Minister Mentor Lee is a modern-day visionary and a unique statesman who is respected world-wide, and it is a privilege for Citigroup to benefit from his understanding, insights and experience. I am honored that Minister Mentor Lee has chosen to be a special advisor to Citigroup and look forward to having the opportunity to work closely with him as we pursue our international growth strategy.” (emphasis added)
Few Singaporeans really cared when the announcement was made. How can anyone take issue with such an accolade especially one coming from the world's biggest bank? In fact, then DPM Lee Hsien Loong lauded his father's appointment in Parliament in 2000 when he pointed out that Lee Sr's roles in these corporations would help to promote Singapore globally.
Mr Lee holds the position of Minister Mentor now as he did in 2006 when he was appointed Citi's advisor. This much is clear. What is ambiguous is whether Mr Lee holds the Citi portfolio in his official capacity as Minister Mentor representing Singapore or whether he does so in his personal capacity as a citizen, albeit a prominent one.
There is no mention of Mr Lee's role in Citi in his profile shown in the Singapore Government's website which leads one to think that these extra-ministerial appointments are a private matter.
But Citi's 2006 press release (and JP Morgan's website) trumpets the fact that Mr Lee is the Minister Mentor of the Republic of Singapore and makes no qualifications that he is serving in a private capacity.
The ambiguity raises the following questions as naturally and necessarily as the day follows night:
- Does Mr Lee receive remuneration or compensation monetarily or otherwise from these positions that he holds? If so, how much? Does Mr Lee get to keep the income?
- In return, what is expected of Mr Lee in terms of the time he spends attending to the business of these corporations?
- What kinds of information is expected from Mr Lee as an advisor and what sort is provided? Is the cabinet fully informed of the discussions that Mr Lee is involved in with these companies?
- Do our ministers also hold such appointments in companies, foreign or domestic? If yes, which ones and in what capacities? If no, why not, since MM Lee does?
What is more disturbing, if that's actually possible, is that these questions have never been asked of the PAP Government in any meaningful manner. Ministers, MPs, state journalists, etc have this uncanny ability to not notice the hyperactive, rainbow-coloured gorilla jumping up and down, screaming and poking them in the eyes right in the middle of the living room.
Maybe the reticence is because it didn't cross anyone's mind that there is actually something called conflict of interest. Be that as it may, that was then and this is now. The now is when we learn that in January 2008 the GIC, chaired by Mr Lee, had poured into Citigroup S$10 billion of our funds.
It transpired that GIC made the investment after it received an "invitation” from Citi to invest in its equity. GIC dove in because, according to its deputy chairman Dr Tony Tan (who, by the way also controls all the Singaporean newspapers as chairman of the SPH), it was "well within the risk limits which we had prescribed for the finance sector.”
Not only were the risks reasonable, Dr Tan assessed, Citi was a "sound bank..temporarily facing significant problems. But their franchises are strong".
Nine months after Dr Tan made the endorsement Citigroup announced that it was on the verge of bankruptcy and needed bail-out money from the US Government. It received US$25 billion – the biggest bailout in history. In November, it came back for more and got another US$20 billion. The bank was staring into the abyss with a potential loss of US$306 billion in toxic assets.
If the US Government had not stepped in, and there is every possibility that the bailout could still fail, Citi would have collapsed and our $10 billion would be no more. (If it's any comfort, our money spread much good cheer among the many millionaire executives of the bank.)
How can a sound bank with strong franchises collapse in just nine months? Did everyone at GIC skip class the day the teacher went through the chapter on Citi's troubles?
More important, did Citi seek its special advisor's advice before it approached the GIC for funds? If it did, what was the advise given? When the GIC received the invitation from Citi, what went into the decision to go ahead with the investment? Did Mr Lee's position in one organisation affect the decision made in the other?
The conflict of interest is too jarring to even contemplate.
Now consider this: When former Senator Hillary Clinton's name was put up for the post of US Secretary of State, there were concerns that she could be influenced by big donors who gave to her husband's presidential foundation. As a result former president Bill Clinton suspended day-to-day responsibilities at the foundation, revealed the identities of all his donors and the amounts they gave, and promised to clear future donations with the White House. And he's not even the one holding office.
But, of course, this is Singapore. Conflict of interest is defined a little different here.
Incredible as it may seem the GIC still refuses to explain its decisions or open up its books for scrutiny or even tell Singaporeans how much it has lost in its investments. Obviously, the Government is a little shy about revealing such information. The question is: Should the people be shy about demanding it? (16 Feb 2009)