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The problem of political financing

(Ballot box pic by Miguel Sanchez /
KUALA LUMPUR, 1 Dec 2009: Malaysia has a problem with political financing but it still remains unclear what solutions might work to address the issue, a Transparency International (TI) Malaysia national conference concluded yesterday.

Dr Edmund Terence Gomez, professor of political economy at Universiti Malaya, said current legislation and disclosure requirements that would restrict covert funding of politics were completely inadequate. He noted that even party members were mostly clueless as to how money was handled in their parties.

“Furthermore, Malaysia is also one of the few countries where [political] parties own businesses. There is no public monitoring of this,” he explained during the conference entitled Challenges for Institutional and Legislative Reforms in Political Financing in Malaysia that was held on 30 Nov in Kuala Lumpur.

TI Malaysia president Datuk Paul Low said that companies should disclose their contributions to political parties. However, there is no legislation to compel them to do so. 

Political observer and former academic Dr Mavis Puthucheary added that the legislation and institutions regulating the financing of electoral campaigns were flawed, and did little to ensure the disclosure of election expenses.

To Gomez’s suggestion for a Political Parties Act, Malaysian Institute for Corporate Governance (MICG) president Tan Sri Megat Najmuddin Megat Khas said it would depend on whether parties would accept such legislation.

Megat suggested a change of party constitutions, but others noted that such codes for parties had not been adhered to thus far.

Abdul Wahab
Even public officials from the Election Commission (EC) and the Malaysian Anti-Corruption Commission (MACC) spoke about their institutions having limited powers to check the abuse of political funds.

The MACC, for example, did not have the power to investigate expenses because candidates only submitted returns to the EC at the end of elections, MACC director for the excellence and professionalism division Abdul Wahab Abdul Aziz claimed.

EC deputy chairperson Datuk Wan Ahmad Wan Omar said the EC only had the power to regulate a party’s campaign expenditure. But the power to investigate its expenditure fell under the jurisdiction of the police or the MACC.

Institutional oversight

Abdul Wahab said the problem was also that Malaysia had two to three bodies dealing with corruption. Anti-corruption enforcement measures would be more effective when a single agency was in charge, he argued, citing the US Federal Election Commission and the Australian Electoral Commission.

However, Bridget Welsh, associate professor in political science at Singapore Management University, urged caution over centralising government bodies, saying it was more important to build the capacity of the civil service.

“Until institutions can operate in an autonomous and independent fashion, it would be unwise to centralise things under one body. Centralising it could actually be destructive and undermine the entire reform process,” she said.

State funding

MICG’s Megat Najmuddin stressed the urgent need for public funding for political parties so that parties were not beholden to racketeers or criminals.

But Welsh said the issue of whether public or state funds should be used for political parties was still being debated. 

Proponents of state funding have said it would give new or minor parties a chance to survive in a political landscape dominated by bigger parties, and would also ensure transparency.

But opponents have argued that people could find it unacceptable for their tax money to go to parties they do not agree with — or even to political parties to begin with. They add that party grassroots might disagree with public funding because it could undermine their influence over the party, since the leadership would no longer depend on them to raise monies.

What next? 

Welsh said the time was ripe for Malaysia to reform in this area, and that there was growing public disgust with corruption. Vote buying had also become less prominent or accepted, she said, and the current landscape had created a more level playing field.

Still, she admitted that political financing around the world was a challenge because not many wanted it regulated.

“The reality is that we need multiple measures together, a series of things. We have to buy in political actors across the board, in a way that is non-confrontational and in their interests,” she said.

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