By Kenneth Jeyaretnam

The Auditor General’s Report for the financial year 2011/12. arrived in the President’s in- tray in July of this year and is now publicly available.   The  objective of the report is stated clearly in the mission statement that precedes it.

“MISSION

To audit and report to the President and Parliament, in accordance with the law, on the proper accounting of public moneys (sic) and use of public resources so as to enhance public accountability.”

It’s a long report almost all of it vital and essential but my attention was drawn  in particular to Part 1B which is an audit of Government Ministries, Organs of State and Government Funds.  Astonishingly the AGO observes that the MOF breached Article 144 of the Constitution.

Under  the heading, ” Ministry of Finance,  you will find the report headed: President’s Concurrence Not Obtained for Promissory Note issued….. 

On 04th January 2012 the Ministry of Finance issued a promissory note for US$16.34 million to the International Development Association.  The International Development Association, by the way is the soft lending arm of The World Bank. By soft lending I  mean that it lends money on concessionary terms to the poorest countries. By  concessionary terms I mean it virtually  gives the  money away. In March of this year the IDA encashed US$2.94 million from the note.

Again let me make this  clear just as I did with the case of the IMF loan. The problem is not the Association (IDA) or the end recipient of the monies. I am not against The IDA  or its mission per se and Singapore needs to be a player on the global stage.  Also, as I said in my second affidavit,  it is equally clear that the sum of money involved is also not material.

The problem with this promissory note to the IDA (which may be a loan or an outright grant) is that the MOF breached Article 144 of the Constitution. Isn’t this what I have been saying all along about the IMF loan?

You can read the full report here.

Page 16 says:

“The Constitution of the Republic of Singapore (1999  revised edition) includes safeguards to protect past reserves of the Government.  One such safeguard, set out in Article 144, requires the President’s concurrence  for the granting of certain loans and guarantees. 

AGO found that the Ministry of Finance did not comply with Article 144 of the Constitution when it issued a promissory note without obtaining the  required President’s concurrence. (sic)”

The Audit clearly pulls the MOF up for breaching the Constitution. It seems the MOF breached the Constitution and gave away our money, blatantly ignoring any requirement for a safeguard.

The AGO’s wording is interesting here. Note,  he doesn’t separate loans and guarantees and interpret it to be  the raising of one versus the giving of the other. This report merely states that the President’s concurrence must be obtained for “the granting of certain loans and guarantees. “

You will be familiar with the Indonesian Loan case from 1997 by now.  If the Auditor -General is correct here then the Attorney General who pronounced in the 1997 loan to Indonesia case was wrong.  I always thought so and have often thought  that my upcoming  IMF case would be very embarrassing for him. The validity of the Indonesian loan rationale after all, has never been tested in a Court of Law. Interestingly that Chief Justice from 1997, Mr. Chan Sek Kheong announced a couple of days ago that he was stepping down.  He will be 75 in November anyway but this will save him from having to recuse himself from my case.

So how was this Constitutional breach  allowed to happen? The Minister (of Finance) gives two excuses in the report for the breach of the Constitution

1. It wasn’t me it was an administrative oversight by an officer who wasn’t familiar with the procedures because we don’t give away money that frequently.

2. It didn’t come from our past reserves anyway, it came from the MOF operating budget for the financial year 2011/2012.

So, that’s how it happened. Let’s move on. What happens subsequently when a Minister (or his Ministry officer)  breaches the Constitution as he did here ?

Well according to the audit  the original promissory note had to be declared invalid. It was scrapped and the MOF subsequently issued a fresh one, this time with the obligatory Presidential concurrence.

According to the AGO, the Ministry then reviewed internal processes following the report’s findings and tightened its standard operating procedures to prevent similar occurrences in the future.

So let’s get this clear. An officer in MOF unknown to the Minister,  gave money away to a foreign organisation from out of  his Ministry’s general operating budget and in breach of the Constitution. When this breach was thrown up by an audit the President signed off on it retrospectively and procedures were then tightened. I wish life was always that simple.

Here is some of what is missing from the report.

  • The Ministry of Finance says there was no draw on past reserves as the money came from  surplus in their own operating expenditure budget. As far as I know any unspent money in the budgeted operating expenditure of Government Ministries stays in the consolidated fund as money not drawn upon.   I can’t see any category in the amount allocated for operating expenditure budget that covers giving money away to foreign lending bodies. Maybe it is covered under the category, International public relations and Communications?
  • The IDA Act section 4  allows for subscriptions or a promissory note in place of a subscription to be given to IDA on behalf of the government. The Act states, “The total subscription to the Association shall not exceed the sum of US$1 million unless increased  with the approval of Parliament signified by resolution.”   The AG only speaks about the President’s concurrence NOT having been obtained. When and how was Parliamentary approval for the US$16.34 million obtained? Where does the authority for the larger sum of money come from?
  • The original promissory note was invalid. If the original note was invalid so was the encashment.  Did the IDA therefore repay the encashed US$2.94 million from the note?
  • The IDA encashed US$2.94 million but where would the money have come from if they had encashed the whole amount of US$16.34 million?  A promissory note is the same as a bank-note and allows the whole amount to be encashed at any time. US$16.34 million is about 2.5% of the total operating expenditure budget  of the MOF. Since when did we allow our Government  Ministries to under spend by US$20 million and then to give that money away rather than return it to State coffers?
  •  How could a Minister failing to obtain Presidential concurrence and  committing a basic breach of the Constitution, thereby rendering the President’s role as a safeguard redundant  be dismissed as an administrative error?
  • What happened to the Officer responsible for the oversight and doesn’t the buck end with the Minister?
  • What does the President intend to do about this?  Is he satisfied with the Minister by -passing him and is he satisfied that the new tightening of operational procedures will prevent this occurrence in future.
  • Presumably the new procedures came into place after the encashment of March and after the publication of the report in July. Does this mean that the new tighter operational procedures weren’t in place when the IMF loan was pledged in March this year?

