Wednesday, 9 January 2013

Review Of Corporate Governance In Town Councils

Updated 28 May 2013

The big 'G' question in town council politics

Twenty-five years after the law to set up town councils was introduced in Parliament in 1988, Singaporeans finally heard a real debate on the pertinent issues.

Are town councils inherently political in nature and therefore expected to act in a partisan manner?

Is there a conflict of interest when the work is done and money paid to companies owned or affiliated to political parties?


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OPINION: After the childish bickerings, issue of conflict of interest in AIM-PAP TC software deal still lingers
Andrewlohhp.wordpress.com, 21 May 2013
The simple fact of the matter is this: a contract was awarded by 14 PAP-run town councils to a PAP-owned company – a company, mind you, which for 22 years no one knew existed.

Here is the sting: any profits made from such transactions with AIM would go directly into PAP coffers, since AIM is a PAP company, unlike the WP case where any profits do not go into the party’s accounts since the management agency involved, FMSS, is not a WP-owned company. 

While “AIM did not make a profit from the TCMS transaction in 2010 [and] its directors were not paid any fees and it charged only a fee to cover its operational costs”, this really is beside the point.

The issue here is that a political party – in fact any political party which owns such a private company providing such services – can benefit politically from such deals. If AIM had made a profit, or had paid its directors, the point would be more stark, and the public outcry would be more devastating to the party. Full story

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Sylvia Lim drops the bombshell on AIM issue!

When the AIM issue emerged a few months ago,  PAP's Dr. Teo explained that the move to have an open tender to sell the town council software was recommended by consultants. Several software companies collected the tender document but nobody responded so AIM wanting to help the town councils decided to bid for the contract. 

"The TCs advertised the tender in the Straits Times on 30 June 2010. Five companies collected the tender documents. These were CSC Technologies Services Pte Ltd, Hutcabb Consulting Pte Ltd, NCS, NEC Asia Pte Ltd and Action Information Management Pte Ltd (“AIM”).

I am aware that NCS considered bidding but in the end, decided not to do so as it was of the view that the IP rights to software developed in 2003 on soon to be replaced platforms were not valuable at all.

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AIM-Gate

– Singapore Kopi Tok: People in Town Council Glass Houses: AIM at FMSS
– Illusio: Bringing the gavel down on Workers Party I
– Sgpolitics.net: Wrapping up the town council debate
– Where Bears Roam Free: Khaw cawing like an arrogant crow on AIM issue
– TOC: MND responds to Workers’ Party

– My Singapore News: Jeremy Chen – Nation Wide Town Council Management System
– Blogging for Myself: Technology to make govt more honest
– Thetwophilo’s Blog : We Need Real Political Leaders At The National Level
– Singapore Kopi Tok: The Town Council Finger Pointing
– Support Site for the Unemployed & Underemployed: Town council AIM saga – political implications for opposition and government
– Ravi Philemon: AIM saga – MND’s failure to distinguish politics from policies
– TRE: Did the Chief of Government Communications help draft Dr Teo’s press statement?
– [Old Post] Little Stories: PAP Town Councils – What A Fiasco
– TOC: AIM debate in Parliament: (Round 4) – Revisiting conflicts of interest?


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AIM, Customer Service and PAP Politics


Every morning, before opening hours we can see customers queuing outside banks, finance houses, CPF, HDB and other government offices. And inside the offices, staffs are sitting under the comfortable air-conditioning environment, talking, walking, laughing and ignoring customers waiting outside under the hot sun.

This is the typical customer service in Singapore. When you complain, the standard answer is ‘law-by-law’; we can only open at 8am, 9am and not early than that. Some offices or clinics are kind enough to provide chairs for early birds, but these facilities are placed outside the offices or clinics. You are not allowed to enter the premises to wait for services.

So, customers are not the kings in Singapore.   Putting money into the banks/finance companies, seeking legal or medical or other professional services, looking for government services, all these activities do not require quality customer services.  Or rather, customers are at a disadvantaged position begging for helps or assistances even you make due payments.

