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Dr Chee Soon Juan and Ms Chee Siok Chin filed their affidavit for the summary judgement hearing on 3 Aug 06. The affidavit which presents the case against the Lees will be posted on this website in separate instalments. Part E is presented below:
E. Counter to the Plaintiffs’ imputed meanings
In this part of the affidavit, the Chees take each of the imputed meanings that the Lees have given in their affidavits (in Part D) and countered with a point-by-point response to the Lees’ accusations. This final part forms the “meat” of the Chees’ Defence.
LHL: That “I, as Prime Minister, has perpetuated a corrupt political system for the benefit of the political elite.”
LKY: That “I devised a corrupt political system for the benefit of the political elite.”
1. The thrust of the Article is that the PAP system of governance has not been one that is transparent and accountable. Without such a political culture, the system of checks and balances will fail. Without checks there is a propensity for corruption to take place. This was exactly what took place in the NKF, leading Plaintiff LHL, himself, to remark: “Obviously the checks and balances [in the NKF] didn’t work.” Thus, in a system as opaque as that of Singapore’s, who is to say that checks and balances will not similarly fail and produce similar types of situations in the NKF?
2. Indeed, given the closed society that Singapore is, a culture of transparency and accountability cannot take root. This ultimately benefits the political elite in Singapore in terms of political power and monetary reward which is similar to the situation that was taking place inside the NKF. This view is held not just by the Defendants. The website Yawning Bread wrote:
“How many Singaporeans, I wonder, would draw parallels with our parliament’s relationship with our executive? With the PAP holding almost all the seats, is our parliament ever going to be a meaningful check on the government?
But we’re all men and women of integrity, the PAP says. Well, for many years, people might have said the same of the coterie running the NKF. They even had libel suit victories to prove how unassailable their integrity was.
Shouldn’t we learn from this and place more value in systems and institutions rather than live in awe of big men, letting them bend the rules, e.g. redrawing constituency boundaries at the last minute, raising election deposits, clamping down on political websites?”
3. As pointed out in the preceding paragraph in the Yawning Bread article, the T T Durai suit against Archie Ong and Tan Kiat Noi testifies to the fact that this present suit cannot necessarily show that there is no corruption within the Government. It took several years before Ong and Tan were shown to be right in their criticism of Durai. Given such a scenario, is it not premature to say that, given the opacity of the PAP system, that the comparison between the NKF and the Government is unwarranted and defamatory?
4. The Government cites the Corruption Perceptions Index (CPI) conducted by Transparency International to show that it is a non-corrupt regime. However, the CPI however is a survey of perceptions by foreigners who may have only limited knowledge of Singapore. Besides, the CPI measures corruption as it takes place in the business world in the form of kickbacks and under-the-table dealings of bribery. This problem is highlighted by Michael Backman in Suffering Singapore’s slings, arrows:
“Singapore does well in Transparency International’s annual survey of perceptions of corruption, but it needs to be remembered perceptions are surveyed, not reality. Sure, it’s unlikely you will ever be asked for a bribe or a kickback in Singapore, but should corruption be so narrowly defined?”
5. There is, however, another aspect to corruption, that is, political corruption. Political corruption encompasses a broader concept than just the illegal acceptance of money (and favours for money). It includes the manipulation of the media, elections system, judiciary, and the rule of law in order to silence opponents and to perpetuate one’s hold on power. In other words, repression is a form of political corruption.
6. Indeed, the PAP has acquired a reputation for being a repressive, and therefore politically corrupt (as defined in the preceding paragraph), regime. The following are just a few examples of how the world sees Singapore in terms of its political system.
“Singapore’s authoritarian legal system has sent an opposition politician to jail for speaking in public without police permission. The leaders of the regime are again demonstrating their defiance of international criticism and contempt for civil liberties…More disturbing is the government’s ongoing repression of the political opposition and denial of freedom of speech.” – The Honolulu Star-Bulletin editorial.
