PAC cracks its whip

This article first appeared in The Edge Malaysia Weekly, on January 10, 2022 - January 16, 2022.
PAC cracks its whip
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WHEN the Pakatan Harapan government came to power in 2018, it set up a special investigation committee on procurement, governance and finance, and parked it under the Prime Minister’s Department.

The committee was headed by former auditor-general Tan Sri Ambrin Buang, who took up, investigated and reported on about 15 questionable cases in a space of less than two years.

However, don’t pop the bubbly yet — there is a catch. Most of the 15 reports were classified under the Official Secrets Act 1972 (OSA), and are not available for scrutiny. This comes across as odd as the OSA is generally used in matters of national security, defence or international relations.

“I can’t answer you why it is under OSA,” says parliament’s Public Accounts Committee (PAC) chairman Wong Kah Woh. The member of parliament for Ipoh Timur has served as chairman since August 2020.

In his capacity as PAC chairman, he has taken up many of Ambrin’s reports and acted on them.

“The reports are good, he [Ambrin] has done a very good job. They are very thick [detailed] reports,” Wong tells The Edge in an exclusive interview.

“We at the PAC looked at all the reports, [and] we asked Tan Sri Ambrin to give us a briefing. We thought that if the PAC did not take up these reports, and we produced our own reports, the investigations [conducted] by Tan Sri Ambrin would have gone down the drain [would have been wasted].”

Some of the cases Ambrin investigated have since been taken on and highlighted by the PAC.

Of the 15 or so cases, a handful stand out. One is Putrajaya’s directive to Lembaga Tabung Angkatan Tentera (LTAT) in 2015 to take over the automated enforcement system (AES) on roads from project owners ATES Sdn Bhd and Beta Tegap Sdn Bhd, in what was deemed to be an inflated price tag of RM555 million.

Another is the Ministry of Education’s RM4.1 billion faux pas with YTL Communications’ 1BestariNet, which aimed to provide high-speed 4G internet access to 10,000 schools nationwide. Also noteworthy is the Ministry of Defence’s (Mindef) 16 land swaps made from 1995 to 2018, worth RM4.8 billion and involving 2,923 acres of government land.

In the news as well was Mindef and LTAT-controlled Boustead Holdings Bhd’s bungle in supplying six littoral combat ships to the Royal Malaysian Navy at a cost of RM9 billion. The first ship should have been delivered in April 2019. However, until now, not a single vessel has been transported to the Navy, despite Mindef forking out RM6.08 billion, or 67.5%, of the total cost.

“His [Ambrin’s] reports are categorised under sulit … You ask me why? I cannot answer. That is why in the AES report, the first recommendation by the PAC is to declassify Tan Sri Ambrin Buang’s report. To me, the report is very comprehensive, it is a base for us to produce our report,” says Wong.

“The government has no excuse but to declassify it [Ambrin and the committee’s report on AES]. To me, there is nothing in the report that will threaten national security.”

The AES conundrum

To cut a long story short, the issue basically involved LTAT’s acquisition of the AES for a steep price of RM555 million, which is a 220% premium to the RM251 million valuation ascribed by independent valuer KPMG PLT.

LTAT acquired the AES from project owners ATES and Beta Tegap in 2015 after much discord, brought about by the concessionaire being a private company and allegedly linked to politically connected individuals.

The government, meanwhile, paid LTAT RM668.9 million in 2019 for the AES, which included RM113.9 million for liabilities the armed forces fund had to take on as a result of the acquisition.

In November last year, when the PAC came out with its report, it said Ambrin had pegged the original cost of the entire AES project at RM45 million. Why the concession was given to private companies and not the Road Transport Department has been questioned.

Wong and the PAC have been nudging the Malaysian Anti-Corruption Commission (MACC) to investigate LTAT’s acquisition of the AES.

While the reports undertaken by Ambrin and the special investigation committee on procurement, governance and finance are under OSA, and thus out of bounds, the PAC has wide powers to investigate dubious deals.

Under Standing Order 77 (1)(d) of the Dewan Rakyat Standing Orders, the PAC can examine any matter it deems appropriate. In a nutshell, the PAC generally has the power to delve into any matters that relate to expenditures made by government agencies or government-linked companies, and can also initiate investigations on cases brought about by the Auditor-General’s report, which is tabled two to three times a year in parliament.

