Empire of Crime

by Tim Newark

  Wallace was 24 years old and from Staffordshire. Before coming to Hong Kong, he had worked his way around the world, sailing across the Atlantic with a yacht crew, cutting Christmas trees in Vancouver and working as a trainee manager for the Hudson Bay Company, a Canadian department store.

  Having lived in the United States for several months and registered as an immigrant, Wallace received call-up papers for the US Army and served in a Military Police unit on the Panama Canal. From there, he returned to England to work briefly as a sales clerk for a Salford rubber company before qualifying to join the Hong Kong Police. He had been in the colony barely a year when he was shocked by what he saw.

  ‘I feel it is my duty to tell you,’ said Wallace to the Prime Minister, ‘that this is an extremely corrupt police force – despite everything I’ve been told to the contrary. I feel so bad about this because it involves dangerous drugs, and all the misery and suffering they bring, not only to the people of Hong Kong but also of many other countries as well. And I feel that if it were not for the fact that this is a corrupt police force, this world menace, if not completely eliminated (where opium and heroin are concerned) could be dealt a very stunning blow.

  ‘But of course,’ Wallace continued, ‘there is a tremendous amount of money involved, and this means that there is a great deal of power to back it up. I feel that an investigation from the outside would be of no avail. I think that it can only be dealt with from the inside – and it may take a long time to amount sufficient evidence so that the whole rotten system can be dealt with once and for all.’

  Wallace had begun his own investigation by chatting to young inspectors like himself, who had also witnessed the corruption around them but felt unable to do anything about it because they were threatened with dismissal. The general feeling was that it was the detective sergeants who wielded the most power in this criminal network, but in most divisions many NCOs were thought to be ‘in it up to their necks’.

  The corruption began as soon as officers left the police training school. With families to support on low wages, the Chinese officers were most vulnerable. European officers took a little longer to bribe. Corruption among the Europeans would show itself in a more subtle way: when officers proved too effective at cracking down on gambling dens or drug dealers, they would find themselves after a while restricted to deskwork.

  In order to discover how the system worked, Wallace himself took bribes.

  ‘I have so far received $300 corruption money (which I sent to the Anti-Tuberculosis Campaign) and anticipate about another $500 at the end of the month,’ he told the Prime Minister. ‘I can assure you I intended to become involved, as I certainly would not know nearly as much as I do now had I refused to have anything to do with it.’

  Wallace could not know the full extent of corruption within the police force, but he suspected that it involved every large station, with the exception of the Narcotics Bureau. He worked in the Kowloon City Division and considered this the most corrupt of them all, with the divisional superintendent and the chief inspector as its ringleaders.

  ‘What I should like to do is to be able to trust my own PCs and NCOs,’ he wrote in a later letter. ‘And for them in turn to be willing – and able – to do police work as it should be done. The situation does not exist at the present where crime and vice (particularly dangerous drugs and gambling) are concerned.’ He was informed by a senior officer in the Anti-Vice Squad that dangerous drugs were controlled by a ‘syndicate’ of officers and gangsters.

  However, as Wallace looked further and further into the endemic corruption around him, the system began to suck him in and he started to see it from the other point of view. In one of his final letters, he expressed doubts that anything could be done about it.

  ‘I am beginning to see that – though it goes against the grain – the advice of more senior officers may hold much wisdom. After all, this is a predominantly Chinese force, with a predominantly Chinese way of getting things done. They appear to be quite effective, though their methods leave much to be desired – which is why I think narcotics will continue to exist on the scale [they do] (as well as illegal gambling etc).’

  ‘I am now of the opinion,’ he admitted, ‘that a purge on corruption in the HKP may do more harm than good, since it interferes with a traditional Chinese way of doing things, and because it is, by all accounts, a deeply embedded system within the force.’

  But, just days later, Wallace changed his mind.

  ‘I was temporarily misled,’ he told the Prime Minister, ‘into believing that it would be futile to try and fight something which has gone on for so long and has been accepted by so many. I regret having said this. I believe that Hong Kong, more than anywhere else perhaps, needs a good police force – and an honest one particularly.’

  He concluded that a thorough investigation needed to be carried out into the integrity and effectiveness of the Anti-Corruption Branch of the Hong Kong Police. Despite the widespread bribery, he believed that other officers would come forward to tell the truth.

  ‘I sometimes feel that it is all rather a bad dream,’ Wallace confided in the Prime Minister. ‘I have reached a point in my life where I am not too particular what happens to me. Even if I leave this colony penniless and in disgrace, at least I shall take my principles with me – and these are more precious to me than anything else.’

  Police Inspector Wallace’s heartfelt correspondence was received at 10 Downing Street in London by the Prime Minister’s Private Secretary. He passed the letters on to the Commonwealth Relations Office with a short note, saying the police officer ‘is engagingly honest if perhaps impetuous – I shall acknowledge his letters and do no more about it’.

  But Wallace had opened a can of worms. By writing to the Prime Minister, his complaints could not be ignored; something had to be done about it. That responsibility lay with Mr J.D. Higham at the Colonial Office, who felt compelled to bat the ball to Sir Robert Brown Black, British Governor of Hong Kong since 1958.