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Price Of A Patriot

If you require proof Khaw Boon Wan is no gentleman, read how he addressed Ms Sylvia Lim in his closing remarks of the MND Review "debate":

"This is self-righteous and - pardon me for saying so - arrogant. Many of us in this House have been serving Singapore for decades, long before she entered this House.  Please, don't behave as if you're the only patriot in this House."

It kind of sets you thinking. Firstly, the oldest man in the House already said Singapore is not yet a nation - patriots are normally associated with nationhood. Then there's this definition of a patriot as a person who loves, supports, and defends his or her country and its interests with devotion. But how can anyone honestly do that when our country has been raped beyond recognition by members in the House who have sold it out to foreign interests, and diluted the national core to a fraction of its original composition? Even the kids of the future generation are not spared the ravaging pillage and plunder of the rapacious horde.

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Khaw Boon Wan's Ministry of National Development clears the controversial PAP Town Council-AIM software deal, which PM Lee gladly accepts
Yahoo! News Singapore, 3 May 2013
A probe into the sale of the People's Action Party (PAP)'s Town Council management software to Action Information Management (AIM) has found no evidence of any misuse of public funds.

A report submitted to Prime Minister Lee Hsien Loong by the Ministry of National Development (MND) found that the controversial AIM deal had complied with the Town Councils Act and Town Council Financial Rules.

In its findings, the report stated that the main issue at hand was whether the interests of residents had been protected, if there had been a conflict of interest for the parties in the deal and if there had been any misuse of public funds.

In a press release Lee said that the government "accepted the findings". Full story
Related:

  1. PM Lee: I accept the findings of MND review – AIM deal is ok - TR Emeritus
  2. Hsien Loong accepts MND’s review on AIM - My Singapore News
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AIM not bidding for PAP town councils' tender

Action Information Management (AIM), which runs the People's Action Party (PAP) town councils' computer systems, will no longer operate the systems when its contract expires on April 30. It said on Wednesday that it will not participate in the latest tender exercise.

The arrangement between AIM, a company fully owned by the PAP, and the PAP town councils had caused controversy even though both parties had explained that the process by which the open tender was awarded to AIM was above board.

AIM Chairman S Chandra Das said: "Given that AIM had helped prepare the tender documents, it decided not to participate in the tender."

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Review of AIM deal good, but doesn’t that pose another conflict of interest?



On hearing that the Prime Minister had ordered a review by the Ministry for National Development (MND) of the business transactions involving Action Information Management (AIM), a company owned by the ruling People’s Action Party (PAP), my reaction was, “Isn’t the Minister for National Development Khaw Boon Wan also the chairman of the PAP, the entity at the centre of this whole controversy?”

It is a sentiment shared by some others as well.

“As AIM is a company that was set up by members of the PAP, is it in the public interest to task a Ministry that is headed by the chairman of the PAP to assess the integrity of its transactions?” asks activist Jolovan Wham in his Facebook note.

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WP need not have withdrawn motion

The Worker’s Party (WP) has withdrawn a motion to debate town council management issues in Parliament during the next sitting on 14 January. The nomination day for Punggol East by-election is 16 January.

In a statement released on Thursday, WP Chairman Sylvia Lim noted that the Prime Minister had indicated in a statement that he had directed the Ministry of National Development to conduct a broad-based review of the fundamental nature of town councils and also to investigate the AIM transaction.

She added that the goal of protecting the public and residents’ interests would be better served if the government investigation and review were to first proceed.

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AIM-ing for good - Tan Wah Piow (London)

The dealings of the PAP-owned company, Action Information Management (AIM), are simply indefensible and unacceptable.

This issue puts the PAP in a corner because:
(a) It makes no commercial sense to grant a contract of this nature where public interests are at stake to a $2 company regardless of whether AIM is owned by the PAP.
(b) The inadvertent admission that AIM is a ruling party vehicle only makes the issue a hundred times worst.
(c) Such revelations open up a big barrel of worms, and the public is justified in demanding a full list of PAP commercial vehicles.

