Malaysia moves to ban foreign political funding

Malaysia's Prime Minister Najib Razak (second from right) leaves his office at the parliament in Kuala Lumpur on May 25, 2016.
Malaysia's Prime Minister Najib Razak (second from right) leaves his office at the parliament in Kuala Lumpur on May 25, 2016.PHOTO: AFP

Committee also pushing for donations from govt-linked sources to be barred before next general election

Political donations from foreign and government-linked sources will be banned, said a committee set up last year to ensure such funds are not used to influence elections.

Committee chairman Paul Low, Minister in the Prime Minister's Department, said these will be among the recommendations to be submitted to the Malaysian Cabinet in August.

The National Consultative Committee on Political Funding (JKNMPP) was formed by Prime Minister Najib Razak last August following a controversy in which more than US$700 million (S$966 million) was found in his private banking accounts.

 

Speaking after a conference on political integrity organised by the JKNMPP, Datuk Low said that while the proposed regulations are not retrospective, the committee expects them to be ready before the next general election. "Hopefully, there will be a Political Donation Act by GE14," he said, referring to Malaysia's 14th general election.

Mr Low said a Political Donation Act would bar the use of foreign funding, as well as donations from government-linked bodies, although a threshold of state ownership has yet to be agreed on. Companies benefiting from government deals would also be under scrutiny, with the committee set to define by the end of July the size and type of contract that would disqualify such a firm from making donations.

A Political Donation Act would bar the use of foreign funding, as well as donations from government-linked bodies, although a threshold of state ownership has yet to be agreed on. Companies benefiting from government deals would also be under scrutiny, with the committee set to define by the end of July the size and type of contract that would disqualify such a firm from making donations.

Mr Low added that "special accounts" must be designated to receive and disburse political funds as "voters are interested in political funding sources and how it (the money) is spent".

But he said the committee was not in favour of setting limits to amounts that could be donated.

Instead, the Election Offences Act would be amended to redefine and update spending limits, taking into consideration the different costs involved when campaigning in urban or remote rural areas.

Datuk Seri Najib has faced calls to resign since news reports last July revealed that massive funds had been deposited into his personal accounts via companies linked to troubled state investor 1Malaysia Development Berhad (1MDB).

He later explained that the bulk of the money was a political donation from the Saudi royal family. 

Attorney-General Mohamed Apandi Ali, who has cleared the Premier of wrongdoing, said in January that Mr Najib was not aware that government-owned SRC International, a former 1MDB subsidiary, had transferred RM42 million (S$14 million) into his accounts, and was therefore not guilty of graft.

Mr Najib then announced the formation of the JKNMPP in August, giving it a year to present proposals to Cabinet that address "an urgent need to regulate political financing to ensure accountability and transparency, in order to create a healthy political practice". Unlike countries such as South Korea, Mexico and Indonesia, which were represented on various panels at the conference, Malaysia has no specific law governing political funding.

Mr Low, who was Transparency International-Malaysia president before being appointed to Cabinet after the 2013 General Election, said further action was needed, such as reforming institutions as well as government procurement to ensure that donors would not be victimised for helping the opposition.

A version of this article appeared in the print edition of The Straits Times on May 26, 2016, with the headline 'KL moves to ban foreign political funding'. Print Edition | Subscribe