Keppel trouble - Systemic Corruption.

Keppel is in the news again. 

One of her lawyers Jeffrey Shiu Chow was sentenced to probation and a fine of US$75,000 by a US district judge. He will be serving his probation in Singapore, where he resides with his wife. 

Jeffrey, 60, pleaded guilty to conspiring to violate the anti-bribery provisions of the Foreign Corrupt Practices Act. 

He drafted and approved contracts between KOM (Keppel Offshore & Marine) and its agents in Brazil, “knowing the contracts were fraudulent and meant to conceal bribes.”

He said: “although no one ever named the bribe recipients for me, I knew they were government party officials and (members of the then) ruling political party.”

In his defence, Jeffrey’s boss (Thomas Keaty) has this to say about him: “(Jeffrey) is one of the most honest people known in life.” 

Another colleague descibed the misconduct as Jeffrey’s “one lone mistake in 26 years of exemplary service to his company and his profession.”

Lesson? One, and it is a lamentation. 

KOM’s history with corruption has been a very long one. It goes back to 1997. And about one year ago, former AG Walter Woon ("WW") wrote an article to trace the paper trail. He highlighted this Straits Times headline at that time: -

"Keppel fined $300,000 for giving $8.53m in bribes for contracts". 

That was more than twenty years ago. 

Then, three years ago, in 2016, the former CEO and president of ST Marine "(pleaded) guilty in August and got 10 months' jail as well as a $100,000 fine." 

Between 2000 and 2011, the total bribe paid out was at least $24.9m, and in Dec 2017, Keppel eventually agreed “to pay US$422 million to resolve the corruption charges with the authorities in the US, Brazil and Singapore.”

Now, this morning, we hear of news of a lawyer admitting to “drafting contracts that were used to make bribe payments,” and he has “worked in the legal department of KOM for over 25 years.”

So, In 1997, Keppel was fined $300k. 20 years later, her top employees faced imprisonment and fine. 

And I believe the investigation is still ongoing as I write this, and this is surely a stain in our clean and corruption-free city-state. 

I recall our PM once said that “there is a Chinese proverb: "If the top beam is askew, the bottom beams will be crooked.”" He said keeping a system clean must start at the very top.

He’s right, but the question is, have we learned anything from KOM’s 20 years’ history of bribery? How askew is the Keppel’s top beam? And how far up the beam are we talking about in terms of accountability? 

What is disconcerting is that Jeffrey can’t be acting alone. 25 years of exemplary and honest service against one act of entrenching a clause to disguise bribery? In a nutshell, isn’t that about using what is legal to pursue what is illegal? Is the top beam not just askew, but discoloured at the core?

Mind you, to come to that stage, that is, drafting a public “over-the-top” contract to hide a private “under-the-table” sweetener, would one be faulted to say that this is a clear sign of systemic corruption of a government-linked corporation? 

It should be noted that hundreds of millions have been paid out to settle the corruption charges. Doesn’t this call for higher ministerial accountability since we as a nation are publicly intolerant of corruption at all levels? 

Indeed, if the top beam is askew, the bottom beams will be crooked. And by extension, if such askew-ness comes from the factory source, then it is no longer a case of ad-hoc corruption but a corporate wide coverup that needs to be addressed at the highest level. 

The irony is that in 1997, when Keppel was fined, the late JB Jeyaretnam asked whether action will be taken against the leaders in Keppel. The reply in essence was “there’s no personal gain.” 

Alas, with a recent payout of hundreds of millions to resolve the corruption charges, I guess personal gains do not enter directly into one’s pocket, but it comes (like the surreptitiously drafted clause in the contract) in the form of bonuses, perks, shares allotment, promotion and salary increments. Who will be ploughing back those indirect gains then since it is still the people’s money?

Are Singaporeans then that dense in the skull when it comes to detecting disguised rewards? 

With regards to these disguised rewards, Walter Woon described it as “more business translates into bigger profits" and this "in turn leads to enhanced bonuses and improve promotion prospects."

He also observed: “Just fining companies (at that time) is not enough; this only trims the weeds without digging out the roots." 

Alas, the roots had grown deeper as the weed bloomed taller from a bribe amount of $8.5m in 1997 to tripling that at $24.9m twenty years later.

Let me end with WW’s observation.

"Despite Singapore's supposedly squeaky clean image, corruption does still exist, even among government-linked companies...Eradication of corruption requires that the humans responsible for the offences account for their misdeeds, no matter how influential or well connected they may be. If we want to have standards, we must be willing and able to defend them.”