In any democratic society with a free press, one would expect the mainstream print and audio-visual media to be saturated with critical articles, demanding satisfactory responses from the prime minister downwards.  Well, readers know more than me that this is not the case in Singapore.

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One landmine after another

If that was the case, there could be wider implications for the country should the PAP lose power to the opposition. Would the transfer of power be fair and smooth?

Or will the new government find itself deprived of services because they had been bought over by a political party?

This is why PM Lee’s order for a probe was warmly welcomed by most Singaporeans.

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Re-AIM the fundamental issues at stake

The developments in the Action Information Management(AIM) saga has taken on a rate that rival a Taiwanese drama. With rapid tos and fros between the Workers Party and PAP, it had sent thrown up revelations that are both melodramatic and shocking.

With the muddy waters stirred as the sequence of events are revisited, netizens and man on the streets have been sent reflecting about the state of affairs in the management of town councils in a one-party governed Singapore.

Fundamental to the entire sage is beyond the utilization of taxpayers funds for the development of IT system that was eventually sold to a PAP-controlled company; it is about understanding the principles of accountability(and the lack of it) and acceptability of public conduct.

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PM Lee asks MND to review AIM computer systems deal



Prime Minister Lee Hsien Loong has asked the Ministry of National Development (MND) to review the transaction involving Action Information Management Pte Ltd (AIM), the firm appointed to manage town councils' computer systems.

The Town Council Review Team will be led by MND's Deputy Secretary Mr Tay Kim Poh.

Read PM Lee's full statement below:

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AIM Affair: PAP Sec-Gen must take the ultimate responsibility

The PM is left with no choice but to convene an investigation. However, we are not going to see this as a separate matter to the subject of integrity. The questionable dealing in the AIM affair is a PAP issue, a party issue which the Secretary General must take responsibility for – like how it had called for LOW THIA KIANG to take responsibility for a party member’s personal infraction once.

Since the MND investigation is going to involve more public funds, we the citizens demand a role in the investigation process. What we do not want is for the investigation to run away with itself and along with the PAP members helming it.

As members of the larger society that is Singapore itself, as Singaporeans, we want to know every detail that had gone into the transaction which involved our monies, and for which it was handed over to a ‘private’ PAP political entity.

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ACRA and ROS should also clarify on the AIM-PAP saga

After much public disquiet about PAP town councils' sale of its computer system to AIM, a PAP-owned company, the Prime Minister has now called for a review of this transaction (link: http://bit.ly/13dEYzF). This Review will also look at corporate governance of the town councils.

I agree with PM Lee that there must be a review of corporate governance of town councils. The fact that the external auditors who audited the town councils' transaction with AIM did not flag the sale, must mean that the financial control policies of the town councils must be wanting, and do not reflect the high overall standards of corporate governance the general public expect from town councils.

The Prime Minister's admission that this review should fully scrutinise PAP town councils sale of the computer system to AIM, and satisfy itself that public funds were safeguarded and residents' interests were not compromised, means that Teo Ho Pin's 2 explanations (see http://bit.ly/10d8NkU and http://bit.ly/12XW44h) and Grace Fu's defense of the transaction were not up to mark, and were only fudging the issue.

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AIM-PAP Saga : White elephants, transparency and accountability

"The big fat white elephant in the room – which the PAP and Teo seem to have missed – is the issue of a conflict of interest in selling the intellectual property (IP) of software developed by the 14 PAP town councils and paid for, presumably, by residents or taxpayers, to a PAP-owned company run by three former PAP MPs." - Andrew Loh [Link]

The big white elephant is not just seen my netizens but by all ordinary people except for the PAP and their staunch supporters. Two days ago, highly respected ex-PAP MP and presidential candidate Tan Cheng Bock  question the sale of software to AIM:

"So did the town councils as public institutions do the right thing, selling (the system) to a company owned by a political party with its own agenda?" - Tan Cheng Bock.