Wong notes, “Some people say the PAC is a toothless tiger. Prior to 2018, what the PAC did after tabling a report was to put it on the MPs’ tables, and it would end there.

“After 2018, we saw that there was a need to improve the whole process. So, after a report is concluded and distributed, we give the ministries two months to get back to the PAC and tell us the follow-up action that has been taken on our [PAC’s] comments. We want them — the relevant ministries — to come back for another proceeding, which we call mesyuarat tindakan susulan.”

MySejahtera a test case

This two-month time frame to come up with follow-up actions is likely to be tested soon. Late last year, Wong and the PAC were in the news after issues related to the government needing to pay for the use of the MySejahtera app surfaced, from initially being free of charge.

“To me, the government shouldn’t pay for the app [MySejahtera] as it was developed as a corporate social responsibility (CSR) effort — they [the government] have to come back and inform us, whether they have looked into our recommendations and made a decision,” says Wong.

He goes on to explain that there are generally three categories of procurement — a quotation, open tender and direct negotiation. While the general perception is that a direct negotiation is the wrong way to go about it, the truth of the matter is that in the case of an urgent transaction or where there is only one supplier, a direct negotiation would be the most efficient way.

“Now on MySejahtera, from what we gather from the evidence, it started out as CSR, so the government didn’t pay a single sen … Okay, fair enough, CSR is something free. [However] this year, much to my shock, I was told the CSR [involving MySejahtera] was for only one year and it lapsed in March 2021. From April onwards, the government would have to pay,” says Wong.

“From my experience in the PAC, you can get a contract via sebut harga (quotation), open tender or direct negotiation. And if you say you are doing CSR and the government gives you a project, and you now start to charge … so CSR is turned into a monopoly. I cannot accept this … So, after two months, they will have to explain [how they managed to come to the conclusion to pay].”

While Wong and the PAC may push for answers, just how much they can actually achieve remains to be seen.

“If there was no PAC report, some issues may never have been investigated in the first place. Second, we want to send a very clear message that the PAC is watching you — ministers, deputy ministers and the rest. The message to everyone out there is that the PAC is watching you,” he says.

 

‘We need to have a good system for people to be answerable for their actions’

Parliament’s Public Accounts Committee (PAC) chairman and MP for Ipoh Timur Wong Kah Woh has a certain vigour about him. While many attribute this to his youth — he is 41 and DAP’s youth chief — others say it stems from his taking on the challenge and cracking the whip at the PAC.

In an exclusive interview with The Edge, Wong shares some of his insights and thoughts, as well as his aspirations for the PAC.

 

The Edge: How do you start investigating an issue? Does someone have to make a complaint?

Wong Kah Woh: It is up to us to decide. We have a committee. Basically, the PAC — there are 14 of us — five from the opposition, nine from the government. The chairman is from the opposition, the vice-chairman is from the government … and the rest, eight and four … so I don’t have the majority.

 

How effective is the PAC?

In the past two years, the effectiveness of the PAC has been torn down, totally torn down [because of the Covid-19-related movement restrictions]. But we have expedited all the cases that we have undertaken, and we have taken up new cases.

 

So the fact that the government is open to scrutiny by the PAC is a deterrent?

Correct.

 

But when a layman looks at things, the automated enforcement system (AES) for example, which happened some time back and nothing seems to have been done, it is understandable that people lose faith.

That is why with the AES, it is now time for the MACC (Malaysian Anti-Corruption Commission) to go into it … just because the things [issues in question] happened eight years ago, it doesn’t mean that the MACC cannot investigate it. It is their duty to investigate.

 

Can the PAC compel the MACC to investigate?

We can ask them to investigate, but we cannot dictate the outcome of the investigation.

 

Do you think the PAC has done a good job?

I think we are doing whatever we need to do to discharge our duties.

 

Every issue you look at, there is a political element, so we need more transparency to regularise political financing.

On political financing, there is a need for legislation to govern it. A lot of times, whether it is political financing or whether it is corruption, the line is quite a thin ... and that is why proper legislation is needed. This issue was discussed way before 2018, but it has yet to be realised.

