Party and Campaign Funding: Is Malaysia Already a Plutocracy?

Partyforumseasia: International IDEA is very clear about the trend world-wide: Big money is taking over:
“…unequal access to political finance contributes to an unequal political playing field. The rapid growth of campaign expenditure in many countries has exacerbated this problem. The huge amounts of money involved in some election campaigns make it impossible for those without access to large private funds to compete on the same level as those who are well funded.” (See IDEA’s Handbook on Political Finance, freely downloadable from their website. (Link here)
The fact as such is not really new, Julius Caesar used enormous sums for his political maneuvers and was never reluctant to go into debt for their funding. But the proliferation of vested business interests in elections from local to national levels threatens to damage the rationality of policies and a balanced accommodation of the broader interests of a society.
Election-FlagsFor a case study of Malaysia see the following article in Malaysia Today, 18 September 2014 (Link here):                                                       by Rita Jong, The Ant Daily
In the mid-1990s, a young politician from a Barisan Nasional component party was picked as a candidate for a state assembly seat. Being a newbie, he naively expected that all component parties in the constituency would campaign for him in the spirit of brotherhood. When that didn’t happen, he asked his party elders and found out that he had to first make “contributions” to the branch chairmen of all the parties to help “pay for expenses like petrol and food and beverages”. His rude awakening to the realities of politics came when he found out the going rate then was RM10,000 to RM20,000 per branch, depending on the number of volunteers involved. “I had to dig deep into my own pockets to pay for their help.” The politician learnt fast that there were big companies he could approach for political donations, and he made use of this channel in later campaigns that even involved throwing expensive dinners underwritten by these companies. It seems such a practice is not confined to elected representatives from the ruling coalition, especially after the watershed 2008 general election. A businessman, who declined to be named, told The Heat that in the last general election, he was instrumental in arranging several opposition candidates in Selangor to meet property development companies for donations to fund campaigns. “The sums were not large; between RM10,000 and RM20,000 each. Some donors asked for help to ease approvals for their projects, while others said they didn’t need anything at that time. This meant they would call in a favour if the need arose,” he said, adding that because Selangor is administered by Pakatan Rakyat, it was easier to seek funding. Election candidates do get funds from their parties, but the amount is usually token. Candidates, especially those in “hot” seats and those with a track record to maintain, will go all out for a win, and often have to spend the maximum that is legally allowed, although it is known that many exceed the cap. Just how much is needed? A 2008 court case gives an idea. In that high-profile case, Elegant Advisory Sdn Bhd claimed RM218 million from Umno for the supply of bottled drinking water, mineral water cartons, posters, buntings, and other election paraphernalia for the Barisan Nasional’s 2004 general election campaign. The company lost the suit on the grounds that there was no written agreement. The Election Offences Act (1954) sets the allowed campaign expenses per candidate at RM100,000 for state seats and RM200,000 for federal seats. Going by such figures alone, and the fact there were 505 state seats and 222 parliamentary seats in the 2013 general election, the BN’s maximum allowance expenses would have been about RM95 million. Using the claim by Elegant Advisory as a guide, it is safe to say the BN would have spent much more than RM95 million in GE13. Dr Wolfgang Sachsenroeder, an associate fellow at the Institute of Southeast Asian Studies in Singapore, in a new academic paper published recently, claimed that Umno spent RM1.5 billion in the 2004 election. “Knowing how close the GE13 was expected to be, the estimations of between RM2 billion and RM3 billion don’t seem to be far-fetched,” he wrote. On a request from The Heat, he said the estimations were based on a long list of items like transfers from parties to candidates, transportation, ceramah and concerts, millions of flags and posters, events sponsored by local branches, food and salaries of campaign helpers, cash handouts to the poor, T-shirts and other paraphernalia, and the pay rise for civil servants. He said a big portion of expenses came from state coffers, but there were also a lot of donations from companies. In a paper published in the International Institute’s The Journal in 2003, Linda Lim said political parties in Malaysia “solved this problem by going into business themselves – Umno, MCA and MIC all run some of the biggest business conglomerates in the country, using their political position to earn large profits, part of which are plowed back into electoral campaigns to maintain their political position”. Pakatan Rakyat’s fund-raising is also shrouded in secrecy. Sachsenröder said the component parties of PR had obviously found their own ways to attract funding for their development in the years since 2008 when they managed to challenge the BN dominance for the first time. He said the DAP was probably getting more donations from Chinese businessmen unhappy with the MCA and Umno, while PKR may have received donations from non-Umno-linked businesses and middle-class Malaysians. “PAS has cultivated its image of clean politics for decades and thrifty party management based on volunteer contributions by members.” Despite all this, and considering that all political parties stand to gain from maintaining the status quo, it is unlikely there will be any move to create laws that compel disclosure of campaign funds. It is precisely because of this that the public would not know how such funding affects them later in the form of public policies and enforcement of rules. As American political journalist Theodore H. White once said: “The flood of money