Foundations and Donations: Political Financing, Corruption, and the Pursuit of Power

When prominent politicians in Malaysia were charged for corruption, including a former Prime Minister, his deputy, and an ex-Chief Minister of Sabah, their court cases brought to public notice a longstanding occurrence in the financing of politics: the abuse of foundations. During these corruption cases, a common defence by these politicians was that the funds they were privy to through these foundations were merely donations for their campaign activities. However, as the court cases revealed, the quid pro quo or return for donations to these well-connected foundations was the award of various government-generated concessions to the donors. This report explores the connections between donations to foundations and political financing in Malaysia.

Malaysia’s political history is replete with scandals precipitated by deeply embedded links between politics and business, an unfortunate outcome of government intervention in the economy since the 1970s to rectify social injustices. Since foundations have long been a feature in Malaysia’s political landscape, ostensibly to fund social development, this disclosure of their role in the accumulation of money for the financing of politics was particularly shocking.

Even though these court cases publicly revealed this covert fund-raising mechanism employed by politicians, two astonishing facts emerged. First, questions were not raised by politicians in government or in the opposition about how to address this problem of the non-transparent role of foundations in the political system. Second, although these cases revealed that substantial volumes of money had been channelled into the political system, contributing to serious corruption, as well as attempts to secure or consolidate power within a party, in a constituency, or in government, there was no mention by any politician of the urgent need to identify effective ways to regulate political financing; even as politicians fervently advocate eradicating corruption.

Read more in the full report here

Media Statement

Slides PPT (PDF)

Watch a summary of the key issues here:

 

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