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Corruption has corroded (or lubricated) the 400-sq.-mi. British colony of Hongkong ever commercial course more than 130 years ago. And while officials are fond of elsewhere in Asia, Hongkong (pop. 4.2 million) does provide a microcosmic introduction t scandal proportions. A lengthy version of the article that appears below formed part
Blair-Kerr, a Hongkong judge whose recent REPORT ON CORRUPTION spotlighted.
REMEM
The fixers: An anatomy
NINETEEN-year-old Cheung Sam, storekeeper's son, had only one advantage a good command of English -- when he quit his war-interrupted schooling at Form III level in 1954 and started work as a trainee book-keeper in his native Hongkong. His father died a few months later and Cheung became breadwinner for his mother and her two other child- ren until, in 1959, he married an assistant sales manager of a department store. Today Cheung Sam* is a wealthy man, a company director with interests in textiles, real estate and high finance. He is one of Hongkong's most respected crooks.
Although young Cheung was not an outstanding success as a trainee book-keeper, his employer began to rely heavily on his ability to interpret and correspond with foreign buy- ers. Having taken a wife, Cheung realised there were ways in which he could supplement his and his wife's monthly salaries (HK$320 and $290 respectively in 1959) and, as a first step, he formed contacts among junior staff in local import-export companies headed by Europeans. It was a time when textile quotas and other barriers were cooling profit- ability, and thus Cheung's boss was happy to have access to these additional outlets for overseas sales. Of course, when shipping through local export houses it was necessary to "sweeten" the export-house staff so they would tolerate a fair proportion of defective goods when checking consign- ments against samples. Since Cheung Sam negotiated these
*A standard Cantonese John Doe.'
NOVEMBER 12, 1973
kickbacks on his employer's behalf, if was only reasonable that he, too, should take a cut.
If his boss was privately annoyed by the fact that Cheung was making extra money out of him on the side, his chagrin quickly dissipated when Cheung one day pointed out the advantages of producing limited quantities of fashion goods for the Hongkong market. To overcome the first snag, Cheung persuaded his wife to get copies of samples, styles. and patterns of foreign-made garments. The second difficulty was not to be resolved without expense. To neutralise the
From the outset, Cheung Sum realised that well-placed partners were just as import- ant to business ventures as the ability to provide cash re- wards for services rendered.
lack of well-known brand names and long-term advertising, "fa- voured factory" treatment in re- tail outlets was most desirable: personal recommendation and prominent display on the sales floors, Cheung told his employ- er, would require payment of a commission. The boss agreed. Cheung arranged the matter through his obliging wife and, through her, got a slice of the commission.
Between 1959 and 1962, Mr and Mrs Cheung Sam were saving an average of $24,000 per year tax-free, although their combin- ed legitimate earnings totalled only $1,100 monthly (by 1962). excluding an annual bonus of three months' wages. Although neither had been squatters and thus did not qualify for welfare accommodation, they paid only $14 per month for a room in a Resettlement Estate. (Thanks to Cheung's interest in basket- ball, he had met a friendly detective-corporal with a Resettle- ment Department contact. This contact had arranged the accommodation as a gratuitous favour for his policeman friend's friend.)
In 1963 Cheung, deciding that he should now become an entrepreneur, invested his $100,000 savings in a building project. His partners included the friendly detective (who was careful to use his wife's name in such activities), 3 solicitor's clerk who in 1960 had been amenable to sharing with Cheung the fee involved in registering brand-names, and
FAR EASTERN ECONOMIC REVIEW