Time for political financing law (unedited original article)

Time for political financing law

Former Prime Minister Muhyiddin Yassin's bribery and money laundering 7 charges have been brought to public attention, involving sums of more than RM230 million. It is another eye-opener, although nothing compared to another former prime minister, Najib Razak, who is serving a jail sentence for siphoning US$681 million into his personal account.. When they were accused of soliciting such funds, they were sitting prime ministers. This should make people concerned about money politics and how political funding can influence or determine election outcomes and undermine free and fair electoral democracy. Najib's money extended his tenure as prime minister in the 2013 general election, Muhyiddin's may have led to a better-than-expected result in the last general election.

Can BERSATU alone be blamed? Hardly, which is why Muhyiddin's ex-aide Marzuki Mohamad has called on the MACC to investigate the PKR and DAP books to show that there is no selective prosecution.

There are three broad ways in which a political party can normally raise funds: i) grassroots fundraising, ii) private donations from vested interests (usually big donors), iii) public funding.

At present, there is no public funding for political parties in Malaysia. Many established traditional political parties would have a greater advantage in grassroots fundraising through membership fees and various forms of voluntary crowdfunding from supporters. Newly formed political parties would then find it difficult to achieve a critical mass of support.

For all the good practices of participatory democracy and the hard work that goes into grassroots fundraising, it may or may not be enough to cover all the expenses of a political party, such as day-to-day operations (salaries, utilities and rent), issue-based campaigns, policy research and advocacy, and ultimately elections. 

It is likely that most political parties would not immediately refuse private donations from vested interests. There are no laws or regulations that directly monitor this flow of money, unless the relevant authorities start investigating possible wrongdoing. Interest groups may offer tens or hundreds of thousands or even millions of dollars, but rarely would such donations come without strings attached. They may not come with explicit promises, but there would be an expectation that the party in power would return the favour. For the donors, it's more like an investment than their genuine love and support for the party - it wouldn't be normal to declare support to the tune of RM230 million free money for the party to use!

This is how things have gone wrong for BERSATU. Its supporters must be feeling the heat as they now find themselves on the wrong side of the political fence. Private funding of a party without legal limits is often a major concern because voters do not know who the big money behind the party is and what their agenda and undue influence would be in terms of policy formulation.

Reducing the party's dependence on a few big donors and vested interests would be the obvious thing to do, but this is where the need for a law on political financing comes in - it is about creating a level playing field for healthy democratic competition.

There needs to be a contribution limit for individuals and companies. In the Private Member's Bill drafted by the former APPG on Political Financing last August, the statutory limits are RM50,000 and RM100,000 per year respectively. Foreign companies and government-linked companies would not be allowed to contribute. For monitoring and regulatory purposes, all fundraising must be done through a designated party account, not through party branches or individual politicians' accounts.

The government should establish a Commission on Political Financing to oversee the monitoring, regulation and enforcement processes for political parties to submit their annual financial reports and disclose major donors. The commission should consist of independent commissioners who enjoy public confidence and support, be paid from the federal budget and be accountable to parliament.

Public funding should be a key component of the Political Financing Bill in order to motivate political parties to support the Bill because of the tangible benefits to them of having to comply with contribution limits and disclosure requirements. The amount of public funding proposed in the APPG Bill would only require 0.05% of the federal budget or the equivalent of RM130 million to start distributing public funds to political parties based on vote share.

It may also be true that the first reaction of most members of the public to the proposed public funding would be: 'why do we have to pay for these political parties?' People need to be told and persuaded that the alternative to public funding would be to de facto encourage political parties to find ways of increasing their share of private funding!