that gushes into politics today is a pollution of democracy.”Sources told The Heat tycoons and industry captains are willing to make huge donations to government leaders and heads of political parties for their campaigns, with the hope that they would be favourably treated when these people were appointed to powerful positions.When these candidates get elected, it would be payback time. The projects that are carried out by the candidates’ beneficiaries may get the nod, despite protests by the people. It is, however, difficult to prove such interference without disclosure of the names of campaign fund donors.Although most contributions given to candidates come mostly in the form of cash, there are different forms of favours they can pledge. Fund-raising dinners where everything is paid for by benefactors is one of them.Former MCA member and five-term Subang Jaya assemblyman Datuk Lee Hwa Beng tells The Heat that political funds can come from individuals as well as companies, mostly developers.“This is because developers are the ones who would be most affected by the outcome of an election. Hence, developers would usually give both sides of the political divide though the amount may vary,” says Lee, who lost in the 2008 general election.The retired politician says these ‘contributions’ would sometimes be offered voluntarily, or they would be approached at times by the political parties.“Businessmen with no self-interest would also give to the political party they support. Besides that, friends of the candidates would also lend their support,” says Lee.“These contributions would normally be given in cash, so that it would not be traced back to them. The money would be given directly to the candidate alone and not through a political party’s bank account.”Lee admits that based on his experience, most candidates from both sides of the political divide could actually make money from campaigning. The problem is, he says, no one keeps a check on the amount spent and if there is any money left, no one would be the wiser.“In the 2008 general election when the then state government gave us an allocation to contest, I actually had money left over and I returned it after I lost the election.“I do feel it is time we look into regulating this like how they do it in the United States. There is nothing wrong with people donating or contributing to election campaign funds, but the money must be declared. This would then be submitted to the Election Commission to show how the money is spent,” he says.PKR’s Yusmadi Yusoff and former one-term Balik Pulau member of parliament (MP) says that during the 2008 general election, he was given RM15,000 by the central party to campaign and that was all he used to win the election.“I did not source money from any individual, except that a businessman donated two boxes of mineral water for my supporters,” Yusmadi saysHe says sourcing of funds for election campaigns actually makes democracy more expensive. “I know parties like PAS and DAP are quite active in raising their funds during ceramah. They can raise quite a lot, particularly in the urban areas,” says Yusmadi.He says since the 2013 general election, his party’s treasurer at the central level appointed a campaign director for each constituency to monitor campaign donations.“The nexus between political finance, dynamics or leadership can be interpreted based on the local development of the area. For example in Balik Pulau, some development projects are still being carried out despite complaints by locals who claimed they were victimised through forced eviction,” he says.According to the Malaysian Corruption Barometer 2014 released by Transparency-International Malaysia (TI-M) recently, Malaysians ranked political parties as the most corrupt among six key institutions. The police scored second place, followed by public officials or civil servants, the judiciary, parliament or legislature, and business or private sector.TI-M called for more transparency in political financing expenditure for campaigning to curb corruption and stop money politics. It urged the government to regulate financing for all political parties where all forms of contributions and funding must be channelled to an official party account and not into political candidates’ personal bank accounts.DAP election strategist Dr Ong Kian Ming, who is also Serdang MP, says the proposal to regulate political finances would only be viable if there is a genuinely level playing field.“My fear is that this may be used as a tool to ‘scare’ people off from contributing to opposition parties, without controlling the flow of funds to the BN parties through official and non-official channels,” he says.“For example, legislation may be introduced to make it compulsory for political parties to disclose the identity of supporters who make donations above a certain amount but does not stop companies or individuals from giving to BN parties through non-official channels.”Ong says as far as DAP is concerned, the party’s election funds are obtained from supporters who attend ceramah and those who contribute to the party’s bank account.He says candidates also get donations directly from friends, family members and their supporters. He adds that he was not aware of donations from companies.“Some funds are given to the party through its official bank accounts while other funds are channelled to the party branch account to be used for individual candidates. The decision on which account to bank the contributions into is up to the individual supporter,” says Ong.The interdependence of party politics and business sectors – once dubbed as an “incestuous relationship” by veteran opposition politician Lim Kit Siang – is prevalent in low-income and developing nations, more so in Southeast Asia.In reality, political parties and their candidates need the political funds to reach out to voters and to ensure governance. To ban such donations to parties would leave them high and dry, incapable of running an effective campaign.The acceptable compromise would be for clear rules to be created to usher in an era of transparency, so that the “dark money” may be brought into the light. Big companies should donate because they support the party they think will do a good job of governing the country, not because they would get favours from it.

