FC elections evade campaign finance rules

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‘Millions’.
That was the word used by Siu Sai-wo to estimate how much Eddy Li Sau-hung spend to secure election as the Chair of the Chinese Manufacturers’ Association. One of the ‘big 4’ business associations with a functional constituency seat in LegCo, the position will put him in a position to have huge influence in selecting the next LegCo member. The incumbent, representing the CMA’s Industrial (Second) seat ran uncontested in 2012,and 2008, as did Liu Ming-wah in 2004 and 2000.

A grueling campaign involving at least 150 dinners, all of it outside the scope of current campaign finance laws since it was not directly for the seat. The spending limit for election campaigns for the seat is $168,000, but with no opponents, spending can likely be kept very low.

Business and politics

In the past year, business organisations across Hong Kong have been asked – some say commanded – to take stands on local political issues outside the normal remit of business. This paper has documented some of the efforts to drag international business organisations into the fray, reluctantly, and generating internal discord when they spoke out .

Local businesses have been more willingly vocal and have a strong position to speak from given that governability of the city goes directly to the local business environment. However, our odd legislative structure means they have a seat at the table for not only business matters, but all manner of policy. It is doubtful business associations convene committees to determine how their FC representative should vote on issues relating to transgender identity, appointments of engineer-bureaucrats and other non-business issues.

No contest

There have been rare contests for Commercial and Industrial, First and Second, since the Handover. By and large though, the seats are uncontested. In effect, the leadership of the organisation chooses the candidate.

Therefore Mr. Li effectively controls the seat, along with the leadership of the CMA that he effectively recruited over the years to support his election. This is all fine and well in terms of the CMA’s internal workings, but seems to be an effective run-around the election campaign rules intended to minimise the impact of money on elections.

There is no claim of there being a problem in the case of the CMA, but structurally, it presents a worrying trend and creates another argument for the disbanding of the functional constituencies. While real campaigns are held for those with wider voter bases (technology, accounting, DC), the actual campaign for FCs has now moved to other electoral platforms outside the election rules for LegCo.

As the pan-Dems seek to assert more control over LegCo’s agenda, as they have done through the PWSC and Establishment committees, the reaction to their action will come. Splits in some industries, illustrated by Ambrose Lam’s ouster earlier this year from presidency of the Law Society, suggest that the internal battles to control the positions that control LegCo seats will heat up.

As Beijing gets more involved in local politics and seeks to ensure they maintain their LegCo supremacy through functional seats, more resources will be spent ensuring the selection of candidates stays in safe hands. Mr. Li’s campaign was not necessarily about this directly, but does show how our system is vulnerable to money, from whatever source, can be used to sidestep election spending laws. He may be entirely well intentioned, and has an excellent track record within his community. But the warning is clear.

Another mark against FCs
There is no practical way to rewrite laws to extend campaign finance rules to cover these secondary and third degree spending campaigns for indirect influence. However, as more examples of how these seats can be bought come to light, they will provide more ammunition for those seeking their abolishment. If the business FCs were quietly working to improve Hong Kong’s economic policy and regulations, while dodging trickier political questions, they may be able to last for another couple of decades as the public demanded action in more incendiary areas.

But if the seats are not just seen as small circle, but also small circle worth buying with millions of dollars of unregulated expenditure, the stench will become unbearable and change will be demanded.