“Lee [Hsien Loong] is keen to be seen as a democrat. He talks like a democrat. He holds elections. But, beneath that thin veneer, he and the party he leads, the People’s Action Party (Pap), have not the faintest inclination to bend to the will of the Singaporean people.” – The openDemocracy
“The huge irony is that Lee Hsien Loong came to the prime ministership on a promise of freeing up Singapore’s creative side, but has fallen back on the techniques of reward and repression developed by his father, Lee Kuan Yew.” – The Age (Australia)
“When independent-thinking Singaporeans speak their minds, they must be ready to face dire consequences, as the government under the People’s Action Party will bring out its full arsenal of repressive measures to try to beat them into submission… It is now common knowledge in the rest of the world that Singaporeans cannot speak their minds, unless they are the chosen ones or members of the PAP. Indeed, the island’s politics is only reserved for PAP cadres and those whose views conveniently match the party’s line or, more specifically, former prime minister Lee Kuan Yew’s thinking.” – The Nation (Thailand)
“Singapore continues its clever use of law to restrict what the press can do and say, both internally and internationally. Journalists who depart from the “Singapore” line are subject to both criminal and civil proceedings in the courts and damages are huge.” – The Guardian (UK)
“State control of the media in Singapore is so complete that few dare to challenge the system and there is no longer much need to arrest or even harass journalists. Even foreign correspondents have learned to be cautious when reporting on Singapore, since the government has frequently hauled the international press into court to face lengthy and expensive libel suits.” – Committee to Protect Journalists
“Singapore is no better than its neighbours—in many ways, it’s worse. It is the Cuba of Asia (but without the crushing poverty or damaging economic sanctions). Indeed, Singapore enjoys Western-style economic prosperity…Denials of civil and political rights in Singapore are simply of governmental policy.” – Human Rights Network
7. This view is shared by members of the local community evidenced by the fact that political discussions on the Internet is overwhelmingly negative of the political system created and maintained by the PAP. Criticisms of the way the general elections are manipulated by the PAP, of the control of the local media, of the victimisation of opposition leaders and dissidents, etc. are exceedingly plentiful.
8. Political corruption can mean the use of one’s office to legitimise what is morally objectionable such as, inter alia, the recent use of public funds to buy votes during the 2001 (through the New Singapore Shares) and 2006 (through the Progress Bonus) general elections. The illegitimate act of vote-buying is made legitimate by virtue of the fact that it is initiated by the Government. Once returned to office through such reprehensible and corrupt means, the Government then uses this “mandate” to claim that voters have approved their lavish salaries. This again is a view not exclusively held by the Defendants. Website Asean News Network wrote in one of its articles:
“Legitimized Corruption means essentially that the corrupt act itself is made perfectly legal…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).”
9. A Singaporean blogger on http://i-speak.blogdrive.com/ made this clearer by explaining the matter thus:
“The defence the PAP has always launched against the accusation that their salaries are too high is to say: ‘We must do so in order to prevent corruption.’ I have always found that to be a thin excuse. What, after all, is corruption? The use of one’s position in order to profit illegally. High ministerial salaries simply permit the PAP to use their position in order to profit legally. A simple analogy: it is illegal for someone to shoplift a gold necklace from a jewelery store. But this thievery would be perfectly legal if we had no laws against shoplifting in the first place. One could profit in an arguably unethical manner without breaking any laws. Similarly, it would be illegal for the Prime Minister to siphon away $2 million a year. But as a politician in power, instead of siphoning it away, he simply ensuresthat he can receive $2 million a year in a perfectly transparent and above-board manner. That’s what they really mean by the concept of high ministerial salaries removing the need for corruption. They don’t need to be corrupt: we just hand over the money anyway.”
LHL: That “I and my Government had access to the information which has since been unearthed about NKF but corruptly concealed and covered up the facts to avoid criticism.”
10. The Government had known that the National Council of Social Services (“NCSS”) had rejected the Institute of Public Character (“IPC”) status of the NKF. Yet, the Ministry of Health reinstated the IPC back to the NKF without any explanation. Again, the Yawning Bread website echoed this view:
“Why did the Health Ministry renew the NKF’s charity status?
We don’t yet have the answer to this, but whatever comes out in the next few weeks, one thing will not change: the NKF did not deserve to have its IPC status renewed. “IPC” stands for Institution of Public Character, which entitles a body to collect tax-exempt donations.
