17 Jul 2005

Legitimized Corruption Understood

From: Carl Kapeland
To: Mellanie Hewlitt
16 July 2005
Singapore Review
Legitimized Corruption Understood

Dear Mellanie

In the latest developments the entire NKF Board and its CEO have taken the easy route out and resigned. That's leadership for you, when things get messy, just get up and leave the mess for someone else to clean up.

But I don't think the new CEO or Board will do much cleaning up. Looks like they are replacing one bunch of rotten apples with another bunch of potentially more rotten apples. It does not address the real problem.


There are several recurrent issues here. Singapore is in this current mess because Lee's PAP Government has forgotten that not everything can be reduced to money. You cannot throw money at all your problems and expect it to magically disappear.

The material base that motivates Singapore's "leaders" is only too evident when the NKF's transit CEO (Gerald Ee) hinted that "SGD600,000/- may not be sufficient for the new replacement to take office"!!! Money is the only motivating factor and if they have elected a leader and a board who is motivated only by money, its only a natural and unavoidable result that they will end up with an organization which has forgotten its once noble purpose and replaced it with more materialistic pursuits.

Have they (Singapore) appointed a Wolf in sheep's clothing to guard their precious flock? For positions like these in charity organizations, THE CHIEF MOTIVATING FACTOR CANNOT BE MONEY! as they are not running an investment bank. The same applies senior public service positions and for ministerial positions. NOT EVERYTHING CAN BE REDUCED TO MONEY. But Lee's PAP Ministers have used this holistic approach to address any and all issues under the sun.

Lee and his ministers simply CANNOT RUN A COUNTRY THE SAME WAY THEY RUN A COMPANY. Why? Because a country comprises of flesh and blood and spirit. A company is merely a corporate vehicle that is often set-up for the sole purpose of reaping a monetary profit.

SINGAPORE AS A COUNTRY, IS NOT SINGAPORE INC!!!! And even if it is, its directors (and that means Lee and his million dollar cabinet) have to remain accountable to the shareholders (Singapore citizens). Singapore MINISTERS have to be transparent, and they are not especially as regards their salaries and the management of the country's reserves.

Consider this, the NKF was originally set up as a supposedly charitable organization. In form and function it appeared above board and reputable. But in actual practice it had a hidden agenda to siphon wealth from the public into state coffers. And what happens to all this money (all SGD200 million of it?) No body knows.

These same similarities in the NKF saga are reproduced on a grander scale in overall state administration in Singapore. Whether its the CPF, LTA, GLCs, Temasek etc they all relate to the the same basic issue. It goes back to the same bunch of corrupt leaders paying themselves and their cronies humongous rediculous salaries, approved and legitimized under a set of bogus laws that they legislated in the first place.

But even before this NKF scam, transparency issues have dogged Singapore's state administration for decades and repeated requests by the World Bank, IMF, FTA and other NGOs for greater accountability and transparency havebasically fallen on deaf ears.

These are basic transparency issues which plaque management of public moneys by all state entities (whether its the CPF Board, GLCs, Temasek, LTA etc). There is massive deception on a grand scale and I suspect the latest NKF debacle only surfaced due to internal friction within Singapore's "inner-circle of elite politicians." Perhaps someone amongst Singapore's Ruling Elite wanted a bigger portion of the loot.

Think about it. Durai commenced his latest law suite on the confident assumption that it would be a "no contest" walk-over like his two previous suites. But whilst the Singapore sham courts had no problems finding
in his favor in the 2 previous suites (which were taken against private individuals and a volunteer who correctly questioned his lavish spending), the latest suite was against another state bureaucracy. And it was inevitable that the sham court found in favor of the bigger devil. So even amongst the thieves there is a power struggle over who gets a bigger piece of the loot.

So this then is justice ala Singapore styled. Who you are and who you are connected with ultimately decides the outcome of the law suite. The material facts of the case (and legal premise) have little relevance in the kangaroo's court final assessment.

But by far the most troubling problem is that of Legitimized Corruption. You (Mellanie) have used the term "Legitimized Corruption" very accurately, but failed to elaborate on its true meaning and implications.

Legitimized Corruption means essentially that the corrupt act itself is made perfectly legal. That is why there is a possibility that the external audit on NKF may turn out nothing because Durai and his actions may have been all perfectly legitimate and authorized according to the internal constitution of the Board.