This article was first published in the June 21, 2014 issue of The Heat

For further reading see also:  Aboo Talib, Kartini: The Political Parties in Malaysia, in: Sachsenröder, Wolfgang (ed.): Party Politics in Southeast Asia, Singapore 2014, available at Amazon, Barnes&Noble and other internet book distributors.

Malaysia: “Fortress” UMNO threatened by Own Supporters?

Partyforumseasia: As the saying goes, with certain friends you don’t need enemies. One possibly dangerous ally of Malaysia’s ruling party UMNO is the support group Perkasa, founded in 2008. It is supposed to have a membership of over 400.000, but probably a majority among them are also UMNO members. Perkasa has been established to defend the leading role of the country’s Malay population and their special rights, enshrined in Article 153 of the constitution. Privileges for the Malays and other indigenous groups (called together “Bumiputera” or sons of the soil) go back to colonial times. The British had imported Chinese and Indian labor in big numbers, but later the decisive division became more economic and social with predominantly rural Malays and more affluent city dwellers from the immigrant minorities. Unfortunately, the imbalance is persisting until today despite all quotas and support programs of successive UMNO-led governments.
Najib Nov.   The big strategic challenge for Prime Minister Najib is the necessity to reform certain outdated provisions like the sedition act and others to win over more votes from the minorities on one hand, and at the same time convince the Malay clientele that he will not touch their privileges. After winning the last election with only 48% of the popular vote with the help of a lopsided election law, Najib faces  challenges now from both sides. And on top of that his pre-predecessor Mahathir, who has already toppled his own direct successor, is increasingly critical vis-a-vis Najib. Dr. M
In this difficult situation Perkasa is not exactly a helpful support group but pours constantly oil in the fire. Their initiatives against perceived and alleged Chinese, Indian, or Christian threats against the Malay and Muslim majority increase all the latent tensions. The minorities are frightened of Muslim criminal law (hudud) for all, hairsplitting controversies about who may use the word Allah and the distribution of bibles in Malay as well as many other gross exaggerations coming from Perkasa.
Strategy-wise the organization threatens to be much more of a liability than a support group and undermines the Prime Minister’s efforts to reduce the tensions and deep divisions after the 2013 election. Asking him now before the UMNO convention to drop most of the so-called “liberal” reforms amounts to stabbing him in the back. And Perkasa adviser Mahathir should carefully weigh the doses of vitriol he pours on Najib.

