Background
As Hong Kong got back on its feet after WWII, the population began to swell and manufacturing industries grew, and by the 1960s Hong Kong was experiencing economic growth. Against this background the government kept Civil Service salaries very low, and so it was probably no surprise that officials in all departments took advantage of their positions to supplement their wages with demands for 'tea money', 'lucky money' or substantially larger sums. Examples of corruption ranged from nursing sisters demanding money to provide extra blankets and/or food or to allow visitors outside normal hours, firemen lived by the saying, 'Mo chin mo sui' (no money no water) and in fact sometimes asked for money to turn off the water, preventing water damage, once a fire had been put out; officials in Lands and Public Works departments secured huge sums of money for 'advice' and 'signatures' that procured the award of tenders and enabled developments and projects to proceed; the Royal Hong Kong Police was also in on the act and entire stations were organised to 'make money' from hawkers, licences and in many other illicit schemes. Civil servants often had to pay for promotions and postings in positions known for a lucrative return. HK was awash with money, and poorly paid civil servants made sure that their wages were supplemented by it. That is not to say that those in private business/employment - from bankers to exporters from taxi drivers to restaurant workers - were scrupulously clean, the whole of Hong Kong was on the take.
The Hong Kong Police had previously had an Anti-Corruption Branch, but it did little to reduce corruption. There was a public perception that Anti Corruption cops essentially, following the discovery of corrupt practices, would then enter into dodgy dealings themselves. A particular example was Peter Fitzroy Godber, a senior officer stationed at Wanchai police station and later at Kai Tak Airport police station. Before his retirement in 1973, he had amassed no less than 4.3 million Hong Kong Dollars (approximately 600,000 US Dollars) in overseas bank accounts. The police's Anti-Corruption Branch investigated his mysterious wealth and ordered him to explain his source of income. In response, Godber immediately arranged for his wife to leave the colony, then he used his police airport pass to bypass Immigration and Passport checks and walked onto a plane for London. Godber's escape led to a large public outcry over the integrity and quality of the police's self-investigation and called for reforms in the government's anti-corruption efforts. Godber was later extradicted back to HK to face trial and convicted.
The newly-formed Independent Commission Against Corruption was created to root out corruption; unlike the old police Anti-Corruption Branch, the new ICAC would be answerable to only the Governor of Hong Kong. Local cynics first joked that "ICAC" stood for "Investigating Chinese Ancient Customs" or even "I Can Accept Cash". Most ICAC operations staff were sergeants recruited from specifically UK police forces and were certainly not beyond sharp practices themselves. Their tactics and methods were often crude and aggressive in the extreme, often they would sweep down to a police station and take an entire shift in for questioning. Such questioning was often just a 'fishing exercise'. Ultimately though their shock tactics were effective.
Read more about this topic: Independent Commission Against Corruption (Hong Kong)
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