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KL plans to regulate political donations

Publication Date : 17-10-2012


Starting next year, Malaysia may require donations to political parties to be held in externally audited accounts, as the first step towards regulating the country's opaque political financing.

This will require an amendment to the Societies Act, targeted to be tabled in Parliament by June next year.

Ravindran Devagunam, the anti-corruption director for the government's reform unit Pemandu, said this is part of a new legal framework being created to govern political financing.

"This has been in the making since 2009. It's not triggered by any particular event but it's a fundamental change needed to fight 'grand corruption'," he told The Straits Times.

There is currently no law governing donations to political parties in Malaysia, nor is there any requirement for public disclosure. But the recent discovery of a 40 million ringgit (US$13 million) donation to Umno's Sabah branch has raised eyebrows.

Prime Minister Najib Razak confirmed over the weekend that Sabah Umno had received the hefty sum but refused to reveal the source.

"Every political party has a right to receive political donations," he was quoted as saying by The Star on Sunday. "The opposition also receives donations and it doesn't disclose."

Transparency International Malaysia chief Paul Low, whose organisation has prepared a detailed proposal on regulating political financing, said such opaque financing is one of the biggest causes of corruption in Malaysia.

The international anti-graft organisation said vast amounts are regularly spent during Malaysia's election campaigns.

In the most recent Sarawak state election last year, he said hundreds of millions were estimated to have gone into campaigning and lavish handouts.

"There are so many unanswered questions in this Sabah case even if its legality is not in question," he said.

The Star reported on Sunday that timber trader Michael Chia had been detained in Hong Kong in 2008 with 40 million ringgit reportedly meant for Sabah Chief Minister Musa Aman.

Last week, Minister in the Prime Minister's Department Nazri Aziz told Parliament that Musa and Chia had been cleared of corruption as the money was for Sabah Umno.

This prompted a further outcry. Opposition MP Tony Pua said in a statement that Umno should immediately disclose the origin of the 40 million ringgit donation.

Low said such a large political donation raised the question of a conflict of interest especially since the donor was a timber trader, and the recipient had control over timber concessions.

"There are more questions than answers now," said political analyst Arnold Puyok from Sabah's University Technology Mara. "He (Musa) will continue to be attacked by the opposition."

Transparency International's memorandum on regulating such donations, sent to the Prime Minister's office two years ago, recommended that party election expenses be independently audited. It also said all parties should make a public disclosure of their accounts, sources and amount of financing.

It recommended a limit set for donations and a ban on overseas funding. It also said the government should fund all political parties based on a transparent formula to ensure a level playing field.

Asked about Pemandu's proposal, Low said it did not go far enough.

"It can help a little but it's not complete," he said.


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