TOC Editorial: The problem with the AIM case, and what YOU can do

By TOC Team –

The People’s Action Party’s (PAP) historical dominance of Singapore politics and government has always rested on the twin pillars of efficacy and incorruptibility. Its record of economic progress since independence is undoubtedly impressive, while winning a global reputation for zero tolerance for corruption.

While 2012 has rocked the establishment with a series of sex and corruption scandals, the PAP, both as the Government and as a political organization, has tried to respond robustly to these in an effort to maintain its aura of incorruptibility.

Which makes its weak and opaque comments about the sale of the Town Council Management System to the PAP-owned $2 company Action Information Management Pte Ltd even more striking.

While so far there is nothing to suggest that any individual had corruptly received personal benefits from this entire transaction, it does not follow that the information currently available shows that the transaction was completely unquestionable.

Indeed, there remain many unanswered questions that the PAP seems to be trying to sidestep. This threatens to cause the simmering controversy to boil over and undermine the PAP’s longstanding claims to accountability and incorruptibility.


A seriously flawed tender process?

Most of the questions to date have rightly focused on the propriety of the tender process and the role of AIM. Much has already been written by others, and we will not rehash those unanswered questions here.

But the latest revelations about the tender notice actually published in the Straits Times on 30 June 2010 (see here for TOC’s coverage) make us wonder whether there was a genuine effort to attract a broad range of competitive bids.

At best, the tender notice demonstrated unimaginable incompetence on the part of the PAP Town Councils; at worst, it begs for more investigation and more information to clarify why this tender is different from the Nparks Brompton bicycle fiasco.

The PAP has also admitted that AIM is owned by the party. This begs the question of exactly how the PAP Town Councils, led and controlled by PAP MPs and their appointees, managed and resolved the glaring conflict of interest in awarding the contract to a PAP-owned company when there was only one bid.

The Town Councils presumably did not even seek an independent valuation of the TCMS, since Dr. Teo Ho Pin, the coordinating chairman for the PAP Town Councils, has said one of the aims of the tender exercise was to value the software.

The question of valuation is of fundamental importance, because the TCMS was developed using HDB residents’ funds, which are essentially public monies. The PAP Town Councils, as custodians of public funds and assets, have a duty to their residents to use those funds and assets in the residents’ best interests, and to extract maximum value from the assets if they are being disposed of.

So the disposal of a public asset like the TCMS must be properly handled to ensure that the public is not shortchanged. When the people in charge of the sale (the PAP MPs) are from the same organization that owns the purchaser (AIM), the Town Councils must spare no effort in ensuring that it is done on an arms-length basis and everything stands up to scrutiny.

One glaring question that the PAP has not explained is why it was necessary or desirable, or in the interests of the residents, to sell the TCMS in the first place.

Commercial entities do sale-and-leaseback exercises to convert capital expenditure into operating expenditure; this is a legitimate financial engineering exercise to improve the balance sheet.

But Town Councils are not commercial enterprises and do not have financial metrics like profitability and return on equity, and so have no need for such exercises. Tellingly, the PAP does not appear to have even attempted to explain why it undertook this exercise in the first place.

For instance, if this exercise was to save money for the Town Councils in the long run (which may well be the only acceptable reason for such an exercise), then it would have been the easiest thing for Dr. Teo to share the cost saving projections used when the Town Councils deliberated on AIM’s proposal. Instead, we get nothing.

Dr. Teo can keep repeating his assertion that the tender process followed the applicable “financial regulations”, but the available facts raise many questions that he and the PAP have so far chosen not to answer.


The PAP’s seriously inadequate response

The PAP’s response to this controversy has been entirely lacking, especially when contrasted with the Government’s robust response to the Brompton bike scandal and the PAP’s quick action when it learnt of Mr. Michael Palmer’s affair. In those cases, the responses were decisive and information was relatively openly shared.

