOrganisationFebruaryKoreaDankook UniversityHankuk University of Foreign StudiesMarchNetherlandsVietnam NigeriaThailandCustoms Policy & Legislation DepartmentHai Phong CityCode of Conduct BureauChulalongkorn UniversityAprilThailandInternational Law Enforcement AcademySingaporeSingapore Police ForceMayAustralia TanzaniaSenator for Western AustraliaPresident's OfficeJuneSingaporePhilippinesSingapore Home TeamDepartment of JusticeSeptemberUSAFederal Bureau of InvestigationAustraliaAustralian Federal PoliceOctober TanzaniaMinistry of State (Good Governance of Tanzania) NovemberKoreaPresidential Commission on Anti-CorruptionFranceMinistry of Finance DecemberUSAGeorgetown University

Appendix C - Overseas Conferences and Training Courses Attended by ICAC officersDateOfficer(s) AttendingTitleVenueJanuary1 Senior Investigator ILEA Integrity Assurance and Corruption Investigations Course Bangkok, Thailand Singapore Police Force Intelligence Analyst/Collator Course1 Senior Investigator1 Assistant Investigator 2001 Singapore International Economic Crime Conference 2001Head of Operations1 Principal Investigator1 Chief InvestigatorSingaporeSingaporeFebruary1 Chief Investigator Royal Canadian Mounted Police Strategic Intelligence Analysis Ottawa, CanadaCourse2 Senior Investigators Singapore Police Force Field Intelligence Officers Course1 Senior Investigator Singapore Police Force Police Trainers CourseSingaporeSingapore Undercover Officers training attachment to London Metropolitan, Greater Manchester and Merseyside Police Forces1 Senior InvestigatorLondon, Manchester& Liverpool, UK1 Investigator2 Assistant Investigators4 Senior Investigators Training attachment to Singapore Police ForceSingaporeMarchMay1 Chief Investigator3 Assistant InvestigatorsUndercover Officers training attachment to South AustraliaPolice, New South Wales Police and Australian Federal PoliceAdelaide, Brisbane,Sydney, AustraliaForces1 Senior Investigator ILEA Supervisory Criminal Investigator CourseBangkok, Thailand1 Chief Investigator 2nd China Accounting and Finance Review InternationalConferenceBeijing, PRCHead of OperationsGlobal Forum II on Fighting CorruptionThe Hague,The NetherlandsJune 1 Senior Investigator MasterCard Asia Pacific Security ConferenceBrisbane, Australia1 Directorate Officer1 Assistant DirectorInternational Group of Experts on Corruption ConferenceCorruption Eradication Commission ConferenceSydney, AustraliaJakarta, Indonesia

Appendix C - Overseas Conferences and Training Courses Attended by ICAC officersDateOfficer(s) AttendingTitleVenueJuly1 Chief Investigator FBI National Academy CourseVirginia, USA National Undercover and Assessment Training at London London, UK1 Senior Investigator Metropolitan Police Force1 Assistant Investigator1 Assistant DirectorPolice Reform Building Integrity ConferenceBrisbane, AustraliaAugust1 Senior Investigator ILEA Supervisory Criminal Investigator CourseBangkok, ThailandSeptember1 Chief Investigator International Association of Financial Crime InvestigatorsConference1 Chief Investigator Australian Police Management Development Programme3 Senior Investigators ILEA Advanced Management CourseUSASydney, AustraliaNew Mexico, USA2 Senior Investigators National and International Fraud Investigation Course, Greater Manchester, UKManchester PoliceOctober1 Directorate Officer9th Interpol International Group of Experts on CorruptionMeetingLyon, France1 Directorate Officer1 Assistant Director10th International Anti-Corruption ConferencePrague,Czech RepublicNovember1 Chief Investigator RCMP Senior Police Management CourseOttawa, Canada 1 Senior Investigator Advanced Source Management Course1 Senior Investigator APG Money Laundering Methods & Typologies Workshop1 Chief Investigator Network Security Conference1 Principal Investigator Australian Police Management Development Programme(Executive)Nottingham, UKSingaporeAmsterdam,The NetherlandsSydney, Australia1 Senior Investigator Policing Cyberspace International Conference and attachment toRoyal Canadian Mounted PoliceVancouver andOttawa, Canada1 Principal Investigator A Holistic Approach to Delivering Quality Customer ServiceCourseBerkshire, UK 1 Chief Investigator Interpol 1st International Conference on Prevention of FraudLyon, France

Group

HG roup provides surveillance support to theDepartment's Investigation Branches in theform of planning and execution of physical surveillance,furnishing technical support during surveillance operationsand undertaking surveillance training for selected investigatingofficers.I am pleased to report that H Group has had anotherbusy and productive year in providing surveillance supportservice to the Investigation Groups. Our current strategy, inpartnership with the investigating team, together withintelligence and technological support, has turned out to bevery successful. This can be illustrated by the two caseswhich I will deal with below.The first case concerned a property tycoon who wasparty to civil litigation over the estate of her husband.During the course of the litigation, it was considered necessaryto refer the husband's will to the Government Chemistfor forensic examination. A report was later made to theICAC alleging that the property tycoon had beena p p roached by a member of the Government Laboratory,who solicited $10 million in return for manipulating theresult of the forensic examination in her favour. Immediateinvestigative action was taken, including covert monitoringof the suspect's activities. Within a short period of time, anambush operation was mounted resulting in the arrest oftwo male suspects, who were later identified to be a practisingbarrister and a solicitor. The pair were later charg e dwith an offence of blackmail, and in the ensuing trial oursurveillance agents gave crucial evidence establishing theguilt of the two defendants.The second case concerned alleged corruption on thepart of a security guard of a security firm and his crew comma n d e r, who were responsible for transportation of cashunder armed escort in an armoured vehicle. Extensive surveillancewas mounted, including physical observation andv i d e o - re c o rding of the activities of a smuggling syndicateand the two corrupt employees, culminating in the interceptionof the armoured vehicle at the border control point andthe arrest of the suspects. Inside the vehicle, about a thousandmobile phones and batteries worth about $3 million,which were unmanifested cargo, were recovered.