Whatever excuses the Health Ministry is coming up with, people are not going to accept them easily.
It’s already clear from KPMG’s report that the National Council of Social Services (NCSS) was extremely unhappy with the NKF as far back as 1999. The NCSS
felt the NKF had inflated the subsidies they said they had given to patients and spent on dialysis, noted how staff costs had shot up by 30%, and how a “disproportionate” amount of money had been spent on fundraising compared to patient care.
All these have now turned out to be true. For example, KPMG estimated that the NKF only spent about 10 cents of every dollar donated on patient care and subsidies, when previously the charity claimed it spent 52 cents.
The NCSS’ unhappiness was such that in late 1999, it sharply shortened NKF’s IPC status to 2 or 3-month renewals, when normally, it is renewed for 5 years at a time.
Still, the NKF did not improve and in December 2001, the NCSS terminated NKF’s IPC status altogether.
Then for some yet unexplained reason, the authority to issue IPC status to medical-type charities was passed to the Health Ministry. The Ministry gave NKF back its IPC status, this time for 3 years.
Now that events has shown abuses at the NKF, the Health Ministry too claimed it had an inkling as to the problems there. In 1999, it sent a representative, Dr Ling Sing Lin, to sit in on its board meetings. This representative felt she was being stonewalled throughout, so after attending 4 meetings, she withdrew.
But why, really, was she sent there?
Throughout all this, not a word leaked out to the press. No one thought it necessary to issue a press statement even though as a charity with huge fund-raising events, it very much concerned the public. The NCSS breathed not a word. The NKF certainly didn’t. And the Health Ministry renewed its IPC status.
The whole thing smells of things under the carpet, if not backroom deals. Why would a ministry look the other way? Were they awed by a big man who could do no wrong? Does our entire government function in awe of big men? On the face of things, there appears to be a certain clubbinness among high-flyers in our establishment that lead to the suspension of critical enquiry of each other’s doings.
Are all these highly-paid ministers and civil servants exercising independence of mind? Are they even competent?”
11. The Government refused to give an account of what transpired between the relevant bodies when the NKF’s IPC status was renewed by the Health Ministry. In such an instance, how does one conclude categorically that nothing has been “concealed” and “covered-up”? If the Government had instituted a transparent and accountable system, it would have revealed what happened when the IPC was reinstated to the NKF by the Health Ministry. In such a scenario, everyone would have been clear about whether there was any concealment or cover-up or not, and there would have been no need for the Article to ask about the whys and wherefores of the NKF’s IPC reinstatement.
12. In addition, the Government assured that all was in order at the NKF when it was not. The claim was made despite the repeated and various concerns brought to the Government’s direct attention. On 19 April 2004 during the Parliamentary sitting, Nominated Member of Parliament Braema Mathi pointed out: “NKF’s reserves…[are] in dire need of better governance.” Member of Parliament Charles Chong asked 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?” The Second Minister for Finance Lim Hng Kiang replied: “Mr Speaker, Sir, the NKF is in full compliance with the regulations.” (emphasis added) Minister for Health Khaw Boon Wan endorsed the NKF’s practices and called on people to continue donating to the charity. Given this scenario, is it so unreasonable for the Article to question the Government on the matter especially when the matter was of intense public interest?
13. The Article touches on issues of national importance and public interest. The Court is hardly the appropriate forum to look into the issues as the system of litigation here is adversarial in nature where one party’s views and arguments are countered by an opposing one. In such a system, the Judiciary must ensure its neutrality and impartiality in all cases and especially when it comes to matters of political opinion and contention. But if the Courts must get involved, then the rules of justice must apply. One such rule is that the contending parties must be able to adduce the relevant evidence to support their respective positions. To this end, the current suit presents two significant problems: One, this matter is a case of David versus Goliath. Very clearly, there is lack of parity between the Plaintiffs and the Defendants in terms of resources and access to information. This adversely affects the Defendants’ ability to gather evidence. Two, by allowing a summary disposal of the Plaintiffs’ defamation claims, the Defendants would be denied the right to a trial and to call witnesses in support of our defences, and avail ourselves to the opportunity to cross-examine the Plaintiffs and their witnesses.
