On Sept 30, 2016, the report entitled Political Financing in Malaysia: Reinforcing Integrity was released. This report was prepared by the National Consultative Committee on Political Financing led by Senator Paul Low, the Minister in the Prime Minister’s Department.
When this Committee was formed last year to prepare this report, there was much public scepticism if this government-initiated initiative would culminate in proposals that would address the issues contributing to the serious monetisation of Malaysia’s electoral process. The proposals in this report, however, are highly commendable and merit support as they will contribute to greater transparency on the income and expenditure of political parties, including when campaigns are conducted during federal and state elections.
The Committee’s specific proposals that merit mention are:
a) The introduction of a Political Donation & Expenditure Act (PDEA);
b) The creation of an independent Office of the Controller of Political Donations and Expenditure;
c) The formation of a Parliamentary Standing Committee on Political Financing;
d) Stringent disclosure of sources of funding;
e) State funding for Members of Parliament and State Legislative Assembly members to allow them to effectively operate their constituency offices;
f) The criminalisation of attempts to victimise donors;
g) That government-linked companies (GLCs) are banned from channelling direct and indirect resources, including money, to parties; and
h) The banning of foreign funding.
This coalition of NGOs commends these recommendations and applauds the fact that all of them can be instituted fairly quickly. We also note that a number of these recommendations are similar in nature to those we submitted to the Prime Minister and this committee (see media.wix.com). We thank the committee for acknowledging in their report that they took into consideration our proposals.
We are, however, perturbed by three core recommendations of this committee:
a) That there will be no limits on donations to and expenditure by parties. While we acknowledge that individuals and companies have the right to support political parties, this right cannot be to the detriment of the fundamental principle of creating a level playing field during elections. We see this proposal not to cap donations and expenditure as undermining the primary objective of these reforms, i.e., to stop the voluminous inflow of money into our political system and during election campaigns and allowing for a financially well-endowed elite to dominate the funding of elections;
b) That apart from establishing the Office of the Controller, no other institutional reforms have been proposed. We recognise that the committee did state that the Cabinet’s terms of reference to them did not include a review of the functioning of public institutions such as the Election Commission (EC) and the Attorney-General’s Chambers (AG) on matters involving federal and state elections and the prosecution of those who violate the relevant legislation. However, the committee’s recommendations cannot be seen as a thorough reform of the monetisation of politics unless the necessary institutional reforms are instituted; and
c) That full disclosure will contribute to fair elections. Unless proper institutional reforms are introduced, full disclosure may hamper opposition parties from securing donations from businesses. Adequate institutional safeguards must be introduced to ensure donors will not be harassed, even victimised. These issues involving institutional reforms and mechanisms to prevent the victimisation of donors to opposition parties have been addressed in the recommendations we submitted to the government. Our proposals can serve as a guide for more holistic reforms of the financing of politics.
The committee’s proposal not to impose a cap on donations could lead to the flow of considerable funds into the coffers of some parties, particularly those now well-established and deeply embedded in the political system or those that control federal and state governments. Big funders of parties are known to fund ruling parties as this serves as an avenue to shape policies that serve their business interests. Since well-established parties will be most privy to business funding, this will put smaller parties, independent candidates, and new parties entering the electoral process at a serious disadvantage. With the committee’s strict disclosure requirements, the electorate will indeed be aware of the funders of all parties. However, this does not mean that the electorate will necessarily vote against a party, even if they are uncomfortable with their funders. This is particularly true of the electorate in rural constituencies, where the issue of primary concern to voters is local development. Furthermore, there should be an assurance that secrecy laws such as the Official Secrets Act (OSA) will not be used to shield information about political financing.
As for uncapped expenditure, parties with access to substantial funds will have an unfair advantage when publicising their manifestos, through adverts, a key though extremely expensive, form of campaigning. As we saw during the 13th General Election in 2013, some parties spent lavishly on billboards and on adverts in the print and TV media.
Institutional reforms are imperative if we are to believe that federal and state elections will be conducted in a free and fair manner. While the Office of the Controller can investigate and take steps to prosecute those who violate the PDEA, the AG will decide if there is a case to prosecute. This committee acknowledges in this report that there have “been comments made on the roles of the attorney-general who, at the moment, has sole power to decide whether or not to prosecute a case including those related to political financing”.
The committee’s report also admits that there is much public support for the reform of the EC. We appreciate and commend the committee’s proposals regarding the appointment of the members of the Office of the Controller; this process will be subjected to much public oversight. A similar system can be instituted when appointments are made to the EC, whose members must also account to a Parliamentary Standing Committee.
Since there are several aspects of the committee’s recommendations which may undermine the objectives of these reforms and we recognise the need for prompt implementation of reforms, a public debate is imperative to discuss in greater depth these issues and give fair hearing to the detailed work done by other groups that have submitted proposals to the government. We believe the additional issues addressed by the coalition of NGOs will offer better possibility of fair implementation of the committee’s recommendations. We propose the following:
a) Since the drafting of the committee’s recommendations, as well as those that we prepared, were done without the participation of MPs and state assemblymen, this public debate must include politicians. Their views must now be heard before a new legislation is prepared on the financing of politics; and
b) The common ground reached on the proposals that have been submitted must be implemented as soon as possible. Other proposals that require further debate should be given more thought and instituted when an agreement has been obtained by all parties.
G25 is a movement of eminent Malay moderates.