Enhancing professionalism and experiencesharingAs I said last year, we are mindful of the need tomaintain the Group's professionalism and eff e c t i v e n e s s ,insofar as we are able to capitalize on technological developmentin maintaining the Group's operational capability.During the year, a new section - the Technical Aid Section -was formed within H Group to provide an efficient andintegrated support service to the Investigation Gro u p srequiring technical assistance. With the rapid developmentof technology and increasing sophistication and globalisationof criminal enterprise, we recognize the need to learnfrom our counterparts through experience-sharing. Duringthe year, we continued to have useful exchanges with otherlaw enforcement agencies overseas, including Canada,S i n g a p o re and the USA through operationalliaison and attachment, as well as with ourneighbouring counterpart in Macau - TheCommission Against Corruption, Macau SAR.In anticipation of new challenges, I andmy senior officers aim to enhance H Gro u p ' se fficiency by promoting and practising openand understanding management, nourishing alearning organizational culture, and building as t rong sense of cohesion and mutual caring.Lastly, I would like to take the opportunity tothank my colleagues in the Group for theirprofessionalism, perseverance and dedication to duty.Surveillance photographs showing activities of acorruption syndicate involved in cross-bordersmuggling. Mobile phones and batteries weredelivered to an armoured vehicle which eventuallycrossed the border via Man Kam To control point

Senior Investigator Dominic LEUNGDominic LEUNG joined the ICAC in 1974 as anAssistant Investigator. He immediately found the workchallenging and exciting. Over the years that feeling has notabated although experience now allows a different perspective.27 years of front line investigation work have resultedin eight Directorate commendations, the most satisfyingbeing that awarded in 1999 for his contribution in a corruptionrelated horse race fixing case. When asked about thefuture, Dominic says, "I have always found job satisfaction,friendship and a sense of belonging and I am sure these valueswill enable me to work for another decade."

Group

RGroup is responsible for providing support servicesin the areas of production of statistics andidentifying corruption trends; intelligence analysis and development; firearms training, witness protection and specialtactical operations.StatisticsR Group maintains key statistical information on corruptionreports and results of investigations. It serves notjust the Operations Department but the whole of theCommission. It provides relevant, reliable and timely statisticsto facilitate intelligence re s e a rch and planning, anddeployment of re s o u rces. Periodic statistical re p o r t s ,together with objective analyses, are produced for a varietyof purposes including briefing and liaison meetings conductedby senior officers. R Group also publishes an annualreport on corruption and malpractices in the civil service forthe information of Civil Service Bureau and heads of governmentdepartments. The report, published in conjunctionwith the Civil Service Integrity Programme, serves to providean overview of the problems of corruption and othermalpractices in government departments, to highlight thea reas which are more susceptible to corruption and malpractices,and to promote a greater awareness of the prob-lems.Intelligence research and developmentDuring the year, continuous IT development hasresulted in the enhancement of a dedicated intelligencedatabase system for use by the Central Research Unit (CRU)in the central development of intelligence and the provisionof tactical and strategic intelligence support to theDepartment. In addition to maintaining the flow of informationand intelligence within the Department, the CRUalso publishes a quarterly report on analysis of statisticsand intelligence on corruption for circulation amongstd i rectorate officers in the Commission. This report places strong emphasis on intelligence gathered by CRU and seeksto identify the extent to which social, economic and politicalevents may have influenced developments in the corruptionscene.

Witness protection and firearms trainingR4 Section, a specially trained and equipped Sectionin R Group, is responsible for training the Commission'sArms Issued Officers (AIOs), implementing witness protectionprogrammes, and special tactical operations - whichinclude the arrest of potentially violent persons - forc e dentry and securing high risk premises.Under the Witness Protection Ordinance, the Directorof Investigation (Government Sector) is the designatedapproving authority for the establishment and maintenanceof the Witness Protection Programme (WPP) under whichthe Section is to arrange for the provision of protection andother assistance for ICAC witnesses. Risk assessment andthe level of protection are determined by a Witness SecurityPanel and once a witness enters a WPP, his identity, locationand the specific arrangements made for his protectionare restricted exclusively to the Chief Investigator in commandof the Section. The Section is also responsible for theprotection and escort of prisoners outside ICAC premises.Arms Issued Officers in training at firingrange/forced entry exercise

Group

XG roup is responsible for the investigation of complaints of corruption involving public bodiesand public elections.Public bodiesAs corruption in this area has a significant impact onthe well-being of the community, this type of investigationis frequently sensitive and tends to attract public attention.To effectively combat corruption in public bodies, X Groupadopts a proactive strategy and partnership appro a c h .These measures have been very successful in fostering theco-operation of management in the various public bodies.In fact, the majority of the following cases were reported bymanagement of the public bodies concerned.Cross-border smuggling facilitated bycorruptionLast year, I reported a corruption case involving af reight manager of the Kowloon Canton RailwayCorporation (KCRC), who allegedly accepted bribesamounting to $200,000 from a syndicate for rendering assistancein cross-border smuggling activities. Millions of dol-lars worth of unmanifested raw material for cigarette filterswas seized from a train departing from Hong Kong for theMainland. The seizure was sufficient to manufacture 1.4billion cigarettes, thus causing a huge financial loss to governmentrevenue in the Mainland. In March 2000, the managerwas convicted of bribery and smuggling offences andwas sentenced to four years' imprisonment. He subsequentlyagreed to co-operate with the ICAC and providedinformation to assist in further investigation. In July 2001,Cigarette filter material on the platform at the RailwayTerminal, prior to being smuggled across the borderthe smuggler and his employee were charged with similaroffences at the District Court. The employee was acquitteddue to insufficient evidence, but the smuggler was convict-ed after trial and was sentenced to three years' imprisonment.The case illustrates the peculiar nature of corruption where, very often, successful prosecution relies heavily onthe evidence of an accomplice.Corruption in works contractIn January 2001, a works supervisor of the MassTransit Railway Corporation (MTRC) and a sub-contractor