14. To truly serve the interests of justice, it would be more appropriate to convene an independent body comprising of members wholly independent of the Government and empower them to investigate and inquire into the issues of national importance and public interest such as those argued in this present matter. Short of taking such an approach, no one can safely say where the truth lies, particularly in relation to the various allegations made by the Plaintiffs.
LHL: That “the defamatory allegations made against me, which were the subject of the Defamation Action were true and that the Defamation Action was brought not to vindicate my reputation but to suppress allegations which were true and which I knew to be true.”
LKY: That “the defamatory allegations made against me, which were the subject of the Defamation Action against among others, Mr J B Jeyaretnam, Mr Tang Liang Hong and CSJ, were true and those actions were brought not to vindicate the my reputation but to suppress allegations which were true and which I knew to be true.”
15. Past defamation cases won by the Plaintiff have always been decided in Singapore by judges. This hardly passes the test set out in Halsbury Laws of Singapore which stipulates that the test of whether a statement is defamatory or not must be considered from the viewpoint of ordinary, reasonable persons in a community as a whole and not just by a limited class. Decisions made exclusively by a single judge, in the absence of a jury, have been recognized to be far from ideal as their opinions would be an inaccurate reflection of the masses and would be perceived as drawn from a limited class. This is one of the reasons why some of the past defendants have chosen not to resist the Plaintiffs’ claims.
16. In addition, the Plaintiffs and other PAP officials frequently resort to lawsuits to silence their critics. Some of their opponents choose to apologise for a host of reasons, which could be due to business considerations, or due to lack of financial means to engage legal representation or to pay higher quantum damages and costs should they choose to resist the defamation claims. Another reason why some of the Plaintiffs’ critics choose to apologise is because of the ease of which the Plaintiffs win their case.
17. Plaintiffs’ critics choose to apologise is because of the ease of which the Plaintiffs win their case and the uphill task their critics face. This uphill task is summed up by Lord Keith in Derbyshire CC v Times Newspapers Ltd  AC 534: “Quite often the facts which would justify a defamatory publication are known to be true, but admissible evidence capable of proving those facts is not available. This may prevent the publication of matters which it is very desirable to make public.” In Arul Chandran v. Chew Chin Aik Victor JP  1 SLR 505, it is commented that: “The law of defamation [in Singapore] presumes that defamatory words are false and the plaintiff need do no more than prove that the defamatory words have been published by the defendant. The burden is then on the defendant, if he wishes to rely on the defence of justification, to prove that those words are true.” This led the US State Department to conclude in its Human Rights Annual Report 2005 that “The country’s defamation laws make it relatively easy for some plaintiffs to win substantial judgments for damages and legal costs.”
18. Thus it can be seen that Government critics who have been sued apologise for a variety of reasons, not necessarily because they admit that their statements were defamatory. Their apologies have no probative value and should, therefore, not be taken into account in the determination of the issue of whether the words they expressed bear a defamatory meaning. There is a lacuna in the defamation laws in the sense that the plaintiff does not have to provide the requisite information or facts that are in his possession as he has been the one running the government or managing the organization. And yet, he still wins the case. In contrast, the defendant has an uphill task as he does not have the requisite access to facts or information required to prove his case. Until such time that the independent body is convened (see para 40 above) to address the lacuna as identified by Lord Keith in Derbyshire CC v Times Newspapers Ltd  AC 534, no one is in the position to truly comment on the substance of those previously decided cases.
19. Such a situation prompts would-be critics not to join in the criticism. This view that defamation suits are used for political purposes is widely held. The Yawning Bread website, quoted in paragraph 10 above is a case in point.
20. Another example is an article posted by John Tessensohn entitled “Pity the Amusement – the Politics of Defamation for the Singapore voter” on the website Singaporeans for Democracy:
“So long as Singapore voters continue to vote for politicians who use defamation lawsuits as the sine qua non of Singapore political discourse, voters abet this menacing method of muting political speech and cruelly cultivate the chilling effect on journalists commenting on Singapore…Singapore voters could send a message that political reputations are best defended by successful policies, rather than a multi-million defamation award. That political reputations are better defended by plans that advance our livelihoods, in initiatives that enrich our jobs. Although a politician may win the defamation battle in the court of law, he will lose in the war in the court of public opinion…”
21. The US State Department Annual Report 2005 wrote:
“Government leaders continued to use court proceedings and defamation suits against political opponents and critics. These suits, which have consistently been decided in favor of government plaintiffs, chilled political speech and action and created a perception that the ruling party used the judicial system for political purposes.”