  The first point Higham made was that in his letters to the Prime Minister, Wallace had admitted to taking a bribe; therefore, an investigation was required into the circumstances behind it. The implication, perhaps, being that it could be used as leverage against him, if need be. The second point concerned his direct approach to the Prime Minister rather than his going through the proper channels.

  ‘This question of protocol is to some extent an embarrassment to all of us,’ said Higham. ‘Especially as, without consulting us, the Prime Minister’s Private Secretary sent an acknowledgment to the first letter indicating that the Prime Minister would look into Wallace’s allegations and saying that “to avoid any embarrassment to you I am sending this letter in a plain envelope”. This latter point was no doubt made because Wallace had telegraphed the GPO asking that the first letter be returned – a request with which of course they were unable to comply.’

  Higham had then investigated Wallace’s background, looking at his Crown Agents recruitment papers.

  ‘The letters show considerable naiveté,’ Higham told the Governor of Hong Kong. ‘It appears that Wallace is a rather earnest young man without much sense of humour but very keen on police work (at the time of his recruitment desperately anxious to get to Hong Kong). Having left school prematurely for financial reasons, he had studied privately to gain two A levels in order to qualify himself and had started to learn Cantonese.’

  ‘The correspondence,’ continued Higham, ‘if it can be taken at its face value, confirms the impression given to the recruiters that here is a young man with a strong moral sense who is somewhat out of his depth in the very difficult situation with which we know you have to cope in Hong Kong; he obviously – from the way he keeps changing his mind – is under severe strain and is probably acting in this unorthodox way, not out of “bloody-mindedness” but rather from inexperience.’

  Fortunately for Wallace, the Prime Minister’s Office had taken a personal interest in the case and wanted
to be informed of any investigation. Higham considered the next step was to discuss the matter in person with the Governor when he visited Hong Kong in January 1964.

  ‘We know how deeply concerned you are with this problem of bribery and corruption,’ ended Higham. ‘Wallace’s very amateur investigations are vitiated by the fact that he has been unable, by his own admission, to produce any firm evidence, and it is on this account, we gather, that he asks for a full enquiry.’

  But there was still the matter of his admission to accepting a bribe.

  ‘We tend to feel that from what we can judge of him here, from his interviews and these letters, that there are mitigating circumstances in the case which might perhaps mean that it could be disposed of, so far as he personally is concerned, without the imposition of a serious penalty.’

  The threat to Wallace remained, but the case was not so easily swept under the carpet. Following a meeting between Higham, the Governor of Hong Kong and a senior police adviser, the following confidential statement was made to the Minister of State of the Colonial Office: ‘While it is Hong Kong’s view that the allegations grossly exaggerate the extent to which European Police Officers are implicated in corruption, there is no disposition locally to treat them other than seriously.’

  And so, Wallace got exactly what he wanted: a thorough investigation of the Hong Kong Police. However, the author of the report was Henry Heath, Commissioner of Police of Hong Kong, and it turned into a ruthless exercise in damage limitation that did much to blacken the reputation of Wallace.

  Heath began with a startling admission, appealing to the government’s sense of realism. ‘Corruption in Hong Kong is a deeprooted evil,’ he said, ‘which is traditional in some circles. Few will deny its widespread existence and there is no reason to believe that members of the Police Force indulge in corrupt activities to a lesser extent than officers in other government departments who are confronted with comparable opportunity.’

  Heath identified several forms of systemic corruption in Hong Kong. There was extortion, where, for example, a government officer sought out a victim, usually having committed a crime, who was threatened with exposure unless he paid the officer a bribe. Then there was bribery, where a government officer accepted cash on behalf of one party in return for some advantage in a business transaction, or simply to ensure an unspecified favour in the future, or as a gift or commission paid on the successful completion of a deal.

  ‘The police officer is in constant touch with the public,’ explained Heath, ‘including the criminal elements, and sooner or later he must come into contact with the perpetrators of narcotic offences, gambling, prostitution and general vice. So long as vice and drug addiction continue, the police officer, especially below the rank of Superintendent, will find himself confronted with opportunity and temptation and there will be many who are ready to exploit his slightest weakness in order to obligate him to their own advantage.’

  Such dealings, felt Heath, in the overall context of Hong Kong business practice, were more acceptable to the Chinese than they would be in some other communities.

  ‘On the other hand,’ said Heath, ‘I am happy to state, there is a growing tendency among the criminal elements to resist this form of squeeze and the police officer who systematically indulges in it runs a risk of detection.

  ‘Corruption does exist, and has existed for a long time among members of the Police Force but to no greater extent, I suggest, than elsewhere in Government where similar opportunities arise. Corruption in the Police Force is likely to be of the overt type more readily discernible and police action or inaction, success or failure, in the suppression of vice or in the handling of matters directly affecting the general public such as traffic control and motor vehicle licensing, are factors which easily give rise to allegations of corruption whether justified or not.’

  The Police Commissioner believed that the police could also be victims of malicious gossip, in which it was presumed that the mere existence of vice and narcotic addiction was due to corruption.