were charged with bribery offences in relation to their corruptcollusion in conniving at sub-standard work and infla-tion of costs in a $4.5 million contract to carry out repairs atan MTRC station. The advantages included lavish meals,visits to karaoke, entertainment at nightclubs and otherfinancial benefits. After trial at the District Court, theyw e re convicted and respectively sentenced to 21 and 12months' imprisonment. The Work Supervisor was orderedto repay $40,000 to the MTRC.In May 2001, a Senior Technician of China Light &Power (CLP) was charged with accepting $730,000 forfavouring a contractor. The offeror was responsible for theinstallation of internal security systems for CLP in a contractworth over $4 million. An internal audit conductedby CLP revealed that equipment valued at more than $2million was either not installed, or was of inferior quality.The contractor and his manager were also charged withbribery offences, conspiracy to defraud and forgery. Theirtrial is ongoing at the time of writing.Sample test showing incomplete waterproof coating,poor workmanship and repair at insufficient depth in theDiamond Hill MTR Station Water Leakage RepairProjectTheft from bus coin boxLast year, I reported a case concerning a coin collectorof Citibus Group Limited (CGL), who allegedly bribedhis supervisor to facilitate the theft of cash from coin boxes.Enquiries revealed no evidence of corruption, but in May2001, the coin collector was charged with theft and wassubsequently convicted. He was sentenced to four months'imprisonment and ord e red to repay CGL the stolen proceeds.Public electionsOn the election front, the new Elections (Corrupt andIllegal Conduct) Ordinance came into operation in Marc h2000. During the year, we continued to maintain close liaisonwith the Election Affairs Commission, with whom wehave been working to ensure fair and open elections, fre e from corrupt influence.District Council electionsIn April 2001, a successful candidate in the 1999District Council Elections was charged with conspiracy to defraud the Registration and Electoral Office and incitingothers to pervert the course of public justice. Enquiries

evealed that, on the candidate's instruction, two employeesof a solicitor's firm fraudulently registered as electors usingfalse addresses provided by the candidate so as to enablethem to vote for her in the election. She subsequently askedthem to lie in order to frustrate criminal investigation. Thetwo employees were prosecuted, pleaded guilty to thecharges, and testified against the candidate. As a result, shewas convicted and sentenced to three months' imprison- ment. She has filed an appeal against her conviction.In May 2001, a former Legislative Councillor wasc h a rged with offences of bribery, misconduct in publico ffice, false accounting and theft in relation to his acceptanceof bribes to abuse his office as a legislator, and misap-propriation of consultation fees by deception. After trial atthe District Court in December 2001, he was convicted ofcorruptly accepting $60,000 through the misuse of his publicoffice and of stealing $20,000 by using false accountingdocuments. He was sentenced to eighteen months' imprisonment.The following part of the judgment delivered by thetrial judge aptly describes the misdeeds of the legislator inabusing his office:-"...... Legislative Councillors are entitled to pursue a careerindependent of their role as legislators. What they are notpermitted to do is to blur those identities, to conceal the factthat they are receiving reward in their professional capacitywhilst purporting to act in their public office ...... The factthat he used his position ...... to accept $60,000 illustratedhis dishonesty, corruption and a desire to obtain a secre tand personal benefit for discharging his public duty ......The public interest was harmed by his conduct which con -stituted a substantial and corrupt deviation from the fiduci -ary duty undertaken by those who hold public office. It isconduct deserving of condemnation and punishment."Misconduct in public office by a legislator

Assistant Investigator, Kelvin WONG Hon-manKelvin in action - break-in exerciseKelvin was described as a quiet and re s e r v e dcharacter when he joined the Commission in 1998. Itwas, there f o re, quite unexpected to see him volunteeringto join the Arms Issued Officer (AIO) cadre,a voluntary service that makes high demands of itsmembers in terms of physical fitness and the abilityto handle challenging situations. He was formallyadmitted as an AIO in 1999 and has, since his transferto the Witness Protection and Firearms Section in2001, been deployed to assist in training new AIOrecruits. He takes pride in his work and says, "TheAIO training and operational exposure have certainlyhelped to build up my confidence and stamina".

INVESTIGATION BRANCH 4INVESTIGATION BRANCH 4 (IB/4)BY MIKE BISHOP, ASSISTANT DIRECTOR OFOPERATIONS 4Anyone who has read this publication regularly over the last few yearscannot help but have noticed the frequency with which the terms "busy" and"heavy workload" appear throughout the entire text. This year is no exception.A glance at the burgeoning corruption report statistics since 1997 putsthis phenomenon firmly into perspective. Simply put, we have been investigatingmore cases, arresting more offenders and initiating more prosecutions.Obviously, this places considerable strain on investigative resources, humanand otherwise, in Investigation Branches 1, 2 and 3. Slightly less obvious isthe effect of all this additional investigative effort on my own Branch. In fact,i n c reased operational activity translates, pro-rata, to increased demands on

support services. The more people arrested, the greater the pre s s u re onDetention Centre staff, who are responsible for the processing and detentionof detainees. The more cases investigated, and suspects and witnesses interviewed,the more transcription and translation services are re q u i red fro mthe Chinese Language Officers and Central Transcription Unit staff .I n c reased operational activity translates also to increased pre s s u re onManagement Services as the need grows for streamlining pro c e d u res andsystems to ease the resultant strain on resources.In the field of information technology, where advances take place atb reath-taking speed, it is necessary at the best of times to run quickly toremain in one place, and to sprint to make any headway. But here also,increased operational activity has had a profound impact, as the correspondingrise in seizures of computers for evidential purposes stretched ourcomputer forensics capacity to the very limit. International initiatives tocombat organised crime and corruption, generated by organisations such asthe United Nations and the OECD, together with pressing need for legalreform on a local basis, ensure that our Legal Research Section staff are kepton their toes, while the drive for continuous professional development of allour investigative staff places yet more pressure on training resources.Yes, it's been a very busy year, with a very heavy workload, but totheir eternal credit, my officers, as always, have risen to the challenge insupport of their colleagues in the investigative arena. In recognition of theimmense contribution they have made, and continue to make to the successof the Operations Department in its unceasing war on corruption, I take thisopportunity to thank them all most sincerely.

