Political patronage and money: The case for a law on political financing

KUALA LUMPUR, Sept 24 — While the federal government has finally agreed to provide all MPs an equal amount of allocation for the last four months of the year, institutional reform advocates are pushing the envelope to regulate political funding permanently.

This would be in the form of a new law that requires all politicians and their parties to publicly disclose the source and the amount of funds received and how the money is to be used.

Corruption watcher Cynthia Gabriel from the Centre to Combat Corruption and Cronyism said political parties have for far too long hid their personal gains and reaped monetary rewards for being in power by deeming money channeled through foundations for charity as political donations.

She said these foundations or yayasan could be state owned, parked under the Prime Minister's Department, or privately-owned and could have millions of ringgit channeled through them.

She said those that need scrutiny are those that are run privately or whose board of trustees comprise mostly family members.

She gave the example of two foundations, Yayasan Nurul Yaqeen and TSM Charity Golf Foundation, which are private and held by a board of trustees consisting of former prime minister Tan Sri Muhyiddin Yassin’s family members.

According to Cynthia, Muhyiddin’s golf foundation had received millions of ringgit in both cash and kind from public-listed conglomerates like Genting Malaysia Bhd, Tropicana Corporation, Top Glove, and DRB-Hicom.

She pointed out that another former prime minister Datuk Seri Najib Razak — who is currently on trial for multiple criminal and corruption charges — had three foundations under him that are currently the subject of a legal tussle following allegations of misappropriation. She named them as Yayasan Rahah, Yayasan Rakyat 1 Malaysia and Yayasan 1MBD.

“The 1MDB case in all its controversies is not registered under the Securities Commission of Malaysia or Companies Commission Malaysia nor was it registered as a non-profit organisation with the Registrar of Societies but millions were moving through it.

“In the case of Datuk Seri Ahmad Zahid Hamidi, some of the foundations abused were religious foundations. Money channeled through his foundation were deemed for his political constituencies ,” Cynthia said during a webinar hosted by Transparency International Malaysia on its Facebook page today.

“That’s why we want a complete stop for foundations and government-linked companies to be used as conduits for political funding. The other issue is what do we do to the gatekeepers like the banks and legal firms who enable this to flourish?

“The fact that so much money has flowed into the political system from foundations meant to eradicate poverty and do social work shows that there is an extremely urgent need for a Political Financing Act,” she added.

Bandar Kuching MP Dr Kelvin Yii, who also participated in the webinar, said he has felt pressured to seek donations from outsiders to help his constituents.

He attributed this to difficulty getting allocations for constituents, saying that in Sarawak, patronage politics is an issue.

He said that voters, especially in rural areas, have long been told that if they vote for the Opposition, they won’t have money and there won’t be any development in their area.

“There is this term in Iban like a mantra in the urban area which is anang anang laban perintah which means you do not fight the ruling government, they are the ruling brothers that need to take care of you.

“Because of these types of development politics, we see corrupt practices where non-transparent sources of funding come into the MPs because development funds are at times insufficient especially for the rural areas.

“Because of these sentiments sometimes there is a need to indulge in such practices and we need to address this systematically,” he said.

Tricia Yeoh, the chief executive officer for the Institute for Democracy and Economic Affairs, felt a lot of Malaysians have great distrust in political parties and the laws that govern their spending.

She said the lack of transparency and regulations on political financing breeds corruption, perpetuates patronage and clientelism. She said Malaysia should push for a Political Funding Act.

She also said that moving into public funding would be a game changer. She said it is currently being used by two-thirds of the world but South Korea was an example of an Asian country using this method for political funding.

“It will curb spending in elections, reduce influence and dependency on foreign and corporate or private funds, promote a more level playing field and shift focus away from fundraising to performance duties.

“Now then comes the question if the parties will be happy with it as big parties like Umno rely on larger sums of money but at least everyone is on a level playing ground,” she said.

“It will also result in more stable and institutionalised parties and party system,” Yeoh added.

A new Bill to regulate political contributions was most recently mooted by Umno secretary-general Datuk Seri Ahamd Maslan.

The Pontian MP said a Political Funding Act would enhance transparency as the political parties would be required to disclose fully the source of the funds.

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