CCAC completed the investigation of the legitimacy of the Macao Foundation funding Jinan University

On 12th May this year, the Macao Youth Dynamics submitted a complaint letter to the Commission Against Corruption (CCAC), stating that the funding of RMB100 million by the Macao Foundation to Jinan University is in violation of the law and is suspected of transfer of benefits, thus requesting the CCAC to commence investigation. After a preliminary analysis of the complaint letter mentioned above, the CCAC commenced the case and adopted the relevant investigative measures in accordance with the provisions of the Organic Law of the CCAC, including the request of documents and information from competent authorities and listened to the statement of the persons concerned, so as to analyse the legitimacy of the funding in this case. I. The development of the Macao Foundation funding Jinan University In April this year, the Macao Foundation received the application of Jinan University, hoping that funding would be granted to fund the construction of the school building on the south campus and the media studies centre. After analysing the information submitted by Jinan University, the Administrative Committee of the Macao Foundation considers that the application for funding is reasonable and feasible, but since the amount applied exceeds the authority of the Administrative Committee, therefore, it was decided to submit the application to the Board of Trustees for discussion and consideration. The Board of Trustees of the Macao Foundation discussed the application for funding at its meeting on 13th April this year and agreed to fund the construction of a media studies centre of Jinan University in 2016 and the funding amount would be RMB50 million; and funding Jinan University in the construction of other development projects in the campus, with the upper limit not exceeding RMB50 million in 2017. According to the statement of the person-in-charge of the Macao Foundation, although the Board of Trustees accepted the application for funding, and Jinan University has submitted all documents related to the funding, such as tendering, bid evaluation, land-use rights, etc., since the details of implementation relating to the funding are still under discussing, therefore, the amount will only be paid after reaching an agreement. II. Whether or not Macao Foundation’s provision of funding to Jinan University contravened the law According to the complaint letter from Macao Youth Dynamics, Jinan University’s seeking funding from Macao Foundation could be regarded as a blatant attempt of the Chinese mainland officials to demand money from the SAR government, which is a violation of the provision under Article 104 of the Basic Law – “The Macao Special Administrative Region shall have independent finances. All financial revenues of the Macao Special Administrative Region shall be managed and controlled by the Region itself and shall not be handed over the Central People’s Government.” The CCAC believed that “hand over” as referred to in Article 104 of the Basic Law is seen as a compulsory act of a local government to pay, as required by the law, financial revenues generated within a particular period of time to the Central People’s Government, including tax revenues and other revenues obtained by legal means. The decision to approve Jinan University’s application for the funding in question was made by Macao Foundation after it conducted an assessment according to the statutory procedures. The bodies of Macao Foundation have the decision-making power regarding whether or not to approve the funding. “Providing funding”, as a matter of fact, is of a completely different nature from that of “handing over revenues”. Therefore, it did not violate the provision under Article 104 of the Basic Law. As Article 2 of the Statute of the Macao Foundation reads, “the Foundation's purpose is to promote the development and the study of cultural, social, economic, educational, scientific, academic and philanthropic activities”, and “the activity of the Foundation is developed predominantly in Macao. The Foundation may develop exchanges and cooperation with institutions or entities whose activities are compatible with its purpose, and support them financially, if necessary, in accordance with this Statute and other applicable instruments”. It can be understood that although the activity carried out by the Macao Foundation must be mainly based in Macao, it may develop exchanges and cooperation with institutions outside the Region and support them financially in accordance with the Statute and other applicable instruments. As the provision of financial support for Jinan University to build educational facilities was compatible with the Macao Foundation’s purpose, the approval of funding according to the statutory procedures did not contravene the law. III. Whether or not the members of Board of Trustees have violated the regulations of recusal The complaint letter from the Macau Youth Dynamics indicated that the Chief Executive and some other individualities were not only the president and the members of the Board of Trustees of Macao Foundation but also the deputy president and the members of the board of directors of Jinan University. Therefore, they were the main interested parties of the case. Since they were the ones who allocated the resource and finally gained the benefits, such obvious conflict of roles has violated the provisions which require recusal of the official himself, or that arise from his relation with his family member or representative under the Code of Administrative Procedure. According to the stipulations about necessary recusal and self-recusal provided by Articles 46 and 50 of the Code of Administrative Procedure, officeholder of the Public Administration shall recuse himself/herself when the person, as himself/herself or as a representative, or his/her relative has an interest in the procedure, activity or contract. The CCAC considered that to clarify whether or not the Chief Executive and some of the members of the Board of Trustees, who were also the vice president and the members of the board of directors of Jinan University, could be considered as the “representatives” of the university and thus should recuse themselves is the key to judge whether the funding is illegal or not. Article 251 of the Civil Code, which serves as the legal definition of “representative”, provides a clear meaning of the concept. Article 1 of the Internal Regulation of Recusal Mechanism Applied to the Collegiate Bodies of Macao Foundation stipulates that for the purpose of Sub-paragraph a) of Article 46 of the Code of Administrative Procedure, the “representative” of an entity involved in the resolutions made by a collegiate body of Macao Foundation refers to: a) The person or body entitled to represent the entity before a third party or inside and outside the court under relevant regulation; or b) The person who is empowered or authorized by the applicant to be its representative regarding the issues involved in the resolution made by the collegiate body of Macao Foundation. According to the Regulation of Board of Directors of Jinan University, the board’s duty is to assist the Overseas Chinese Affairs Office of the State Council in Jinan University’s development. It is the board members’ duty to supervise and give opinions on the operation of the university, but it is not their duty to act as representatives of the university on external matters. Moreover, they were not authorized to represent the university when making the application to the Macao Foundation. Therefore, the Chief Executive and those members of the Board of Trustees cannot be considered as “representatives” of Jinan University. Therefore, in the process of assessment and approval of the funding application, there was no situation in which recusal was necessary for avoiding conflict of roles and interests as stipulated by the Code of Administrative Procedure and the Internal Regulation of Recusal Mechanism Applied to the Collegiate Bodies of Macao Foundation and those requiring the personnel of Public Administration to self-recuse due to reasonable suspicion over their impartiality and the righteousness of their behavior as mentioned in the said code and internal regulation. IV. Whether the members of Board of Trustees have involved in transfer of interests The CCAC believed that Jinan University, being a public institution engaging in higher education activities launched by the Mainland government department, possesses the quality of public legal person whose financial resources should be allocated on public education works according to law. The grant given to Jinan University by the Macao Foundation conformed to the objects and statutory procedures of the Foundation and has not violated the legal stipulation of recusal. Thus, there was no sign showing the involvement of “transfer of interests” claimed in the letter. Concerning the claim in the letter that the Board of Trustees and the Administrative Council of Macao Foundation were mostly comprised of traditional association representatives and businesspersons, with some of them also being the members of the Election Committee of the Chief Executive, thus “they were from the same interest group and were suspicious of involving in collusion with each other”. The CCAC believed that such conclusion was just a guess made by the complainants. After investigation, given that there was no evidence showing that the procedures and decisions concerning the funding given to Jinan University by Macao Foundation were against the above legal stipulation or showed the signs of criminal offences, the allegations made in the letter were groundless. The CCAC archived the case in accordance with the law.