Halting the decline

How severely are the streets of Malaysia paved with dirty money? (© Stephen Finn / Dreamstime)

PERCEPTION, it is said, is everything. And when it comes to corruption in the government, Malaysia just cannot seem to shake it off. Despite strides taken to cut bureaucracy and increase transparency in government services, the country’s overall score in the annual Corruption Perception Index (CPI) continues to slip.

Malaysia scored 5.1 out of 10 in the 2008 CPI, and was ranked 47^th of 180 countries surveyed. The index measures the degree of perceived corruption among public officials and politicians. It was released on 23 Sept 2008 by Transparency International (TI) Malaysia.

The country’s average score over the last eight years is 5.05, while its ranking has slipped from 36^th place among 91 countries surveyed in 2001.

As the number of countries surveyed has increased, Malaysia’s global ranking has fallen, putting it far behind Singapore, the world’s fourth most transparent country with a score of 9.2.

Malaysia’s stagnant score is not for a lack of effort, though more could be done by the civil service. The problem, according to good governance watchdogs, lies with our political culture and its patronage system.

There is no transparent process of accountability to prevent
corrupt practices by political parties, including during
election time No transparency

The civil service has been helped by the joint private sector-government Special Task Force to Facilitate Business (Pemudah) to respond more efficiently to clients. Since 2007, Pemudah has sped up and simplified applications for business licences and the hiring of expatriates, cleared the backlog for land approvals, and hastened refunds for overpaid taxes.

But Pemudah’s ambit does not extend to political parties. Political parties have their code of ethics and internal disciplinary measures, but these are only applied at the discretion of the party leadership. Action is only taken after an alleged corrupt act. There is no transparent process of accountability to prevent such acts in the first place.

Even Malaysia’s Elections Offences Act 1954 (revised 1969), which limits candidates’ expenses during campaigning (RM200,000 for parliamentary candidates and RM100,000 for state seat candidates), does not cover expenses by the candidates’ parties, which clearly run into far higher sums.

TI, which monitored election spending by Barisan Nasional during the 8 March 2008 general election, has said that some RM1.5 million was spent on election advertisements in domestic newspapers for three days from 25 to 27 Feb.

The Elections Offences Act also requires candidates to file their election expenses within 31 days after the election results are published in the Gazette, or be fined RM5,000 and lose the seat.

But merely filing a statement without any audit or disclosure is not transparency, Malaysian Institute for Corporate Governance (MICG) president Tan Sri Megat Najmuddin Megat Khas tells The Nut Graph.

So long as political funding and spending remains opaque, Malaysia’s CPI score will be in limbo, between that of first- and third-world countries, despite its ambitions of being a fully developed nation by 2020.

Perception does matter

Malaysian Institute of Integrity (IIM) president Datuk Dr Mohd Tap Salleh says the local political culture of patronage directly contributes to the CPI score, since perception of political corruption is one of the sub-indices measured.

“Money politics is something everybody knows about, and it is even reported in the press [that] some politicians get involved in it to get elected.

“The impact on the CPI score is that it cancels out efforts made by the civil service to be more transparent, as politicians are leaders of the country and people look to them. If they do not clean up their act, it obviously affects perception,” Mohd Tap tells The Nut Graph.

Former senior civil servant and now TI Malaysia president Tan Sri Ramon Navaratnam adds that corruption in politics can affect the civil service by using the public delivery system to achieve political agendas or personal enrichment.

This scenario gives rise to the perception that certain government projects are approved based on political connections.

“Public officials and politicians are sometimes closely inter-related. Officials are also part of the political system,” Ramon says.

Corruption in politics affects the civil service, says TI
Malaysia president Ramon Adds Megat Najmuddin: “Look at the cases of public buildings where the ceilings collapse, and schools where new computers don’t work. To me, they may or may not be linked to politics, but they are all incidents of corruption in the civil service.”

Watchdogs say it will be a long road to changing the political culture, but the first step is to regulate political funding. A system of accountability, once introduced, will hopefully bring other shadowy machinations into the light.

TI is embarking on the Crinis Project (crinis in Latin meaning “a ray of light”) here to evaluate current laws and processes on the political financing of parties and candidates during election and non-election periods.

The two-year project has just started, says Megat Najmuddin, and will ultimately recommend to the government political funding laws. Universiti Teknologi Malaysia’s expert in constitutional law Prof Dr Shad Saleem Faruqi has been commissioned to conduct the study.

The Crinis Project has been conducted in eight Latin American countries, where joint studies by TI and The Carter Centre (founded by former US president Jimmy Carter) have found a lack of accountability in the political funding process.