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MND Review of the Town Councils: What This Really Means and the Implications

According to Today, “Prime Minister Lee Hsien Loong has issued a statement announcing that he has asked the Ministry of National Development (MND) to review the PAP town councils’ transaction with Action Information Management “in the interest of transparency and maintaining trust in the system”.

It is very interesting to analyse the statements that had been issued. To be very sure, you have to understand who the intended target audience of PAP is. After the PAP-Aim-AHTC episode, there are broadly 3 camps that have emerged. Two of the camps have existed for a while now, and has become more entrenched during the last elections – one camp is aligned to PAP’s policies while the other camp is the camp which disagrees with PAP’s current direction. There’s a third camp which has emerged from this episode – the fence sitters, or the undecided.

From the long drawn-out episode which has lasted weeks and where there were very clear and specific questions and raised and unanswered, there is a growing awareness among a group of Singaporeans that something isn’t right – why isn’t the PAP answering any of the questions posed by Singaporeans directly, or even at all? And so, there were some Singaporeans who had previously aligned themselves to PAP who are beginning to start questioning.

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Vindication of Goh Meng Seng’s point over the AIM saga


There is a need to separate our running of town councils from the electoral process

If I were to make an assertion 4 years ago in 2009 that our general electoral process to select law-makers should be made separate from town council issues, I suspect many may hurl brickbats at me. After all, it is true that hot trending topics surrounding our general elections do revolve around the town councils. Ask Chiam See Tong and he will tell you loads about the fire he went under when questioned about his former ward, Potong Pasir town council’s sinking funds.

Perhaps, we are used to thinking that general elections are about both national issues or policies and local estate plus town council issues. This is until one former member of the opposition, Goh Meng Seng, highlighted the problems in an interview with our current political system, that member of parliaments (MPs) are both town council or real estate managers and law-makers rolled into one. Goh doesn’t believe that one person should fulfill both roles and that there should be a two-tier system to elect a law-maker and another candidate to manage the town councils.
Voters are voting for legislators in parliament, not just local estate managers. The PAP has successfully confused Singaporeans about the real meaning of General Elections with the Town Council concepts. Most countries have two-tier elections in which they elect the local Town Councilors apart from their legislators in parliament or Congress. But in Singapore, the PAP wants to avoid the focus of General Elections to be set on National Policies which affect everybody so much so that they will always divert voters’ attention from the real issues created by their policies towards how good opposition members are in managing their HDB flats (scare cry about rubbish building up in their cutes) or attacking individual opposition candidates, making a mountain out of a molehill and flood the mass media with constant bombardment on opposition candidates’ characters. Real policy issues are rarely debated during General Elections in Singapore for the past 2 decades. – Goh Meng Seng
Fast forward to 2013 and one AIM saga later, we can begin to appreciate the merits of separating the role of a Member of Parliament from that of the town council manager. In fact, it will be best if the role of town council manager can be depoliticised. From a certain perspective, the Action Information Management Pte Ltd (AIM) saga showed the very worst side of the politicisation of town council management.

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Check and counter check. More drama to come on AIM saga

Just to set the record straight on the sequence of events, Workers Party Sylvia Lim has filed an adjournment motion this afternoon to discuss  ”Safeguarding the Public Interest in Town Council Management” at the next Parliamentary sitting starting Jan 14.

Interestingly, PM Lee Hsien Loong announced later in the evening that he had instructed the Ministry of National Development to  look into the AIM transaction to make sure public funds were safeguarded and residents interest were not compromised. The PM said the review will take a month or two.

Was it a coincidence that both announcements took place today? Or was the PM’s announcement a political move to counter  the upcoming grilling session in Parliament?


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The Singapore Auditing Standard Of AIM (and Olam) Is Beautiful But Not Enough

Motion First or Review First? Both AIM and Teo are lone defenders.