22. The Committee to Protect Journalists Executive Director Ann Cooper commented:
“The tactic of using the courts fools no one; the government is clearly bent on stifling its critics.” (5 May 2006)
“Defamation suits are used as a club by the government of Singapore to silence critical thinking and reporting in the media.” (5 July 2005)
23. Amnesty International said in October 1997:
“Amnesty International believes that civil defamation suits are being misused by the Executive to intimidate and deter those Singaporeans holding dissenting views. The suits have a ‘chilling’ effect on Singapore’s political life and place unreasonable and unacceptable restrictions on the right of Singaporeans to freely hold and peacefully express their opinions.”
24. Even the New York City Bar Association warned:
“What emerges…is a government that has been willing to decimate the rule of law for the benefit of its political interests.”
25. More recently, Hugo Restall of the Far Eastern Economic Review wrote:
“That raises the question of whether Singapore deserves its reputation for squeaky-clean government. A scandal involving the country’s biggest charity, the National Kidney Foundation, erupted in 2004 when it turned out that its Chief Executive T.T. Durai was not only drawing a $357,000 annual salary, but the charity was paying for his first-class flights, maintenance on his Mercedes, and gold-plated fixtures in his private office bathroom.
The scandal was a gift for the opposition, which naturally raised questions about why the government didn’t do a better job of supervising the highly secretive NKF, whose patron was the wife of former Prime Minister Goh Chok Tong (she called Mr. Durai’s salary “peanuts”). But it had wider implications too. The government controls huge pools of public money in the Central Provident Fund and the Government of Singapore Investment Corp., both of which are highly nontransparent. It also controls spending on the public housing most Singaporeans live in, and openly uses the funds for refurbishing apartment blocks as a bribe for districts that vote for the ruling party. Singaporeans have no way of knowing whether officials are abusing their trust as Mr. Durai did.
It gets worse. Mr. Durai’s abuses only came to light because he sued the Straits Times newspaper for libel over an article detailing some of his perks. Why was Mr. Durai so confident he could win a libel suit when the allegations against him were true? Because he had done it before. The NKF won a libel case in 1998 against defendants who alleged it had paid for first-class flights for Mr. Durai. This time, however, he was up against a major bulwark of the regime, Singapore Press Holdings; its lawyers uncovered the truth.
Singaporean officials have a remarkable record of success in winning libel suits against their critics. The question then is, how many other libel suits have Singapore’s great and good wrongly won, resulting in the cover-up of real misdeeds? And are libel suits deliberately used as a tool to suppress questioning voices?”
LHL: That “as the allegations in the Defamation Action were true, I am guilty of corruption, nepotism, criminal conduct, a cover up and of advancing the interest of the Lee family at the expenses of the needs of Singapore.”
LKY: That “as the defamatory allegations were true, I am guilty of corruption, nepotism, criminal conduct, dishonesty, and had advanced the interests of my family at the expenses of the needs of Singapore; had misled Parliament and had covered my tracks to avoid criticism.”
26. With the system in Singapore as opaque and closed as it is, it is impossible to say that corruption, nepotism, criminal conduct, and cover-up does not exist. There have been and continue to be questions raised about how the Lee family controls Singapore.
27. The story about LHL slapping former minister S Dhanabalan has been circulating in the Singapore community for many years. This episode was documented by Professor Ross Worthington in his book “Governance in Singapore.” While LHL and Goh Chok Tong have both publicly denied that such an event took place, the Defendants must at least be given the chance to verify the statements of Lee and Goh by calling for witnesses.
28. As regards to criminal conduct, there are several reports of torture and abuse of Internal Security Act detainees over the years. One example of this is found in an Amnesty International report in 1980 about Ho Piao and Chua Hock Hua who were reported to be severely tortured by the Government whilst under detention. Other reports of physical/mental abuse and torture are also reported by Francis Seow and the detainees in 1987. These complaints and reports have yet to be properly investigated.