Group

As Principal Investigator, I Group, I find that thework of the Group, in volume, diversity andcomplexity, continues to provide stimulating challenges andinterest. Through over 150 staff, the Group provides a varietyof support services to the Operations Department, out-lined as follows.Report Centre staff at workReport CentreMaintaining a 24-hour service throughout the year,the Report Centre receives and processes corruption complaintsfrom numerous sources, including walk-in complainants,telephone, fax, e-mail, letter, referral from ICACRegional Offices, and from other government departments.The Report Centre also maintains the Department's radiocommunications network, as well as providing officers withimmediate information on internal matters, such as operationalarrangements for rapid responses or urgent contacts,transport availability and even weather reports.In the year 2001, the Report Centre received a total of7,135 reports (including those not relating to corru p t i o n ),compared to 6,823 reports in 2000. The changing communicationenvironment was reflected in a rise in the use of e-mail as a mode of reporting. By end of 2001, we hadreceived 132 e-mail reports, many via the ICAC web-site,compared to 67 received in the year 2000.Detention CentreUnder the same command as the Report Centre, theDetention Centre is responsible for the security and safekeeping of suspects detained in ICAC custody. In accordancewith the provisions of the ICAC Ordinance and theICAC (Treatment of Detained Persons) Ord e r, the majorityof detainees remain in custody for no longer than 48 hoursfollowing arrest. Under an order issued by the ChiefExecutive of the HKSAR Government, however, convictedpersons who are willing to assist in ICAC investigations,and perhaps testify against other suspects, may be temporarilyreturned to ICAC custody for de-briefing purposes.These individuals are known as Resident Informers.The Detention Centre comprises 17 cells, which arec u r rently being upgraded under a renovation pro g r a m m e .During the year, Justices of the Peace made 23 unscheduledvisits as part of a system of checks and balances designed to

e n s u re that Detention Centre facilities are adequate andthat detainees are fairly treated. In 2001, the DetentionCentre processed 1,468 arrested persons and detained 1,063persons. This compares with 1,254 and 894 persons,respectively, in the year 2000, reflecting a very high workload.Detention CellGuarding Officers in-service training at Correctional ServicesDepartmnet During the year,Detention Centre staffreceived pro f e s s i o n a ltraining in the taking ofnon-intimate DNA samples,and also attendedt h ree-day re f resher coursesdelivered by theC o r rectional ServicesDepartment to enhancetheir expertise and professionalismin the performanceof their duties.Translation, interpretation and transcriptionservices33 Chinese Language Officers (CLOs) provide essentialsupport to the Department's investigations and pro s e-cutions. Apart from possessing primary linguistic skills in Chinese (Cantonese and Mandarin) and English, severalCLOs have specialist proficiencies in various Chinesedialects.The Central Transcription Unit (CTU) with six transcribers,was established in November 1995 to assistInvestigating Sections in transcribing videotaped interviewsof suspects. The unit has proved a most valuableresource in support of investigative staff.General administration support servicesThese include financial management, humanresources administration, (including establishment mattersand postings), supplies pro c u rement, building security,acquisition and design of new accommodation and themaintenance of our existing premises.In 2000, a Central Property Unit (CPU) was formed tocope with the increasing demand of Investigation Gro u p s

for extra storage of documents and other exhibits requiredfor prosecution purposes. By early 2002, a strong room forhigh value case property will also have been established.In the year 2001, in order to enhance the Department'sworking environment, we provided all investigators withmodern desktop partition screens and space-saving slidingdoor cabinets, to replace conventional filing cabinets. Thesem e a s u res not only make more work space available, butalso minimise distractions and provide more confidentialityand privacy for investigators in their large, open-planG roup offices, whilst maintaining the all important teamidentity.To further enhance mutual trust and co-operation among I Group personnel who are normally separatelylocated and operate in different functional units, three residential"Team Building/Energy Training Camps" wereorganized for a total of 141 officers in May 2001. Those whoparticipated in the various exercises were deliberatelymixed with less familiar colleagues, to explore the value ofmutual cooperation, understanding and team spirit.Team buildingQuick Response Team (QRT)The QRT was established on an experimental basis in 1994. After consistently demonstrating its effectiveness andsuccess in dealing promptly and efficiently with the moreeasily resolved cases, it subsequently became a permanentfeature, albeit staffed by temporary deployment of officers from Investigation Branches on a rotational basis. In April2001, in response to burgeoning annual caseloads, additionalgovernment funding was secured and the QRT becamepart of the Department's official establishment. Headed bya Chief Investigator, the Team is staffed by 14 investigators, and deals with a monthly average caseload of around 430.In the year 2001, 1,031 cases were concluded by theQ RT with the endorsement of the Operations ReviewCommittee that no further investigative action be taken.During the same period, following preliminary QRT investigationwhich revealed evidence of corruption or re l a t e doffences, 40 cases were transferred to Investigation Groupsfor more in-depth investigation.

Group

JGroup provides administrative and support servicesto the Operations Department. The Gro u p ' scharter embraces responsibility for some of the most importantaspects of the Department's work. These include strate-gic planning; management services; re c ruitment, trainingand development; and legal research. Strategic planningSince 1996, policy issues affecting the OperationsDepartment and the way in which it is heading have beenidentified in annual Strategic Planning Workshops, org a n-ized by J Group with the participation of all Principal andChief Investigators. These workshops aim first to identifycritical issues affecting the Department in the context ofboth the external and internal environment, and then to formulatebasic proposals addressing them. This provides theDirectorate with the raw material from which to refine anddevelop strategies for incorporation in the Department'sFive-Year Corporate Plan. The 2001 workshops took placein April, and the Department's fourth Five-Year CorporatePlan was published in August. A prominent concerna d d ressed in this year's workshops was the incre a s i n gworkload faced by the Department, both in terms of volumeand complexity. Another issue focussed upon by the workshopswas the concept of continuous professional develop-ment of staff, and the question of how best to promote andachieve pro g ress in this area. In order to ensure that theyare fully aware of the Department's objectives and commitments,all officers are supplied with a copy of the 5-Ye a rCorporate Plan.Management servicesIn December 2001, the ManagementServices Unit, J1 Section, carried out the secondDepartmental staff survey to seek and collatestaff views on various aspects of work and staffw e l f a re. The results were welcomed by seniormanagement, who found them extremely usefulin identifying areas for improvement in staffworking and environmental conditions.In addition to its "think tank" role, theSection is responsible for reviewing operationalp ro c e d u res and management practices, makingMr. Tony KWOK, Head of Operations speaking to CI Command Coursemembers about stress management

