Post by anenro on Dec 20, 2019 14:09:14 GMT 4
Mysterious Bags of Cash Trigger Major Hong Kong Protest Arrests
Glancing at bags of cash stuffed to the brim earlier this month, Gary Fan simply wanted someone to remove them from an office in Hong Kong used by his political party.
The former pro-democracy lawmaker had collected HK$2.7 million ($345,000) during an anti-government protest the day before, and was waiting for someone to pick it up from a mysterious group known as Spark Alliance that helps bail protesters out of jail. The next day, a person whom he knew and trusted came to collect the cash, even though Fan says he doesn’t know who exactly is behind the group or where the money ends up.
“We just work by an honor system now, trusting them with a good cause,” Fan said in a Dec. 11 interview, adding that Spark Alliance has “earned credibility with real work” like getting legal assistance for protesters. Still, he said, “I absolutely agree there should be more disclosure, transparency and accountability when you take money from the public.”
On Thursday evening, police announced the arrests of four people connected with Spark Alliance for suspected money laundering, the first cases brought over financing the demonstrations after six months of protests against China’s tightening grip over Hong Kong. Authorities froze HK$70 million of bank deposits and personal insurance products linked to the fund, while also seizing HK$130,000 in cash.
“The police attempted, through false statements, to distort the work of Spark Alliance as money laundering for malicious uses,” the group said in a statement on Facebook. “Spark Alliance condemns this kind of defamatory action.”
The crackdown deals a major blow to demonstrators as they face ever-mounting legal bills, with more than 6,000 people arrested since June. Spark Alliance, one of the largest crowd-funding campaigns supporting the protests, plays a crucial behind-the-scenes role — often sending anonymous representatives to bail protesters out of jail in the middle of the night.
The latest arrests risk deterring Hong Kong’s professional class from giving more cash, potentially curbing a substantial source of funds that have helped sustain the protests longer than anyone had expected. They also show the limits of the leaderless movement’s ability to manage tens of millions of dollars with little oversight outside of a formal financial system.
Funds bankrolling the protests have collectively raised at least HK$254 million ($33 million) since June, with 70% coming from just two groups, Spark Alliance and the 612 Humanitarian Fund, according to a tally based on disclosures from the groups and an analysis of publicly available documents. That figure doesn’t reflect all the money raised related to the protests, only the funds Bloomberg News could verify.
The $33 million alone amounts to a third of the money the city has spent in overtime pay to 11,000 police officers since June, and would be able to purchase some 300,000 gas masks. But the largest costs faced by protesters are legal fees that may stretch out for years.
Nearly 1,000 people have been charged for offenses like rioting, which carries a jail sentence of as much as a decade, according to police. The 612 Fund says it can cost up to HK$1.8 million per person for a 60-day legal defense, and many trials last far longer. Some proceedings related to Hong Kong’s 2014 Occupy protests are still ongoing.
Among dozens of groups, Spark Alliance is one of the most secretive: Even some donors and lawyers who assist the group say they don’t know who runs it, while the bank account listed on its website belongs to a firm that owns a pest control company. A person who picked up Spark Alliance’s hotline last week said the number was only for protester requests. The group didn’t respond to requests for comment via Facebook, Whatsapp or Telegram.
‘We Need Protection’
“Spark is probably less transparent but people tend to believe them,” said Jason, a protester in his 30s who asked to be identified by his English name. He said he memorized the group’s phone number and called the group after he was arrested in August. Seven hours later, two lawyers helped arrange HK$4,000 in bail money.
“Everyone knows the cost to fight for this movement and not everyone can afford lawyer fees,” he said. “We need protection.”
Over the past few months he’s raised half a million dollars for Spark Alliance and other charities through the sale of Hong Kong-themed figurines, including a miniature Carrie Lam and a masked protester. Asked on Thursday night if he would still give the money to Spark Alliance, Jason said he wanted more information on the arrests.
Even before the police action on Thursday, many of the bankers, accountants and other Hong Kong professionals who give money in lieu of battling authorities in the streets were concerned about retribution for supporting the protests. While lawyers say it would be difficult to prove a donor violated any laws, people fear that reporting mechanisms in place to deter terrorist financing and anti-money laundering could still end up flagging contributions to authorities.
HSBC Holdings Plc last month said it shut down Spark Alliance’s bank account after it “spotted activity differing from the stated purpose of the company account.”
HSBC decided to close the account, according to people familiar with the matter who asked not to be identified. Freezing it would entail locking up millions in funds raised to support the protesters. After closing the account, the bank returned more than HK$50 million in checks to people affiliated with Spark Alliance, one of the people said. It’s unclear whether the group has found another bank since the checks haven’t been cashed and the account owner hasn’t provided relevant information, they said.
“HSBC never takes the decision to suspend or close any account lightly,” spokeswoman Maggie Cheung said, while declining to comment on specific details. On Thursday, the bank referred to comment on the arrests to government authorities.
Spark Alliance’s Facebook page lists the account holder as Prime Management Service Ltd. According to Hong Kong’s companies registry, the only business in active operation with that name is wholly owned by company director Tony Wong, who also runs a pest control company, according to LinkedIn. Reached on Dec. 11 through a mobile phone number listed in the registry, Wong said he “did not know these things” and hung up when asked why Prime Management Service lent the use of its bank account to Spark Alliance.
Spark Alliance said on Nov. 18 it would cease accepting money via bank transfers after HSBC closed its account. Instead, it said it would sell gift cards through its website. Since then, a stream of supporters have posted of their gift card receipts on Facebook. Transactions are processed by Paypal and Stripe, but it’s unclear where the funds go from there. On Friday, its website appeared to be stripped of all previous information and a donation function.