“Who owns Jokowi?” or Political Funding in Indonesia

Partyforumseasia: In “Indonesia”, no. 96, October 2013, pp. 1-121, the Cornell Southeast Asia Program focuses on the political science debates about Indonesia’s political funding in the democratic era. The volume contains five essays by prominent researchers, namely Jeffrey A. Winters, Vedi R. Hadiz and Richard Robison, R. William Liddle, Thomas B. Pepinsky, and Edward Aspinall. Jokowi
Three of them are working on the importance – and problem – of oligarchic influence on the politics of Indonesia. Hadiz, Robison, and Winters share the concept that material resources as a form of both economic and political power count most in Indonesia’s politics. The breathtaking speed with which the well-oiled and well-funded machinery of candidate Prabowo managed to reduce the twenty odd percent lead in most opinion polls of rival Jokowi during only some weeks of campaigning in June and July this year seems to support the theory. And Prabowo, his billionaire brother Hashim Djojokusumo, Golkar’s chairman Aburizal Bakrie and other allies and supporters must have been of the same opinion. Obviously they did not expect that Jokowi could win with a clear majority of over six per cent or eight million votes, which seduced Prabowo to jeopardize a lot of his credibility by not accepting the results and being seen as a bad loser.
Winters, Hadiz and Robison come to the conclusion that only a revolutionary degree of political change could disrupt the nexus between wealth and political power. Liddle, Pepinsky, and Aspinall, on the other hand, challenge the oligarchy paradigm and focus on other and new political actors with mobilization power beside the remaining power brokers from the old Suharto “New Order”. Published in October 2013 and irrespective of their competing hypotheses, probably none of the scholars could have predicted that an outsider and political newcomer like Jokowi could have so successfully challenged the political and economic establishment of Indonesia.
But Winters also highlights the effect of the scandalous corruption which allows even oligarchs with moderate means to “buy and distort the legal system, from the police and prosecutors up to the judges and politicians.” (p.19). Since variety and freedom of the media have been exposing these multiple “pathologies” and their undercutting of the reformasi gains, the voters have reacted the way they did on 9 July 2014 buy giving Jokowi a convincing majority over Prabowo and the oligarchs behind him.
But wait a minute, this simplified picture is too nice to be true. Jokowi is certainly not an oligarch, only a “minor millionaire” with assets of something between three and five million USD. The typical Indonesian shadow play (wayang) is hiding some rather interesting details about Jokowi’s election as Jakarta governor in 2012. Tempo magazine on 24 July of that year offered some juicy details of the funding behind candidacy and victory under the title “Who owns Jokowi?“. Prabowo, his oligarch brother Hashim Djojohadikusumo, ex-president Megawati Sukarnoputri, the Gerindra and PDI-P parties were involved, but also many grassroots organizations. Only at that time Prabowo could not imagine or foresee that Jokowi was to become a rival for the presidency. Winters has detailed background information on the oligarchic support for Jokowi in 2012 (p. 23 ff). As usual in politics everywhere, façade, perception, tactics and strategies make it difficult to see the reality. The office gives president Jokowi a chance to make himself more independent financially (in both meanings..) and to reduce oligarchic influence on his administration, but he must play his cards skilfully and ruthlessly.

“Singfirst”, A New Opposition Party in Singapore

Partyforumseasia: Three political parties have made it into Singapore’s Parliament: The dominant PAP with 80 seats, the biggest opposition Workers’ Party (WP) with 7elected and 2 non-constituency (NC) seats (which are given to the best losers), and the Singapore People’s Party with one non-constituency seat. There are ten other active parties and twenty-two are registered but not active.
On this background of a splintered opposition camp which had problems in past elections to avoid three- and more cornered fights instead of uniting against the PAP, it certainly needs optimism to start a new party from scratch.

Tan Jee SayTan Jee Say is the man behind this new party founded in May 2014 and registered three months later under the name Singaporeans First or Singfirst in short. Singfirst logoTan is a former civil servant (principal private secretary to PM Goh Chok Tong). He had a short stint in the Singapore Democratic Party, and lost the 2011 presidential election as third of three candidates with 25% of the votes. According to the party’s website (link here: Tan Jee Say is the secretary-general, chairman is psychiatrist Dr. Ang Yong Guan, a schoolmate of Tan in the elitist Raffles Institution.  Ang
Under the headline “Chairman says fear no more” Ang explains that Singfirst had to be established because he thinks that the PAP has deviated from the old successful course: “The old service-driven people-connected PAP was able to deliver and people did not mind the tough policies it implemented. Singaporeans were prepared to tolerate living in a nation that is largely apolitical but economically vibrant. (…) The emergence of the new PAP in recent years driven by profits, obsessed with economic growth and disconnected from the people has led to complacency at the top and anger and helplessness on the ground.”
Since Dr. Ang is giving a glimpse into his own political experience as a (PAP??) community leader from 1988 to 2004 and in close cooperation with former foreign minister George Yeo, there may be some space for speculation about different views inside the ruling party and what the establishment of Singaporeans First might mean for the next election, due latest by January 2017.
Partyforumseasia has a little doubt about the expressed intention to find common ground with the other opposition parties. It did not work well among the older opposition parties so far. The choice of the party’s name, though, which sounds somewhat anti-immigrant if not xenophobic, might resonate with the many Singaporeans who resent the pressure created by more than a million foreign workers in the city republic.