ecommendations for improvement, and formulatingguidelines to optimise effectiveness and efficiency throughoutthe Department.J1 Section also provides secretariat support to severalcommittees, including, of course, the Operations ReviewCommittee (ORC). ORC membership comprises theS e c retary for Justice, the Commissioner of Police, theD i rector of Administration and the Commissioner of theICAC as ex-officio members, and 12 members appointedf rom the private sector by the Chief Executive in re c o g n i-tion of their widely accepted integrity and sense of civicre s p o n s i b i l i t y. ORC members work closely together tomonitor the work of the Operations Department, in termsof its powers, accountability and use of re s o u rces, and toadvise the Chief Executive on matters they consider should be brought to his attention.Training and career developmentDuring the year, the Operations Department TrainingSchool, J2 Section, ran an induction course for 31 newlyre c ruited Assistant Investigators. The re c ruits underwent17 weeks classroom training in law, investigation techniquesand court procedures, and further training in physicalfitness, use of firearms and team building at the ICACResidential Training Centre in Tuen Mun. A "foster father"scheme is provided within the Department to assist initialorientation and ensure the wellbeing of new re c ru i t s .Selected Principal Investigators are assigned as fosterfathers to new re c ruits, and provide them with ongoingguidance, counselling and support during the early stagesof their careers. Additionally, mentors - experienced investigatorswith relevant inter-personal skills - provide on-thejobtraining and advice to the new recruits after inductiontraining. Under this system, the "rookies" benefit fro mtheir mentors' operational experience and expertise, whiletheir individual training needs are systematicallyaddressed.Course members of Induction Course No. 14 conductingan arrest and search exercise under the supervision ofTraining Officer Mr. Keith LEUNGTo promote a learning culture within theDepartment, J2 Section organises a variety of in-housecourses, operational workshops, seminars and recall sessionsfor officers up to and including the rank of ChiefInvestigator. These events provide participants a forum forDr. YE Feng (centre) Director, Foreign Affairs Bureau,Supreme People's Procuratorate with CI Command Coursemembers

sharing their professional experience and reviewing variouspractical aspects of their work. J2 also arranges and co-ordinatesoverseas and external local training for officers.Assessment Centre2001 saw the establishment and implementation ofthe Department's Promotion Assessment Centre, referred toin this publication last year. Aimed at providing a faire r,m o re objective and transparent selection process for promotingofficers to the Investigator rank, the AssessmentC e n t re replaced the existing selection system which re l i e de n t i rely upon recommendation and promotion board performance.During the two-and-a half day AssessmentC e n t re process, which is organised and co-ordinated by J2Section, candidates undergo evaluation by assessment panelsin a series of practical scenarios designed to test theirc o re competency skills. The process is competitive, andthose who successfully pass the Assessment Centre teststhen appear before a final selection board where theirresults, operational "track re c o rd" and performance beforethe board are considered together. 35 AssistantInvestigators underwent the new promotion selectionprocess in 2001, and although only nine were promoted as aresult, all agreed in an anonymous survey that theAssessment Centre was an almost unqualified success interms of meeting its objectives.Chief Investigators Command CourseThe Chief Investigators Command Course isdesigned to equip newly promoted Chief Investigators withsome of the additional leadership and management skillsthey will need in their new role, and is traditionally run bythe Principal Investigator of J Group, as Director of Studies.Command Course Number 23, which took place over a fiveweek period in September and October 2001, provided mewith my first experience in this capacity. I enjoyed iti m m e n s e l y, and derived considerable satisfaction from theexperience. Although designed for our own officers, theICAC has traditionally made places available to other lawenforcement agencies, both locally and overseas. The 2001course catered for 27 participants from 13 local and overseasagencies, including officers from the Hebei Pro v i n c i a lPeople's Procuratorate and Beijing Municipal Procuratoratein the Mainland. Also among the participants were membersof the Malaysian Anti-Corruption Agency, the

S i n g a p o re Police and the Corrupt PracticesInvestigation Bureau, as well as Macau'sComissariado Contra a Corrupcao and Gabinetedo Procurador. A truly cosmopolitan event!For the first time, the management studiescomponent of the course was accredited with theUniversity of South Australia InternationalGraduate School of Management distance MBAp rogramme. Under this accreditation arrangement,by virtue of having completed theCommand Course, members who wish to pursuethis programme further will be accredited with oneof the twelve modules re q u i red. The course programmefeatured a study visit to the Supre m ePeople's Procuratorate and the NationalP rocurators College in Beijing, an experiencewhich members found both interesting and useful,particularly in enhancing their understanding ofMainland anti-corruption work and legislation.Professor OXENBERRY (third from right) of the University of SouthAustralia Graduate School of Management with CI Command CoursemembersLegal researchDr. WANG Hongxiang, Deputy Director, Foreign Affairs Bureau,Supreme People's Procuratorate, addressing the Hong Kong delegationat the end of the study visitThe Legal Research Unit (J3 Section) worksin close liaison with the Department of Justice andvarious policy bureaux in the GovernmentS e c retariat on legal issues that affect the work ofthe Operations Department. J3 Section also examinesinvestigative practices and pro c e d u res in thelight of changing legislation and court judgementsto ensure that they remain appropriate and up to date. Relevant judgements and important legal advice are summarisedby J3 staff and disseminated to staff via theDepartment's computer network.In the international arena, J3 Section contributes tothe Hong Kong SAR Government's input on various inter-national conventions on corruption and related crime, suchas the United Nations Convention on Transnational Crime,to which Hong Kong is to become a signatory. With theDirector of Investigation/Private Sector as a member of theInterpol International Group of Experts on Corruption, J3makes regular contributions to the Interpol library of bestpractices in anti-corruption work.In 2001, the Section completed the research project onthe need to codify the Common Law offence of Misconduct