29. There is also the statement of LHL saying during the elections in May 2006: “Suppose you had 10, 15, 20 opposition members in Parliament. Instead of spending my time thinking what is the right policy for Singapore, I’m going to spend all my time thinking what’s the right way to fix them, to buy my supporters’ votes, how can I solve this week’s problem and forget about next year’s challenges?” Fixing the opposition and buying votes are serious offences. Does this kind of statement, by no less than the Prime Minister of Singapore, not give cause for the community to question if the Government is indeed involved in criminal conduct? At the very least, there must be an opportunity for the Defendants to adduce evidence from the Plaintiff through cross-examination so that the real meaning behind his statement is ascertained? Summary proceedings will not allow such a process.
30. There is also the matter of conveyancing cases commissioned by the Housing and Development Board (“HDB”). For a long time, there had been unhappiness amongst the legal fraternity that much of the HDB conveyancing cases have been handled by Messrs Lee & Lee, the law firm owned by LKY’s family members. Chee Soon Juan had asked LKY to reveal such information, Lee has refused to answer. To date no information has been forthcoming about which law firms receive such business from the HDB.
31. It is also widely believed that SingTel is used for surveillance on opposition parties and/or its members as well as on other Singaporeans. If this is indeed the case, questions have to be asked about the legality of such state action. But in order to find out whether such activity has taken place, evidence need to be adduced from the Plaintiffs. Needless to say, summary proceedings will not allow this.
32. It has been reported that Plaintiff LKY uses his Press Secretary to issue statements for his defamation lawsuits which are taken out in his personal capacity. This needs to be examined to see if public funds was used for Lee’s personal matters. In this regard, it has also been reported that the PAP interviews its election candidates at the Istana. This would be that public funds and state property are being used for the private gain of the PAP. There needs to be an inquiry into such reports.
33. With several of the Lee family members and relatives holding key appointments and top positions within the Singapore establishment, there are questions that need to be asked in regards to this matter as it is of public interest. It is fair to ask if nepotism plays a role in all of this. This however is forbidden by the Government as demonstrated in the case involving Zulfikar Mohd Shariff who is under investigation for criminal defamation for making comments about nepotism in his website Fateha.com. Another example is the case of the buying of Hotel Properties Limited condominiums by members of the Lee family under significant discounts. Questions raised by Tang Liang Hong resulted in a lawsuit. Under such a repressive environment how can issues of nepotism in Singapore be examined and resolved?
34. This view of nepotism in Singapore is captured by Professor of International Relations at University of Pennsylvania, Arthur Waldron, observed:
“Thirty years ago, Lee looked set for real greatness. And he could have achieved it if he had used his time in the power he had earned to create an institutional system for Singapore that would survive him. This he never did. Today his vision for the future seems to be limited to turning over politics to his son and management of the island’s vast government assets to his daughter-in-law. The task of creating a Singapore run by laws and institutions, rather than by a family and its associates, Mr. Lee has bequeathed to his successors.”
35. This is echoed by Michael Backman who wrote:
“It might be fair to question whether nepotism played a role in [Ho Ching’s] appointment…”
LHL: That “there is corruption in institutions such as the Housing Development Board, the Government of Singapore Investment Corporation and the Central Provident Fund, and I condone or permit it.”
LKY: That “I have managed the GIC in a corrupt manner.”
36. Transparency in Singapore has been questioned repeatedly. The European Union named Singapore among 25 countries whose transparency and supervision in the banking system as poor. In a report in 2000, the United States State Department pointed out that the system in Singapore “provided opportunities for money launderers to conduct a wide range of illicit transactions.”
37. There have also been reports about Singapore quietly selling arms to the Burmese military rulers. Burma expert Bertil Lintner reported: “Late in the evening of 6th October , there was a curious blackout along Prome Road in Rangoon…residents counted 75 trucks making three trips each; in the port workers had seen boxes marked ‘Allied Ordnance Singapore’ being unloaded from a ship.”