  ‘Since the liberation of the Colony, anti-corruption measures have been placed high on the list of police priorities,’ he assured the British government. ‘All senior officers have frequently been directed to give the matter constant and personal attention, especially corruption, which appears to stem from undetected vice and from drug addiction. Police personnel are frequently lectured on the subject when senior officers, including myself, address large groups.’

  He claimed several ‘black sheep’ had been weeded out and some officers failed to win promotion because of the suspicious manner in which they discharged their duties. Alongside this, measures had been taken to improve the housing, welfare facilities and pay of ordinary policemen, thus lessening the temptation for corruption.

  ‘Working in these conditions,’ said Heath, ‘it is not difficult to see how a naive and impressionable young officer such as Wallace could leap to the most hasty and unfounded conclusions and become obsessed with the thought that every irregularity and every lost opportunity or the inability on the part of the police to eliminate any unlawful conduct may be due to corruption than to other causes.’

  But there was another side to Wallace’s short police career that Heath had to bring to the attention of his colonial superiors.

  ‘For some weeks past’ – prior to the January 1964 discussions about Wallace – ‘rumours had reached Police Headquarters, Kowloon and the Anti-Corruption Branch that one or more European Inspectors in Kowloon had started the practice of conducting police raids against suspected narcotic and gambling establishments without making reports and without following up with official police action, such as prosecutions. The suspected motive was corruption, but it took some time to collect sufficient data for any real conclusions to be drawn.

  ‘Wallace came under suspicion when rumours of his strange behaviour began to circulate. Evidence led to the belief that on occasions, alone, and on other occasions accompanied by police rank and file, he had systematically solicited and corruptly received bribes and on one occasion had demanded and received money in circumstances amounting to the original offence of robbery with violence. His victims were alleged to be persons accused of running opium divans [dens] or heroin stalls.’

  According to his divisional superintendent, Wallace had ‘gone rogue’ – venturing into the Kowloon Walled City to conduct a gambling raid without warrant and without making an official report. On a second occasion, he had taken Chinese police constables away from their usual beats to assist him in raiding suspected vice establishments during his off-duty hours. As Heath saw it, the probationary police inspector was becoming a lone crime-busting machine – but without the sanction of his superiors.

  As a result of these unorthodox actions, the divisional superintendent, Kowloon City Division, interviewed Wallace and came to the conclusion that the young man seemed to be distressed and had something on his mind. Shortly afterwards, Wallace revealed to other police officers that he had written to the Prime Minister. There was an immediate panic that the story might leak to the press before a full inquiry could be instituted. In the ensuing rapidly organised investigation, a number of officers serving in the Kowloon District were interviewed.

  ‘It soon became clear that whatever the true facts,’ said Heath, ‘a fair number of inspectors, especially young officers in their first tour of service, believed in the existence of what they called the “system” which organised corruption in the Police Force. It was also obvious that there had been a great deal of loose talk among young inspectors undergoing their basic training on entering the Force, and undoubtedly some of them passed out of the Police Training School believing that organised corruption was rampant.’

  Common gossip among trainee inspectors likened the ‘system’ to an ‘omnibus’, in that sooner or later an inspector would be propositioned by someone in the force to join the system and he could either ‘get on the bus’ or ‘run alongside the bus’, but in no circumstances, h
e was advised, ‘should he get in front of the bus’.

  One of the wilder allegations concerned a divisional superintendent who, it was said, was receiving $HK5 million (over £300,000) in bribes per month. Heath laughed this off as ‘canteen gossip’. He did accept there were some lower-level examples of corruption, especially in relation to vice, where money was paid to officers to look the other way. But just one Chinese police constable was found guilty of acting as a go-between, offering payments to prevent action against a narcotics dealer. Charged on account of his irregular association with the keeper of a heroin divan, he pleaded guilty and was dismissed from the police force.

  ‘Regarding the Inspectorate,’ said Heath, ‘I believe that corruption is not as widespread as the initial stages of this investigation appeared to indicate. Indeed, the inspectors recruited in recent years have a better educational and family background than many of their predecessors and it may well be that the loose talk and gossip on the subject of corruption of recent date is partly because of an increased number of inspectors who are themselves not corrupt.

  ‘Although many have, I believe, acted from the most honest motives, it is unfortunate that they did not exercise a more adult sense of responsibility by reporting their knowledge or suspicions to senior officers instead of indulging in a whispering campaign which has led to an exaggeration of the real facts.’

  Having found little to uphold the claims of widespread corruption, the Commissioner of Police turned his attention to Wallace. The probationary police inspector’s admission of receiving a bribe meant he should face criminal prosecution, but Heath believed he had acted in good faith and the Deputy Public Prosecutor advised that the matter be dealt with inside the department. In March 1964, Wallace was transferred to the Frontier Division, where the assistant commissioner of his district was instructed to watch his progress.

  ‘So far he shows poor prospects of measuring up to the required standard of conduct and efficiency for confirmation in the rank of Police Inspector,’ noted Heath. ‘He did reasonably well in his basic training course at the Police Training School, although the Commandant reported that he did not mix well with his fellow officers under training. He is a person who clearly keeps very much to himself and it is doubtful whether he has any real friends in the Force.’