 

Is there a lack of political will?

I would say yes, there is a lack of political will on this, and the government will definitely have to improve in this area. But to be clear, the PAC does not go into whether there should be anything [legislation governing political financing]. I am just giving you my views.

 

Just for comparison, what is the level of transparency in, say, the PAC in the UK?

In the UK, the PAC’s proceedings are telecast live. So when it is held live, at least the awareness of the people is there, the people can see how the ministers answer questions.

In a case here, there was a politician who said, ‘Saya tidak tahu’ at least 26 times while being grilled … if it had been televised live, do you think the witness would have dared to say, ‘Saya tidak tahu’ 26 times?

 

Did the government explain why it does not want the proceedings televised live?

They use confidentiality as an excuse.

 

If you look at the Littoral Combat Ship issue … there were similar problems with Penang Shipbuilding Corp Bhd (PSC) under Tan Sri Amin Shah Omar Shah. Boustead Naval Shipyard took over PSC and now, there are problems at the Boustead Naval Shipyard.

Yes, even when we interviewed the witnesses, the Ministry of Defence (Mindef) had yet to come up with a way forward. For the six ships, it cost Mindef RM9 billion. As of today, RM6 billion has already been paid, but not even one ship has been completed.

It is not a matter of paying the remaining RM3 billion and you get the six ships, no. So, the task of the government is what the decision is, moving forward. Does the government terminate the contract and sue Boustead Naval Shipyard, do they pump in more money, or do they leave it to Boustead to raise more money and complete the contract? Sometimes, it’s not just administrative considerations.

 

 In your opinion, how do you control something like this?

To avoid situations like what we faced in Boustead Naval Shipyard, to me, you need to be extra careful in your procurement process. You need to find vendors and contractors who give you confidence that they can complete the job. And in some direct negotiations, you can see that the company that gets the project may not be the best company.

 

Do you feel that the notion that everything should be done in the best interests of the nation is lacking?

To me, it is down to the person itself, the person that is holding power, as to how he discharges his power.

 

Do you think things have become worse over the years?

It is hard to come to a conclusion whether things are getting better or worse. We have to look at things on a case-to-case basis.

 

Are the number of cases where you find issues cropping up more rampant now?

We cannot expect a perfect administration, that is for sure, but we need to have a good system for people to be answerable for their actions. Then, over the years, I believe there will be an improvement.

 

The PAC only got more aggressive after 2018.

It all depends on how you see it. Of course, previously, before 2018, the PAC was active. The PAC even took up the 1MDB (1Malaysia Development Bhd) case in 2015. But of course during that time, the chairman was from the ruling government and the majority of the members of the PAC were also from the ruling government, so the credibility of the PAC, or the respect towards the PAC, was not that huge or strong.

 

How is the PAC funded?

We do not have any funding. We have a secretariat of about nine staff, stationed in parliament.

 

Do you think there should be funding?

I would prefer the resources to come in the form of staffing. For example, we need researchers.

 

Now that Barisan Nasional is back in power, how are things?

It doesn’t affect the work of the PAC. The challenges — to me — are time and resources.

 

Are the governance standards very poor in Malaysia?

We really didn’t make a comparison with other nations, particularly on levels of governance.

 

You said you don’t have time, and you don’t have funding, so it must be challenging.

This job is challenging, but interesting.

 

Do you think corruption is ingrained in the country?

If you look at Malaysia’s position on the corruption index, over the past two years, the ranking has gone down. In 2018 and 2019, we improved quite a lot. Of course, it’s not just the government’s administration issues. It also touches on a lot of the political issues, whether the political leaders are clean or not, and so on.

Under the Pakatan Harapan government, we had to declare our assets for all to see. These were some of the efforts that were made.

 

But then again, after the asset declaration, there was nothing more done. No scrutiny.

Just because a person is rich doesn’t mean there is corruption. We have to get this point right.

 

How much effort is put into investigating the use of proxies with the asset declaration?

As far as the declaration of assets is concerned, 2018 was a start. I personally was not very happy with the way the declaration was done. The concept is good, but I was not happy with how they calculated assets. They calculated assets based on gross assets, they didn’t use net assets.

 

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