The People’s Action Party (PAP) government has launched an attack on the Worker’s Party over the management of its funds at the Aljunied-Hougang-Punggol East Town Council (AHPETC).
The Today newspaper drew a chart and said that “AHPETC’s key officers had ownership interests in two companies engaged by the town council for estate services — FM Solutions & Integrated Services (FMSI) and FM Solutions & Services (FMSS)” and that there was no “proper disclosures of the interests of the related parties” and that there were “conflicts of interest”. It also said that there were “Lapses in governance of related party transactions”. AHPETC was also criticised for “Inadequacies in record management and accounting system”.
However, when you look at the PAP’s government fund management of Singaporeans’ Central Provident Fund (CPF) pension funds and “ownership interests”, you see a somewhat similar structure.
Below, I replaced what the PAP ministers and members of parliament had said about the AHPETC with what can also be said about the PAP’s management of our CPF. The hypocrisy of what the PAP has said will then be revealed. (The change of words are in italics.)
GIC and Temasek Holding receive large sums of CPF monies from Singaporeans. These are all public monies. As stewards of public funds, GIC and Temasek Holdings must keep proper accounts and records, and maintain adequate control over their assets. Who has paid and who has not? How is the money spent? Is it properly used? Is anybody doing anything wrong? … These and many other questions directly affect the interests and safety of the Singaporeans. They are not trivial technical issues raised merely to satisfy the accountants or the auditors, or to meet financial regulations. Unfortunately, … (there are) serious questions about the reliability and accuracy of their financial and accounting systems.
There is always the temptation, when the GIC and Temasek Holdings are financially strapped, to postpone saving, and say it will make up the shortfall later, or worse, to put its hand into the cookie jar, to draw from the savings to satisfy immediate needs. Just spend, use the savings first. Sounds appealing, but the GIC and Temasek Holdings will then be simply running down the reserves and mortgaging the future of Singaporeans away.
“GIC and Temasek Holdings did not adequately manage the conflicts of interests of related parties arising from ownership interests of their key officers”.”
The related parties were two companies, GIC and Temasek Holdings, engaged by the PAP government to invest Singaporeans’ CPF. GIC and Temasek Holdings are owned by the PAP government. The chairman and directors of the GIC are the Prime Minister, Deputy Prime Ministers, Ministers, ex-Ministers and members of parliament of the PAP government. The Chairman of GIC and CEO of Temasek Holdings are, by the way, husband and wife.
The key officers of the PAP government (i.e. Prime Minister, Deputy Prime Ministers, Ministers, ex-Ministers and members of parliament) who have ownership interests in the GIC and at the same time performed a role (for the PAP government) in approving transfer of the CPF to GIC were in clear conflicts of interests.
“Taken in totality, the PAP government cannot possibly adequately manage the conflicts of interest involved in related party transactions”. This means that the PAP government may not have obtained the best value for the moneys paid to these related parties. Or worse, there could be opportunities of wrong-doing or unethical practices which the PAP government may not be able to detect or prevent.
Singaporeans and taxpayers need to know that their monies are properly spent and they are getting best value for money. When these contracts are awarded to parties related to the PAP government, the PAP government needs to be upfront with Singaporeans as well as with taxpayers at large, so that there is transparency and proper scrutiny.
Each year, the PAP government collects about $30 billion in CPF contributions from Singaporeans. The PAP government also manages a reserve of about $1 trillion, accumulated from Singaporeans’ CPF monies and government grants… There is also no assurance that the CPF monies, which are taxpayers’ monies disbursed to the GIC and Temasek Holdings, are being safeguarded and channelled to the purpose for which they are given. And most fundamental of all, there is no safeguard against potential mischief and loss of public monies.
The PAP government has no proper system to safeguard important documents, and had weak accounting procedures. It did not provide key information requested by President Ong Teng Cheong on the reserves. Without access to proper records, President Ong was unable to make a proper assessment of the GIC and Temasek Holding’s financial situation.
We do not know the exact state of the GIC and Temasek Holding’s financial position.
Something is seriously wrong with the PAP government. They paint a picture of financial mismanagement, incompetence and negligence in corporate governance.
