Govt cannot claim that it was “misled” in NKF scandal: Chee

Govt cannot claim that it was “misled” in NKF scandal: Chee
16 Jan 06

Friends, ladies and gentlemen,

Before I tackle the question of the Government’s role in the NKF scandal, let me give you a quick round-up of the developments thus far. First, here was the list of abuses and misuse of donations that was revealed in the KPMG audit:

· Durai’s annual salary and bonuses: $600,000 a year.

· Durai given backdated salary increments; in 1997 given increment 39% backdated by 11 months.

· He was paid $187,000 for "overtime" between 1997 and 2003.

· In 1999 his leave was raised from 21 to 31 days per annum which was then backdated to 1992. He cashed the unused leave for $423,000 between 1995 and 2003 when NKF employees were not permitted to do so.

· He charged an average of $32,952 a month to his corporate credit card in 2004.

· Durai received numerous salary increments.

· He flew first class as did other Board directors and senior volunteers.

· Matilda Chua, a former employee, was given a backdated raise when she resigned.

· She received an additional 6 months' bonus of $75,000 and an ex-gratia payment of another $75,000 on her departure.

· She also cashed in her unused leave for $79,195.

· She then came back as a member of the Board.

· NKF signed 2 contracts worth $7.5 million with companies owned by Durai's personal friend.

· Matilda Chua had an interest in one of the companies.

· Durai and others went on a study tour of Las Vegas in 2004 for $70,000.

In 2004, however, the Government was still defending NKF. Ministers Khaw Boon Wan and Lim Hng Kiang were still singing the praises of an organization and its staff when the rot had already set in. Mr Khaw lauded NKF’s operations and wanted the organization to remain transparent. He said: “I take my hat off to the NKF.” Mr Lim assured everyone that NKF was on “quite a sound record.”

I highlight these statements made by the Ministers not to show how silly they now in retrospect because Mr Khaw Boon Wan has admitted as much. Words like “duped”, “misled”, “naïve”, and “oversight” were used liberally in the aftermath of the KPMG exposē.

Parliamentary statements in 2004, however, indicate otherwise.

For example, in Parliament on 19 April 2004, NMP Braema Mathi had raised the concern of NKF’s computation of the amount of donated money going to the beneficiary. Second Minister for Finance Lim Hng Kiang brushed off the matter and concluded that NKF was” on quite a sound record.” The following was the exchange:

Braema Mathi: “…NKF, in the public domain, has made two announcements of 52 cents coming back to the beneficiary, as well as 56 cents…What I am raising here with this incident is that different definitions do go into making up what comes back to the beneficiary in terms of a precise dollar value. There needs to be greater consistency in the factors that go into such computation.”

Lim Hng Kiang: “…[NKF] put up the press release and explained the differences between 52% and 56% go to the beneficiaries. I recall also that they indicated in the press release that about 26% goes to the reserves. So, actually, if you add up the two numbers, nearly 80% goes to the beneficiaries. I think that puts NKF on quite a sound record.”

The NMP also brought up the question of transparency and suggested that NKF reveal the salary of its CEO. Mr Lim left it to the NKF to decide whether it wanted to tell the public (remember, this was in spite of the misgivings many quarters had over NKF). He said:

“…this is a decision by NKF whether to disclose the salaries of the CEOs. Here, I have some sympathy for their dilemma. If they do not disclose, then there will be critics who say they are not transparent. If they disclose, there will also be critics who will say that whatever they pay are too high. So I think they are caught between a rock and a hard place. I think it is their decision not to disclose.”

If there was ever any doubt that concern was brought to the direct attention of the Government, it was removed by this statement from Ms Braema Mathi: “NKF's reserves…[are] in dire need of better governance.”

To put the public’s unease over the NKF’s compliance with regulations, Mr Lim Hng Kiang told Parliament in 2004:

Lim: “Mr Speaker, Sir, it is important to have clear guidelines on the raising and utilisation of funds to maintain public confidence in our non-profit organisations and their programmes. There are essentially three questions the public is most interested in. First, what methods are used to raise the money? Second, how much of the charity dollar is used to raise funds? And, finally, how is the money spent or saved?”

Of the three questions, the third is the most relevant to the issue today: Was NKF in compliance with regulations over how the money spent or saved?

PAP MP Charles Chong asked Minister Lim point-blank: “Sir, could the Minister tell us whether the National Kidney Foundation is in full compliance with all the current guidelines that he mentioned just now in the collection and utilisation of the funds that it receives from the public?”

Mr Lim did not mince words: “Mr Speaker, Sir, the NKF is in full compliance with the regulations.” (emphasis added)

From the above parliamentary exchanges, it can be seen that the Government was alerted to questionable practices in the NKF. Not only did Mr Lim ignore these warnings he categorically told Parliament that he had “full confidence” that NKF had complied with regulations.

Then there was the matter of the National Council of Social Services (NCSS). On Dec 31, 2001, the NCSS revoked the IPC status of NKF. The NCSS took action because it saw the problems within the NKF. And yet, within a month the Ministry of Health reinstated the NKF’s IPC status.