in Public Office (referred to elsewhere in this, and last year'sReview). The exercise was aimed at clarifying the existingCommon Law provision in definitive legislation in order todeal more effectively with public officials misusing theiroffice for personal gain. A working committee chaired bythe Deputy Director of Administration, with representativesf rom the Department of Justice, the Civil Service Bure a uand the ICAC as members, was formed in late 2001 to studythe legal ramifications of the proposal.All in all, this has been another extremely busy andproductive year for the whole of J Group.CI Command Course members visiting the exhibition hall of the National ProcuratorCollege in Beijing

Group

The primary responsibility of K Group is to provideinformation technology and financial inves- tigation support to the Operations Department. It is almostfive years since I became Principal Investigator of K Group,and I continue to find my work both challenging and satisfying;the following paragraphs may provide some insight as to why.OPSIS and Internet ServersOperations Department Information SystemFollowing the successful implementation of theOperations Department Information System (OPSIS) in2000, each and every investigating officer in the Departmenthas at his or her fingertips advanced investigation and intelligencemanagement systems to process and update thep ro g ress of cases. Apart from complaints logging, casemanagement and intelligence analysis, OPSIS now providesn e w, user- f r i e n d l yOperation Control Management System applications toi n c rease the eff e c-tiveness of thei n v e s t i g a t i o np rocess. Theseinclude a statisticalreporting systemand a RemoteC o m m u n i c a t i o n sand Control System(RCCS). Through the RCCS, officers in the field are ablefrom remote locations to access a wealth of useful information,while senior officers can monitor, direct and contro lthe progress of ICAC operations from their offices.Since many enhancements have been made to OPSISfollowing implementation, various intensive training courseshave been provided to officers to ensure that they areable to derive optimum benefit from the system.Department computer networkThe Operations Department Local Area Network(OPSLAN) entered a new phase during the year, when thenetwork was upgraded and the number of workstationswas increased to over 700. The enlarged user base has, nots u r p r i s i n g l y, resulted in an exponential increase in emailusage. We are closely monitoring the system to ensure thatit continues to offer a stable and reliable service to our colleagues.

OPSLAN ServersTo further improve the security of our informationtechnology systems, we began a project to introduce moree ffective measures to protect OPSLAN against intru s i o n ,and safeguard confidential information and personal data.In early 2002, the SAR Government's Office AutomationFacilities will be upgraded to include a confidential mailOne Officer One WorkstationInternet Resource Centresystem, and e-mail communicationsbetweenusers, including the ICAC,will be protected bypowerful encryption.M o re o v e r, the latest smartc a rd, electronic certificateand public key infrastru c-t u re technology will alsobe introduced.To promote optimum use of Internet technologywithin the Department, we have established an InternetR e s o u rce Centre (IRC). All officers have been pro v i d e dwith their own e-mail accounts, and can now communicate with points around the globe through convenient, multiuseraccess to the Internet via the IRC.Computer forensicsT h e re is a growing dependency on computers by both public and private sector organisations, as well as privateindividuals, but whilst IT has done much to facilitate the convenient and effective pursuit of business and leisureactivities, computers are vulnerable to attack by theu n s c rupulous. As a result, computer crime - theft of, ordamage to data or property - has become an incre a s i n g l yp rominent feature of the IT era. The use of computers,either as a meansto commit crime Computer Forensics Trainingor to store data which re p re s e n t spotential evidenceof corru p-tion or re l a t e dcrime, is commonplace,andthis is where K

G roup's Computer Forensics and Research andDevelopment Section (K5) comes into play.K5 Section is heavily involved in providing computer f o rensics expertise to mainstream investigators, assistingthem in the search for, and retrieval and analysis of electronicinformation from computers in order to provide evidenceof criminality. In 2001, the Section was involved inthe seizure of over 80 computers in this respect, all of whichcontained information materially relevant to investigations.To ensure that our computer forensics capability remains atthe leading edge we continue to share experience in thefield with our local and overseas counterparts, and our officersattend training courses organised by universities, majorcomputer forensics tools vendors and overseas law enforcementagencies. We also provided basic computer forensicstraining to all of our investigators.The ICAC is a core member of the SAR Government'sI n t e r-departmental Working Group on Computer RelatedCrime, chaired by the Security Bureau. The Working Groupwas established to identify the challenges presented byinformation technology to law enforcement, to review theadequacy of existing legislation in that regard and to makerecommendations as to how best to address the issues identified,in the light of rapid development in information technology.Financial Investigation TrainingFinancial investigation2001 was a year of particular challenge for K Group'sFinancial Investigation Section (K4), the number of requestsfrom other Investigation Branches for assistance in complexfinancial investigations having sharply increased. The complexityof such investigations typically demands a highd e g ree of financial investigative knowledge and expertiseon the part of financial investigators - qualities possessed inabundance by K4 Section officers.During the year, officers of K4 Section conducted over80 financial investigations in support of their mainstre a mcolleagues, unravelling complicated fraudulent transactionsinvolving over 340 companies/individuals, and $9 billionin value. More o v e r, by using our own in-house fore n s i caccounting expertise rather than employing externalaccountants, the Department made savings in expenditureof around $11 million.

As a supplement to its financial investigation service,K4 Section also provides assistance to other Branches byconducting bank enquiries, and land, business registrationand company searches. The Section is also responsible forconducting financial investigation courses through theOperations Department Training School.

