Thursday, July 21, 2005

NKF Saga III: Transparency & Accountability?

Transparency & Accountability?

Look who is talking? PAP talking about transparency and Accountability? Singaporeans didn’t even know the components of our reserves, not even professors in NUS are aware that CPF money is not managed by GIC!

Transparency and accountability should be applied to ALL entities that utilize or manage public funds, including but not restricting to charities, government, public listed companies, GLCs (Temasek Holdings), GIC etc.

This is the CRUX of the whole NKF saga but apparently the mass media is so well managed that NOT a single hint or link was mentioned in the whole period to indicate the need of transparency and accountability to all the entities mentioned above.

What happened to NKF, could and have happened to public listed companies. Could it happen to our government, GLCs and GIC? Nobody could discount such possibilities, no matter how remote they claim to be.

The crux of the matter is that there need to be good checks and balances. Minister Khaw was only half right to say that even strict rules cannot guarantee good governance, but only good heart and head will make sure of that. TT Durai is a man of good heart and head, isn’t it? He has contributed 37 years in NKF! He is so successful in marketing NKF that NKF as an independent charity organization has outdone other government controlled charities! Unfortunately, he has become the prisoner of his own success!

To “hope” for “good heart and head” to run entities that utilize public monies is just too amateurish. The only way to provide good checks and balances is to provide laws that protect and encourage whistle blowers and to put in enough independent or “opposing” force within the system. The PAP’s line of argument that by providing million dollar pay so to attract good talent and at the same time prevent them from being corrupt has been demolished totally by this NKF saga. If $600K is not enough to prevent a good man like TT Durai to fall into the traps of Moral Hazards (eg. Let NKF pay his own vehicle tax), what could convince us that a million dollar would prevent it? And TT Durai is a “good” man so to speak as he has dedicated 37 years of his life to NKF!

TT Durai’s success is just a mirror or miniature of PAP. He started off with a good heart and a strong dedication to volunteer his time and effort to build up NKF. But when success sets in, he has become the prisoner of his own success. NKF pays him the “peanuts” of $600K, justifying this using PAP’s same logic:

1) Need to pay high pay to attract talent
2) Need to pay high to get man of integrity to manage an entity with huge reserves

But apparently, this line of thinking has failed miserably. In public service both in the case of charitable organization and government, adequate checks and balances must be in place. To depend on high salary to make sure good governance is a totally flawed logic.
The checks and balances must be in the form of independent or opposing force, not merely rules and regulations that may be ignored. Guidelines could be ignored too and such happening could be unknown to the public. Only whistle blowers would blow it out to let the public knows of the flaws. In the spirit of public interests, the law must protect the whistle blowers from prosecution by the entities that have huge resources. For a government, only by voting in more opposition members, effective checks and balance could be achieved. The only way of ensuring this of happening is to change our system into proportionate representation, which will guarantee, at anytime, there will be minority or opposition representation. This is the main reason why emerging democracy like Taiwan and Hong Kong chose to have proportionate representation implemented in the political system.

Our political system has been changed so many times to ensure opposition representation will be curbed. This is unhealthy as it has robbed from the system the necessary checks and balances that are needed to maintain good governance. The threat of mismanagement is as REAL as the many recent happenings in public listed companies and NKF. From these recent scandals, it is clear that no amount of salary or perks could keep good people from turning bad.

The mass media and PAP itself has carefully avoided such a wide link of great implications to its own power base. They have talked about transparency and accountability to others, but nothing was mentioned about PAP government. Despite the fact that many in internet forums are linking this NKF saga with the possible pitfalls of a government that goes unchecked, the mass media just keep mum about this vital implications. In fact, with the recent outburst of scandals in various public listed companies, there are already many doubts arising about the standard of corporate governance in Singapore. Some are quietly worried about the implications of such scandals being replayed in a bigger scale if it so happen to a big government with great powers that go unchecked.

We must not behave like an ostrich that stick its head in the sand when something happens. The threat of Moral Hazard and corporate mismanagement is REAL and it is only a matter of time when it explodes into our faces if we continue to be complacent and accommodating to this system that discourage opposition politics. It may not happen now, maybe not in our life time but nobody could guarantee it will not happen to our future generations. It is time for us to rethink on what kind of political system we need to ensure REAL checks and balances are in place.

