Emotions remain high over NKF scandal

  Star, Malaysia
July 24, 2005

Insight Down South By Seah Chiang Nee

GENERALLY polite and predictable, Singapore’s predominantly one-party Parliament has rarely attracted public attention as much as it did last week, for a good reason.

Its two-day session was on the National Kidney Foundation scandal, which has angered many Singaporeans, and was taken seriously by the government.

Unsurprisingly, the interest was centred on what the government and Members of Parliament had to say about it.

The Health Minister was to explain the official position that could lead to erosion – or strengthening – of bonds between government and its people.

Prior to that, national TV had repeatedly announced the time of the live broadcast.

So when it came, virtually the whole nation’s focus was transfixed on Khaw Boon Wan as he made clear what he expected the new NKF team, the biggest charity in Singapore, to do.

People were also anxious to see if their elected MPs, 82 out of 84 of them from the People’s Action Party (PAP), would fairly reflect their unhappiness.

The emotions remain high. The controversy has moved across Singaporeans like a mini-tsunami, undermining their enthusiasm for charity, at least for the moment.

The foreign media saw it as a local story and gave it little play, so not many outsiders have much inkling of its tremendous impact here.

Two out of every three people – or more than 2,000,000 Singaporeans – have been donating to it for years to help poor kidney patients get their dialysis treatment.

The money comes from middle class Singaporeans, including the new unemployed who dished out S$5 to S$10 each time. A large number signed up to have their pay deducted every month. Three TV shows this year netted S$16mil, a phenomenal response for a weak economy. In one alone, some 500,000 people phoned in donations.

PAP backbencher and union leader, Halimah Yacob told Parliament that she felt “under siege” after the revelation of NKF’s lavish spending.

“At every union meeting I attended, I was besieged with a deluge of questions. There were many angry words, frustrations and, above all, a sense of betrayal,” she said.

“Many workers were outraged to find out that in 2003, during SARS, when some of them had to take no-pay leave or work reduced hours to keep their jobs, NKF CEO T.T. Durai was paid 12 months’ bonus – and all in the name of charity.”

One donor told the Straits Times: “Twelve months’ bonus! What planet or economy are we on that still pays out such bonuses?”

Another reader who had been jobless for 22 months but had continued to give to NKF wrote: “I have just terminated my miserable S$5 monthly donation to NKF ... completely smashed heart.”

One of the 40,000 petitioners against Durai simply said: “I’m so angry I cannot talk.”

More than 15,000 have cancelled their monthly contributions.

The replacement of Durai and the whole board by a new team has reduced some hurt and anger, but confidence is still low as people wait for changes to unfold.

Transparency, though important, is evidently the main complaint but there are others.

The Health Minister has stopped any campaigning pending an extensive review of the foundation’s governance, its reserves and mode of operations as well as pay system for its top executives.

The donors were the foundation’s real stakeholders and their views would ultimately count, Khaw said. He has emerged as man of the hour, articulate and rational.

While some MPs praised Durai for his fund-raising creativity, critics questioned his management ability, including reconsidering these points:

+ NKF had a staff of 1000 to care for only 1800 patients in 21 dialysis centres, considered too top-heavy.

+ Under him, the foundation collected S$67.3m in 2003 but spent only S$7.1mil on patients. Life-sustaining dialysis costs S$2700 for an average patient, but he has to fork out 80% of it.

With a large size, S$260mil in reserves and objectives (it wants to help cancer patients), the foundation, it is felt, cannot be run by volunteers pleading for small funds house to house. It looks like the glitz type of mass fund-raising using paid professionals, TV stars and lucky draws with huge prizes, which was pioneered by Durai, is likely to continue.

That could mean paying its top executives like corporate chiefs using the basis suggested by Khaw when he ended the session.

He said the board should come up with an appropriate pay policy based on performance and it must be able to defend it publicly.

“It may not be wrong to incentivise performance of fund-raisers based on funds raised.”

Singapore has put in place a culture of high salaries for leadership in all arms of the government, including Cabinet leaders and civil servants, as well as government-owned businesses.

The large institutional donors will probably find it acceptable to see this culture extended to charity. But it is hard to predict how ordinary Singaporeans will take to the idea.

Some individuals may resent seeing their money for the needy being used to pay corporate salaries.

In recent years, Durai’s fund-raising blitzes had also a negative impact on many smaller charities run by volunteers who were not in it for the money. They see some hope that some of the disengaged funds would migrate from the foundation to their causes to help needy Singaporeans.

o Seah Chiang Nee is a veteran journalist and editor of the information website littlespeck.com