Report Centre - A Command PostingBen CHAN at work in the Report CentreBen "one-on-one" with a member of the public makinga corruption reportCertain posts within the Operations Department are designated"Command Postings". These are specialised areas in which it is consideredparticularly beneficial for an officer to gain some experience for care e rdevelopment purposes. One example is the Report Centre, where investigatingofficers are exposed to "first contact" with members of the publicwho wish to report corruption through the ICAC's "hotline".Mr. Ben CHAN Kai-hung joined the ICAC in 1997. After three and ahalf years' experience investigating corruption in public bodies and the privatesector, he was posted to the Report Centre for a twelve month stint.At first, Ben admits, he was not thrilled with the idea, because it took himaway from active investigation. However, he soon came to appreciate howimportant his new role was; his previous investigative experience, togetherwith patience, understanding, and an ability to ask logical, intelligent questions,were, he quickly realised, vital in establishing trust and confidencewith members of the public."I'm glad, now, that I was given this opportunity," Ben says. "I feelthat my posting to the Report Centre has made me a much better all-roundinvestigator."

Group

Although the Principal Investigator of L Gro u preports directly to the Director of Investigation(Private Sector), the Group is located administratively withinInvestigation Branch 4 of the Operations Department andconsists of two sections, each staffed by a Chief Investigatorand four Senior Investigators, supported by a small clericalteam.The Internal Investigation and Monitoring Group, togive L Group its formal title, is responsible for the investigationof allegations of corruption and non-criminal com-plaints against all personnel employed within theCommission. Criminal allegations against ICAC personnelthat do not include an element of corruption are referred tothe Hong Kong Police Force for investigation.Allegations of corruption against ICAC officers areimmediately reported to the Secretary for Justice who willdecide whether or not investigation should be undertakenby the ICAC itself. If so, the investigation will normally beconducted by L Group. At the conclusion of an investigationinto allegations of corruption against ICAC personnel,a report detailing the findings is forwarded to the Secretaryfor Justice for legal advice on the question of pro s e c u t i o n .I r respective of whether or not a prosecution ensues, theresult of the investigation, together with the legal advice,are reported to the Operations Review Committee for theirconsideration. At the conclusion of all criminal investigationsagainst ICAC officers, whether or not a pro s e c u t i o ntakes place, an assessment is made as to the need for consequentialinternal administrative or disciplinary measures.Non-criminal complaints against ICAC off i c e r s ,which constitute the bulk of L Group's work, are immediatelyreported to the Commissioner for formal registration.The complainant, the officer(s) subject of the complaint, andthe independent ICAC Complaints Committee (ICC) arethen informed of the complaint by letter. Normally, a complaintwill be investigated as soon as possible, but where itis inextricably linked to a criminal investigation which issub-judice, it may be deferred, on legal advice, pending theoutcome of that case.The ICC, whose members are appointed by the ChiefExecutive, meets three times a year, its terms of reference tomonitor, and where it considers appropriate, to review thep ro g ress and outcome of non-criminal complaints against

ICAC officers. When the ICC identifies shortcomings inrelated ICAC pro c e d u res it may make re c o m m e n d a t i o n sfor those pro c e d u res to be reviewed and rectified. As a result, concluded complaint investigations occasionallyresult in the issue of procedural guidelines to officers ino rder to preclude the likelihood of future similar complaints.During 2001 a number of such guidelines wereissued, thus enhancing customer service and safeguardingofficers against potential complaints.As an additional means of raising ICAC off i c e r s 'a w a reness of the most common causes of complaint fro mmembers of the public, L Group publishes internal reportssetting out, in general terms, the nature of all complaintsreceived during the year. The report includes details of anyresultant administrative or (without identifying individuals)disciplinary consequences of complaints dealt with, aswell as relevant changes to procedures.An important facet of L Group's work is its relationshipwith the Department's Training School. The communityquite rightly has high expectations as to the integrityof the ICAC and the conduct of its officers. To ensure thatthose expectations are met, L group officers regularly contributeto training programmes and courses, addre s s i n go fficers on the need to maintain the highest pro f e s s i o n a land personal standards.

EDDY LAIEddy at work in the CTUEddy LAI Chun-wang of the OperationsDepartment's Central Transcription Unit(CTU) received the "Outstanding DisabledEmployees Aw a rd 2001" from LegislativeC o u n c i l l o r, the Honourable Bernard CHAN,while, on behalf of the Commission, SeniorChinese Language Off i c e r, Mr. TSANG Ya n -sang, receives the Employer's Certificate ofA p p reciation. The CTU is staffed almostexclusively by individuals who are in someway physically disabled.

Report from the Abacushe R1 'bean counters' The year under review has been a busy one for ourStatistical Officers following the conversion of our databases onto the new Operations DepartmentInformation System (OPSIS). The year 2001 saw an all-time record high in the totalnumber of non-election corruption reports received - 4,476c o m p a red with 4,390 in 2000, re p resenting an increase of2%. The number of corruption reports relating to the publicsector fell in 2001 by 8% (from 1,732 to 1,587) with reports involving the Police decreasing by 15% (from 602 to513), and the rest of the Government sector showing a 5%decrease (from 1,130 to 1,074). Reports concerning the privatesector increased by 6% (2,402 to 2,542) and those relat- ing to Public Bodies also increased by 36% (from 256 to347).The total number of reports considered capable ofinvestigation (pursuable reports) rose from 3,141 in 2000 to3,261 in 2001 - another re c o rd high. The number of pursuablereports relating to the public sector fell in 2001 by 5% (from 1,066 to 1,011) with reports involving the Police d e c reasing by 9% from 370 to 338, and the rest of the

Government sector also showing a 3% decrease (from 696 to 673). Pursuable reports concerning the private sectorincreased by 5% (1,903 to 2,005) and those relating to Public Bodies also increased by 42% (from 172 to 245). In 2001, we received 245 corruption reports concerningelections, of which four related to the 1999 District Council elections and 237 to the 2000 Legislative Councilelections, while the remaining four related to District Boardelections in 1998 (1), Rural Committee election in 1998/1999(1) and Rural Committee elections in 2001 (2). 243 containedsufficient information for investigation to commence.Investigations Undertaken and Strength of the Operations Department(1986 -2001)NOTE: Investigations undertaken are investigations commenced during the year + outstanding investigations brought forwardfrom previous years.