Goh Meng Seng

Saturday, July 16, 2005

NKF Saga II : The Prisoner of Success

I have written the following article in Sammyboy.

I think people are reacting inproportionately to the NKF Saga without knowing that their emotions have been fanned by the press media in a certain way to target at TT Durai. Look at the press coverage once Durai and the board resigned, damage control all fall in line.

In some instances, people are more angry about Mrs. Goh's peanut remark which make them quit contributing, but the media deliberately play this down while continue targeting Durai. It is very obvious that the aim is to force Durai out of NKF.

No "rational" deliberation was done on Durai's past contributions, as they have done extensively on PAP's, to justify that $600K pay as compared to million dollar ministers' salary.

Nothing was mentioned about the root problem of the whole saga, Moral Hazard; instead, full force was concentrated on one individual's ill doing.

There is something missing here. The NKF saga is a perfect educational material for Singaporeans to learn more about the folly of an unchecked government that will always subject to the temptations of Moral Hazard. This is an important lesson for everyone of us to learn about why we need good system that protect whistle blowers and how to provide good checks and balances to a government.

So, I am very cynical with the mass media in Singapore which the gullible ones will just go and praise them for uncovering the dirt in NKF. They will still report what they want you to see and manipulate your views in every ways they could.

Goh Meng Seng

Many people only see the bad side of TT Durai basically due to the deliberate press reporting. Forumers have always been talking about the Press and the mass media here as 147th position but ironically, they jump the gun when the issue of TT Durai surface.

How many people here have volunteered their service to charitable organizations before? How many of us have the perserverance to serve a charitable organization for 37 years, in whatever capacity? If you really take this into perspective, you will understand why the staff of NKF is so supportive of Durai even when he made the blunder.

It is very unfortunate that Durai has fallen prey to his own success. But look at this way, he is just a mirror of PAP success. From the beginning, NKF started off with only a small office. There isn't anything call half a million pay. Very thrifty in spending and such. This is just like the old guard of PAP running Singapore. They didn't ask for million dollar pay. Dr. Goh KS and other ministers are always on the guard, looking for opportunity to save money for Singapore.

But when prosperity sets in, reserves started climbing, PAP ministers use exactly the same reasoning that for any organization that manage so much funds, its executives must be highly paid. Not many Singaporeans (well, forumers here exception) find big fault with that, but people find fault with Durai, why? At the very least, Durai has spent 37 years of service in NKF, how many years our ministers have spent? Some are just helicopter into the rank!

As for the moral hazard Durai and NKF committed, it is also happening in PAP govt! Have people forgotten the seven wonders of Singapore?

It is very intriguing to find that Singaporeans could react in such a violent way to this NKF saga but they don't seem to see the flaws in the monopoly of power by PAP. Maybe it is just letting up of a pent up emotional force that created this big hoohaa. There will always be excuses given here and there by the PAP apologists, but haven't people consider the same for NKF? NKF may never be the same again without Durai?

I am only trying to play the devil's advocate here. I must declare that I do not know nor support Durai in the latest saga but I do see his pass merits. To a certain extend, I believe the masses' emotions have been fanned up by the press.

This is also a big alarming lesson to PAP actually. It demonstrates that if there is any findings of PAP govt's wrong doing (technically illegal, morally or otherwise) being exposed and fanned up, PAP govt will face the same fate of Durai and NKF board.

But from another perspective, it is important for us to understand that no matter how good a man initially was, with the combination of overwhelming success, concetration of power and the buildup of arrogance replacing the initial humility (always talking about suing people), he will bound to be morally corrupted by the many temptations that come with such combinations. The threat of moral hazard will always be there. Thus we need to provide a system that ensure effective checks and balances to be in place, protection of whistle blowers that acted in public interests, in the form of freedom of expression.

It is interesting to note that many people are gunning at Durai (maybe someone is right, the agents are here to fan the emotions against Durai) but they could not see the root problem and how it is relevant to any organizations that utilize public funds. And also, how freedom of expression is so important to maintain good governance.