Now read what Mr Lim told Parliament in 2004: “[The Ministry of Finance] has certain criteria by which [it] evaluates applicants who want IPC status, and these criteria are set by IRAS, and we make sure that people who apply have to qualify before they are given this IPC status.” (emphasis added)

In other words we are given to believe that there was an active search for answers from the NKF before NKF was given clearance to reclaim its IPC status.

Before we go further, let’s do a quick recap. There were several occasions in which NKF’s operations were questioned:

· Criticisms by NKF volunteers which led to Durai taking defamations suits against them in 1997 and 1998.

· Letters to the press from 2002-2004 questioning NKF’s practices.

· NCSS revoking NKF’s bid for IPC status.

· Statements in parliament pointing to problematic operations in NKF.

With all these warning signs, can the Government claim that it was “misled” and that it was an “oversight” that allowed the abuses to continue for years?

What is especially noteworthy is that the Government not only ignored these warnings, it actually overruled the NCSS. This indicates that the Government felt that the concerns of NCSS were misplaced. Remember that Mr Lim had told Parliament that the MOF “makes sure” that applicants for IPC status the criteria that it sets before approval is given. How can the Government say that it “makes sure” and gives the assurance that the NKF was in “full compliance” with the guidelines, but then later claim to have been “misled”?

Think about it this way. A driver speeding along a highway comes across a sign asking him to slow down. He continues to speed on. Another signpost reminds him to slow down again, and again he speeds on. The third signpost comes up and this time the driver stops, gets out of his car, takes the signpost down and then speeds down the road again. Further down the road someone frantically waves to the driver to pay attention to the fourth slowdown sign. The driver acknowledges the person and the sign, but then picks up speed. Not long after he crashes and kills someone.

Can the driver now claim that he was “misled” and that it was an “oversight” that he didn’t slowdown? What do you think the judge would say?

There are several urgent questions that need to be asked:

1. Why did Lim not make greater effort to look into the matter of how the expenditure was computer when it was pointed out to him that there were discrepancies? Even if the audited reports did not raise any alarm, there were plenty of other sources that had, repeatedly through many years, drawn the attention of the Minister to the problems. Why were these ignored?

2. Not only were warnings ignored, the Government actually overruled NCSS’ decision to rein in the NKF. Did the Government seek the feedback of NCSS and find out why it had revoked NKF’s IPC status? If it did, what did the NCSS tell the Government? If not, why not?

3. What questions were asked of NKF before the IRAS reinstated the NKF its IPC status?

4. Why is the MOF keeping so quiet?

The scary part is that if TT Durai had not sued, NKF would have gone on merrily doing what it did.

Clearly there was no transparency. The mystery over what happened when the Government overruled the NCSS and reinstated NKF’s IPC status remains. The Government said it was all right for NKF not to reveal Durai’s despite mounting evidence that there was abuse.

Will there be any accountability? Going by what Mr Khaw has said, we shouldn’t hold our breath. After all, how can we hold people who have been duped and misled – the victims – responsible?

Now think of everything else that is going on right now. The Government won’t open the books of the GIC, HDB, CPF, etc. and insists that everything is all right just as Messrs Khaw and Lim were telling us that everything was all right with NKF.

And when questions are asked, lawsuits start flying. Suits lead to silence. Silence is taken as support.

PAP MP Halimah Yacob said of the NKF matter: “There was a total failure of checks and balances and all those who were supposed to supervise and act as guardians of the public interest failed in their task. The public was completely misled and their trust was abused.”

Wise words no doubt. Pity that she cannot see that it is the very organisation that she belongs to and works for that ensures the total eradication of a checks-and-balance system, system that only democracy provides. But listen to what her bosses say:

1. Lee Hsien Loong: Singapore “doesn’t aspire to be a Western-style democracy.”

2. Goh Chok Tong: “[Singaporeans] have rejected Western-style liberal democracy and freedoms.”

3. Teo Chee Hean: “A two-party system would put us on the dangerous road to contention when we should play as one team.”

4. George Yeo: Singapore cannot function “solely one a one-man-one-vote democracy.”

5. Lee Kuan Yew: “We haven’t found it necessary yet [to change the one-man-one-vote system]. If it became necessary we should do it.”

With these pronouncements and the ability to make, amend, and break the law at will, it is realistic to bring about a state of democracy and everything else that goes with it, including transparency and accountability, checks-and-balance, etc?

So what’s the solution?

Train activists in nonviolent action. That’s the only way the Singaporeans are going to be able to demand transparency and accountability and checks and balance in Parliament.

We need to empower ourselves. We need to break the mental shackles of fear and helplessness. We need to say that we will not submit to intimidation and repression any longer. I leave you with a quote by a 16th century French philosopher Etienne de la Boatie:

He who dominates over you has only two eyes, only two hands, only one body, no more than is possessed by the least…among the infinite numbers of dwelling in your cities; he has indeed nothing more than the power you confer on him to destroy you. How has he acquired enough eyes to spy upon you, if you do not provide them yourselves? How can he have so many arms to beat you with, if he does not borrow them from you? The feet that trample down your cities, where does he get them if they are not your own? How does he have any power over you, except through you? What could he do to you if you yourselves did not connive with the thief who plunders you? If you were not accomplices of the murderer who kills you? If you were not traitors to yourselves?

We, the people, need to demand change. As Frederick Douglass, a black American abolitionist once said: " Power concedes nothing without a demand. It never did and it never will.”