What lessons for Hong Kong in dramatic fall of Donald Tsang?

Former Hong Kong chief executive Donald Tsang Yam-kuen once wined and dined with the city’s business and political elite while pulling down a salary equivalent to about US$575,000 a year, more than the US president takes home.

Now Tsang dons a prison jumpsuit, presumably without his signature bow-tie, and will spend the better part of the next two years behind bars wondering how it all went so terribly wrong.

The trial and conviction of a man who once held Hong Kong’s most powerful position are being held up as a shining example of how the city’s judicial system has maintained its vaunted independence nearly 20 years after the handover from British to Chinese rule. And that is certainly true.

On the mainland, the courts are just another arm of the Communist Party that convict or exonerate according to the dictates of party leaders.

Under Hong Kong’s “one country, two systems” agreement with Beijing, the British common law system continues and an independent judiciary (along with free speech and free media) is still regarded as a core value that must be maintained lest Hong Kong become, as the worry is often succinctly summarized, “just another Chinese city” – meaning, among other things, a den of corruption.

Unfortunately, the courts alone cannot save Hong Kong. Its political and business class must also pitch in and, if the recently concluded Tsang trial is anything to go by, that is not happening.

Indeed, the trial revealed that Hong Kong’s tycoons and political kingpins live in a parallel universe that is inherently corrupt while the anti-graft body charged with keeping these high-flyers honest, the Independent Commission Against Corruption (ICAC), is itself badly compromised.

Tsang’s fall from penthouse to prison block has been joltingly dramatic – a drawn-out morality play that kept Hong Kong riveted during a six-week trial that ended with a jury of eight women and one man declaring him guilty of misconduct in public office and a High Court judge sentencing him last week to 20 months behind bars.

And, as it turns out, the play will have a second act, opening in September, when Tsang, now 72, who served as chief executive from 2005 to 2012, steps back into the courtroom to face a charge of bribery on which the jury in his first trial was unable to reach a verdict.

Both the misconduct conviction and the bribery charge are related to Tsang’s dealings with businessman Bill Wong Cho-bau, to whom Tsang’s wife, Selina Tsang Pao, transferred 800,000 yuan (US$116,000) in November 2010. Tsang’s defense team claimed the sum was a rental payment on a three-story penthouse owned by Wong. The prosecution argued the payment was a special arrangement to allow the Tsangs to live in the penthouse at a price well below market value, and thus amounted to a bribe.

Tsang was found guilty of misconduct for not revealing his ties to Wong to his Executive Council as he and council members considered and ultimately approved a digital broadcasting license for Wong’s company, Wave Media, later renamed Digital Broadcasting Corp.

The prosecution was granted a retrial of the unresolved bribery charge, which could see Tsang’s misfortunes multiply come September. Tsang’s defense team has also filed an appeal on the misconduct conviction.

It’s hard not to feel sorry for Tsang, who obviously loves Hong Kong and earned much praise and many honors (including a knighthood) before his ignominious fall from grace at the end of a 45-year career as an admired civil servant and political leader.

And, in the grand scheme of things, his offenses amount to mere peccadilloes in a city where a handful of property developers have been colluding with governments since the colonial days to hoard land and reap obscene profits, while keeping property prices so astronomically high that owning your own home has become an impossible dream for most people in Hong Kong.

It is a city where the Heung Yee Kuk – widely considered a mafia-like organization – runs the New Territories (which comprises 952 square kilometers, or 86.2%, of Hong Kong) like its own private fiefdom. And where the central government’s fingerprints are all over the city’s politics, including the contest to determine Hong Kong’s next chief executive in a so-called election scheduled for March 26.

Beijing’s golden girl, former chief secretary Carrie Lam Cheng Yuet-ngor, appears set to win a majority of votes on the 1,200-member chief executive election committee – largely controlled, of course, by the central Chinese leadership – even though her chief rival, former finance chief John Tsang Chun-wah, is trouncing her in public opinion polls.

But since John Tsang grew up in the United States and has garnered support among Hong Kong’s pan-democrats, Beijing reportedly does not trust him to run the city. So much for the will of the people.

All of which brings us back to the other Tsang, the significance of whose rise and fall goes beyond his personal tragedy to illustrate tragic developments in the city that allowed this hard-working son of a policeman to reach the pinnacle of power before his plunge.

Certainly, the now compromised anti-corruption body whose investigation brought down Tsang qualifies as one of those tragedies. The ICAC, which made its name purging Hong Kong’s notoriously corrupt civil service and police force in the 1970s, has itself recently been beset by scandal.

That includes revelations that former commissioner Timothy Tong Hin-ming, who headed the agency from 2007 to 2012, took frequent, all-expenses-paid junkets to the mainland during his time at the helm. He also made a habit of lavish spending from ICAC funds on gifts, entertainment, food and liquor for Chinese officials visiting Hong Kong. (ICAC announced early last year that Tong would not face criminal prosecution.)

In the wake of the Tsang trial, many have wondered why ICAC officers did not bother to question the head of the Bank of East Asia, David Li Kwok-po, who allegedly made a HK$300,000 (US$38,600) cash payment to Selina, during the ICAC investigation of her husband. A senior investigator’s testimony that he and others decided not to interrogate Li because they believed he would be uncooperative raised more questions than it answered.

The ICAC has also been suspected of dragging its heels in its investigation, now two-and-a-half years old, of current chief executive Leung Chun-ying for his undeclared acceptance of a HK$50 million (US$6.4 million) payment from Australian engineering firm UGL. That’s a lot more than the relatively paltry amount involved in Tsang’s case, and Tsang’s conviction has stirred calls for the ICAC to act on Leung.

Doubt was cast over the agency’s enthusiasm for the Leung investigation last July when the woman in charge of it –  the acting head of the ICAC’s investigative unit, Rebecca Li Bo-lan – was abruptly demoted and subsequently resigned.

Critics have also noted that the ICAC’s Operations Review Committee is chaired by Maria Tam Wai-chu, a longtime Hong Kong politician who has been a deputy to the National People’s Congress, the rubber-stamp Chinese parliament, since 1997 and whose loyalties lie first and foremost with the powers that be in Beijing.

So the Donald Tsang trial, the tragic personal spectacle that it was, turned out to be about a lot more than Donald Tsang.