Follow the money trail

(© Ijansempoi / Dreamstime)

Megat Najmuddin, who is also a TI executive council member, says: “If we are serious about curbing money politics, the funding process is where we should start. Money is a necessity in politics for party overheads and to run programmes, but as it is now there is no transparency. We don’t know who or where the money is coming from.”

The study will look at laws in other countries. The United States regulates campaign financing under its Federal Election Campaign Act 1971. It requires election candidates to disclose their sources of campaign contributions and expenditure, limits the amount of contributions made, and also stipulates who and what type of organisation may raise funds and make donations. It also allows funding from taxpayers’ money for presidential and general elections, and places limits on candidates who accept public funding.

The US law also bans certain sources of funding, namely from corporations, labour organisations, banks, government contractors and foreign nationals. Donations in cash over US$100 are also prohibited, as are anonymous contributions. Penalties for breaching these regulations are fines imposed by the Federal Election Commission.

Additionally, civil society also plays a strong role in monitoring and disclosing campaign funding and expenditure. The OpenSecrets.org Centre for Responsive Politics lists on its website the donors, amount of contributions, and spending details of current presidential candidates Senators John McCain and Barack Obama.

Closer to home, Singapore leads the region in transparency in political party funding. Political parties in the city state are required to submit yearly reports on donations received to the Registrar of Political Donations. Donors must also report their contributions above SD$10,000. However, it is not necessary for these disclosures to be made public.

According to the Sweden-based International Institute for Democracy and Electoral Assistance, Malaysia ranks alongside Myanmar and Cambodia in having no regulatory provisions for political funding.

Mohd Tap: CPI score is low because of money politics
(Source: iim.com.my) Mohd Tap says the US system whereby presidential candidates can apply for a portion of public funds for their campaigns enhances political parties’ responsibility towards the taxpaying public. It frees candidates from the controversies of fundraising, and helps them avoid potentially questionable sources.

“Here, if a politician joins a party, they have to use their own money. If you don’t have money, you are tempted to resort to other means to get it,” says Mohd Tap.

How your money is being used

Disclosure on campaign expenditure is important because taxpayers, whose contributions are meant to help the running of the government administration, have every right to know how their money is being used.

Allegations of such misuse were made against Prime Minister Datuk Seri Abdullah Ahmad Badawi and his deputy Datuk Seri Najib Razak twice to the Anti-Corruption Agency (ACA) on 5 Aug and 4 Sept. The complainant, former Umno Youth exco member Datuk Mazlan Harun, alleged that the two leaders had used an agency under the Information Ministry to campaign for their positions among Umno branch and division leaders. This was said to include providing hotel accommodation and pocket money. Abdullah and Najib have since denied any wrongdoing, while the ACA is silent on the case.

Few politicians have been charged for money politics under the Anti-Corruption Act 1997. Seremban Umno deputy division chief, businessman Mohd Nor Awang, may have been the first party member to have charges brought against him. He pleaded not guilty on 2 Sept 2008 to two counts of corruption for offering money to an Umno branch head in exchange for nominations for the division’s top post in the coming party elections.

It is hoped that Mohd Nor’s case is the start of a new aggressiveness on the ACA’s part to check corruption in political parties. Until his case, the norm in Umno has been to merely suspend guilty party members without referring their cases to the ACA.

What political funding legislation can provide that the ACA cannot is an accountability process that discloses the sources of money coming to political parties and into politicians’ hands; how that money is spent; and the limits on donations received and spending.

Nazri Aziz: The next best thing is to regulate political spending Datuk Seri Nazri Aziz, minister in the prime minister’s department in charge of parliamentary affairs and law, welcomes efforts to institute political funding regulations.

“It is difficult to stop spending in politics, so the next best thing is to try to regulate it,” Nazri says of the Crinis Project.

Mohd Tap is confident that the ACA’s increased activeness in prosecuting top civil servants for graft will be reflected in a higher CPI score next year.

He points to recent cases such as immigration director-general Datuk Wahid Md Don, tourism director-general Datuk Mirza Mohamad Taiyab, Perak executive councillors Mohd Osman Mohd Jailu and Jamaluddin Mohd Radzi, plus the clean-up at the Computerised Vehicle Inspection Centre (Puspakom). The ACA’s revamp into the independent Malaysian Commission Against Corruption in 2009 is also expected to push the score up.

But before Malaysia can get a score worthy of a first-world nation, much more has to be done. And money politics, “the mother of all corruption”, has to be nipped in the bud. A transparent process to disclose political funding and expenditures can be the first step.