The National Heritage Board had initially found Mrs Lee Suet Fern's offer to facilitate a donation deal with Mr Lee Kuan Yew's estate useful, but ended up being caught in a private family dispute.
This picture emerged when National Development Minister Lawrence Wong and Deputy Prime Minister Teo Chee Hean spoke about a Deed of Gift involved in the exhibition yesterday. Eventually, NHB had to ask Mrs Lee, its board director, to recuse herself from matters related to the deed.
Mrs Lee had offered to help with a deal that would see items from the 38, Oxley Road house donated as artefacts for an exhibition on Singapore's founding fathers in 2015.
But MPs wondered if there was a conflict of interest, as she is also the wife of Prime Minister Lee Hsien Loong's brother, Mr Lee Hsien Yang, an executor of Mr Lee's will.
NHB had thought Mrs Lee would be "useful as an intermediary" with the Lee family, said Mr Wong.
"Later, as NHB had to engage in more extensive discussions with the executors to resolve the legal issues, the chairman of NHB approached her on June 12 to recuse herself on matters concerning the deed, which she did," he said.
These issues included whether the will's executors, Mr Lee Hsien Yang and Dr Lee Wei Ling, could enter the deed without consulting all its beneficiaries - including their older brother PM Lee.
PM Lee had also taken issue with "highly unusual" clauses in the deed, like the right to buy back the donated items at $1 as long as the house was not demolished.
A second condition was to display only the first part of the demolition clause in Mr Lee's will during the exhibition - citing his wish to demolish the house.
But the second part of the clause, which concedes the possibility that the house may not be demolished, was not to be displayed.
Mr Lee Hsien Yang had previously criticised NHB's decision to delay exhibiting the items after signing a legally binding deed.
Yesterday, Mr Wong said: "No one realised there were these sharp differences of views...
"The executors spoke for all the beneficiaries - this was my assumption too when NHB updated me on the discussion, and I only realised the situation was very different when I spoke to PM. With the benefit of hindsight, some of these roles should have been better clarified, and NHB has strengthened these roles internally."
Speaking later on the issue, DPM Teo defended the board, saying: "If the NHB is to be faulted for anything, it is that they were drawn, through this Deed of Gift, into this private disagreement."
Referring to the demolition clause requirement, he said he was uncomfortable with NHB, a public institution, being drawn into "presenting a particular point of view which was incomplete".
But as NHB had already signed the deed, he agreed with Mr Wong that they should proceed with the exhibition rather than have a public controversy.
"Contrary to this being an abuse of power, these were efforts to keep NHB, a public agency, and to keep a major public exhibition neutral... It is ironic that these efforts to keep our public agencies neutral is now being distorted into allegations of abuse of power for private interests," he said.
Mr Wong said PM Lee would have been entitled to receive a copy of the agreement with the executors, both as a beneficiary of the estate as well as in his official capacity.