Methods of Reporting Corruption (Excluding Election Reports) - 2000All ReportsBy E-mail 25 (0.6%) By Fax 43 (1%)Referred by Government Depts 248 (5.6%) By Letter 862 (19.6%) In Person 1230 (28%) By Phone 1982 (45.2%) Reports by Identified ComplainantsBy E-mail 22 (0.7%) By Fax 13 (0.4%)Referred by Government Depts 155 (5.2%) By Letter 123 (4.1%) In Person 1202 (40%) By Phone 1488 (49.6%)Corruption Reports Recorded by Sector - (Excluding Election Reports) - 2000All Reports Public Bodies 256 (5.8%) Police 602 (13.7%) () Government Depts (less Police) 1130 (25.8%) ()Private Sector (Excluding Election Reports) 2402 (54.7%)Pursuable Reports Public Bodies 172 (5.5%) Police 370 (11.8%) () Government Depts (less Police) 696 (22.1%) ()Private Sector (Excluding Election Reports) 1903 (60.6%)

Methods of Reporting Corruption (Excluding Election Reports) - 2001All ReportsBy E-mail 39 (0.9%) By Fax 52 (1.2%)Referred by Government Depts 226 (5%) By Letter 749 (16.7%) In Person 1212 (27.1%) By Phone 2198 (49.1%) Reports by Identified ComplainantsBy E-mail 12 (0.4%) By Fax 19 (0.6%)Referred by Government Depts 150 (4.7%) By Letter 120 (3.8%) In Person 1189 (37.2%) By Phone 1702 (53.3%)Corruption Reports Recorded by Sector (Excluding Election Reports) - 2001All Reports Public Bodies 347 (7.7%) Police 513 (11.5%) () Government Depts (less Police) 1074 (24%) ()Private Sector (Excluding Election Reports) 2542 (56.8%)Pursuable Reports Public Bodies 245 (7.5%) Police 338 (10.4%) () Government Depts (less Police) 673 (20.6%) ()Private Sector (Excluding Election Reports) 2005 (61.5%)

559 of the 600 defendants whose prosecution wascompleted in 2001 were interviewed on video. Only 138challenged the interviews, and as a result the interviews of35 individuals, relating to 19 cases, were ruled inadmissible.In 12 cases in which the interviews were ruled inad-missible, the judges or magistrates were not satisfiedbeyond reasonable doubt that the admissions made werevoluntary.535 persons were prosecuted in 2001. This totalincluded 464 individuals in private sector cases, comprising101 prosecuted for involvement in corrupt transactionscontrary to Section 9 of the Prevention of BriberyOrdinance; 21 for offences of offering bribes to Governmento fficers or public servants contrary to sections 4(1) and 8;t h ree for conspiracy to commit Section 4(2) and one for o ffering bribes to pro c u re a public body contract contraryto Section 5(1); and 338 for offences under other ordinances.With the agreement of the ICAC, the Police undertook thep rosecution of five persons arrested for offering bribes topolice officers during police investigations into othero ffences. Of the 600 defendants whose prosecution wascompleted in 2001, 423 were convicted. A further 85 individualswere formally cautioned. In 2001, the OperationsReview Committee recommended disciplinary action against 188 persons compared with 295 in 2000.

Number of Persons Prosecuted for Corruption & Related Offences in 2000*These are cases in which private individuals were charged for their dealings with public servants.#1 died while awaiting trial.Number of Persons Prosecuted for Corruption & Related Offences in 2001*These are cases in which private individuals were charged for their dealings with public servants.

Liaison Contact DetailsTo facilitate further liaison, a directory of personalities, their areas of responsibility and their contacttelephone numbers follows: (some of the officers have changed posts since their submissions tothis Review). POST INCUMBENT TEL. NOS.CommissionerMr. LAI Nin (Alan)2826 3111Deputy Commissioner andMr. KWOK Man-wai (Tony)Head of Operations Director of InvestigationMr. LEE Chun-sang (Francis)(Government Sector) Director of InvestigationMr. LI Ming-chak (Daniel)(Private Sector) Assistant Director 1Mr. A.A. Godfrey (Tony) Assistant Director 2Mr. WONG Sai-chiu (Ryan) Assistant Director 3Mr. CHAN Tak-shing (Gilbert) Assistant Director 4Mr. M.J. Bishop (Mike)Principal Investigator AMr. LO Kwok-chung (Jeremy)Principal Investigator BMr. SO Ping-hung (Daniel)Principal Investigator CMr. NG Ping-kwok (P.K.)2826 43012826 43072826 43022826 43032826 44072826 43042826 44092826 42962826 42822826 4272

Liaison Contact Details POST INCUMBENT TEL. NOS.Principal Investigator DMr. P. Gregory (Peter)2826 4018Principal Investigator EM r. J.N. Parkinson (Neil)2826 4247Principal Investigator FMr. LEE Chi-hung (Denis)2826 4253Principal Investigator GMr. CHU Man-kin (Ricky)2826 4711Principal Investigator IWONG Lok-ning (Dominic)Principal Investigator JMr. TSO Wai-yan (Kenny)Principal Investigator KMr. CHEUNG Wah-pong (Louis)Principal Investigator LMr. YIU Cheuk-wah (George)Principal Investigator RMr. WONG Shiu-cheung (Danny)Principal Investigator XMr. G. Osborn (Gerry)Principal Investigator YMr. HUI Kar-man (Ricky)Principal Investigator ZMr. CHAN Chor-keung (Stephen)2826 42112826 43052826 42342826 47612826 42352826 40612826 42482826 4366Postal Address: Ground floor, Murray Road Carpark Building, 2 Murray Road, Hong Kong.Tel (24 hours): 2526 6366 E-mail: general@icac.org.hkWebsite: http://www.icac.org.hk/newsl.htmlReport Centre (Fax): 2868 4344

Acknowledgement :Apple DailySouth China Morning PostTa Kung PaoWen Wei Pao