Response to Working Paper Which Claimed Public Officers Purchased Properties near MRT Stations before Locations were Announced

Mr Alex Yam asked the Prime Minister and Minister for Finance (a) whether the Public Service has reviewed the findings of a recent study suggesting that, prior to 2011 to 2012, some public officers disproportionately purchased properties near future MRT stations before their locations were publicly announced; (b) whether the Government will independently examine or validate these findings; and (c) what actions will be taken in response.

Mr Alex Yam asked the Prime Minister and Minister for Finance (a) what safeguards are currently in place to prevent and detect public officers from using non-public Government information for private financial gain, including through related persons; and (b) whether these safeguards are periodically reviewed for officers with access to market-sensitive information concerning infrastructure, land use and other Government decisions.

Ms Joan Pereira asked the Prime Minister and Minister for Finance (a) whether the Public Service Division (PSD) has completed its review of the National Bureau of Economic Research (NBER) paper regarding private property purchases by civil servants near unannounced MRT stations; (b) what initial findings or anomalies, if any, have been identified; and (c) whether further investigations and enforcement measures will be required.

Mr Yip Hon Weng asked the Prime Minister and Minister for Finance (a) how the effectiveness of safeguards against public officers using confidential MRT and land-use information for property purchases is assessed; (b) whether officers' property declarations are systematically cross-checked against their access to such information; and (c) what the considerations are for requiring prior transaction clearance in addition to property declarations.

Ms Elysa Chen asked the Prime Minister and Minister for Finance (a) whether public officers, contractors, consultants or other key personnel in and commissioned by agencies that plan rail and other infrastructure are subject to declaration or transaction rules that differ from those applying to the wider Public Service; and (b) if so, how do these differ.

Mr Azhar Othman asked the Prime Minister and Minister for Finance in light of recent reports of civil servants acquiring properties in or near areas earmarked for future development, where such development plans have not been made public (a) whether there is a regulatory framework to ensure that such actions are curbed; and (b) if so, what safeguards and enforcement measures are in place.

Assoc Prof Terence Ho asked the Prime Minister and Minister for Finance whether the Government assesses that there is a need to strengthen safeguards, including rules, penalties, preventive measures and detection or enforcement methods, to ensure that public officers do not use privileged information for material gain for themselves or their family members.

Mr Gerald Giam Yean Song asked the Prime Minister and Minister for Finance (a) whether public officials' purchasing property based on non-public land-use information constitutes a breach of statutory duties or civil service rules; (b) whether public officials' asset declaration rules will be expanded to cover immediate family members and co-habitants; and (c) whether retrospective checks for anomalies will be conducted on past property transactions near unannounced infrastructure projects.

Ms Lee Hui Ying asked the Prime Minister and Minister for Finance (a) whether the review of the research paper that civil servants allegedly disproportionately bought homes near unannounced MRT stations has been completed; and (b) what safeguards are in place to govern the access to non-public information.

Ms He Ting Ru asked the Prime Minister and Minister for Finance (a) whether civil servants are required to declare property purchases that may relate to non-public information on future transport infrastructure; and (b) how such declarations are cross-checked against officers' access to planning information.

The Coordinating Minister for Public Services and Minister for Defence (Mr Chan Chun Sing): Mr Speaker, Sir, may I have your permission to answer Parliamentary Question Nos 18 to 27 in today's Order Paper together?

My response will also address a question for written answer today, questions scheduled for 7 October and questions scheduled for 8 October. If satisfied with the response, Dr Choo Pei Ling 1 , Miss Rachel Ong 2,3,4 , Mr Fadli Fawzi 5 and Ms Gho Sze Kee 6 may wish to withdraw their questions for subsequent Sittings.

Mr Speaker: Please proceed.

Mr Chan Chun Sing: The Government set out our preliminary response to the National Bureau of Economic Research (NBER) working paper in Public Service Division's (PSD's) media release of 25 September. I will briefly recap the key points and update the House on our review.

The NBER working paper reported a statistical association between individuals whom the authors classified as civil servants working in agencies connected to rail planning and property purchases near planned Mass Rapid Transit (MRT) stations before their locations were announced. The statistical association concerned announcements in or before 2011 and was not observed after 2011.

As we said earlier, this statistical association is a matter of concern and we take it seriously. But it does not, by itself, establish misconduct by any individual officer. There are also limitations to what we can independently establish about the paper's underlying data, including the source and representativeness of its proprietary dataset and how individuals in the different datasets were matched.

We have therefore carried out our own checks, using Government records.