All of this makes me feel very uneasy . Even when the President’s approval is unequivocally required it appears that it can be simply be overlooked until at the end of the financial year an audit throws up the constitutional breach.   The same due constitutional process must be complied with as mandated under the constitution whether it be for $1 or as in the case of MAS a potential $300 billion under management or in the case of the GOS a minimum of $705 billion; which monies, any and all, belong to the people/citizens of the Republic of Singapore. Here we are dealing with a more manageable US 16.34 million.  True, it is considerably more than the sum involved in the folding bicycle debacle and considerably less than the sum in the IMF loan case. But is is still our money and the MOF and Parliament need to account for it.

This article first appeared on Kenneth Jeyaretnam's blog here.

You May Also Like

URA: S'pore retail, office rents dropped in Q1 amid pandemic

According to the data released by the Urban Redevelopment Authority (URA) on…

南海捕非法渔民 印尼军舰与越南海警船相撞

本月26日,印尼军方在南海抓捕非法捕鱼的越南渔民时,遭两艘越南海警船拦截,其中一艘越方海警船撞向印尼护卫舰。 据法新社29日报导,本周一印尼方面已专门就此召见越南驻印尼大使。印尼外交部之厄泽越南海警的做法,威胁双方公务人员生命安全,不符国际法,有违东盟精神。 印尼方面声称,本次事件发生在印尼专属经济区海域。碰撞发生前,印尼护卫舰拦截了一搜越南渔船,该渔船涉非法捕鱼,随后该舰遭到越南海岸警卫队船只的撞击。 冲突造成涉事渔船沉没,印尼方面则扣留12名渔民,据称目前被关押在一个海军基地,“等待进一步法律程序”。 另有两名渔民跳水逃跑,被越南海警船救走。值得注意的是,双方发生碰撞的视频在社交媒体上传开。视频显示,越南海警船主动撞上印尼海军护卫舰。随后,印尼海军士兵持枪与越南海员进行对峙,并使用木棍等工具击打越南海警船。印尼海军军人怒飙脏话。 美联社则援引印尼海军第一舰队司令部司令马戈诺的声明称,事发地为印尼“北纳土纳海”水域,(2017年后,印尼为声索主权,给南海最南端海域更改的名称)。他同时说,越南也对该水域声讨主权。 据法新社报道,2014年以来,印尼一度采用清空非法捕鱼船再将其炸沉的办法遏制非法捕鱼。不过近几个月则上述措施遭暂停。 不过印尼渔业部长29日宣布,该国本周末就将恢复这种做法,具体计划为在5月4日炸沉51搜被捕获的非法捕鱼船,其中大多数为越南籍渔船。 以下为源自法新社的剪接视频:

Candlelight vigil in solidarity with Hong Kong for democracy

A candlelight vigil will be carried out this coming Wednesday at Hong Lim…

疑贬低狮城食物 马国麦丹劳椰浆饭宣传片引争议

一则广告若弄不好,会引起两国国民争议,马来西亚麦丹劳就是最好的例子之一。马国麦丹劳推出椰浆饭广告,其中含有贬低新加坡椰浆饭不如马国的好吃,马来西亚国民没兴趣食用该国椰浆饭的内容,令两国网民在网上大吵起来。 马国麦丹劳最近为新推出的椰浆饭做宣传,两周内推出了四则广告。其中一则30秒的宣传广告中,就有 “新加坡和马来西亚椰浆饭大对垒” 的意思。 广告中,一名新加坡男子带着心仪的马来西亚女子,到新加坡小贩中心用餐。女子当时手中还拖着行李,似乎刚刚抵达新加坡。 男子当时用两包纸巾“霸占”好位子后,就到名为“新加坡最好吃椰浆饭”的摊位排队,为自己和女子购买了椰浆饭。 岂知女子看到食物后,仅礼貌性地笑笑后将椰浆饭退给男子,随后就掏出一包标记着“马来西亚制造”的椰浆饭,开始享用。片尾时,女子成功引诱到男子,却不让对方试吃。 广告叙述文写道,“到充满诱惑的外国去,马来西亚人是否能够抵制诱惑并坚持自己所喜欢的东西呢?” 有刻意丑化国人之嫌 该广告引起网民的争议,狮城网民怒斥这是在玩弄国家主义,并且认为自家的椰浆饭绝对不比马来西亚的差,也更具特色。 马国网民当然也不会善罢甘休,直接回敬说马国美味的椰浆饭随处、随时可得。 我国网民表示,有关的广告有些部分令他们决定不满和不恰当,比如用两包纸巾“霸位”、排队时抢先一步排在其他人前面等,似乎在暗喻新加坡人“怕输”行为,甚至怀疑该广告有刻意丑化之举。…