PS: Singapore’s “The Online Citizen” (link here) asks what Singfirst can possibly do in Tanjong Pagar, a constituency dominated by Lee Kuan Yew himself since 1955!!! Lee is 91 already and will most probably not run again. With him on the team of candidates no party contested there, providing the PAP with a comfortable “walkover”. See the following chart from The Online Citizen:
Tanjong Pagar

The Future of Singapore’s PAP – Part II

Partyforumseasia:  In most countries with a liberal democratic system anywhere in the world any political party would be more than happy with the comfortable absolute majority the People’s Action Party is enjoying since sixty years. PAP 50But there are also few parties world-wide which have ruled as successfully as the PAP (though there are few city states for comparison). The authoritarian style of founding father and patriarch Lee Kuan Yew, now 91, has been gradually softened under successor Goh Chok Tong and more so under son Lee Hsien Loong. So the debate about future dangers to the PAP looks somewhat overly fearful in comparison to the narrow majorities and shaky coalitions in other countries. As already quoted in part I, Netina Tan has described the mechanisms in the Singapore system which favor the ruling party. Link here:
Parliament SGRocking a big boat like Singapore and the PAP is certainly difficult. Nevertheless, losing one six-member group constituency which looked unassailable in 2011 and a by-election 2013 is painful for a party spoiled by decades of success. And one can expect differences within the party, maybe with a faction that does not fully support the softened style of the Prime Minister.
With the 60th anniversary of the PAP, the 50th of independent Singapore and general elections coming up in 2015, the crystal ball is being kept rather busy. The latest contribution by Han Fook Kwang, senior editor at large at the Straits Times (9.11.2014, the question mark cartoon above also in this article), is correctly adjusting the question to what the PAP will have to do to stay in power. For there are no real threats in the party scene with the runner up Workers’ Party far behind with 7 elected and 2 non constituency (or consolation prize) MPs against 80 PAP parliamentarians.
What is conspicuously missing in the public debate so far is the possibility of a coalition government. At least in the next few decades the election law will not make a coalition government necessary if the PAP can win majorities in Parliament even with less than 50% of the popular vote. Neighboring Malaysia has that already since last year and many other countries with majoritarian or first-past-the-post systems as well.
So the PAP may just be nervous about more signs of protest votes in various forms and some activists being more fearless than anyone since the crackdown on Communists in the 1950s and 1960s. Obviously there is a ant-establishment subculture among younger Singaporeans who take all the material achievements for granted and see social injustices from a subjective, if not parochial perspective. The debate about the supposed shortcomings of the Central Provident Fund (CPF) seems to be a point in case. Social security for everybody is difficult to achieve, and increasing life expectancy threatens all pension schemes in rich countries. But in terms of distribution justice Singapore’s CPF system can match most other schemes.










See the Singapore chapter by Netina Tan in
B&N book




available at Amzon, Barnes & Noble and other e-book retailers.

How Stable is the Opposition Coalition in Malaysia?

Partyforum has always seen the opposition coalition as lacking cohesion apart from the charisma of its leader Anwar Ibrahim and the groundswell among Malaysia’s voters against the eternal rule of the Barisan Nasional coalition led by UMNO. In the special context of the country’s racial divide and the dominance of the Malays as raison d’état, the opposition trio of PAS, PKR and DAP is rather improbable as “bedfellows”. There is a lot of speculation about their common future if Anwar’s increasingly bizarre sodomy conviction should be confirmed by the Federal Court this week. Homosexuality not being considered a crime in most advanced countries anymore, the whole legal procedure against the most prominent opposition figure looks for many like Anwar himself and many Malaysians see it: as a means to crush him politically. The saga is highly detrimental for the country’s international reputation.

Lim Guan EngBut instead of highlighting this, the internal communication between the Pakatan Rakyat coalition members is not as coordinated and strategically skillful as the fragile situation would require. After the Selangor-Chief Minister-replacement-crisis has been solved with great damage to the opposition, the coalition partners continue bickering against each other. The Malaysian Insider ( Link here ) published on 4 November how DAP secretary general Lim Guan Eng attacked the supremo of partner party PAS, Abdul Hadi Awang,  for his authoritarian leadership style:

HadiDAP secretary-general Lim Guan Eng said the coalition found it difficult to continue operating when PAS had a leader who could “override everything”, including decisions made in his absence during the PR presidential council meetings. (…) He can overrule (his party). If that is the system, he must attend PR leadership council meetings so that we can make decisions, we can keep promises, and we can fulfil our commitment.
“So long as he stays away from the PR leadership council meeting, then it will be very difficult for PR to function as a whole,” said Lim in his speech during last night’s DAP fund-raising dinner at the MBPJ Civic Hall in Petaling Jaya.”

Lim’s criticism is certainly justified, but it is not the best moment to say it in public or say it in public at all. All over the world controversial political debates are not appreciated by the voters, open quarrels even less, and they are certainly not conducive for the image of a coalition which is not very stable anyway.