While the NBER working paper identified the period of concern as between 2007 and 2011, PSD extended the review to 2014 as a matter of prudence, as many new MRT station locations continued to be announced in the years after 2011. Based on our administrative records, PSD identified officers who were in agencies involved in rail planning and who made property purchases between 2007 and 2014 that were close to locations subsequently announced as MRT stations. For each transaction, we examined the available records. This included the officer's role at the time, whether the officer had access to relevant non-public information, the timing and circumstances of the transaction, and other relevant information available to us.

Through this process, we reviewed property transactions made by 191 officers. Further checks are still ongoing.

Based on the available information at this stage, we have identified eight officers whose cases warrant further examination. This could be due to the specific circumstances surrounding the purchase or that we currently do not have adequate information to exclude the cases from further review. We have referred these cases to the Police.

Let me emphasise that a referral does not mean that wrongdoing has been established. The Police will look into the facts independently and due process will be followed.

Members have also asked about the safeguards against misuse of non-public Government information. The fundamental principle is clear, public officers must never use information obtained through their official duties to advance their own private interest or those of others. This is set out in the Public Service Code of Conduct, depending on the circumstances, unauthorised use or disclosure of official information may also constitute an offence under the law.

There are thorough layers of safeguards.

First, access to sensitive information is controlled. Officers are given access on a need-to-know basis. Such information is subject to security classification and handling requirements, system and physical access controls and where appropriate, audit monitoring and project-specific safeguards.

Second, there are declaration and approval requirements governing officers' personal interests and transactions. Since the 1990s, all officers have been required to declare purchases of private property and annually, any non-owner-occupied properties they hold.

These requirements have been progressively tightened over the years. Today, when officers possesses non-public information relevant to a transaction that he or she proposes to undertake, the officer must seek approval from the head of agency before proceeding. This is not confined to property transactions; it applies to other personal transactions where the officer possesses relevant non-public information.

These requirements also extend to transactions involving officers' spouses and financially-dependent children. More broadly, an officer must not pass non-public information to a relative, friend, or any other person for private gain. Doing so would breach the applicable rules and may constitute an offence under the law, including the Official Secrets Act.

Third, agencies handling particularly sensitive information may put in place additional requirements according to the risks involved. For example, the Singapore Land Authority (SLA) had an additional requirement for officers in the relevant department to declare to human resources (HR) any sale of property or land by themselves, their spouses, or financially-dependent children. This supplemented the existing requirement for all public officers to declare purchases of private property.

Agencies also have safeguards covering persons outside the Public Service who are given access to sensitive Government information. Contractors, consultants and other personnel are subject to appropriate confidentiality, conflict of interest and information handling requirements. Agencies may also impose additional requirements on them, depending on the nature and sensitivity of the work involved.

Fourth, agencies have channels to allow officers to report suspected wrongdoing to their supervisors, HR, or heads of the agencies. This provide an additional means of bringing possible misconduct to attention.

Several Members have asked whether we should go further, for example, through more systematic cross checking, widen declaration requirements to other family members or co-habitants, or other measures. The Public Service regularly reviews our rules and has strengthened them over time. We will continue what the present review tells us about the effectiveness and whether there are gaps to address.

Any further measures should be proportionate to the risk and practical to implement, while allowing legitimate personal transactions to proceed with appropriate oversight. Even with strong safeguards, no system can eliminate the possibility of wrongdoing entirely. We must therefore continue to reduce the opportunities for abuse, maintain effective means of detection and act firmly where evidence of wrongdoing emerges.

Members have also asked whether checks should extend to other infrastructure projects and property transactions, including schools or land use decisions, as well as property disposals before the announcement of the 15-month wait out period in September 2022.

We have not undertaken such a review at this point in time. The present exercise arose from specific assertions in the NBER working paper concerning rail planning and property purchases over a particular period, and our checks have therefore focused on these assertions.

Sir, we should not assume that officers with access to non-public information have misused it. However, where specific information gives reasonable grounds for concern in another context, we will look into it.

Ms Ong has asked how the Government will avoid actual or perceived conflicts of interest in deciding what matters arising from this review should be referred for further investigation. PSD's present exercise is an administrative review to establish the relevant facts. PSD does not determine criminal culpability. Where the facts disclose grounds for concern, the matter will be referred to the appropriate law enforcement agency, whether the Police or the Corrupt Practices Investigation Bureau (CPIB), depending on the circumstances. The relevant law enforcement agencies will look into the matter independently and determine the appropriate course of action.

Ms Goh has asked about the ability to link publicly available information about officers with information on property transactions and whether such additional safeguards are needed to protect officers' confidentiality. There are different considerations involved. Certain information on property transactions and ownership is already publicly accessible for legitimate reasons. Separately, some information about civil servant's appointments and responsibilities also need to be made available in the public domain. We should not restrict access to such information simply because it may be linked across different sources. At the same time, the Government will continue to ensure that personal information about public officers, which does not need to be made public, is appropriately protected.

