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Experts: M’sia needs laws to prevent abuse of political funds
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The one-year time frame given to the National Consultative Committee on Political Funding to draw up a comprehensive and inclusive political funding action plan of integrity is due to end in August.

While the committee is confident that it can complete the task by then, its preliminary findings show that there is, indeed, a need for legislation and regulations to govern political financing.

According to committee chairperson Paul Low Seng Kuan, who is Minister in the Prime Minister’s Department, some laws also need to be reviewed to improve financing within the political system.

In other words, donations for political purposes should be regulated while institutional reforms have to be carried out to enhance and strengthen the regulatory bodies that govern the nation's political system.

In a press statement issued in conjunction with the International Conference on Political Integrity: Reinforcing Transparency in Political Financing held in Kuala Lumpur on May 24 and 25, Low said as part of the studies undertaken by the committee’s secretariat at the Malaysian Institute of Integrity, it has met relevant stakeholders throughout Malaysia in order to obtain inputs on issues, challenges and possible solutions to matters relating to political financing.

Legislation

The recent conference, organised by the committee and Malaysian Institute of Integrity, saw political management experts from Mexico, South Korea, Indonesia and Taiwan sharing their countries’ experiences in managing their respective political financing systems.

Indonesia’s General Election Commission member Arief Budiman said every country should have its own set of laws and regulations to deal with the issue of political funding.

“Maybe in some places it’s not wrong (not to declare political funds) while in other places it is an offence (not to declare such funds). But it’s clear that if it's not declared, then it’s not transparent... and this surely doesn’t speak well of a party’s integrity.

“The question here is whether it is right or wrong (to receive political financing). The funding may be legitimate and it may be used for legitimate purposes, but why wasn’t it declared... it’s strange that if the funding is legitimate, then why wasn’t it declared?” he told Bernama, on the sidelines of the conference.

Sources of funding

On Indonesia’s laws related to political financing, Arief said the republicrequired all such funding to be reported to the authority concerned for its scrutiny.

He explained that his country’s registered political parties usually obtained their financing from party members or individuals inside or outside the party, and even companies, business entities, the state government or local government.

He said funds received from the government have to be reported to the Revenue, Financial Processing and Assets agency, which was in charge of scrutinising financing.

“But contributions made by individuals have to be reported to the General Election Commission, which will instruct its accountant, as well as an independent public accountant, to carry out the necessary checks.

“This way we’ll get to know who the donors are and the public will know how much funds political parties have in their coffers, where they sourced it from and how it is utilised,” he said.

Is there a possibility of political parties being beholden to the individuals or organisations that had contributed funds to the parties?

To this Arief, who has actively participated in various election programmes organised by the United Nations, said every party should adhere to its own principles when going about their agenda without being influenced by anyone.

“It’s up to each party to determine its affairs. Each party has its own platform and plans, so there’s no need for the (fund) contributors to intervene. It’s not necessary for any party to change its agenda in order to please a contributor,” he added.

Penalty

Earlier in his working paper presented at the conference, Arief said in Indonesia under Section 34 paragraph (2) of Law Number 2 Year 2008, political party members can make contributions to their party in the form of money, property and/or service.

Non-members can contribute a maximum of one billion rupiah (RM304,913) per person per year, while the maximum donation a company or business entity can give in a year is 7.5 billion rupiah ((RM2.3 million).

According to Arief, Indonesian political parties were prohibited from receiving any contribution or funds from either foreign sources or any unidentified company or business entity, as this clearly contravened the law.

“If there’s proof of violation of the law, the party leaders or others involved face a maximum jail term of one or two years (depending on the category of offence) and also a fine equivalent to twice the amount of contribution received,” he said.

Prevent abuse

Universiti Utara Malaysia senior lecturer in international studies Associate Prof Dr Mohd Azizuddin Mohd Sani, who participated in one of panel discussions during the conference, said there was a need to draft new laws to govern political funding in Malaysia to prevent abuse of funds and ensure that they were utilised for legitimate purposes.

It will also help to put a stop to public concerns over how political parties manage their funds.

“The public is not questioning how much money a party has but whether or not they are spending it on projects to improve the welfare of the people.

“Democratic countries like Taiwan, South Korea, Mexico and Indonesia all have laws on political funding but we (Malaysia) don’t. Hence, it is crucial that we have similar legislation in place, more so when outside parties are being involved in contributing funds as this can raise concerns about corruption,” he told Bernama, on the sidelines of the conference.

Mohd Azizuddin said geopolitical financing was fraught with the risk that the political party involved may feel “obliged” to be influenced by the donor, which may lead to consequences that are not in the interests of the rakyat.

It is precisely for this reason that the perception that “financial contributions are part of the political culture and, as such, warrant no special monitoring” must be changed, he said.

“Yes, political parties need a lot of funds, especially when campaigning during elections, but then the rakyat also seeks financial help through their elected representatives.

“Having specific laws related to political financing will help all the parties involved to be more transparent and trustworthy (in their dealings),” he said.

Reveal donors

What are the implications of such legislation on political parties?

Mohd Azizuddin felt that parties need not worry whether or not voters would approve of their fund contributors if their names were revealed.

The contributors, on the other hand, have more reason to worry as they may find themselves at a disadvantage if the party they had backed lost in an election.

“The contributors may also end up having problems with the winning party or parties,” he said, adding he was confident that the relevant legislation to govern political financing would become a reality in this country through the efforts of the Malaysian Institute of Integrity.

Arief, meanwhile, said political parties should be more selective when it came to accepting donations as “some voters approve of it while others don’t, but in the end it will have an impact on the party. For example, if a party chooses to receive donations from a dubious source, voters for sure won’t support that party.”

- Bernama

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