If an auditor makes such a finding on a listed company, it will immediately cause consternation among the shareholders, and a call for the removal of the CEO and the Board of Directors. In Japan, the president or CEO will call a press conference and take a deep bow; in the good old days, they may even commit hara-kiri. Where there are breaches of the Companies Act, both the company as well as the individuals responsible could be charged, and if found guilty, punished with fines and/or jail terms for the individuals.
Even for charities, if their auditor makes such a damning finding, the Commissioner of Charities will haul up the Governing Board and key officers for a full inquiry. They will be suspended and eventually removed from their duties. If the findings are borne out, they can also be charged and punished for any breaches of the Charities Act.
Unfortunately, throughout this saga, we have found the PAP MPs running the PAP government to be evasive, unresponsive and misleading. In response to legitimate queries from Singaporeans, they stone-walled, deflected the queries, made false or dishonest claims, raised irrelevant excuses and sought to confuse the public with a flurry of red-herrings.
First, their lack of transparency – they failed to disclose things on time; they failed to submit reports they should be submitting. Every time we reminded them, again and again, they came up with yet another excuse.
The government need competent, honest people and proper systems to serve Singaporeans well. Good intentions and bland assurances alone are not sufficient. Elected MPs need to supervise the work of the government, GIC and Temasek Holdings. While they enjoy wide autonomy, they also have huge responsibility. And they are accountable to Singaporeans. They have statutory duties but they are also subject to national laws.
Running a government requires elected MPs to govern, not just politick. Compared to the sound and fury of politicking, governing is long, tedious and unglamorous work. But good government is what secures a good life for Singaporeans, on a long-term, sustainable basis. Conversely, neglect of government ultimately compromises Singaporeans’ well-being. It may not show up immediately, but it will eventually.
What concerns me is that the PAP government’s actions are clearly unlawful.
The rhetoric from the PAP is always about helping the poor man, the reality is that the PAP took CPF money from the man in the street to give to their friends in the GIC and Temasek Holdings.
The PAP keep saying there’s been no loss (of CPF monies from the more than $100 billion that the GIC and Temasek Holdings lost in 2008). Maybe there was no one taking money through the back door in the dark of the night, there was no need because the money was taken from the front door in broad daylight through all this overcharging.
The second major problem arising from the facts is lack of transparency, lack of disclosure. First, the facts do not seem to have been fully disclosed to all Singaporeans. And second, there seems to have been no proper discussion of the conflicts at all.
Active, persistent non-disclosure. Obviously, deliberate. And the consequence of all of this? Of the billions that were paid to the GIC and Temasek Holdings, who knows how much was justifiable?
The PAP have been quick to say that despite all the problems, no CPF monies have been lost. Can the PAP honestly say that no CPF monies have been lost? When the PAP ministers and members of parliament act in breach of their fiduciary duties; and pay the GIC and Temasek Holdings billions of dollars? Overpayment to a related party is not a loss?
It is a really strange statement from the PAP. The House is burning – and they are standing in front of it and says – you know, there has been no “loss”. Is it possible that the PAP does not recognise loss even when it is staring before their face?
Let us put this in layman terms: You have a business, with cash, valuables belonging to other people. You don’t know exactly what you have. You put a friend in charge. They take what they want of the cash. You overpay them several billion dollars. You don’t check. Auditors say your accounts are in a mess, the accounts are unreliable. In fact you say yourself that you can’t produce the accounts. Auditors say you have no clear idea of what has happened to the cash.
And you come and you say: no money is lost. One can only wonder at such a statement.
And the money was lost not through accident. The structure was approved by at least some in the PAP government for your party to form a company and do all of this.
This is not just a question of negligence, or inexperience. You don’t need many years of experience to know that you shouldn’t let your friends do what they like with public funds.
The big questions remain unanswered. Why did you hide information from your own President, Ong Teng Cheong? What are you going to do to recover monies that have been lost? Those are questions, because these are people’s monies. There will have to be consequences; we have to see what they do to recover lost money.