But when it came to this case, all Singaporeans got were statements from Dr. Teo that were long on bare assertions and short on the details that we really want. Instead, Dr. Teo keeps talking about the Workers’ Party (WP) supposed desire to terminate their contract with AIM. This is particularly strange, given that Dr Teo has put it on record that AIM did in fact terminate the contract with the Aljunied-Hougang Town Council. So whether or not the WP had wanted to terminate the contract with AIM was moot, because AIM had struck first.

Singaporeans want answers as to how public assets and public funds have been used by the PAP Town Councils; instead, we get irrelevant comments about a non-issue.

The obvious outcome, of course, is that the controversy continues simmering, coming ever closer to boiling over as more and more troubling information surfaces, when a straightforward and open response would be far more effective in reassuring Singaporeans about how the Town Councils administer public funds and public assets.


What Singaporeans can do

Singaporeans are not powerless in all this. Besides keeping the spotlight focused on this case that the mainstream media has conveniently chosen to forget, Singaporeans can do their part in getting us all closer to the truth. It’s important to do this, because it is our money that is involved.

TOC calls on all affected Singaporeans living in HDB estates in PAP constituencies to write to their PAP MPs, to ask for a full and proper accounting about this case. Here is a simple step-by-step guide on what to do:

  1. Find out who’s your MP here: It will take you 2 clicks after you key in your postal code to find the email address, but you will get it.
  1. Compose an email to your MP. Please add in the “cc” field, so that TOC can track the number of emails sent to MPs.
  1. Use “Your resident’s questions about the AIM case” as the subject-heading. You can use a different subject-heading, but using this subject-heading will help us to track numbers better.
  1. You can copy-and-paste the text below to get you started, and then amend as you like. For instance, you can replace “Member of Parliament” in the first line with the name of your MP.
  1. Sign off with your full name per your NRIC, and your address. You can use a partial address (e.g. “Block 123, Pasir Panjang Street 45”) if you like, but ideally there should be enough information to show that you are in fact the MP’s constituent. You may, but do not have to, include your NRIC number.
  1. Send the email to your MP, cc-ed to TOC as described above.
  1. If you receive any responses from your MP (or his/her representatives), they are likely to omit TOC. So please make sure to forward all responses (even if it is just an acknowledgment receipt) to TOC.

This is our suggested text for sending to your MP:

“Dear Member of Parliament,

I am your constituent. I write to you to seek more information on the controversy surrounding the sale of the Town Councils Management Software to the PAP-owned $2 company, Action Information Management Pte Ltd.

As a HDB resident in a constituency managed by a PAP town council, I am affected by this transaction, either because my money was used to develop the TCMS or because the sale of the TCMS to AIM could affect me in future. As my duly-elected representative and a member of my town council, you have a duty to account to me on how my money has been spent or how I will be affected in future.

My questions are set out below:

  1. How much did my town council pay to National Computer Systems to develop the TCMS originally?
  1. Why did my town council decide to sell the TCMS to a third-party in the first place? Did the town council discuss this decision to sell the TCMS? Please provide to me a copy of the minutes of the town council meeting (or at least, a copy of the portion of the minutes dealing with this) where this decision was made.
  1. Who were the other 4 companies, other than AIM, who obtained the tender documents?
  1. What due diligence did my town council do on AIM, before awarding the contract to AIM?
  1. What protections are there in the contract with AIM, to ensure that it could properly deliver on its contractual obligations? For instance, was a performance bond or bankers’ guarantee required from this $2 company?
  1. Was the fact that AIM is a PAP-owned company disclosed to my town council? If so, how did my town council address the conflict of interest, when AIM submitted the only bid for this tender?
  1. Was National Computer Systems, who originally developed the TCMS, asked to participate in the tender?
  1. Did my town council know that AIM would engage NCS as a sub-contractor? If so, why did my town council not decide to cut out the middleman (i.e. AIM) and simply renew its contract with NCS?

Please let me have a response as soon as practicable, and in any event within 30 days of my email. Thank you for your attention to this matter.”

TOC hopes that all Singaporeans can work together, to bring some more clarity to this case. We deserve a full accounting from the PAP on this case.


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