Tuesday, 1 September 2015

The Story of FMSS: More than meets the eye

More to it than meets the eye: the story of FMSS

The numbers speak loudly enough for themselves – FMSS and its owners have clearly managed the TC to their own advantage and profiteered from it. In all, $3 million dollars in salaries, fees and profits last year– crazy margin - three dollars out of every S&CC ten dollar spent on the MA is sheer profit and benefits for the 4 owners. What adds insult to injury is that while they got paid big bucks, they didn’t even deliver a basic standard of administration and financial system to past muster under the TC’s own auditors. Four years this went on until the AGO audit exposed the mess the TC was in. Then Sylvia Lim finally had to step in and try to clean up the mess.

What is really difficult to comprehend is Sylvia Lim’s defensive reactions over FMSS. Each time, the TC screwed up – which means FMSS screwed it up - as highlighted by their own auditors, she will defend the FMSS with spurious and some plainly, false assertions.  When all else fails, she hide behind the argument that their relationship with FMSS is purely commercial and the contract was awarded via open tender bla bla bla. When AGO found a case of FMSS having misled the TC which wound up paying 40 % more than was rightly the amount, she trivialised it as a mathematical error and even took personal responsibility as Chairman of the TC for the “mistaken overcharging” by FMSS. Now when confronted this week with the glaringly obscene profits that the FMSS owners made off the TC, she dismissed it and declared there has been no overcharging by FMSS. 

The latest distraction she is trying to throw smoke with is that the Government shouldn’t look into all these things (even if it involved public monies) and that all this is an abuse of Government power. Are you kidding? As an elected MP, she has a legal duty to manage the TC conscientiously and safeguarding the residents interests and monies is at the heart of that.  No different from the Government, namely MND which oversees the TCs under the TC Act. This  duty of the office - of the elected MP of AHPETC and of the Minister for ND - requires that no stone be left unturned and that no one looks the other way to find out if residents have indeed been short-changed and overcharged by FMSS. The public has a right to know what the hell happened in the 4 years that the FMSS ran the TC, laughing to the bank but leaving behind such a huge rotten mess brewing under the façade of efficient enough cleaning services and other visible activities, which lull residents to believe that everything in the TC is hunky dory.

When you research and trace the facts, the picture that comes out tells you that there is more to FMSS than meets the eye. I have no doubt that FMSS was set-up at the initiative of the WP leaders. It was incorporated on 15 May 2011,  13 days after the GE; preparation for incorporation – collect/submit forms and getting lawyers to draw up incorporation documents - probably occurred at least a week before that. All this happened before CPG spoke to Sylvia expressing wish to terminate their service as the MA. In an interview reported in Straits Times (19 Aug 2011), Sylvia revealed that CPG asked to be released from their MA contract in “late May”

Ms How and her husband, Danny, long time supporters of the WP, were trusted aides who ran Hougang TC. They managed to put up almost $500,000 in a jiffy as paid up capital for the new company. And most telling, the company was set up as a “limited exempt private company” which means that its annual accounts need not even be submitted to ACRA . Completely out of public scrutiny.

There was obvious pre-meditation and strategy by the WP in the formation of FMSS. They had a hand in forming it, more than they have disclosed. To be fair, they had just won a GRC and were obviously nervous about trusting the CPG who had been running the TC under the PAP. They needed to rely on their own people. The FMSS was a WP trusted and WP aligned entity from the point of its creation. In my view, there is nothing wrong with what they did, even if they chose to keep it secret. No big deal, they did what they had to do. This is politics, man.

The story however starts to go bad after FMSS took over running the TC and ran it to the ground. Ms How, used to being her own boss under Low Thia Khiang in Hougang, ran AHPETC like the way she ran Hougang. Sylvia Lim had little control over her even when Ms How behaved in a rude and disrespectful manner to her - there was little she could do about it. But the truth it, Sylvia was quite happy not to have to deal with boring, mundane stuff like running a TC. She had her sights on higher things, they were on a roll, everyone in the WP was politically high. So no surprise, that in the same ST interview reported in Aug 2011, she assured that the party can run the TC and has set aside the first 6 months after the GE to focus on the TC and after that “ a few months down the road, we will start to think about the next general election and the new areas we would like to contest”

Four years passed – disclaimers piled up each year by their own auditor – FKP - as the TC under FMSS couldn’t even produce a clean set of accounts. I recall that the High Court Judge Quentin Low said that in another setting, this state of affairs would have led to civil if not criminal sanctions. What FMSS was guilty of was incompetence and greed. What Sylvia and her fellow WP MPs were guilty of was negligence arising from the arrogant belief that running a TC was no big deal. She had assured voters that the WP can easily run a GRC TC and were ready.  She thought she could have the challenge of running a GRC TC done in 6 months and then just focus on politics.