So why set up the GIC and Temasek Holdings? It was a convenient vehicle to which billions of dollars went from the Town Council. And another obvious question: money that went to the GIC and Temasek Holdings – where did it actually go? What happened to it?
This process is unacceptable. It is also unlawful. In all these 25 years, in no other government except the PAP government are the Prime Minister, Deputy Prime Ministers, Ministers, ex-Ministers and members of parliament of the PAP government not just part of the GIC, but also directors of the GIC. Their ownership interest and control of the GIC is what distinguishes the PAP government from all other governments.
Why doesn’t the PAP government give proper answers instead of playing hide and seek? What are you hiding? This is not negligence. It is an active decision to suppress information. It raises the issue of integrity.
Any honest PAP member of parliament will admit that all this is unacceptable, and will want to set right what has gone wrong, which means coming clean on the facts, relooking at all the contracts and payments, and recovering all the excesses, the overpayments, and the payments made in breach of fiduciary duties. Which means taking legal action where necessary. Will the PAP members of parliament do that?
What concerns me is that the actions are clearly unlawful, … we were inundated with minutiae about how the safekeeping is going to be made better, how there are going to be two locks and so on. The big questions remain unanswered: Why did you hide info from Singaporeans? …What are you going to do to recover monies that have been lost?
If you were a listed company, by now your shareholders would have sued you. Because you collect public funds every month, and you have a duty to account to Singaporeans. Basically, the PAP government is in shambles. It is quite amazing to hear you stand up and say everything is okay. If you were a listed company, by now your shareholders would have sued you because you collect public funds every month and you have a duty to account to Singaporeans.
There has been a complete dereliction of duties and this is in addition to the gross breach of fiduciary duties, in relation to the GIC and Temasek Holdings. You made a conscious decision to appoint your ministers to run the GIC… What does this say of your integrity? In conclusion, I say this to the PAP government: Each of you appear to have seriously breached your fiduciary duties.
On behalf of the residents of Singaporeans, more than 3.5 million of them, hard-working, honest people, we have to ask the PAP to come clean and explain yourselves to the public. Singaporeans deserve some real, honest answers.
I am concerned about the well-being and interests of all Singaporeans. Elected MPs are expected to be clean, honest and to act with integrity.
So I am sad to observe that the elected members of parliament of the PAP have betrayed the people’s trust. They betrayed the people’s trust in three ways:
- One, they betrayed the people’s trust by failing to act in the best interests of the Singaporeans.
- Two, they betrayed the people’s with a consistent pattern of evasive behaviour.
- Third, they betrayed the people’s trust by promising one thing and doing another.
First, the PAP government have betrayed the trust of Singaporeans.
Singaporeans cannot trust the PAP on several counts.
For a start, Singaporeans cannot trust the PAP to get them a good deal – in fact, the PAP has gotten them a raw deal.
The GIC and Temasek Holdings charge the highest rate in the world for their services.
Till now, after all the debate…, the public doesn’t know, none of us knows, the reasons why the GIC and Temasek Holdings’s rates are higher than everywhere else.
And sadly, this is precisely what we are seeing – short-term, opportunistic behaviour.
What we have is a structure (of how the CPF is channelled into the GIC and Temasek Holdings) that is quite convoluted. There were other options that could have been pursued.
Singaporeans cannot trust the elected PAP members of parliament to account honestly for where their CPF money is.
I’m also very concerned about the second way in which the PAP has betrayed the people’s trust. The pattern of behaviour. A consistent pattern of denial, deflection and protection of their managing agent, which suggests a serious rot is happening.
Why did the elected PAP members of parliament allow such a deeply flawed structure to be set up in the very first place? We have not heard any good answer.
But the PAP government told us in this House that they are professional and experienced! So who is telling us the accurate version? And you are talking about experience. How much experience do you need to know that you cannot be handing money to the GIC and Temasek Holdings, at the expense of overcharging Singaporeans? How much experience do you need to truthfully disclose information to your President?
The elected PAP members of parliament have acted in the best interests of the GIC and Temasek Holdings. They have neglected the interests of Singaporeans. Can Singaporeans trust that the PAP is acting in their interests? Why are they so protective of the GIC and Temasek Holdings that messed up the CPF Board’s work?