38. In August 1989, Singapore was also accused of providing arms to the Burmese Government. This was apparently done through SKS Marketing, a newly formed Singapore-based joint venture with the Burmese regime. As recently as 1997, the Asian Defence Journal reported that Singapore was supplying high-tech equipment to the SLORC for its Cyber Warfare Centre in Rangoon, a military set-up that taps “domestic phone, fax, and e-mail lines on a countrywide basis.” Singapore is also “thought to be training large numbers of Burmese secret police.” None of these have come to the public’s attention.
39. The Burmese affair is not confined to arms sales. In the 1990s, the SLORC, for strategic military reasons, abandoned its policy of disallowing bank deposits in the country that were considered to have come from a dubious origin. It now levies a tax on funds entering the country. As a result, money from drug sales that had been deposited in safe havens outside of Burma came flooding back (Burma is the world’s leading producer of heroin). One of the main players in the game was Lo Hsing-han, who had become an adviser to the Burmese Government. Lo owns a corporate empire through his flagship company, Asia World. When the outside world was invited to invest in Burma, the Singapore government poured in more than $1 billion. Some of the cash found its way into the Myanmar Fund, an investment fund set up to finance business projects in Burma. A couple of these businesses involved Lo Hsing-han’s Asia World. In 1996, the Special Broadcasting Service, an Australia television network, exposed this relationship. The United States State Department said that “over half [of the investments in Burma] from Singapore have been tied to the family of narco-trafficker Lo Hsing-han.”
40. When Chee Soon Juan questioned the government’s involvement in the matter and the Myanmar Fund, Chee Soon Suan was given no answers, but was instead called a traitor and accused of colluding with the Australians to tarnish Singapore’s good name. Obviously stung by the barrage of criticism, however, the Government quietly announced in August 1997 that “a majority of the shareholders voted in favour of winding up the Myanmar Fund.”
41. One of the most striking examples of how opaque the Singapore system is when it comes to business and commerce is its trade figures with Indonesia—they were for a long time simply not available. Garry Rodan, an academic and keen observer of Singapore’s political economy, commented that publication of such information would not only give a “more accurate picture of Singapore’s current account surplus and capital flows,” but might also “lead in Indonesia to a more effective clamp on smuggling and a consequent drop in revenue to Singapore.”
42. In 1998 Singapore pledged a US$10 billion aid package to Indonesia. Singaporeans, even the parliament, were not told of the loan until the foreign media reported it. The news shocked and confused political and economic analysts in the region. Information on how and under what conditions the deal was made remains sketchy. Why was the matter not made known to the Singaporean public right from the beginning?
43. More recently, the Suzhou Industrial Park project in China folded up in its fifth year of operation. The PAP government refused to conduct a parliamentary debate on the finances of the project, because it was, according to the deputy prime minister, “not appropriate” to do so.
44. Ironically, the most serious indictment of the non-transparent system in Singapore came from former deputy prime minister and founding chairman of the PAP Toh Chin Chye who said: “I don’t believe the statistics put out by the Government. The man in the street doesn’t know whether he’s on thin ice or solid rock.”
45. More recently, the late Ong Teng Cheong, president and former deputy prime minister complained that he had difficulty obtaining information about the country’s financial reserves. When Ong initially asked the Accountant-General for an account of the reserves in 1993, he was told that it would take “52 man years” to compile the list. But the president insisted on having the figures. Four years later, he was finally given a list of all the properties Singapore owned. When his tenure came to an end in 1999, Ong wrote about the “long list of problems” that he encountered with the administration. It thus came as no surprise that when he wanted to seek a second term in office, the government, which backed him for his first, decided to support someone else.
46. Accountability is another problem under the PAP system. The acquisition of Micropolis, a disk-drive manufacturing company in the United States, by Singapore Technologies, a major GLC failed within a year after Singapore Technologies took over, losing about $630 million along the way. The Government only said that the loss resulted “in a diminution of the Government’s assets.” What went wrong and who was responsible were not revealed.
