police are looking into whether eight public servants might have used insider information to buy properties near MRT stations for personal benefit.

To be clear, no wrongdoing has been established so far. The police will look into the facts independently and due process will be followed.

But Coordinating Minister for Public Services Chan Chun Sing’s revelation in parliament on Tuesday (Oct 6) that out of 191 cases identified, these eight have been singled out for further action has upped the concern level by several notches.

It also raised more questions about the extent of the problem, how many cases there might potentially be, what safeguards are in place and what this saga says about the integrity of the public service. Members of Parliament voiced some of these issues but Mr Chan could not answer many of them at this stage beyond providing broad assurances on the handling of sensitive information by public servants and the requirement that they declare properties they own and obtain approval whenever they possess non-public information relevant to a transaction they propose to undertake.

QUESTIONS TO BE ANSWERED What can one make of this saga, pending the outcome of the investigations? First, it was very disconcerting to learn that that it took a US-based economic research organisation, the National Bureau of Economic Research (NBER) operating thousands of kilometres away in Cambridge, Massachusetts to make the stunning revelation that Singapore civil servants were disproportionately represented as buyers of properties near MRT stations before the locations of these stations were publicly announced.

Was it possible that these illegal transactions might have taken place right under the noses of the authorities - and for how long - without a hint of it being noticed?

It should be stressed - again - that no illegality has yet been uncovered. But the idea that it might have taken place unbeknown to anyone here is galling.

This is because the issue of sensitive information used for private monetary gain is not a new one. Every public service anywhere in the world faces this issue as every government is in possession of valuable information which many people would dearly like to have their hands on.

Singapore should be especially vigilant because the authorities here are involved in many areas of life and market-determined prices are a feature of the economy. Insider information is particularly valuable in such an operating environment.

If you knew Certificate of Entitlement (COE) supply would shrink at a certain date before it was known publicly, that’s priceless information, or that stamp duty on property transactions would go up, or that the authorities would restrict the purchase of certain products, potentially raising their prices. How do you protect the confidentiality of the secret information, and from their misuse by public officers?

Mr Chan mentioned several safeguards, including limiting the information to only those who needed to know and subjecting it to security classification.

In addition, since 1990, officers have been required to declare their property purchases, and, for non-owner-occupied properties, to do so annually. They also need to obtain approval from their heads if they possess non-public information relevant to a transaction they propose to undertake.

These are sensible safeguards. But the key question is, how are they enforced?

Who looks at the declarations to find out if any warrant further action, or are suspicious? Or are they merely filed away as a matter of routine?

MANY GREY AREAS Following up on these declarations is not a straightforward matter because there are many grey areas to contend with.

The rules should also not be so onerous as to hamper the legitimate actions of public officers to make purchases and investments.

For example if an officer is aware of discussions taking place within government of the possibility of an MRT line being built in a specific area but does not know the specific location of any station, and none have so far surfaced in any discussion, can the officer make an educated guess and buy a property based on his hunch, without infringing any laws? Supposing he is knowledgeable about government thinking on transport infrastructure as part of his work and he uses this knowledge to make the purchase.

Legitimate, or not?

Second example: An officer is already thinking of buying a property and has narrowed it down to two options. He is veering towards option A but before he commits he comes across information of a station being planned in the vicinity of that property. He was already going to commit but with the new information, he immediately paid the deposit.

Guilty? Or was his timing just fortuitous, or potentially problematic?

How to strike the right balance between deterring misuse of confidential information and allowing some legitimate flexibility and discretion that do not compromise an organisation's ethos and integrity?

THE STRICTER THE BETTER When deciding where to draw this line, it is prudent to guard against being too lenient because you may not be doing the service or its officers a favour. On the contrary you may be doing them in.

I found this from a painful experience years ago in my previous job as editor. The newspaper I worked for had a ready supply of shopping vouchers to be given to readers whenever we held contests or events promoting the paper. They were entrusted for safekeeping to the head of the department that ran the promotions. Alas, he was found out through an audit to have used some of the vouchers for his personal needs, and subsequently sacked.

I realised then that the safeguards in place to prevent this sort of fraud were too lax and the person was given too free a hand to run his unit.

In effect, I was not doing him a favour because the temptation to pilfer was too great for him, given the loose arrangements.

If I had been stricter, he might not be so tempted and his career would not have been cut short so abruptly. He also had to face the consequences of breaking the law.

The lesson I learnt is that being stricter on the rules may be better for the officers concerned.

It is not that they are not to be trusted but that while I trust you, I also want you to know that someone is watching whether you cross the red line.

In the present case, if officers know that the declarations they make are not scrutinised closely by someone and are only a formality, the temptation to offend might become too great for some. "Trust but verify" should always be the operating principle.

It is a lesson worth learning for the public service as it decides what further safeguards to put in place.

Han Fook Kwang was a veteran newspaper editor and is Senior Fellow at the S Rajaratnam School of International Studies, Nanyang Technological University.