The PAP rejected the suggestion that the arrangement was to benefit the GIC and Temasek Holdings. So may I ask: … Did they benefit? Yes, richly so. The structure that the PAP set up allowed this to happen – you awarded the contracts at these exorbitant rates and allowed them to get away with it. What other conclusions can be drawn?
All the PAP MPs have said that they would take collective responsibility… One would have expected:
- That they will conduct a forensic audit;
- That they will take legal action against the GIC and Temasek Holdings;
- That they will file accounts immediately, on time, as required by the law, and any administrative action;
- That they will put in the checks and balances where there is a severe conflict of interest.
And Singaporeans deserve to know what had happened. Is the PAP prepared to come clean, and explain, and answer all the questions that have been raised in this House? How exactly will you safeguard the interests of Singaporeans?
The third way that the PAP had betrayed the trust of our people is they promise one thing, and do another, quite the opposite. They said something in one forum, and in another forum, they said something else.
We have seen clearly how they have created a system where there is no check, no balance. You can’t even check yourselves! Or you are not willing to check yourself.
They have been entrusted with running a government. Where is the First World government that they should be delivering? Instead, we have a government which cannot account where the resources go to.
The PAP also spoke vigorously about accountability – but surely you would agree that the most basic aspect of accountability is to be able to keep proper accounts of the money that have been entrusted to you. I can understand if you are keeping accounts for the first time, but you are not – you have told Singaporeans of your experience in running Singapore. So till today, we do not know the true state of the accounts of the GIC and Temasek Holdings.
We saw a big wayang in this house. Ordinarily, such a wayang would have seemed comical. But in the context of how important integrity and trust is in how we govern our little red dot, I am so disappointed and so saddened by this entire sorry saga.
What we are seeing are not isolated lapses or behaviours. What we are seeing is a troubling pattern of dishonest and misleading behaviour – to say one thing but to do the opposite, to say one thing that suits them to Singaporeans, but to say a different thing in Parliament or elsewhere when it suits them better.
And these are very serious lapses. What has been troubling is the pattern of denial and the pattern of deflection of these very serious lapses. And therefore, it was necessary to have this debate in Parliament. So it is not about partisan politics. It is really about how we must work as elected Members of Parliament to serve Singaporeans and to serve Singaporeans sincerely, wholeheartedly.
Won’t answer President Ong Teng Cheong. Won’t answer Parliament. Won’t answer Singaporeans. Who is left in Singapore that the PAP think is worthy of an answer?
This is wrong. This is a serious problem of integrity.
It costs the PAP nothing to promise the world. But there is a real cost to Singaporeans – real lives are affected – when they break their promises.
We have seen how, in many countries, when elected officials engage in self-serving practices, when they put their own interests ahead of the public interest, when they do not act with integrity and when they put the interests of their cronies first, the country fails. And it is the man in the street, the young, and the future generation who suffer the most.
As a little red dot, good governance is critical to Singapore’s future. Elected public officials must act with integrity and a deep sense of responsibility, and serve our people whole-heartedly. In the many decisions we take, there may be errors – human or system, but what matters most is that elected officials act with integrity and do our very best to serve the public interest.
A government requires elected MPs to govern, and not just politick. It is easy to shout campaign slogans and make all sorts of promises. But do you really believe in what you say wholeheartedly, and walk the talk? Running a government in a clean, competent and accountable way is a test of the integrity of the MP and his sense of responsibility and accountability. In other words, can we trust him or her?
This is not about partisan politics – I have no joy pointing out the many failings and questionable practices of the PAP. This is important for all Singaporeans because it is about our long-term future. Unless elected MPs act with integrity and a deep sense of responsibility, and take the trust of the people seriously, we will not be able to maintain a system of good governance – clean, honest, accountable, competent, and pass this on to our future generations. We must not betray the trust of Singaporeans. Singaporean deserve better. Let us all honour the trust that Singaporeans have placed in us.
It is about integrity, trust, our conviction that as elected MPs, we are here to serve the people of Singapore, not our friends.