The AIM saga has reached a new stage and AIM and Dr Teo Ho Pin are now the only defenders.  No supports are given to them by the Prime Minister or the PAP Headquarters.  Look like the PAP wants to concentrate their forces on the defence of Punggol East by-election.

PM is now more interesting on fighting the real war of by-election rather than the paper war or conversation of AIM.  He wants to cut his association with AIM and has instructed the Ministry of National Development to review the town council management and the safeguard of public interest.

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He Blinked

The Prime Minister has asked the Ministry of National Development (MND) to review the controversial sale of a publicly funded software to a private politically linked entity "in the interest of transparency". It would be awkward to call in the Corrupt Practices Investigation Bureau (CPIB) as a blogger has already been threatened with a law suit for alleging corruption. The Auditor General is probably too busy with the passing of batons from outgoing Mr Lim Soo Ping, 62, to incoming Mr Willie Tan Yoke Meng, 57.

MND was involved when parliament was told in 2008 that 8 Town Councils (TC) had used $16 million of their sinking funds to buy toxic financial products from Lehman Brothers. MND then was tasked to come up  with a report to assess TCs' management of estates and funds. The stupid report ended up as a whipping boy to make the opposition wards look bad. Well, maybe not so stupid, it also opened up the Pandora's box that is the AIM scandal. It remains to be seen if MND's deputy secretary Tay and permanent secretary Lim will come up with something better.

The Prime Minister pointed out that none of the external auditors raised the sale as an issue.

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PM Lee calls for review of AIM transaction

When contacted, the WP said that Ms Lim yesterday filed an adjournment motion titled Safeguarding the Public Interest in Town Council Management for the coming Parliament sitting on Jan 14. Dr Teo Ho Pin, Co-ordinating Chairman for PAP Town Council, and AIM Chairman Chandras Das have mounted a stout defence of the transaction. Among other things, they gave detailed explanations of how the process was conducted and stressed that it was above board.

Dr Teo and Mr Das could not be reached for comment yesterday.

Political analysts TODAY spoke to said the explanations provided thus far were inadequate. Both Nominated MP Assistant Professor Eugene Tan and former NMP Siew Kum Hong felt the review should make clear how assets should be handled by town councils

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WP files motion to debate town council issue in Parliament

Town councils is set to be debated in the House when Parliament sits on Monday.

Workers’ Party chairman Sylvia Lim said that she has filed an adjournment motion for the next sitting titled “Safeguarding the Public Interest in Town Council Management”.

Members of Parliament file such motions when they want more time to tackle a particular topic. During the 90-minute long question time, the Speaker decides which and how many supplementary questions to allow.

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Taking AIM into the wilderness

The AIM saga is not going to go away. First impression, if it counts, is that it is in muddy waters. There are so many things that the general public do not think were right and the stench is getting foul as the days go by.

On the PAP side, several efforts were made by Teo Ho Pin, Chandra Das and a minister in Grace Fu to explain that everything is in order. Unfortunately the explanations only helped to muddy the water even more and people listening to the explanations are getting exasperated. It is something that cannot be explained away. It is like the proverbial elephant that is too big to be covered up.

Three presidential candidates in the last Presidential Election have all chipped in to air their dissatisfaction over the whole saga. This can only mean that they were in agreement that something is not right. The only presidential candidate that became the President has yet to say anything. Perhaps he disagrees with the other three and did not see anything wrong with the AIM. Until the President speaks, no one would know what he is thinking and his position on this matter. Maybe it is a matter that should not involve the President.

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PAP u-turns on claim that Town Councils are non-public institutions

The People’s Action Party (PAP) has made a complete u-turn from its earlier claim that Town Councils (TC) are non-public institutions with the calling of a “full review” on the transaction of the TC management software to Action Information Management (AIM) by Prime Minister Lee Hsien Loong.

In a statement released to the media today (8 January 2013), PM Lee said he has asked the Ministry of National Development (MND) to review the transaction in the interest of transparency and maintaining trust in the system, for MND to “satisfy itself that public funds were safeguarded and residents’ interests were not compromised”.

