WP told it must act to recover public funds

WP told it must act to recover public funds
Low Thia Khiang from the Workers' Party (WP).

Leaders of the People's Action Party called on the Workers' Party (WP) yesterday to take all necessary steps, including legal action, to recover public money from its managing agent company, FM Services & Solutions (FMSS).

Charging that its Aljunied-Hougang-Punggol East Town Council (AHPETC) had paid FMSS fees that were $1.6 million more each year - over the past four years - than what other town councils pay, the PAP leaders said in Parliament that the WP must conduct a forensic audit of its accounts.

These actions, said National Development Minister Khaw Boon Wan, would be the "right thing to do" if the WP truly supported the motion before the House.

This motion, which endorsed the Auditor-General's Office (AGO) findings of serious lapses at the only opposition-run town council and called for stiffening the law regulating town councils, was unanimously endorsed by all 85 MPs present, including the nine WP MPs, after a debate that totalled seven hours.

Thirteen MPs spoke over two tense days.

The AGO's scrutiny of AHPETC was the first national audit of a town council and came after the WP's own auditors could not give it a clean bill of health. "Mr Low must walk the talk. Demonstrate your sincerity through real actions," said Mr Khaw, referring to WP chief Low Thia Khiang.

Earlier in the day, Mr Low said the WP MPs took collective responsibility for the accounting and governance lapses, and that they would rectify matters.

He said the WP had no choice but to accept FMSS' higher charges because no other managing agent company would bid for the business, for political reasons. But PAP leaders yesterday said the debate was fundamentally about the WP's integrity.

Education Minister Heng Swee Keat (Tampines GRC) said the WP had "betrayed the trust" of AHPETC residents, and rejected its argument that inexperience in running a big town council accounted for some of its lapses.

"How much experience do you need to know that you cannot be handing money to your supporters at the expense of overcharging your residents?" he asked.

In several heated exchanges, Mr Low and WP chairman Sylvia Lim sought to explain why FMSS' fees were 20 per cent higher than those of the previous managing agent hired by the PAP in Aljunied GRC.

FMSS is majority-owned by AHPETC's general manager and secretary, a married couple who are long-time WP supporters.

Building on speeches by WP MPs such as Ms Lee Li Lian (Punggol East), who told the House that contractors would not work with them when the constituency changed hands, Mr Low said only FMSS submitted a bid, making its fees the market rate that AHPETC faced when it took over the GRC.

"These rates were through an open tender. But the environment is such that there is no one tendering for the job. Nobody wants to work for me. That is the problem, Prime Minister!" he said, directing his explanation at PM Lee Hsien Loong, who was seated across the aisle from him.

Ms Lim said the WP had done due diligence into FMSS' bid. While at "the high end", it included an IT system from scratch. They also took into account that FMSS was a small company without the economies of scale other managing agents enjoyed, and thus faced higher costs, she said.

PAP MPs called the lack of bids issue a "red herring", as there are town councils who directly manage their towns without hiring managing agents, like Bishan-Toa Payoh GRC, said one of its MPs, Mr Hri Kumar Nair.

He and other PAP MPs took aim at what they described as the WP's "blase" and "arrogant" responses to the charges.

Mr Khaw wrapped up the debate by asking the WP to "take ownership and do their duty".

"If they cannot even run a town council well, how can they be entrusted with the even more critical responsibility of running the country?"



"I am very concerned about the pattern in which the WP has betrayed the people's trust. It has a consistent pattern of denial, deflection and protection of its managing agent, which suggests a serious rot is happening."

- Education Minister Heng Swee Keat, accusing the Workers' Party (WP) of lacking integrity in dealings with managing agent FM Solutions and Services (FMSS), owned by key officers of the WP-run town council


"Why should the WP be let off easy just because it is the opposition? And why should its residents be forced to accept anything less than full accountability? This cannot be the right way forward."

- Mr Hri Kumar Nair (Bishan-Toa Payoh GRC), on why the WP town council must be held to the same standards as other entities that have been audited by the Auditor-General's Office


"If in the public tender for our managing agent contract there is more than one tenderer, that would be easier... Unfortunately, the environment is such that there is no one tendering for the managing agent job. Nobody wants to work for me. That is the problem, Prime Minister!"

- WP chief Low Thia Khiang, on why the WP town council paid its managing agent higher-than-average rates


"In a situation where FMSS is a tenderer in a tender called by the town council, (it) is kept at an arm's length and a (Chinese) wall is built between FMSS and the town council... At no point does FMSS make a decision on who to award the contract to."

- Mr Pritam Singh (Aljunied GRC) of the WP, disputing allegations about possible conflicts of interest involving the WP town council's managing agent FMSS

This article was first published on Feb 14, 2015.
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