In a normal organization with bona fide controls in place, the Board would not have approved and allowed such unreasonable and lavish expenditures. However, in Singapore's setting where "anything goes" it is possible that the board were within their discretionary powers to authorize such lavish expenditures. Mind you these are expenditures which (by any ordinary definition) would have amounted to an immoral mis-management of public moneys for unauthorized applications. But if the internal rules of conduct of NKF allowed the Board to act in this manner, it would then be an authorized and legitimate act.

So even after the process of audit has concluded it is perfectly possible for the auditors to conclude that the use of donor funds for;
a) Durai's pay of SGD600,000 and his salary of SGD1.8 million;
b) All expenses and application of donor funds used for purchase of SGD990/- gold taps;
c) All expenses for first class air travel;
d) The levying of a 30% Admin Fee;
e) The hiring of personal drivers and limos.
All of the above are authorized and legitimate.

Anyway we all know that the so called "audit" of the NKF accounts is merely a publicity stunt to show case to the world that the current government and the new board is taking steps to remain accountable.

But does this make the above acts any more acceptable and morally correct. NO! Of cause not. An atrocity is still an atrocity even though it is legitimized. One clear example is prostitution in Singapore. It is legal and the fact that it is legal does not detract one iota from the fact that it is still immoral, depraved and inhuman.

Of cause there are critics who will argue that moral values are to subjective concepts and we cannot always use these imprecise measures to define what is right or wrong. And I concede that there is some truth in this as we live in a world coloured in grey.

However, there will always remain some acts which are so blatantly wrong that they remain morally objectionable and immoral by any standard and yardstick. And the NKF scam (as well as Singapore ministerial salaries) fall within this category. It is morally wrong by any measure and this is not a grey area at all.

This same logic applies on a larger scale as regards ministerial salaries and the process that is orchestrated to "approve" such unreasonable and lavish salaries (amounting to millions of dollars per minister).

Legitimized Corruption works much like Money Laundering, but is worse. In essence Legitimized Corruption is corruption which is made legal. These perpetrators attempt to do what drug cartels and money launderers do;- basically "launder" the money (or the dishonest act) and make the final product appear nice and clean.

But senior politicians differ from your average drug lord or mafia boss in one important respect;- these ministers are much more sophisticated. They know the system (and probably designed it) and know how to manupulate and tweak the system so that they can have access to the ill-gotten gains without getting their hands dirty. Next to them, Gordon Gecko and the God-Father look like novices and vestal virgins.

However make no mistake the underlying act itself remains wrong, dishonest and morally objectionable but is hidden under a cloak of legitimacy. Drug money (and money from dishonest trades) is still ill-gotten loot. Behind this elaborate sham are a host of corporate and state entities (GLCs, state owned entities and yes, charitable organisations) which are set-up to place a corporate veil between the real perpetrators and the morally objectionable and dishonest transaction.

The fact that it is perfectly legitimate does not itself make it MORALLY CORRECT. This is especially the case when you have a legislature that is totally removed (and remains out of touch) with the moral values and aspirations of the people it is supposed to serve and protect.

In fact, this kind of legitimized corruption is the worst possible kind as it means the corruption has infiltrated the most senior ranks of management (and the political leaders). Compared to this elaborate deceit, the more obvious corruption in Indonesia are crude by comparison and far easier to identify and correct as it is acknowledged that such objectionable acts itself are WRONG and are not endorsed by the country's laws.

How do you ask a cop to catch a thief when the cop himself is a thief?

Legitimized Corruption by its very nature is more sinister and difficult to identify. For instance, a government official who accepts bribes worth $1.6 million a year is guilty of corruption. But what happens if this same official or minister receives this money as part of his "LEGITIMATE" salary. In both cases the act itself is the same unconscionable and immoral act. But in the later case, there is no need for the official to hide his ill-gotten gains as it is formally endorsed by an equally corrupt legislature/parliament who has a hand in the ill gotten gains.

The definition of a Parasitic Leech is as follows: "leech: a follower who hangs around a host (without benefit to the host) in hope of gain or advantage"
The kind of legitimized corruption already endorsed and prevalent in Singapore's state machinery is far worse. It is a cancerous malice which is more surreptitious and insidious. The festering rot is not immediately apparent to an external casual observer but is eating away the core of the its host. Left unchecked, such parasites will consume a once healthy body before discarding the empty shell and relocating to another unwary host.