It is a broader issue of how elected MPs must act with integrity and act to serve the interests of Singaporeans so it is of greater interest than just a CPF issue.
Bishan-Toa Payoh GRC MP Hri Kumar Nair:
That would not be a satisfactory solution or outcome because that means the CPF is deprived of funds and ultimately the people who suffer will be Singaporeans because their CPF would not have sufficient funds to allow them to retire.
So why should the PAP be let off easy just because they are the government? And why should Singaporeans be forced to accept anything less than full accountability? This cannot be the right way forward.
By any standard – any standard – of corporate governance, the engagement of GIC and Temasek Holdings involves a conflict of interest.
The PAP team should also procure an undertaking from the GIC and Temasek Holdings that they will make all their papers and staff available for investigation. That is the only way to put this matter to rest. And I really hope for the sake of Singaporeans, that the GIC and Temasek Holdings has suffered no loss or will be able to recover the loss. That is good for Singaporeans. But we need to do that investigation to find out. But if the PAP is not willing to do it, then that says everything.
The PAP has not answered all the questions that have been posed to them, and they are certainly not answering the questions they don’t want to answer.
That CPF money is not going to come back. This is something we still have not heard any explanation for.
Minister of State in Prime Minister’s Office and for Ministry of Culture, Community and Youth Sam Tan:
The PAP MPs and candidates sounded very eloquent and righteous over this matter.
Holland-Bukit Timah GRC MP Liang Eng Hwa:
These are practices that would not even find their place in a Third-World Parliament.
We must not let any errant practices erode the public confidence, trust and integrity of the finances of town councils.
Our politics must not be about accepting mediocre performance and substandard practices. Singaporeans deserve better.
What we are concerned about is public money and that the PAP is bullying Singaporeans.
Institutions that collect and spend public money must always ensure a high standard of transparency and accountability. Institutions are not perfect and there is always scope to improve and occasionally, they may even make mistakes. Where there is criminal intent, the law will take its course. When mistakes are made, we expect the leaders in charge to take ownership and admit them and to promptly institute changes to avoid any repeat.
As MPs, we set the tone and the standard of corporate governance in Singapore. As the Chinese saying goes: “上梁不正下梁歪” (if the top beam is not straight, the lower beams are bound to be crooked). If the leader sets a bad example, or condones bad behaviour by his senior staff, the other subordinates will likely follow suit.
This consistent pattern of evasive behaviour gives us cause to doubt the sincerity of the PAP MPs.
I would urge that the PAP come out of denial and see the gravity of the situation for what it is… The lapses are symptomatic of a systemic failure: the failure to have proper controls and a reliable record and accounting system. This is the staple that every government must have in order to operate. How else can you safeguard public monies? The PAP government cannot safeguard public monies; its accounts are inaccurate and unreliable.
All political parties, we assume, must aspire to eventually run the Singapore Government. Now, if they cannot even run the GIC and Temasek Holdings well, how can they be entrusted with the even more critical responsibility of running the whole country?
At the core of this tragic saga is the incompetence of the GIC and Temasek Holdings, and the PAP government.
The PAP government, GIC and Temasek Holdings are very highly paid. It cannot even deliver a competent reliable system and administration of accounts and records. Without a reliable accounting and financial management system, there will be financial and accounting lapses, and opportunities for fraud, abuse and wrong-doing. And in such a setting, when wrong-doers dip their fingers into the pie, the acts may not be discovered for a long time. If I may quote another Chinese saying: “混水摸鱼” (when the water is murky, it is easier to fish). In other words, opacity creates opportunities for crooks to make money. Eventually the financial health of the government will be placed at risk. This can only be at the expense of Singaporeans.
I bet the GIC and Temasek Holdings are one of those rare companies which is profitable from year one. If my guess is correct, we can safely assume where the husband-and-wife team places their priority.
The structure is downright unlawful, and that it is a serious breach of fiduciary duties for any PAP member of parliament to have approved such a process. Inflated fees were paid to the GIC and Temasek Holdings, in return for gross incompetence, placing the government’s financial health at risk… In short, the GIC and Temasek Holdings and their board who de facto run the CPF have milked it, and Singaporeans’ money and public funds have in this manner been abused.