Glancing at bags of cash stuffed to the brim earlier this month, Gary Fan simply wanted someone to remove them from an office in Hong Kong used by his political party.
The former pro-democracy lawmaker had collected HK$2.7 million ($345,000) during an anti-government protest the day before, and was waiting for someone to pick it up from a mysterious group known as Spark Alliance that helps bail protesters out of jail. The next day, a person whom he knew and trusted came to collect the cash, even though Fan says he doesn’t know who exactly is behind the group or where the money ends up.
“We just work by an honor system now, trusting them with a good cause,” Fan said in a Dec. 11 interview, adding that Spark Alliance has “earned credibility with real work” like getting legal assistance for protesters. Still, he said, “I absolutely agree there should be more disclosure, transparency and accountability when you take money from the public.”
On Thursday evening, police announced the arrests of four people connected with Spark Alliance for suspected money laundering, the first cases brought over financing the demonstrations after six months of protests against China’s tightening grip over Hong Kong. Authorities froze HK$70 million of bank deposits and personal insurance products linked to the fund, while also seizing HK$130,000 in cash.
“The police attempted, through false statements, to distort the work of Spark Alliance as money laundering for malicious uses,” the group said in a statement on Facebook. “Spark Alliance condemns this kind of defamatory action.”
The crackdown deals a major blow to demonstrators as they face ever-mounting legal bills, with more than 6,000 people arrested since June. Spark Alliance, one of the largest crowd-funding campaigns supporting the protests, plays a crucial behind-the-scenes role — often sending anonymous representatives to bail protesters out of jail in the middle of the night.
The latest arrests risk deterring Hong Kong’s professional class from giving more cash, potentially curbing a substantial source of funds that have helped sustain the protests longer than anyone had expected. They also show the limits of the leaderless movement’s ability to manage tens of millions of dollars with little oversight outside of a formal financial system.
Funds bankrolling the protests have collectively raised at least HK$254 million ($33 million) since June, with 70% coming from just two groups, Spark Alliance and the 612 Humanitarian Fund, according to a tally based on disclosures from the groups and an analysis of publicly available documents. That figure doesn’t reflect all the money raised related to the protests, only the funds Bloomberg News could verify.
The $33 million alone amounts to a third of the money the city has spent in overtime pay to 11,000 police officers since June, and would be able to purchase some 300,000 gas masks. But the largest costs faced by protesters are legal fees that may stretch out for years.
Nearly 1,000 people have been charged for offenses like rioting, which carries a jail sentence of as much as a decade, according to police. The 612 Fund says it can cost up to HK$1.8 million per person for a 60-day legal defense, and many trials last far longer. Some proceedings related to Hong Kong’s 2014 Occupy protests are still ongoing.
Among dozens of groups, Spark Alliance is one of the most secretive: Even some donors and lawyers who assist the group say they don’t know who runs it, while the bank account listed on its website belongs to a firm that owns a pest control company. A person who picked up Spark Alliance’s hotline last week said the number was only for protester requests. The group didn’t respond to requests for comment via Facebook, Whatsapp or Telegram.
‘We Need Protection’
“Spark is probably less transparent but people tend to believe them,” said Jason, a protester in his 30s who asked to be identified by his English name. He said he memorized the group’s phone number and called the group after he was arrested in August. Seven hours later, two lawyers helped arrange HK$4,000 in bail money.
“Everyone knows the cost to fight for this movement and not everyone can afford lawyer fees,” he said. “We need protection.”
Over the past few months he’s raised half a million dollars for Spark Alliance and other charities through the sale of Hong Kong-themed figurines, including a miniature Carrie Lam and a masked protester. Asked on Thursday night if he would still give the money to Spark Alliance, Jason said he wanted more information on the arrests.
Even before the police action on Thursday, many of the bankers, accountants and other Hong Kong professionals who give money in lieu of battling authorities in the streets were concerned about retribution for supporting the protests. While lawyers say it would be difficult to prove a donor violated any laws, people fear that reporting mechanisms in place to deter terrorist financing and anti-money laundering could still end up flagging contributions to authorities.
HSBC Holdings Plc last month said it shut down Spark Alliance’s bank account after it “spotted activity differing from the stated purpose of the company account.”
HSBC decided to close the account, according to people familiar with the matter who asked not to be identified. Freezing it would entail locking up millions in funds raised to support the protesters. After closing the account, the bank returned more than HK$50 million in checks to people affiliated with Spark Alliance, one of the people said. It’s unclear whether the group has found another bank since the checks haven’t been cashed and the account owner hasn’t provided relevant information, they said.
“HSBC never takes the decision to suspend or close any account lightly,” spokeswoman Maggie Cheung said, while declining to comment on specific details. On Thursday, the bank referred to comment on the arrests to government authorities.
Spark Alliance’s Facebook page lists the account holder as Prime Management Service Ltd. According to Hong Kong’s companies registry, the only business in active operation with that name is wholly owned by company director Tony Wong, who also runs a pest control company, according to LinkedIn. Reached on Dec. 11 through a mobile phone number listed in the registry, Wong said he “did not know these things” and hung up when asked why Prime Management Service lent the use of its bank account to Spark Alliance.
Spark Alliance said on Nov. 18 it would cease accepting money via bank transfers after HSBC closed its account. Instead, it said it would sell gift cards through its website. Since then, a stream of supporters have posted of their gift card receipts on Facebook. Transactions are processed by Paypal and Stripe, but it’s unclear where the funds go from there. On Friday, its website appeared to be stripped of all previous information and a donation function.