PETALING JAYA: A Political Financing Act is needed to break the cycle of corruption tied to government contracts, says the Centre to Combat Corruption and Cronyism (C4).
Its chief executive officer Pushpan Murugiah said the lack of transparency in the distribution of contracts and the unregulated appointment of leaders within government-linked companies (GLCs) created fertile ground for corrupt practices.
He said the situation allowed businesses to form crony networks, with funds often being channelled to political parties in exchange for favours.
ALSO READ: Scope of planned political funding law still being fine-tuned, says PM
Pushpan stressed that corruption in GLCs has become a common mechanism for funding political parties.
“The ever-narrowing relationship between business and politics facilitates public sector corruption, with money from government contracts flowing directly into political party coffers,” he said when contacted Wednesday (Oct 16).
He called for immediate reforms, including the introduction of a Political Financing Act and a legally enforceable asset declaration framework, to create barriers against these entrenched practices.
Pushpan said politicians often turn to GLCs due to the opacity surrounding their leadership appointments, particularly at the state level.
“The appointment process in these entities is not regulated, and at the state level is even more opaque,” he said, adding that this has allowed politicians to exploit GLCs.
C4’s research, alongside findings from prominent academics such as Dr Terence Edmund Gomez, has consistently highlighted the deepening ties between business and politics, he said.
ALSO READ: Existing laws to govern political funding until new Bill takes effect, says Kulasegaran
“Crony networks are used to create a cycle of mutual benefit, where businesses benefitting from government contracts make contributions back to political parties,” Pushpan said.
He stressed that without proper regulation, political parties in Malaysia will continue to benefit from corrupt practices, as current laws impose only minimal obligations on parties to report their finances.
Pushpan noted that enacting political funding laws appeared to remain law on the government’s list of priorities.
He also pointed to other avenues of financial corruption, including the use of foundations, charities and trusts.
“Bank accounts are not the only avenue by which politicians can ‘legally’ veil their funds from scrutiny. Charities and foundations have been used extensively for this purpose,” he added.
Touching on the recent discovery of RM5mil in a safe house allegedly linked to a politician, Pushpan said the news was shocking but not entirely surprising.
ALSO READ: MACC raids politician’s ‘safe house’, seizes RM5mil in foreign currency
“This follows a pattern we have observed before – funds are often concealed in various ways, and it reflects the systemic issues we face in the lack of oversight and regulation,” he said.
His view was echoed by political analyst Dr Azmi Hassan, who said the absence of a specific political funding law is a major factor contributing to the misuse of such safe houses by politicians to store illicit cash.
Azmi highlighted that without clear political funding laws, it is difficult to regulate how politicians acquire funds.
“Safe houses come into play because transactions through the banking system are more easily traced,” he said.
He pointed to Singapore’s strict regulations on political donations, where anything beyond a certain amount must be made public.
Azmi said Malaysia’s Elections Act 1958 regulates campaign spending, but many candidates find ways to bypass the limits, further illustrating the need for a proper political funding law.
“Politicians talk a lot about this but no one wants to champion it, as a strict law would make it difficult for them to fund their activities as they wish,” he said.
He called for more concrete action, stating that while there has been plenty of discussion, no serious steps have been taken to introduce a draft or Bill in Parliament for debate.
ALSO READ: Expert: Demonetisation will cripple the corrupt
The proposed Political Financing Bill has been under discussion since 2015 following the 1MDB scandal but has faced delays.
In 2022, the law was set to be fast-tracked but was postponed after the restructuring of the National Centre for Governance, Integrity, and Anti-Corruption (GIACC).
On Tuesday (Oct 15), Prime Minister Datuk Seri Anwar Ibrahim said the law’s scope is still being fine-tuned by a Parliamentary Special Select Committee, with a particular focus on individual and party contributions.
The Bill is expected to be tabled by December.