Ms Ong also asked about the funding of the NBER research. We do not have information about its sources of funding. More fundamentally, our approach is to assess the substantive claims in the paper on their merits by examining the methodology, the available evidence and most importantly, the underlying facts.

Mr Speaker, Sir, the integrity of the Public Service and the public's trust in it are fundamental. We therefore take allegations of misuse of official information seriously, but we must also proceed on the basis of evidence and due process. This is why we have examined the actual officers' transactions and available records. Where the facts disclose grounds for concern, we will refer them to the appropriate authorities. Where wrongdoing is established, we will act firmly.

We will also learn from this episode. If the review or subsequent investigation reveal gaps in our safeguards, we will strengthen them. This is how we will continue to uphold the high standards of integrity expected of our Singapore Public Service and maintain the trust that Singaporeans place on us.

Mr Speaker: Mr Yam.

Mr Alex Yam (Marsiling-Yew Tee): I thank the Coordinating Minister for his response. I have three supplementary questions.

The first is, could the Minister share how long the complete review will take and if the Government will be releasing its full report?

Secondly, the Minister has indicated that 191 officers' transactions were reviewed under the current exercise. Thus, can the Coordinating Minister also share what is the total number that could be covered with the extension of the review period to 2014?

Lastly, given that the paper indicates that patterns appear to disappear after 2011, has PSD examined what changed around that period and whether that tells us something about the safeguards that have been effective?

Mr Chan Chun Sing: Mr Speaker, Sir, we will complete the review as soon as possible and if there are findings that are relevant, we will publish them in full.

The second supplementary question, we have reviewed 191 cases so far, and if there is information that requires us to review more, we will do so.

The third supplementary question, we, at this point in time, do not have reasons to believe that something fundamentally has changed post 2011, but we will certainly do this as part of our review.

Mr Speaker: Mr Yip Hon Weng.

Mr Yip Hon Weng (Yio Chu Kang): Thank you, Mr Speaker. I thank the Minister for his response. Declarations and prior approval are important safeguards, given that property transactions and access to sensitive planning information can leave records.

Has the Government considered risk-based retrospective checks for officers, in particular, information-sensitive roles so the unusual patterns can be identified independently of self declaration? I raise this because this could strengthen public confidence while avoiding intrusive checks on every public officer.

Mr Chan Chun Sing: Mr Speaker, Sir, the answer is yes. Beyond individual declarations, we do checks retrospectively if there are reasons for us to suspect that there may be wrongdoing.

Mr Speaker: Ms Elysa Chen.

Ms Elysa Chen (Bishan-Toa Payoh): As Singaporeans, we have prided ourselves on our incorruptible Public Service; and the notion that public servants acted on sensitive information for their own personal gain is potentially a serious lapse against our ethos.

Beyond property purchases, has the Government identified other avenues for public officers to make other investments related to sensitive Government information? And what measures do we have in place to check for the existence of such breaches?

Given the importance of integrity here, it will also be critical not to take a reactive stance and only investigate after researchers have pointed out lapses. Will the frequency and intensity of these checks be increased going forward?

Mr Chan Chun Sing: Mr Speaker, Sir, I will make two points in response to Ms Elysa Chen's comment.

First, be it property or any other transactions that pertain to or may involve sensitive information, we take them all in the same spirit – which is that no officers should use any non-public information for their personal gain. Whether is it financial transactions, property transactions or otherwise, the same rules apply. And I have explained the different layers of checks required.

Second, I will be careful not to jump to a conclusion, because the working paper has made certain assertions based on a statistical association. At this point in time, we have not concluded whether any wrongdoing, or especially any criminal offences have been committed. So, we want to get to the bottom of this precisely because of the reasons that Ms Elysa Chen says: that the integrity of the Singapore Public Service and the faith of Singaporeans in our Public Service are of utmost importance to us.

Mr Speaker: Mr Azhar Othman.

Mr Azhar Othman (Nominated Member): Thank you, Speaker. I thank the Coordinating Minister. I have three questions.

Number one, the Minister did mention about information to be confidential and not to be shared with other relatives. To that extent, typically where they are associated to companies as well, does the civil servants have shares in companies that purchased the properties? This is just an extension of what I think is in question.

Number two is the extent ai which civil servants have properties. Whether it is one, two, three, four, five – I think that is a red flag. Something that we need to understand as well.

Number three on putting in place a prevention position, whether the civil servant should be limited in the number of properties that they can own? So, these are my questions.

Mr Chan Chun Sing: Mr Speaker, Sir, can I respond to the three questions by making two points?

First, if a public officer reveals sensitive non-public information to anyone, be it individuals or companies, we apply the same rules to them. It should not be done and we will take to task anybody who does it. It is not relevant to us whether the information is revealed to a relative, a family member, a partner or a company, the same rules apply.