Legitimized Corruption is also like cancer. It is a chronic ailment which rooted itself very deeply within the host (and the state machinery). Such a chronic ailment did not occur over night but took place over decades of accumulated unchecked accesses. Durai himself was in the NKF for over 30 years and it is no mere coincidence that Singapore has been under the same government (and people and family) for over 30 years.

This is precisely the reason why in the US and other bona fide democracies there is a mandatory change in administration every 4-8 years. A new administration brings forth a completely new government which will was away unchecked accesses and commence things tabula rasa.

But somehow in Singapore it appears that only families starting with the Lee surname or who are closely affiliated with this first family are the only candidates who qualify for election. What a quaint and family friendly arrangement! Its just too bad that the average Singaporean is excluded from this elitist inner-circle.

However, Singapore's Ruling Elite also have to be wary of the accompanying dangers of in-breeding which can occur from a small and exclusive gene pool. Cancerous deformaities can result after generations of in-breeding.

And the Cancer has many signs and symptoms. There have already been many evident tell tale signs of the internal rot and its accompanying putrid stench. However, Singaporeans in their numbed state of awareness may be mistaking the over-powering stench of decay for sweet perfume. The entire state machinery is orchestrated to maintain this state of illusion and deception.

In the normal mechanics of an open and transparent state legislature and government, the moral values of the mans on the street is reflected (although not perfectly) in the policy formulation process. This is not the case in Singapore and your "leaders" know it. Just challenge them to run a referendum regarding their salaries and it will be evident that 90% of the population are totally disgusted by such blatant acts of greed. Of cause the local state owned media will somehow always paint the picture of an adoring and obedient public as part of an elaborate charade. So the truth never ever gets out.

Corruption of this scale starts form the top and slowly works its way down the ranks to pollute every senior arm of the state machinery from the Judiciary to Legislature to the Executive and especially to a docile and compliant state managed local press. It cannot be stopped easily without external intervention.

Slowly but surely what started off as a morally unacceptable issue becomes part and parcel of "accepted norm" which is disguised behind a pile of state endorsed laws and bills. Even the once sacred document, the Constitution, is not spared and is re-written to the whims and fancies of those they serve. How many Singaporeans are aware of the fact that the country's Constituion has been amended to allow state owned entities and GLCs easier access directly to the country's reserves? And it also does not take a genius to work out that it is the close affiliates of the Ruling Elite who sit on the management boards of these state owned entities and GLCs.

The following is a fascinating observation. The exact size of Singapore's foreign exchange reserves and the management of thses funds is designated as a STATE SECURITY FOR INTERNAL SECURITY REASONS. Is it mere co-incidence that the conservative ball park estimate of the net worth of the Lee family is roughly equivalent to your country's reserves? (USD130-140 billion?)

What you have in Singapore are a bunch of hired mercenaries who are ripping off the very people they are supposed to look after.

Singaporeans. This is your country and your life. If you continue in this state of drugged apathy, you will cease to have any control over your own faith and destiny.

Do you really want to hand over your life to the devil?

Do you want to have a Singapore with No Singaporeans?

Its time to wake up from your state of denial and confront the harsh reality before your very eyes.

Yours faithfully

Karl Capeland
Ohio State

For more details on the above, see "Lifting The Veil On Singapore
Politics"; http://groups.yahoo.com/group/Sg_Review/message/1755

Does splashing white paint on a black car make the black car white? You decide.


The Legal Janitor said...

this piece is mostly hysterical conjecture and speculation without facts. Surely the person should come up with some concrete evidence before going all shrill?

Anonymous said...

...just as success breeds contempt, control leads to managing outcomes, managed outcomes to hegemony, hegemony to totalitarianism, and totalitarianism to revolution. The painful and unpredictable part is how the process pans out, the period required, and so on...

soci said...

all that exists does not fall under the methodology of the positivist criteria of science that require physical concrete evidence shianux.

many of us believe that ideas exist and exert a force similar to that of the material.

It is not ideas, but material and ideal forces that sometimes, like switchmen determine the track along which human progress advances. to poorly paraphrase the master.

justice4nkfdonors said...