Leave TT Durai alone as I think he has squandered off all the goodwill he has built up for the past three decades. The biggest enemy is his own success. Instead we should concentrate on how to build a system that ensure such things happening in NKF don't happen in a bigger scale, especially in our govt.

Goh Meng Seng

Friday, July 15, 2005

NKF Saga: Moral Hazard

NKF Saga: Moral Hazard

Many Singaporeans are very angry with NKF and its CEO due to the revelation made in court. One of my friends SMS me in great anger, message said “If $600K are peanuts, then my monthly $6 contribution is just peesai! I will cancel my monthly giro donations immediately!”

Some call for blood (TT Durai and Board of Directors please resign!), some call for accountability. But what is the real issue behind this saga?

In economics and management, the root problem is termed as “Moral Hazard”. As the term explains, it is technically not illegal but lies more on the MORALITY in management. Moral Hazards could only happen in public entities that utilize public funds. Examples of these entities are Public Listed Companies, Charitable Organizations and the Government.

One fine example of Moral Hazard is those who are entrusted to run these organizations, used the public funds to give himself bigger office, bigger desk, big perks, privileges, exceptionally high pays (especially in the case of government and charitable organizations) etc. These decisions are normally made in the daily running of the organizations which did not need to go through those who have a stake (moral stake as a donor, taxpayer, investment or otherwise) in these organizations. In NKF saga, the mention of expensive toilet bowl and tap is a sign of “Moral Hazard” in play. These are not “illegal” technically, but it puts doubts on the moral standing on those who made such decisions as public monies are involved. Sometimes, things like high salaries are difficult to determine whether they are excessive or not, depending on the organizations’ status. However, there are clear cuts things like big offices, extravagant fittings, using public funds to pay for personal items like road taxes and such etc.

The only way to prevent or control Moral Hazard is to put in sufficient checks and balances within the system so that the various decisions could be monitored and vetted. Sometimes, it takes external or internal whistle blowers to put pressure on the organization to avoid Moral Hazard. To cultivate such a culture, freedom of speech and expression without fear or favor must be guarded by the system.

The only reason why the past whistle blowers are being subdued is basically because they are individuals that are taking on a huge organization with overwhelming resources. The system must ensure that the defamation law must be just and unbiased when public interest is in question. That is to say that the organization must prove itself fully that there are no Moral Hazard in its running. Full disclosure and transparency must be enhanced in these organizations and the system of rules and laws must ensure that it is being practiced. Some protection to the whistle blowers must be ensured. It is a delicate task of balancing.

Singaporeans must also be educated on the potentially high possibility of Moral Hazard occurring in a huge government. The only effective way is to elect through the democratic process an opposition force that will put on pressures and checks on the ruling party. And they must register their preferences on an equitable system that will safeguard the rights and power of the minority opposition in questioning and performing the role of whistle blowers to the government.

Nobody is perfect in this world and human beings are subjected to many temptations especially when you wield overwhelming power. At the moment of weakness, one could just make that stupid mistake or judgement. Thus, those in great power must be subjected to adequate checks and balances from others not in their rank to ensure minimum abuses and Moral Hazard from happening.

The culture of FEAR would in fact detrimental to good corporate governance of public organizations that utilize public funding. If this FEAR is not overcome by the Moral Courage of potential whistle blowers, many abuses and Moral Hazard would go unnoticed. Thus we must eradicate such culture of FEAR by giving protection to whistle blowers in view of public interests. Laws should be made to protect whistle blowers, at the same time include rules that prevent abuses by the public.

I hope that Singaporeans could learn something more than anger from this NKF saga and really reflect and think about how it applies to the running of a government too. There are signs of Moral Hazard happening in our government simply by looking at the seven wonders of Singapore. But it seems that nobody thinks that it is a big deal at all. Then why the huge reaction to NKF’s excess now? It is to me that a government should maintain as high a moral ground as those who are running a charity. This is something for us to think about.

Goh Meng Seng

Sunday, July 10, 2005

Political Forums in a Police State

Political Forums in a Police State

I have attended a couple of political forums and book launch recently. One of them is the forum on Death Penalty (Organized by Open Singapore, JBJ and Dr. Chee are speakers) and the other one is Dr. Chee’s recent book launch.