The systemic failure at the PAP government resides in the arrangement that they have allowed – the de facto management of the PAP government being also the board of the GIC, resulting in the adverse outcome of over-charging and the obvious ineffectiveness of any oversight by them. The result is the deteriorating financial health of the CPF, with all signs suggesting it is only going to get worse this year and the next.
If a listed company has such an auditor’s report, the Chairman of the company will be duty bound to investigate and to satisfy himself and his shareholders whether fraud or criminal conduct was involved. In this instance, the ball is in the PAP’s court.
Regardless, we must not allow the PAP to profiteer from their incompetence, all the more when it is at the expense of Singaporeans and public monies. Even if it was not illegal, it is morally wrong. The Prime Minister should not condone this. He should hold his government accountable. I expect him to take action against the GIC and Temasek Holdings for their monumental incompetence. That would be the right thing to do.
It cannot be just lip service, a convenient way of sliding past this debacle, to live and fight another day. Demonstrate your sincerity through real actions. There is another Chinese saying for this: “听其言，观其行” (watch his actions, even as you are listening to his words). How to show sincerity?
It is not about PAP versus the opposition. It is about Singaporeans. Let us do our very best to uphold high standards of governance, transparency and accountability so that we can protect their interests. Let us do our best to protect, safeguard all the public monies that have been entrusted to the government.
Mr Khaw said that the Ministry of National Development will censure the AHPETC in the following ways:
Clearly, this state of affairs is unacceptable. MND will follow up in three ways.
- But MND expects them to submit an unqualified set of their FY2013 financial statements to MND by 30 Jun this year, and FY2014 financial reports by 31 Aug this year. These must be tabled to Parliament, just like the financial reports from all the other TCs.
- Second, because of these serious problems, MND has withheld this year, FY2014 S&CC grant from the AHPETC. The money has been put aside in a separate deposit account, and will be paid out after the problems are fixed… Anyway, the earlier the AHPETC cleans up the mess, the earlier we could resume payment of the S&CC grants. So the ball is in the TC’s court.
- Regardless of which party is running the TC, there is a need to ensure proper systems, accountability and governance, to safeguard residents’ interests… We will strengthen TCs’ corporate governance and financial accountability, to ensure that TCs plan and use their finances in a sustainable way. This will take reference from best practices in companies and other organisations, and include spelling out the duties and responsibilities of the town councillors and elected MPs, and the penalties if they fail to perform those duties.
If so, should Singaporeans also censure the PAP government on the use of our CPF funds in the following ways?
- The CPF Board, GIC and Temasek Holdings have to submit their full financial reports.
- Singaporeans should withhold their CPF monies from the CPF Board, GIC and Temasek Holdings until after the problems are fixed.
- We should ensure proper systems, accountability and government from the CPF Board, GIC and Temasek Holdings, and spell out penalties if they fail to perform their duties.
What the PAP is playing against the WP is severely hypocritical. As Mr Heng had said to the WP, will the PAP then take legal action against the GIC and Temasek Holdings? The PAP would attack the WP for the relatively minor lapses but which the WP has no choice of – if it trusts someone else who might be affiliated to the PAP to do the job for them, this might place them in a worse situation.
However, the PAP has every opportunity to be transparent and accountable to Singaporeans on our CPF. Yet, the PAP has refused to provide full reports and would drag its feet instead of answer to Singaporeans on how the CPF monies have been used. The PAP would then attack the WP for the very lapses and dishonesty that it has done with our CPF.
If the PAP is to be as brazen as this to accuse the WP of wrongdoings, then isn’t what the PAP has done to our CPF of graver deeds? If so, should Singaporeans not take legal action against the PAP? Should the whole PAP government not be removed? And should the PAP not be charged, sentenced and jailed?
Singaporeans, you know what to do. This is no joking matter. If the PAP has the awareness to understand what wrongdoing is but has continued to act in dishonest ways, then it is time we eradicate the PAP from government. It’s time to stand up and fight, to safeguard our own future.