The writer is just opportunistic and making a cheap shot by using the NKF scandal to wildy equate it with the PAP's supposed breach of social contract with the people. No management of funds, personal, company or national, is perfect. In the NKF scandal, a social contract was breached because the funds were seen as grossly misused. Donor funds were manipulated by Durai in ways that sparked the people's rage. In the case of the PAP, the social contract is subjectively not breached. The taxes from the people and government revenue are not so grossly mismanaged that we feel the PAP has cheated us. Hence, the social contract is still intact for the moment.

Anonymous said...

'Golden tap scandal' turns on rare outpouring of public anger in Singapore

SINGAPORE, July 17 - In Singapore, where public protests are banned and the
government has tamed the media, it took an unlikely golden tap in a luxurious office to turn on a rare outpouring of widespread community anger.

Singapore's biggest charity, the National Kidney Foundation, was the focus of the outrage last week after an attempt to avoid scrutiny over its chief executive's lavish perks and 600,000-Singapore-dollar (350,000-US) salary spectacularly backfired.

The saga began when the foundation and its chief executive, T.T. Durai, sued the Straits Times newspaper for defamation over an article published last year that raised questions about how donors' money was being spent.

They claimed the article, which said a 1,000-dollar gold-plated tap had been installed in the private bathroom of Durai's office suite then removed after protests from the building contractor, had damaged the charity's reputation.

In his libel suit, Durai, who had led the foundation since 1992, said the implication that donors' funds were being misused was "scandalous" and "ridiculous".

However, Durai went to court apparently unaware the case would force him and the
foundation to reveal a wide range of facts and practices that the Straits Times' legal
counsel said the organisation had long tried to keep hidden.

During a torrid two days of questioning in court by the newspaper's lawyer, Durai was
forced to reveal his salary and that donors' money paid for his first-class flights overseas
as well as the upkeep of his Mercedes Benz.

Durai also reluctantly admitted the foundation had misled the public over how long its
reserves of 260 million dollars would last if donors' money stopped pouring in, as well as
how many patients it treated each year.

After finally conceding the original article about the tap was indeed not defamatory, a
defeated Durai on Tuesday withdrew the libel suit with his and the foundation's reputation in tatters.

On Thursday, after more than 40,000 people had signed an on-line petition calling for
Durai to quit and the government had expressed major concerns, he and the 15-member board resigned.

Prominent lawyer Tan Choo Leng, the wife of former prime minister and current Senior Minister Goh Chok Tong, also stepped down as patron of the foundation after initially publicly backing Durai's salary.

It was an enormous come down for one of Singapore's highest-profile organisations, which was formed in 1969 and rose to become the self-proclaimed "largest not-for-profit (kidney) dialysis provider in the world".

An estimated two thirds of Singapore's population have donated to the foundation, which employs an aggressive, commission-based marketing model and regularly holds television donation drives featuring celebrities.

"This whole issue has been about transparency and accountability," 20-year-old national serviceman Lawrence Tan, who started the on-line petition after reading about the court proceedings, told AFP.

"The public has showed them a lot of support for a long time, it's only right they should
be held accountable by the public and that they should be more transparent."

But government critics say the "golden tap scandal" has generated so many expressions of anger from the community because it was also a rare opportunity for ordinary citizens to vent their frustrations at figures of authority.

-- Libel cases brought to silence crictics --

Aside from the online petition, there was also a blitz of letters to newspapers and
complaints on radio talk shows, as well as the foundation's head office being vandalised with graffiti.

"This is almost a surrogate situation. It's basically a reaction because they (the
community) can not speak out against the government," prominent opposition politician Chee Soon Juan told AFP.

"The government has basically got a lock on society."

Chee said the National Kidney Foundation could not operate without having close government links. Yet he said the charity was not a direct government body and was thus seen by the public as a "safe" target for criticism.

Chee said the issues of transparency, accountability and high salaries raised in the
National Kidney Foundation affair were also matters of concern for the public in regards to the government.

The People's Action Party, which has ruled since the nation's independence in 1965 and
currently holds all but two seats in parliament, has ensured government ministers in
Singapore are among the highest paid in the world, saying it keeps them from becoming

Another opposition group also said last week's charity saga raised broader questions about the use of public money by all government bodies.

"The public has the right to ask, and the equivalent right to a satisfactory answer, from institutions charged with the handling of public money," National Solidarity Party president Yip Yew Weng said in a letter to the government.

