Monday, 10 December 2012

Corruption: Public perception far more powerful than stats

Corruption: Public perception far more powerful than stats
By Chua Jui Meng

 JUST take the latest Corruption Perception Index (CPI) released by TI-Malaysia, on behalf of Berlin’s Transparency International, with a pinch of salt.
The TI finding is derived from statistics provided by the Malaysian government. This is why Malaysians find TI’s announcement that the country’s CPI had improved unbelievable.
Also, there cannot be a compatible comparison with the previous year’s CPI report because the scoring system this year had been revised. A comparison would likely be misleading.
I need not dwell into the hundreds of financial scandals exposed over the years by the media and political parties to prove my point. Also, many of the fiascos are backed with credible evidence.
I only need to highlight five high profile examples. But, before I state the cases, let me first take you back to 1983.
The first billion-ringgit financial scandal in Malaysia, which came with a murder suspense, unfolded in 1983. Do you remember what it was?
It’s the Bumiputra Malaysia Finance (BMF) financial scandal cum murder of its internal auditor Jalil Ibrahim who was found dead in a banana grove in Hong Kong in July 1983.
The federal government had to bailout BMF three times to a tune of RM2.5 billion to keep it afloat.
After 29 years, has anyone been punished for the financial scandal? Has anyone been convicted for the murder?

Now I wish to highlight the five high profile cases:
Ø Does anyone know why Mongolian interpreter Altantuya Shaariibuu was murdered, despite the convictions of two police security officers who served Prime Minister Najib Abdul Razak and his wife? Why is the Barisan Nasional (BN) government so fearful of the French court’s ongoing probe on alleged corrupt practices over Malaysia’s Defence Ministry’s purchase of two French-made second hand Scorpene submarines at an inflated price of RM6.7 billion?
Ø How did former Women, Family and Community Development Minister Shahrizat Abdul Jalil’s family secure a RM250 million cattle breeding project from the government without any experience and failed the project, but spent tens of millions of ringgit buying condominiums, luxury cars, land and failed investments, etc;
Ø How businessman Michael Chia was caught carrying RM40 million in Singapore currency in Hong Kong and then claimed that the money belonged to Sabah Chief Minister Musa Aman who then claimed that the money was a donation to Sabah Umno;
Ø No plausible explanation by Prime Minister Najib Abdul Razak on the Global Financial Integrity Report that over the last decade, Malaysia’s illicit capital outflow was the fourth largest in the world amounting to RM1.08 trillion! Similar results were also found in a study commissioned by Tax Justice Network (TJN), a London-based organisation of professionals including economists and tax consultants; and
Ø Disclosure of the Manser Bruno Fund of Sarawak Chief Minister Taib Mahmud’s family wealth at RM65 billion which begs the question of what is the true wealth of Umno’s prime ministers from Mahathir Mohamad onwards and their top leaders.
Just these five examples are enough to tickle the funny bone of Malaysians and laugh until their ribs hurt to hear that the country’s CPI has improved by moving up six places to 54.
The fact that the TI findings are probably based on statistics provided by the federal government is enough to raise biasness.
The assertion by Pemandu that Malaysian crimes had gone down, based on government statistics, also gave us a good placing in the World Peace Index.
When this was announced, the people rebutted by showing that crime had actually increased based on their own experience and of the perception of the people.
Obviously the report was based on police’s own statistics which the people did not believe and rejected outright.
Both government and the police had to withdraw and agreed with the overwhelming public outcry.
Now, even a retired inspector-general of police, Musa Hassan, is disputing the police force’s crime statistics and also made damning accusations that ministers had interfered in police work and investigations.
The TI finding would have been more credible if it was based on independent surveys conducted with the public.