I always feel that as opposition politicians, we are very “privileged” that we will always have “police protection” whenever we hold such public forums! Usually, they will send a team of two to put up video cameras (yes, two cameras) to take down the whole proceedings. Sometimes, they will even call in uniformed police officers! (It did happen during the Death Penalty forum.)

In view of the recent terrorist bombing in London, I wonder whether the police is afraid of us being bombed by the terrorists or that they are wasting their limited resources to “monitor” harmless patriotic people who attend the forums. They should have spent more time in tracking down terrorists out there instead.

I do not understand why the police officers have to do all these things. Maybe they are really looking out for subversive messages being transmitted in these forums. However, normally for these forums, the attendance is very small. When you minus the “regulars”, party members, reporters and of course, the agents and policemen, you will only have a handful of “genuinely public” individuals attending the forums. Even if there is any “bad messages” (defamation included), the outreach is really very limited. Isn’t the police “killing chicken using knife meant for cow? (This is a Chinese saying.)

Even though I do not agree with Dr. Chee and JBJ on many issues and stands they take, but I think it is only good for us to listen to diverse views WITHOUT INTERFERRENCE. We are matured enough to judge for ourselves what is right or wrong, good or bad.

What happened during the Death Penalty forum was that one plain cloth police officer just walk up to Dr. Chee and demanded particulars of a speaker. Strange enough, the police officer in plain cloth did not approach the Malay lady speaker directly (even though she was sitting right there) but he chose to ask Dr. Chee. Although the forum was ending but it was still in the last minute of Q&A session! To a bystander like me, I could only have two impressions:

1) The police officer was very rude to interrupt a forum like this.
2) The intention of the police was to exert authority on the whole audience right in front of the stage.

Of course the police officer may just be following instructions from the top, just trying to do their job but at least, common sense and tact should be practiced on the ground. When the Malay lady lawyer raised her voice to register her dissatisfaction, the plain cloth police officer actually called in two uniformed officers into the room later!

During Dr. Chee’s book launch yesterday, what happened was that during the Q&A session, a muted video of the May Day incident (whereby Dr. Chee was arrested) was screened on the background. I am not sure about the law but as a normal bystander, it seemed to be perfectly o.k. as video has been screened in wedding dinners as well. Besides, the attendance is less than 70, no big deal. But the police came in and seized the cd that contains the video.

This brings us back to the film act again. As I have stated in my previous posting, I feel that the film act is totally outdated, in view of the fact that many Singaporeans could afford a video camera and just shoot. If recording a true event is a crime, then all news video clippings would be put into question. The arrest of Dr. Chee captured in the video clip is not a “mock up” but a real life event. Is it a “political film”? I would just say that it is merely a historical recording of what really happened in the past. It is not a film of “re-enactment”.

I would appreciate more if the police could just perform their duties effectively, especially on fighting terrorists. Making a mountain out of a mole hole would not give us a good image, especially so when there are foreigners present in these forums.

When I attended the memorial service for Zhao Zhi Yang in Hong Kong, no police officers in uniform were seen on the rally ground. It is normal to them and it has demonstrated the state/government has more trust in its people even in a rally that has tens of thousands of people attending. Police officers could only be seen outside the compound regulating human flow. There are no interference from the police or the state even when a special memorial video was screened on a big make shift black drop in the open air, with ten of thousands of people viewing.

PAP government has claimed that they wanted to open up. So far, we have not seen any moves in opening up the political space in Singapore. We are just behaving like a police state as ever.

In this globalised world, it is only time when people, both Singaporeans and foreigners, come to this conclusion that we are still a police state when they start to make comparisons. The acts of the policemen so far give me an impression that they are all out to nit pick on opposition members like Dr. Chee. They would bounce on you readily on the slightest sign of mistakes being made. This is like having police officers (in plain cloth or otherwise) guarding at every traffic light to make sure that everyone (in this case, opposition members) cross the roads according to the law! This isn’t what an “open society” supposed to be isn’t it?

If the PAP government wants to play it this way, why not just declare all opposition parties illegal? It will save a lot of manpower and hassles for the police department to be re-deployed to fight terrorists!

Goh Meng Seng