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Political financing through foundations, corruption and the pursuit of power

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The Center to Combat Corruption and Cronyism (C4 Center) demands answers regarding the vulnerabilities inherent in foundations or “yayasan” being controlled by political parties and being used as war chests during political campaigns, especially since little to no attention has been brought to this matter.

“Foundations and Donations: Political Financing, Corruption, and the Pursuit of Power” is the title of the report launched by C4 Center recently on political funding through donations in Malaysian politics, which features case studies involving prominent politicians such as Najib Razak, Zahid Hamidi and Adnan Mansor.

The report also explores the various methods politicians’ exerted control over such foundations and raises questions about the nexus between policies and selective patronage.

There needs to be answers on how foundations helmed or founded by politicians, including Prime Minister Muhyiddin Yassin and opposition leader Anwar Ibrahim, can be used to provide specific aid to the constituencies of such politicians, especially when established as charities or organisations meant to fund social and community programmes or as a focal point for religious pursuits.

Examples here include the TSM Charity Golf Foundation, which has accumulated more than RM27m in donations since its inception in 2003, and has channelled approximately RM24m to charitable projects. However, food donations were also made by the foundation in the name of Bersatu Hulu Selangor and Bersatu Lembah Pantai, which reflects a political agenda within the social cause.

Another example is Yayasan Aman, founded by Anwar and helmed by his wife, Dr Wan Azizah Wan Izmail, which provided aid specifically to Port Dickson and Pandan, the constituencies of Anwar and Wan Azizah, respectively.

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Answers are also needed about how there can be vulnerabilities in the system when it comes to foundations – by nature of the foundations being under the personal control of political persons, nepotism through family foundations as well as abuse of power, which can be used to circumvent rules, such as those regarding audits and filing financial reports. That this has gone unmentioned at all is a black mark against Malaysian politics.

Ultimately, while there are indeed foundations that do proper charity work, and while political donations are a legitimate means of raising campaign funds, it is when the two intersect that things get murkier, as the vulnerability for quid pro quo arrangements exists, meaning the system itself is vulnerable to corruption by those in power.

The full report on Foundations and Donations: Political Financing, Corruption, and the Pursuit of Power is available for download at c4center.org

  • The full report is here
  • Copy of slides presented by Prof Edmund Terence Gomez and Lalitha Kunaratnam, authors of the report, available for download here

Center to Combat Corruption & Cronyism (C4 Center)

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