The following are two reports reproduced for those who want more details on the issues raised:

Thursday, 06 December 2012 12:15
POSER FOR NAJIB: Has M'sia really done better in the Corruption Perception Index?
Written by  Ramon Navaratnam
It is arguable whether Malaysia has really done better in the latest Corruption Perception Index (CPI) released by TI Malaysia , on behalf of Transparency International in Berlin .
As the TI - CPI Report states clearly , the scoring system this year has been upgraded . Hence it cannot be accurately compared to last year's scoring. Thus it can be misleading to highlight the claim that Malaysia has moved up 6 places to number 54 this year, compared to the ranking of 60 last year .
Furthermore Malaysia scored 49 out of 100 marks for this year . This is below the half mark of 50 thus placing Malaysia amongst the 2/3 of the 176 countries surveyed ,that have serious corruption problems .
So how can say that we have improved . If at all we have improved , then it is a very insignificant improvement , which does not deserve all the praise bestowed on this dubious success.
Indeed it is disappointing that after so many Government initiatives through Macc and Pemandu to combat corruption , we are not making much headway to improve the universal perception that we have a high level of corruption in Malaysia .
More disturbing is the TI Briber Payers survey which indicates that we scored the worst score at 50 % of respondents who `failed to win a contract or gain new business because a competitor has paid a bribe ``in the last 12 months !
This is very damaging to our image especially to the foreign and domestic investors and our overall perception of well-being and the new Happiness Index that we plan to introduce in the national budget .
All this begs the question as to why we should go so far to pat ourselves on the back for perceived success when we should be ringing our hands in concern and do much more to fight corruption ? Being unduly optimistic can in fact become counter-productive as we can become unnecessarily complacent and lose the war against corruption.
But perhaps there could be some misconception or misunderstanding on the part of TI Berlin in their analysis of our corruption ? It may be that local and foreign contractors fail so badly to get contracts and new businesses, because of our official preferential treatment that we widely practise in the award of Government contracts for goods and services ?
Therefore I would urge Pemandu and TI Malaysia therefore to take this matter up with TI in Berlin to set this bad record straight .
Could also our low scores in combatting corruption , be due to our relative lack in our success to fight Grand Corruption , which includes the Big Fish that get away ? We seem to be more successful in catching the small fish or Ikan Billis - and this is most unfortunate , as it sends the wrong signals to the public !
But there are lessons to be learnt . Now that we know how poorly we are assessed by TI Berlin, even with the new revised CPI , we need to introduce much stronger measures to fight Grand Corruption .
We need to raise our sense of urgency and political will , to go all out to fight corruption or we will surely lose out in improving our quality of Governance , our Quality of Life and Happiness and also our prospects to achieve Industrial status by 2020 !
Tan Sri Ramon Navaratnam is a retired top civil servant & past president of Transparency International Malaysia

