Corruption
A mixed outcome
Government corruption declines but private sector fraud shoots up. By Seah Chiang Nee
Apr 19, 2005

How has Singapore's record in the war against corruption fared in an
economic decline?

During the era of prosperity, the city-state had gained a reputation
as one of the world's least corrupt countries, but since then some
fundamentals have changed.

Businesses and people's assets fell and unemployment rose. Have these
trends made Singaporeans greedier, more ready to accept - or give -
bribes?

I thought about this when I opened a tabloid newspaper last week and
was confronted with this tell-all headline, "Want to smoke? Just $320.
Prison officer jailed six months for smuggling in tobacco and giving
three packs to prisoner."

The financially-hit officer had tried to make some quick money by
helping a prisoner to beat the smoking ban.

Earlier, two policemen - one a station inspector - were arrested for
accepting S$13,350 payments, disguised as loans from triad members "to
leave them alone".

Then came a big fish. Former armed forces scholar (part of a small
elite) Eng Heng Chiaw, 46, was hauled into court last week to answer
charges related to a helicopter bribery scandal.

Eng was alleged to have offered S$500,000 to a Singaporean defence
ministry official for details of a rival bid for the contract being
sought by the European Aeronautic Defence and Space Company.

The contract was for six naval helicopters, which the Singapore
government eventually awarded to America's Sikorsky Aircraft Corp.

The trial was held behind closed doors. The project was classified and
subject to the Official Secrets Act.

Last year, a top army officer, Lt Col Ong Beng Leong, was found guilty
of accepting false quotations from a contractor for work in training
areas.

The hard times have raised the anti-graft workload but not in the
number of cases actually prosecuted.

Last year 14 civil servants, including statutory board employees, were
charged with various offences compared with 32 in 2003.

In fact, the number of corruption cases has been cut in half in the past five years, a period of economic stagnation.

"Because of the low level, many Singaporean youths today don't know
what graft is," an official said. "They don't know what 'coffee money'
is or why people elsewhere should pay it."

The anti-corruption authorities have stepped up secret projects in the
more vulnerable departments, like police, immigration, Customs and
prisons.

These operations, with exotic names like "El Dorado" and "Deep Snow",
have weeded out bent policemen in vice, illegal gambling and loan
shark operations.

A number of immigration officers were also caught helping people who
overstayed. Also caught were some narcotics agents.

Being small, of course, helps. A corruption record could mean not
being able to work again. In a recession this could be a death
sentence. People are careful not to take risks.

Fighting graft has been one of Singapore's top achievements. A global
watchdog, Transparency International, last year ranked Singapore as
the world's fifth least corrupt country - behind Finland, New Zealand,
Denmark and Iceland.

Tough laws and strict enforcement were not the only answer; more
important is the public role. Many people are intolerant of graft and
make great whistle-blowers.

But the private sector is another story. Lately it has been hit by one
scandal after another, involving directors or executives of large
listed companies.

In the largest cheating case in history, Chia Teck Leng, former
finance manager of Asia Pacific Breweries, was jailed last May for 42
years. He pleaded guilty to cheating four banks out of S$117mil.

Other big headline investigations into possible fraud or insider
trading were launched into these listed companies:

Singapore's Accord Customer Care Solutions,
Citiraya Industries,
Informatics Holdings,
Auston International,
Leong Hin Holdings and
Greatronics Ltd.

The rash of problems is unusual for Singapore. It has been promoting
itself as a regional financial centre for South East Asia with high
standards of corporate governance and efficient market regulators.

It is still trying to limit damage from the biggest scandal since
rogue British trader Nick Leeson felled Barings bank, ordering an
inquiry into a S$550mil derivatives loss by a Chinese company.

Singapore's white-collar crime unit is investigating China Aviation
Oil (Singapore) Corp, which supplies a third of China's jet fuel,
after it disclosed the losses caused by bad bets on oil prices.

The disclosure highlights a lack of transparency at some China-related
companies listed here. Many Singaporeans were burned as the shares
plummeted.

"As the market starts to open up, these risks are becoming a lot more relevant for investors and authorities."

They are also serving to dent Singapore's reputation.

Transparency International said the activities of some international
companies in Singapore are a classic textbook case of how much
international corruption is operating.

Part of the blame is the globalised market. More companies are listed
here whose foreign activities cannot be easily checked until it is too
late.

Bribery and white-collar crime in Singapore are generally not driven
by poverty but by greed.

With almost no natural resources, smallish Singapore has always
regarded integrity as an ingredient for business confidence. If
foreign investors see the people as lacking in trustworthiness, they
will stay away.

Much depends on the civil service. To keep it honest, the government
has paid the political and bureaucratic leaders one of the highest
salaries in the world against public unhappiness.

The fight is likely to become tougher, not easier, as the new
generation is in a greater hurry to go places.

"Singapore is a consumerist society where money is god," a local
businessman said. "More people will be taking short cuts in making
money."

The economy gets more complex, borderless and driven by higher
technology that is not easy to control or supervise.

Now with the two approved casinos likely to change lifestyle, the anti-corruption authorities will have a harder time.

Singaporeans are not easy people to persuade to hand over their money.
A recent global survey has shown Singaporeans as a less trusting
people than others in China, Japan and the United States.

Only one Singaporean in four would help when approached by a stranger
to lend S$20 because she had lost her wallet. Fewer than two in 10
Singaporeans feel that people can be trusted.

This cynicism may not serve as a social asset but it could remain a
powerful force against corruption.

(This article was first published in The Sunday Star on April 17, 2005)