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

Minister for National Development Khaw Boon Wan is also the chairman of PAP (AFP photo)

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.

“Your decision,” he adds, referring to the Prime Minister, “to conduct an investigation via an arrangement that reveals a clear bias in protecting the interests of your party is deeply problematic.”

While the order to “review this transaction fully, and satisfy itself that public funds were safeguarded and residents’ interests were not compromised” is a welcome move by the prime minister, he could have done better by making sure that the agency doing the review was manifestly independent and seen to be so.

The review, which is expected to take a month or two to complete, is being undertaken by the MND’s town council review team, headed by deputy secretary of the ministry, Tay Kim Poh. The team will report to the ministry’s permanent secretary, Benny Lim.

While one can be sure that the team will do a professional and thorough job of the task assigned to it, this is a particularly special case, one would argue, which requires a higher degree of independence in the public’s eyes.

As the issue at the centre of the controversy involves the business transactions of the 14 PAP town councils with a PAP-owned company, it is reasonable to expect to see some distance between the review committee and the chairman of the party whose business dealings are the subject of the review. Otherwise, the apparent or perceived conflict of interests would or might cast doubts on the review itself.

“After all, if there was anything untoward in the transaction, shouldn’t MND have spotted it in the first place? It’s like telling MND to go through self-criticism,” Bertha Henson wrote on her blog.

As such, the review team should consist of non-PAP, non-MND personnel. “[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,” Wham suggested.

I agree.

The controversy over the AIM-PAP issue is one of a conflict of interests. With MND heading the review of the business transactions, another conflict of interest, perceived or otherwise, has apparently emerged.

The PAP itself
Questions have also been raised about other PAP-owned companies which the party “decline[d] to comment on.”

It is unclear if the MND review will look into questions and matters such as this.

It is thus perhaps necessary that the PAP subject itself to public inquiry or be more forthcoming about the number of companies – for-profit or otherwise – it owns, the nature of their businesses, and who helm them.

In the area of politics and political finances and financing, there must be openness and transparency. This is what the government itself has always reiterated and insisted. Even socio-political blogs get gazetted by the Prime Minister’s Office for the same reasons.

So, the same standards and expectations of openness must be forthcoming from the ruling party – especially, as this AIM-PAP saga showed, PAP-owned companies may have a direct impact on the well-being of residents and the operations of town councils.

As the prime minister himself said, in convening the review of the AIM transactions and the fundamental nature of town councils, the “interest of transparency and maintaining trust in the system” must be safeguarded, and “residents’ interests… not compromised”.

In the same spirit as the prime minister’s hope of “ensuring high overall standards of corporate governance in TCs”, the same high standards of professionalism and independence should be expected of the MND review team, and indeed of the PAP itself, as far as being open and transparent about its business dealings are concerned.

One feels that the PAP must not hide behind this review by the MND and instead take its own initiative to answer the many questions which the public has about its business dealings.

The PAP does not have to wait for the results of the MND review to be released before doing so.

It can start by disclosing to the public the number of companies it owns.

Andrew helms publichouse.sg as Editor-in-Chief. His writings have been reproduced in other publications, including the Australian Housing Journal in 2010. He was nominated by Yahoo! Singapore as one of Singapore's most influential media persons in 2011.

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