Trail that led all the way to the PM: Lorrain takes BMF secret to the grave
Posted on August 11, 2011
In the eyes of the world, former Bumiputera Malaysia Finance chairman Lorrain Esme Osman, who died in exile in London on Monday was an unknown banker until the day, one of his auditors, Jalil Ibrahim, turned up murdered in July 1983 in a banana grove in Hong Kong.
Lorrain, 79 and a Eurasian from Penang and an ex-Christian, eventually took the initial rap and pleaded guilty in London in 1993 under a plea bargain to a charge of financial negligence in giving unsecured loans to the tune of RM 2.5 billion in the 1980s to George Tan, a Sarawakian who headed the Carrian Group of Companies until it collapsed like a house of cards.
Even now RM 2.5billion is a huge sum to embezzle and take out of the country without any involvement of top government leaders. The Malaysian financial system makes this virtually impossible, and more likely than not, such deals are transacted on behalf of the top politicos of the day.
It is a sad reflection that nearly 30 years on, and Lorrain finally passed on, the wheels of corruption are still busily rolling in Malaysia. The system has not changed but instead grown dramatically much worse. Most glaring is the Scorpene submarines graft scandal involving Prime Minister Najib Razak and spanning three countries, Malaysia-France-Mongolia.
Malaysians should indeed take a moment to reflect on this or another 30 years might pass, with the jury having no choice but to point out that corruption has worsened even more. If that happens, Malaysia would surely be in receivership and this is another reason why its citizens should wake up now and tackle the scourge of corruption with strong action. The wheels of time truly wait for no one, as Lorrain will attest to.
Trail that led right up to the PM
When Jalil was found, the only thing linking him to Malaysia was a coin caught in the lining of his trousers. He had no wallet or ID of any kind on him but a colleague had apparently reported him missing 24 hours earlier.
The Hong Kong Police got their hands on Jalil’s personal diaries and some letters which revealed that he had stumbled on something big by way of financial irregularities at BMF.
One Hong Kong Independent Commission Against Corruption (ICAC) officer asked Lorrain: “You have been fighting all this while for the benefit of others. Isn’t it time to do something for your own benefit?”
So a deal was concluded. As Lorrain would not plead guilty to corruption and certainly not to all the 43 charges, the Hong Kong prosecutors suggested the one single charge of financial negligence, which Lorrain finally accepted.
Lorrain, who had fled to London in 1983 to avoid being extradited to Hong Kong, spent two months in Stanley Prison in the British crown colony before being released. He had in fact already served six months at the Lai Chi Kok Detention Centre while awaiting trial, and another four months for remission. The ICAC submitted over 30,000 pages of evidence against Lorrain to the British High Court, the Court of Appeals and finally to the House of Lords.
The Carrian Case is the longest criminal case in Hong Kong judiciary history spanning over 17 years at a cost of HK$210 million and with over 4 million pages of exhibit.
Lorrain’s guilty plea closed the file on a long-running case. He continued to claim innocence upon his release and was dismissive of Jalil but nevertheless conceded, rather disingenuously, that “there was a lack of supervision and oversight at BMF” under his watch. He ostensibly never returned to Malaysia where the suspicion is that he was protecting the other culprits involved in the BMF financial scandal. The trail, it’s widely believed, led right up to the Prime Minister, who was then Mahathir Mohamad.
Siphoning money
George Tan, the story goes, was just a conduit to siphon money out of BMF. No proof was ever produced anywhere that the massive loans taken from BMF were entirely for the purpose of doing business. Instead, blame was placed on the collapse of the Hong Kong property market for the loans going sour.
Between Dec 6, 1985 when he was arrested at his London home on a provisional extradition warrant from Hong Kong until he was jailed for two months in 1993, Lorrain fought a long and costly legal battle for 90 months from Brixton Prison to remain in London. He took on the Home Office and complained to the European Commission of Human Rights. He launched several habeas corpus applications and judicial reviews, appealed to the House of Lords several times and put in several bail applications.
Meanwhile, the public lost all hope of ever seeing other culprits behind bars, Lorrain, Tan and smalltime businessman Mak Fook Than – convicted of Jalil’s murder – and three other BMF directors aside.
Mak’s lengthy 24-paged statement about his “ministerial business” trip to Hong Kong went missing during the trial. During his interrogation by the Hong Kong police, Mak claimed that he was in Hong Kong at the behest of a senior Malaysian Minister to collect “some money” from a Malaysian national residing in Hong Kong. He denied having said so after the disappearance of his 24-paged statement.
Lorrain had in one public interview in London hinted at the possibility that Jalil was being blackmailed by Mak “who wanted more”. That’s akin to saying that the blackmailer wanted the goose that was laying the golden eggs, dead. In fact, investigations into the Jalil murder revealed that Lorrain was “holidaying” in Hong Kong at the same time that the BMF auditor met his grisly end.
Another favourite theory floated by Lorrain in public was that “someone wanted to embarrass the Malaysian Government” and thought that one way would be to do in Jalil, presumably the banana stretch in Hong Kong being equally embarrassing. He was once reported as saying he suspected a Russian diplomat who was caught spying in Malaysia and sent home. But by that stage, one could be forgiven for expecting Lorrain to claim that the Ku Klux Kan, the Mafia, Mossad and the CIA were all suspects in Jalil’s murder.
But whichever individual or group that financed his exile in London and all the expensive trials and court appeals are another mystery that perhaps only some senior top leaders in the Malaysian government with privileged information will ever know. – Malaysia Chronicle