This under-estimation of the complexities of a GRC level TC management and over-estimation of the experience and expertise of FMSS is the root of why things went so wrong in AHPETC. This is why Sylvia assumed that the PAP’s AIM IT system contract would not be renewed and never bothered to ask; indeed like FMSS, the WP preferred to have their own system over which they had total control. Sylvia asked AIM for short extensions to get her own system going and this was acceded to; she even thanked AIM at the end of it all. But when things go wrong because of FMSS incompetence (even manual records got lost and couldn’t be traced), Sylvia blamed AIM. When their own auditors raised a list of growing disclaimers, Sylvia blamed “handover issues” implying that George Yeo fixed them up – this was a constant and tiresome refrain until debunked. The fact is the “handover” of documents and records was between the CPG and FMSS held under the supervision of the TC with Sylvia at the helm. Poor Georgie boy had nothing to do with it. I heard that when CPG left after a proper handing over records with FMSS signing for all documents received, Sylvia hosted a big makan to thank the CPG folks for staying back and handing over properly to ensure a seamless transfer. (Sylvia’s reflex to deflect and blame others seem deep seated.More recently she blamed deficits in the past to MND withholding their grants – the facts are completely the opposite! AHPETC TC was in deficit for those years when they had the full grants (FY 12/13, FY 13/14)  and they reported an operating surplus for FY 14/15, the year when the grant was withheld!)

When the AGO auditors went in to do a special audit of the TC , they were horrified to find that the TC’s archival and record system consisted of a room full of piled up boxes overflowing with documents.  No proper record keeping and many missing records, some conveniently so for FMSS as related third party transactions were found to be an issue by the AGO and even later by the TC’s own auditors. What was Sylvia and her MPs doing during all this time?  To be blunt, they had been sleeping on the job, underestimated the challenge of running a GRC TC and trusted the wrong people to do it but who screwed them. The only problem is because the monies are all residents’ monies, the ones who got royally screwed are the residents of AHPETC and many of them till today don’t even know it.

Sylvia makes a fine speech about the duties of MP looking after the TC. During the 2011 GE, she assured the voters that she and her team have the experience to run a GRC TC – no fear.  But the truth is she didn’t bother to spend any time looking after the TC. Hubris led her to presume that she could just oursource her duties to look after the TC to a trusted MA like FMSS and focus on cultivating her political ambitions. Indeed I recall seeing her on stage pleased as Punch when her fellow MP, Pritam Singh commended her to the rally audience as a political leader with Prime Minister material (aiyoh ).Some of you may recall it too. (Anyway the bloody PAP machinery makes sure you don’t forget it by running the footage ad nauseum on the social media.)

A word on the FMSS people. I know that there is no love loss between Sylvia and Ms How. Danny who died suddenly has been a victim of sorts too. By all accounts, he was a nice man and it is really quite nasty of Sylvia of constantly press him for recovery of monies and when he agreed, changed her mind to demand for even more. ( A FMSS staff told me that Danny was a good boss and FMSS a good and fair employer). As a lawyer Sylvia should have worked through proper legal channels but she wanted to do it confidentially for political damage control reasons and so she kept putting pressure  Danny personally to cough up more monies on the grounds of overpayment due to poor service. ( This is completely at odds with  Sylvia’s public assertion later that payment according to contract cannot be overpayment!) Sylvia of course didn’t dare to deal with Ms How as the fiery woman would probably have kicked her in the groin ( slapping is reserved only for use by WP candidates J).

I have always thought that Sylvia was a nice  damsel and Ms How was the bad egg; but I have revised my view since researching this story – Ms How is abrasive, hot tempered and cantankerous, a  rough diamond, but what you see is what you get. Sylvia is really a devious character (maybe politics have changed her) and she has shown herself to have no compunction to lie in your face. She is of course under great pressure too because she is left to shoulder this AHPETC-FMSS mess by herself and some of her fellow MPs have clearly distanced themselves from her on this issue.

Anyway back to the story: a  business is driven to make profits; it is not a charity. So I suppose one can argue that there is really nothing wrong for FMSS owners to pursue profits; they are not obliged to save for the TC. On the other hand, it is the elected MPs whose job and duty it is to oversee and manage the MA and ensure that they don’t profit at the expense of the residents. No checks, no balance. The WP MPs failed in their duty because the buck ends with them – final responsibility for managing the TC rests with them, the elected MPs. 

The Government wants to do a forensic audit of the 4 years of TC accounts when the TC was run by FMSS. Eventhough Sylvia has found instances of overcharging and was exposed trying to recover monies from FMSS privately, she resists any such forensic audit.

I am glad that Sylvia has finally took charge of TC affairs since Mar this year. But she must stop “protecting” FMSS in order to exercise political damage control to avoid the public knowing just how much their friends have screwed them and the residents, right under their noses for four years.

The PAP is not going to win back Aljunied this GE. You can bet on it. No need for Sylvia to be so kiasu and kiasi. Do the right thing even if the truth turns out to be inconvenient politically. Because in the long run, you will be politically stronger for it.

It is time for Sylvia to take ownership and not keep on sweeping this FMSS-TC episode under the carpet. Afterall she has taken the first steps already and have as reported in her latest audited accounts cleaned up the shit and improved the situation. She cannot pretend not to have an inkling of what a mess she is left with in the TC, she cannot pretend that the last 4 years under FMSS didn’t happen. Time to step up and do the right thing. Do a forensic audit and get it cleaned up once and for all.

“The bottom line is this: We are responsible to ensure that the town runs well. The managing agent is employed for their professional expertise, and they have to deliver ….We are quite well aware of the need to be careful with these monies which come from the residents and also from government grants. We will definitely want to protect these monies” (Sylvia Lim, ST 19 Aug 2011)

I believe Sylvia Lim meant these words when she said them then. Time for her to go back and live by them and stop ducking the problem.

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