47. There were also other transactions that were not properly explained even though they involved public-funds tied in with private money. First, there was the tie-up between Keppel Bank and Tat Lee Bank. The latter, a private bank, had loan exposures in Malaysia, Indonesia, Thailand, and South Korea amounting to $1.16 billion in 1997 and had incurred bad loans of up to $589 million. At one point, it saw 35 percent of its share price disappear. A member of LKY’s family is involved in the management of Tat Lee Bank. Then Keppel Bank, funded by public money, agreed to a merger. As usual, few questions were asked and fewer answers given.
48. The merger between the Post Office Savings Bank (POSBank) and DBS was also questioned. The POSB had served lower-income Singaporeans well for decades without incurring debts and losses. DBS, on the other hand, had lost money from its deals all over Asia. Its chairman and former foreign minister, S Dhanabalan, announced that in a period of 12 months in 1998, the bank’s total non-performing loans, spread throughout Malaysia, Indonesia, Thailand, South Korea, and the Philippines, had gone from from $1.1 billion to $7 billion. Net profit had tumbled by half, to $223 million. This, however, did not stop the government from announcing that DBS would take over POSBank. By the time Singaporeans found out about this arrangement, the acquisition was all but a done deal.
49. The above examples demonstrate how un-transparent the system in Singapore is. As explained earlier, without a system that is transparent and accountable, conclusive statements about non-corruption is hard to make.
Housing Development Board
50. Many questions have been asked about the transparency of the HDB and repeated calls for more accountability have been made:
“Govt should be open about true costs” by Wendy Lee Wan Fern, on the building costs and pricing of new HDB flats. (23 Jan 2002 ST Forum letter)
“So, what’s the true cost of an HDB flat?” by See Leong Kit (27 Aug 2003 TODAY letter).
“How does HDB price its flats?” by Douglas Chow Tuck Kheong (12 Jul 2004 ST Forum letter).
“Subsidy should be based on flat’s building cost” by Mohamed Rafiq Hamjah (27 Jul 2004 ST Forum letter).
“Flat buyers pay more than cost unless resale prices take a sharp dip” by Ee Teck Siew (11 Aug 2004 ST Forum letter).
“Transparency begins at home. How does HDB derive flat prices? What are the costs?” by See Leong Kit (1 Dec 2005 TODAY letter).
“How does HDB manage its finances?” by Gary Lee (2 Dec 2005 TODAY letter).
Government of Singapore Investment Corporation
51. In September 2000, Dr Caroline Danford, a corporate lawyer with Shearman and Sterling, a New York City-based law firm, was in Singapore on sabbatical leave. She volunteered to help the Open Singapore Centre (OSC), which is a non-profit, non-government organisation. The OSC’s primary purpose, as its name suggests, is to look into issues of transparency and openness in Singapore. We asked Danford to contact the Government of Singapore Investment Corporation (“GIC”) to request an interview. She duly submitted a list of questions to the company for the interview:
a. What is the GIC’s contribution to financing Singapore’s infrastructure, such as housing?
b. What is the GIC’s contribution to making Singapore a major player in the global economic market?
c. Who develops the GIC’s investment policies and strategies, and how are investment decisions made?
d. What methods of internal control are in place to ensure compliance with the GIC’s policies?
e. What is the GIC’s position on socially responsible investing?
f. What are the GIC’s risk-management policies and investment return expectations?
g. What is the GIC’s view on maintaining its status as a limited exempt private company and the type of information it makes available to the public?
52. In addition, the OSC also requested a copy of the annual returns, audited accounts, documents of incorporation, and bylaws of the company. The GIC replied saying no and concluded: “As for our incorporate documents, we do not think they are of relevance to your study.”
53. Associate Professor Mukul Asher at the National University of Singapore noted about the funds invested by the GIC:
“There is…no transparency or public accountability concerning where these funds are invested. These funds, however, are believed to be wholly invested abroad. No information has been provided on the performance of these investments.”
Central Provident Fund
54. On the transparency of the Central Provident Fund (“CPF”), the Asian Wall Street Journal wrote:
“Where do the CPF funds go? No one is exactly sure since the government, amazingly, won’t give the public a precise accounting of how it uses the public’s money.”
55. As argued in the preceding paragraphs, with a non-transparent and non-accountable system running the HDB, GIC and CPF, who is to say that checks and balances will not similarly fail and produce similar types of situations in the NKF?