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Special Editorial

12/31/2015

 
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In this time of festivities and giving, we would like to close the year with a focus on the issue of transparency in financial management in charitable organisations. The recently concluded 3-year trial of City Harvest Church has gripped much of the public attention and we would like to start by drawing parallels with the previous high profile case involving National Kidney Foundation.

1. National Kidney Foundation saga​

In August 1997 and December 1998, NKF volunteer Archie Ong and aero-modelling instructor Piragasam Singaravelu respectively were hauled to court separately for defamation when both said that T.T. Durai had been flying first class. The former mentioned in April 1997 that the NKF “squandered monies” in a casual conversation with former chairman of NKF’s finance committee Alwyn Lim, while the latter has claimed that he had personally seen Mr Durai in Singapore Airlines’ first-class cabin. Both paid an undisclosed amount of damages to the NKF, and apologised.

The Straits Times then published an editorial “NKF: Controversially ahead of its time?” on 19 April 2004, written by senior correspondent Susan Long. This article became the subject of the dispute, and eventually the lawsuit that led to the scandal. Durai and NKF challenged the first six lines of the article, which claimed that a retired contractor (who declined to be named, for fear of being sued) had ‘lost it’ when he was asked to install “a glass-panelled shower, a pricey German toilet bowl and a (S$1,000) gold-plated tap” in Durai’s office. The tap was said to have been replaced later with a different material.

NKF shortly issued a letter of demand for an apology, retraction, and payment of damages from the paper’s publisher, Singapore Press Holdings (SPH), within 24 hours. Four days after the article’s publication, NKF and Durai served a writ on Long and SPH for defamation, demanding S$3.24 million in damages. They claimed that the six paragraphs in the article implied the mismanagement of donors’ funds, that the installations were scaled down only due to the contractor’s protests, and that it had avoided providing further details on that matter.

The focus of the scandal turned to the revelation of Durai’s S$600,000 pay, which caused widespread feelings of outrage, anger, and betrayal among the public.

Durai was formally accused of having submitted false invoices between 2003 and 2004 to the NKF to make claims for various consultancy services which were never rendered. One invoice was for $20,000 and the other, $5,000. Durai was said to have misled the charity by using the false invoices "knowingly . . . with intent to deceive (the NKF)". Anyone who uses a false or erroneous document, which to his knowledge is intended to mislead, is guilty of an offence under Section 6(c) of the Prevention of Corruption Act.

On June 11, 2007, Durai was eventually found guilty of misleading the charitable organisation with a falsified invoice of $20,000 which was allegedly for interior design consultancy work done by David Tan, director of the design firm. The invoice, dated December 29, 2003, was meant for work done for various dialysis centres. For this, Durai was sentenced to three months in jail on June 21.

On May 30, 2008, he lost the appeal as Justice Tay Yong Kwang said Durai "was in a position of trust and authority at the NKF and the return of the money only came about after investigations into the invoices were underway."He added that the "money in question belonged to a charity whose funds come from well -meaning trusting donors".

2. City Harvest Church Scandal​
​

In 2003, it was a businessman Roland Poon who first alleged that City Harvest Church (CHC) church funds were being misused to finance the music career of Ms Ho, the wife of CHC founder Kong Hee.Mr Poon eventually retracted his statement and apologised, but his comments set off a chain of events leading to the criminal charges.

A number of formal church members recalled how they were strongly encouraged to divert their tithes and donations to music production company Xtron to fund the mounting expenses of Ms Ho’s US album. Apparently, ordinary church members who donated to the church, the building fund and the Crossover Project had sacrificed their own well-being in the process, some even only eating biscuits and downgrading their flats to save money so that they can donate more to the church.

The senior leaders of City Harvest Church had control and considerable influence over Xtron, the management firm handling the music career of church founder Kong Hee's wife. Xtron had intended to use the money to pay for the production of Ms Ho's United States album and then repay the debt with album proceeds. City Harvest Church (CHC) loaned $13 million to Xtron over two years - but repayment of the loan was never formally documented in the company's cash flows.

The court found 6 senior leaders guilty of funnelling $24 million in church building funds into sham bond investments to bankroll the music ambitions of Kong's wife, Ms HoYeow Sun.Later, they used a further $26 million to cover their tracks.

Ms Ho reportedly lived in a S$28,000-a-month rented apartment in the Hollywood Hills estate where famous Hollywood celebrities were her neighbours when she moved to Los Angeles for her music career.

Furthermore, Kong Hee and his wife had misled a small group of donors who had been supporting the livelihood of the couple.  Kong had apparently struck himself off the church payroll in 2005. Kong did so by showing the donors ‘false accounts’. The money was channelled to a multi-purpose account (MPA) a trust fund that comprised personal donations – called love gifts – from about 40 of Kong’s closest supporters.

The MPA was used by Kong Hee and his wife for their personal expenses including travel, medical bills, hair and make-up. Later, investigations showed Ms Ho and Kong had been withdrawing more than $400, 000 per year from the MPA as part of Ms Ho’s salary, royalties and bonuses for her music career. This was not told to the MPA donors as CHC had a practice of keeping its members’ income confidential.

The issue was Kong and Sun were living an extravagant life, but when they presented the MPA to the donors, they made it seem like they are so sacrificial and are having a hard time.

For their multi-million dollar fraud, Kong Hee was sentenced to 8 years in prison while 5 others received a sentence between 21 months and 6 years.

What do these mean for donors like us?

These two scandals shared two distinctive features:

  1. Things came to light in the presence of whistle blowers with a sense of justice when they sensed something was fishy.
  2. ​The scandal was perpetrated by a core team, approved by the top leader. Financial accounts can be manipulated ingeniously, to the extent that experienced auditors can be misled.​
​
According to the article in the Straits Times Opinion section titled Holding charities to account by Priscilla Goy, 50% of charities consist of religious groups and that donations rose from $1.8 billion in 2009 to $2.5 billion in 2013.

It was observed that many charities have been slow to disclose key information about how they are run. Few charities feel the pressure to improve governance and transparency. It leaves door open to murky practices. In one sense, religious organisations are more vulnerable because of the deep trust in religious leaders who are likely to have a hold on followers as they are able to quote passages from teachings to convince them that what they do is in accordance of the teachings.

However, from the perspective of Buddhism, no organisation is infallible, not even local organisations since they are run by human beings and we know that human beings can be susceptible to the three poisons and the eight winds.

For members like us, these two unfortunate incidents had reminded us that we have the right to question how donations are being used and where there are delays in promised projects such as expansion plans, we should press the management committee for updates and explanation. When something is amiss, we must have the courage to speak up. It is no exaggeration to say that Singapore has a fair judicial system which protects all people who uphold a strong sense of justice.

It is only when ordinary members, instead of blindly complying with the authorities, become wise and vigilant, that top leaders of religious organisations are kept on their toes and are held accountable of their responsibilities.

We must never be fooled by a leader’s charisma; instead, as true Bodhisattvas of the earth, our minds must know no fear, become courageous men and women, who fight against the devilish functions that trample on the sanctity of life and obstruct human happiness.

In this way, we, as true Bodhisattvas of the Earth become true treasures of the community, country and the world.


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