He said MND will take a broad-based approach, including re-examining the fundamental nature of town councils, with a view to ensuring high overall standards of their corporate governance.

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Comments on: PM Lee asks MND to review AIM deal (UPDATE)


PikuChoo 9 hours ago
Hopefully this will not be a white-wash just for show going through the motion process with the usual "move along now" conclusion. Thus far, the government's response to this whole affair, let's just call it AIMGate for brevity's sake, can be likened to the Delhi police initial response to the recent gang rape case: Indifference.

In AIMGate, the public's interest is being violated (gang raped if you will) and the few responses thus far from government minister/MP and especially those involved in the matter can be likened to saying that "she was asking for it".

PM Lee himself (until now) apparently had been too busy to voice a personal opinion but yet had the time to get his lawyer to bust a blogger for allegedly writing a defamatory post on the matter. I don't think it is the responsibility of external auditors to flag questionable transactions that are NOT of a financial nature as long as the figures add up.

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DEAR PRIME MINISTER: PLEASE CONVENE ANOTHER REVIEW COMMITTEE FOR THE AIM-PAP INVESTIGATION
PAP-AIM

I am concerned that you have just ordered the Ministry of National Development to review the transaction between AIM and the Aljunied-Hougang Town council.  As AIM is a company that was set up by members of the PAP, is it in the public interest to task a Ministry that is headed by the chairman of the PAP to assess the integrity of its transactions? Your decision to conduct an investigation via an arrangement that reveals a clear bias in protecting the interests of your party is deeply problematic. It shows that you and the PAP have not sufficiently acknowledged the key issues that have been thrown into the spotlight by your party’s mishandling of the issue so far.

The review that you have called for is not only unsatisfactory, it has also reinforced the deeply entrenched and widely known fact that some of the major institutions of this country are engaged in a self-serving and incestuous relationship. A stark and obvious example of this is the ‘you scratch my back and I’ll scratch yours’ habit among the Ministry of Manpower, NTUC and SNEF. The sycophantic relationship among the three reached its lowest point when the Secretary General of the NTUC, who is also a Minister in your office, Mr Lim Swee Say, announced embarrassingly to the whole world that he does not believe in the principle of equal pay for equal work.

The conflict of interest in the investigation has also been noted by others in the online community. Therefore, I would like to suggest that you call for an independent review committee to investigate the AIM-Aljunied Town Council issue. This will ensure that the entire process is fair, transparent and trustworthy. This episode has thrown up so many unanswered questions and deepened the mistrust between Singaporeans like me and your party. In order for you to improve public confidence in the review process, a committee comprising independent and respected members of society from the business community, civil society and the various political parties should be appointed to carry out the investigations.

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MND reviews TCs that it administers under the TC Act?

I refer to the report “PM Lee directs MND to fully review AIM transaction” (Channel NewsAsia, Jan 8).
This is a move which I think will be much welcomed by Singaporeans.

It states that “Town Councils are autonomous bodies managed by elected Members of Parliament and governed by the Town Councils Act which the Ministry of National Development administers.” 

Possible conflict of interest?
So, the MND is the body that is being given the sole task to review the town councils which are governed by the Town Councils Act which it administers? Does administering the Town Councils Act also mean that it may indirectly be concerned with administering the town councils?

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If nothing is wrong with AIM, why the need for review?

The heat is on. PM Lee has implicitly admitted that something's amiss in the AIM issue and it needs to be fixed fast. So he's calling MND to review the AIM transaction - which will take two months.... hardy har har.


"Two months is about right. Everyone will forget about the issue then. Hahaha haaaa..."

Really, if there is nothing wrong, why the review? Not to mention that all the issues brought up pertaining to AIM are currently unanswered. Add that to the point the results of the review is going to take two months, it looks like PM wants to sweep everything under the carpet - before calling a by election at Punggol East. That's if one is held in the first place.

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Continued from:


Town Councils Graded On Corporate Governance