**** Second, we also have to be fair to the public officers. All of them are fellow Singaporeans, they have legitimate housing needs, they have legitimate needs to make investments and manage their own finances. The fact that they buy properties itself is not a red flag. The question is whether they have misused any public information. The fact that they can have more than one property is not necessarily a red flag. The red flag is when you have assets that are way beyond what your financial means or income allow you to have. That itself is a red flag. But if you husband your resources well and you make judicious investment, that itself is not a red flag.

Mr Speaker: Mr Gerald Giam.

Mr Gerald Giam Yean Song (Aljunied): Sir, beyond standard declarations by public officers which may not cover all conflicts of interest, will the Government leverage technology to identify anomalous transactions, including property and companies' share purchases and disposals, where there are potential conflicts of interest?

Secondly, I understand declarations apply to properties acquired by the public officer's spouse or financially-dependent children. Has PSD considered requiring such declarations to extend to properties acquired by the public officer's parents and financially-independent children, since these are also immediate relatives whose financial gains indirectly benefit the public officer?

And lastly, what specific training is provided across agencies to educate officers on their legal, administrative and ethical obligations to prevent the exploitation of non-public information for personal gain?

Mr Chan Chun Sing: Mr Speaker, Sir, on the first supplementary question, we will use whatever information that is available to us, including any technology for us to cross-reference any suspicious case, especially if there is a whistle-blowing information that allows us to dive into a case.

On the second supplementary question, I think we have to find a balance as to what an officer needs to declare. I think, today we have classified the need to declare as for yourself, for your immediate family, which includes your spouse and your financially-dependent children. As to whether we want to keep enlarging the association to parents or relatives, I think we need to find a balance.

But the key point is this. The key point is not how many people are associated with your extended family. The key point is whether anyone has used non-public information for personal gain. If anyone has used non-public information for personal gain, it does not matter whether it is your immediate spouse, immediate family members or your extended family, it is still wrong.

On the third supplementary question, how do we educate our officers, they all go through their milestone programmes and embedded in all our milestone programmes are rules and ethics expected of all public officers in their standard of behaviour in the service of our country.

12.19 pm

Mr Speaker: Order. End of Question Time. Introduction of Government Bills.

[ Pursuant to Standing Order No 22(3), provided that Members had not asked for questions standing in their names to be postponed to a later Sitting day or withdrawn, written answers to questions not reached by the end of Question Time are reproduced in the Appendix. ]

Note(s) to Question No(s) 18-27:

1 Question subsequently withdrawn: To ask the Prime Minister and Minister for Finance regarding the working paper published by the National Bureau of Economic Research, a US-based non-profit organisation (a) what is the Government’s assessment of the methodology used linking Singapore Government Directory data with private property transaction records; and (b) what steps is the Government taking to maintain public trust in the integrity of the Civil Service.

2 Question subsequently withdrawn: To ask the Prime Minister and Minister for Finance regarding Public Service Division's review of research alleging unusual property purchases by civil servants near yet-to-be-announced MRT stations (a) how it will ensure independence and avoid actual or perceived conflicts of interest in determining whether there is a material basis for referral to the Corrupt Practices Investigation Bureau (CPIB); and (b) whether CPIB will independently assess whether this threshold is met.

3 Question subsequently withdrawn: To ask the Prime Minister and Minister for Finance (a) whether current safeguards preventing public officers from using privileged information for personal or related-party gain remain effective against increasingly complex potential schemes for wrongdoing; and (b) how the Government plans to enhance these safeguards to further reduce such opportunities.

4 Question subsequently withdrawn: To ask the Prime Minister and Minister for Finance whether the Government has ascertained if the National Bureau of Economic Research (NBER), or the researchers behind the recently published study on public officials’ home purchases in Singapore, received any direct or indirect funding for this or related research from foreign governments, political organisations or other entities that may raise concerns about foreign influence or conflicts of interest.

5 Question subsequently withdrawn: To ask the Prime Minister and Minister for Finance (a) how the Public Service Division (PSD) currently monitors property purchases by civil servants and their immediate relatives; (b) whether PSD intends to strengthen controls over property purchases by civil servants involved in strategic planning and land use decisions; and (c) whether PSD will investigate property purchases by civil servants around other types of infrastructure such as new schools.

6 Question subsequently withdrawn: To ask the Prime Minister and Minister for Finance in light of the working paper by US-based National Bureau of Economic Research on public officers’ property purchases (a) whether the Government has assessed the ability to systematically link individual private-property transactions with publicly accessible information identifying public officers; and (b) whether additional safeguards are warranted where such linkage could reveal the property transactions of public officers, particularly those in sensitive positions.