"These institutions include ... the nation's public offices."

In pursuing defamation action, the National Kidney Foundation also attempted to use a
tactic that senior Singapore government figures have successfully used over many years.

The career of Singapore's most famous opposition politician, J.B. Jeyaratnam, was
destroyed by defamation suits from the nation's founding father, Lee Kuan Yew, among others.

Fellow opposition politician Chee is also facing bankruptcy after losing a defamation suit to Lee and his successor, Goh Chok Tong.

While Lee and Goh have insisted the defamation actions are necessary and legitimate
actions to defend their reputations, Chee and others maintain the libel laws have been used to silence government critics.

In the National Kidney Foundation's case, the charity successfully won damages and
apologies from two people in 1998 who said Durai and other senior figures in the organisation had flown internationally on first class.

But in court last week, the defamation tactic ended up destroying Durai's career and the NKF's reputation after he admitted that he indeed flew first-class on foundation money. - AFP

Thrasymachus said...

Sorry to say that this article is whole lot of crap with unfounded evidence. The lawyer who fought against the NKF is a MP in Bishan-Toa Payoh GRC under the PAP.

So please see both sides of the coin before making senseless judgements. I'm sure social science covers pluralism.

soci said...

which article thrasymachus, the main article or the one posted here in th ecomments section or both?

Anonymous said...

Coincidentally, it is time to be electing a new executive president. But will the new president know why he is elected?
Will he be another "Man With The Golden Tap?"

clyde said...

The lawyer who fought against the NKF is a MP in Bishan-Toa Payoh GRC under the PAP.

Does that not add to the author's point about 'internal friction' within the political circle and a struggle amongst some for greater power/money? Just because the PAP send one their own to attack an "affiliated" organisation for corruption does not redeem them or make them righteous. I believe the author is suggesting it was a battle between thieves rather than a battle between thieves and the people. Justice is served in favour of the bigger dog, and hence Durai lost his lawsuit.

It's pretty interesting that quite a number of western foreigners share such insightful opinions and interest in Singaporean politics, judging from the SG Review website. Even if they are possibly expatriats who have since left the country for good. I wonder what drives them to stay in touch...

Anonymous said...

I'll have u know that the government has not been entirely supportive of the NKF all this while either.

Also, u should try to offer a solution too. Instead of just complaining. It doesn't take much intelligence to complain.

Anonymous said...

I'm happy to hear the garhmen has not been entirely supportive of NKF. I find the show an entire turn-off (so sick of the call 1900...thingy). First it was kidney, then cancer....what next?

Gerard Ee is a competent accountant. Let's see if he comes up with the income/expense and state of account for NKF, and if it is available for scrutiny.

...should try to offer solution instead of just complaining... has been a much bandied but impracticable argument...when the state of affairs at NKF is not made available...

Beach-yi said...

The ones who make the most noise about others complaining also tend to stay anonymous the most often, and why should anyone offer solutions freely. pfft.

Thrasymachus said...

I meant the article by Kapeland...

Anyway....ever notice no Health Ministers ever attended NKF shows? But they do attend Renci Hospital shows in full force...

Going by your argument of corrupt system bred corruption...maybe bias arguments bred biasness...and if people on reads only the things they want to believe in...everything is evil to their eyes...

justice4nkfdonors said...

While there is hope for NKF donors and kidny dialysis patients when Gerard Ee took over, it is still too early to tell if he can do the job. He has the image and background, but we will see in one week's time if a credible revamp of NKF is rolled out AND whether there is news on what will be done to Durai and co. I don't hear the word "inquiry" or "investigation" enough in the NKF scam. The only good thing about the whole scandal is that things moved rather fast after the government wisely stepped in. It was just about one week ago when things started to fall apart for Durai.

Anonymous said...

...interesting...now we have six monkeys.

1. see no evil
2. hear no evil
3. speak no evil

4. see all evil
5. hear all evil (that could be you, McDermott)
6. speak all evil

Super said...

To Anonymous....

You start doing something by talking about it. Given the fact that there is a high chance of getting bankrupt, there is nothing much you can do either. Anyway you are not making any positive solutions too. Oh I forgot, u r pro-PAP. Just to let you know, your evidence is meager to say the least. Doesn't need much intelligence for that.

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