Shocking revelations from Zahid’s corruption trial highlight urgent need for law to regulate political donations

Zahid Hamidi - WIKIPEDIA

The Center to Combat Corruption and Cronyism (C4 Center) is shocked by recent testimonies in the corruption trial of former Deputy Prime Minister Zahid Hamidi which confirm fund transfers termed as political donations made by Ultra Kirana Sdn Bhd (UKSB) to prominent politicians including:

  • Monthly payments [allegedly] to Zahid from 2014 to 2018 beginning at S$200,000 per month, increased to S$520,000 per month some time in 2017
  • RM1.3m [allegedly] to then home minister Mahiaddin Yasin in 2018
  • RM3.7m [allegedly] to Khairy Jamaluddin
  • Between RM200,000 and RM300,000 [allegedly] to Reezal Merican Naina Merican
  • Amounts unknown [allegedly] to Hishammuddin Hussein, Shafie Apdal and Anifah Aman

Testimonies from a former UKSB director and employee confirmed that UKSB’s payments to Zahid and Mahiaddin Yasin were related to the government’s foreign visa system programme, which involved a contract agreement between UKSB and the Ministry of Home Affairs. The payments above were recorded in UKSB’s ledger.

These revelations once again highlight the urgent need to introduce laws on political financing and comprehensively regulate donations to political parties and politically linked individuals. Unregulated political donations are key enablers of political corruption. Despite this, no laws on political financing have yet been passed, despite years of demands from legal experts and civil society.

Under the current legal framework, there are no limits on the amount of political donations permitted. There is also no requirement for political parties to disclose the identities of their donors. This prevents any sort of public oversight or scrutiny on how political donations affect our political system until after a politician is charged with receiving bribes, as proven by Zahid’s present case. How many other suspicious ‘political donations’ to politicians are the public not privy to?

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The lack of regulations on political donations also create a grey area where the line between a political donation and a bribe can be blurred. This uncertainty was recently illustrated by the case of former Federal Territories Minister Tengku Adnan Mansor. After being found guilty by the High Court under Section 165 of the Penal Code with receiving kickbacks totalling RM2m from Aset Kayamas Sdn Bhd (AKSB) managing director Tan Sri Chai Kin Kong, he was acquitted by the Court of Appeal.

The reason for his acquittal was that the RM2m in question, deposited into Tadmansori Holdings Sdn Bhd owned by Tengku Adnan himself, was found to have been a donation to Umno for two by-elections and not for Tengku Adnan’s personal use. However, according to Justice Abu Bakar Jais’ dissenting judgement, there was no record that Tadmansori had given the money to Umno after receiving the cheque and that Tengku Adnan had pocketed the money.

Where, then, do we draw the line for political donations? While they may be a legitimate source of political financing, without proper regulations and oversight, they not only open the door to the possibility of massive corruption between powerful politicians and companies seeking influence, but they also destroy public trust in the political system. The sheer number of politicians facing court cases involving political donations demonstrates that this is not an isolated practice.

How many more cases of political corruption involving donations must we bear before we take action? How many more names of politicians must be revealed before we fix the system? What is taking so long for a law to be passed? Can we really risk waiting until after the next election?

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With this, C4 Center calls for the following:

  • Parliament to table a political financing law as soon as possible. A draft of this law has existed since before the Pakatan Harapan administration yet has still not been made public
  • Asset declaration laws to be tabled to prevent the flow of secret and illicit wealth
  • Mahiaddin and all other politicians named in Zahid’s present trial to explain their receipt of funds from UKSB and how the money was used. Mere denials will only lead to further trust deficits
  • The Malaysian Anti-Corruption Commission to investigate the politicians alleged to have received funds from UKSB and to issue a public statement why investigations were not launched despite knowledge of the contents of the ledger. The MACC should be investigated for this seemingly selective action
  • The public accounts committee to investigate the matter and find out why the MACC did not launch investigations into the other politicians despite prior knowledge of the contents of the ledger

– C4 Center



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