NKF scandal
Ripples widely felt
It undermined Singaporeans’ generosity and faith towards charity giving and good governance. By Seah Chiang Nee.
Jan 13, 2007

SINGAPORE’S biggest charity scandal has emerged from a three-day court hearing with ringing reverberations that could affect Singapore and its people for years to come.

It has already undermined the generosity and faith Singaporeans feel towards charity donation, which has run into hundreds of millions of dollars in recent years.

The revelation has also eroded some of the people’s faith in the government’s system of self-checks to monitor official corruption and abuse of power (“we don’t need opposition to do it”) – especially when it comes to handling public funds.

Both will take some time to restore.

The abuse of power and lavish spending of charity money had already been documented.

It was revisited this week when the National Kidney Foundation (NKF) brought – and won – a suit to recover some S$12mil (RM27.4mil) from its former CEO T.T. Durai for breaching his duties.

It accused the flamboyant lawyer, who had run the foundation (once with funds of S$200m) for many years, of “hypocrisy, cynical pattern of deception, subversion and dishonesty.”

On the third day, the politically connected Durai, who was once endorsed by several top political figures, threw in the towel and admitted liabilities.

The outcome was less important than the details that emerged.

The government is still revered as largely non-corrupt, but the case has shown that when trust is placed on the wrong person, the public has a high price to pay.

The ripples are widely felt, affecting some two million donors. Two out of every three Singaporeans had contributed to the fund, which is to help needy kidney patients get dialysis treatment.

The contributions ranged from thousands of dollars each to blue-collar workers agreeing to deduct one or two dollars from their monthly wages.

The anger is therefore wide ranging, compounded by the endorsement given to Durai even when there were public signs that things were not quite right.

Two ministers backed him against public complaints of unmatched statistics, with one of them later admitting that “I was fooled.”

And when donors were shocked to hear that the CEO had paid himself S$600,000 a year, the wife of Senior Minister Goh Chok Tong said that “it is peanuts” for someone who ran such a large operation.

This week the court heard that he (and several executives) had operated a slush fund, overspent charity money in the millions, cooked statistics to lure donors and overpaid himself without board approval.

The NKF lawyers said he had run the foundation as his personal fiefdom, exercising unquestioned powers.

That such a thing could happen in squeaky-clean Singapore shocked many people. “It’s a national shame,” said a professional.

(It was earlier revealed that only 10% of every dollar had gone to healthcare; Durai had claimed it was 51%.)

The episode has not ended yet. The NKF is assessing costs and a hearing on it will take place in a year’s time. Durai may also face more criminal charges. Several of his colleagues are also facing related suits.

A political analyst said the Durai case has, to some extent, altered Singapore’s political and social landscape.

“Singaporeans have become less trusting of government assurances. Some are now questioning whether a stronger independent checking system is needed,” he said.

Many more have stopped donating to charitable institutions and are even calling for an audit on government bodies operated outside public purview.

A common question is: “How many other Durais are lurking undiscovered in Singapore?”

One forummer said on the Young PAP website: “It is a big shock to see formerly highly regarded people treat large public organisations like their backyard in such a brazen way.

“I wonder if there are heads of other large and somewhat public organisations behaving in this way.”

A large number of Singaporeans have stopped donating to the NKF despite the fact that it has been reorganised and is now run by a new team whose actions and accounts are more open.

People are waiting to see if the government is pressing criminal charges on those involved after this week’s hearing.

“Unlike profits, donations are money given to a charity and not for the CEO to spend it on personal luxury or on business deals with companies set up by him,” noted one letter writer.

Another wants to see him in jail for what he has done as an example to others. “There are more than sufficient grounds to prove corruption and fraud to cheat the NKF to convict him.”

Given the strong public awareness of his political connections, any failure to prosecute may bring further repercussions to the government.

At the moment, he is charged with submitting false invoices with the “intent to deceive” the NKF to make claims for services that were not rendered, an offence under the Prevention of Corruption Act.

It carries a maximum fine of S$100,000 (RM228,500) and a five-year jail term.

Some members of the public, however, pay a grudging respect for a rare talent who has succeeded is raising such a huge amount of money from so many Singaporeans.

“I couldn't help but to pay my highest respect to the man who could mobilise hundreds of people to work willingly for him,” he said.

He would surely have been hero-worshipped, not hated, if he had not gone bad.

(An expanded version of the article published in The Star on Jan 13, 2007).