Thinking Allowed

By Mariam Mokhtar

The tranquillity of the Lumut naval base was shattered when the chattering classes in the naval community were horrified to learn about a corruption scandal, involving several Royal Malaysian Navy (RMN) personnel. Many people were shocked that it was many years before it was exposed.

In a report by the Malay Mail online, the Malaysian Anti Corruption Commission (MACC) said that the scandal was just the tip of the iceberg and that more officers will be investigated. He added that one of the suspects had used the ‘Ali Baba’ method to supply goods to the RMN.

It also alleged that one person was using assumed names in the procurement process. The MACC source said, “The navy deals with about 2500 companies. But we are now focusing our investigations on 20 to 30 of these companies. We believe the individual is controlling them.”

The MACC will also be checking the involvement of other companies in this scandal.

The navy purchases materials to keep its fleet in good order. The process involves vast numbers of transactions, on a daily basis, and costs the nation millions of ringgit. In the initial stages of the MACC investigation, the five navy personnel who were arrested included at least one female RMN officer.

Despite holding middle-rank positions, these navy staff enjoyed the lifestyles of high-earners. They were from the procurement section of the navy and ranged from 20 to 50-year-olds.

It is also believed that the navy suspects worked together with the civilian suspects, as in a syndicate. The cost of certain goods would be marked up and the navy staff would receive kickbacks in cash and bank deposits.

The syndicate was suspected of operating at various levels and the MACC will investigate higher up the chain of command.

Intelligence reports unmasked the activities of the syndicates involved in the procurement of goods. The unashamed greed and displays of unexplained wealth, including expensive watches, land transactions, luxury cars, unmasked the conspirators.

The civilians being investigated were officials of the companies which were supplying goods to the navy.

With a budget of around RM300 million, the temptation to siphon off some of this money into personal coffers, proved too great for some navy personnel.

The Malay Mail reported that over the past five years, millions of ringgit had changed hands between suppliers and members of the fleet supply depot. The MACC alleges that around RM48 million has been misappropriated.

In an interview with the paper, Retired First Admiral Mohamad Imran Abdul Hamid, who once served at the Lumut naval base, said that the procurement department, called Depot Bekalan Armada (Fleet Supply Depot), operated a three-tier procurement system, depending on the cost of the item.

When he became MP for Lumut, on his retirement from service, Mohamad Imran urged the government to tighten the naval procurement system, to prevent unscrupulous staff from manipulating the prices of the goods.

The Fleet Supply Depot comprised a commanding officer and his deputy. Below them were the material controllers (MC), who are responsible for sending out requests for goods, using one of the three procurement methods.

The MP for Lumut alleged that one particular item had been sold to the navy at six times its normal price. So, RM180,000 was paid for an item worth RM30,000.

He has suggested measures to prevent navy staff and suppliers from forming close working relationships, and advocated the regular transfer of navy staff to other sections. He also alleged that certain officers were able to exert undue influence, on the procurement process.

The MACC claimed that the corrupt activities had been in operation for five to ten years. What happened to the checks and balances which would have thwarted the efforts of unscrupulous staff members? Do these need an overhaul? Is the rakyat being fleeced again?

How regularly does the MACC scrutinise this particular area of procurement, in other armed forces departments?

Did the annual Auditor-General’s report not show any discrepancy?

It was reported that the illegal activities, in Lumut, only emerged after a crackdown by the MACC, last year, against Customs officials who had been involved in smuggling. An inside source claims otherwise. They say that the corruption was unearthed because rival naval personnel were envious of the activities and multi million ringgit perks, of the syndicates and so decided to snitch on them. The rivals had no thought of loyalty to the King, country or the rakyat!