Who pays our political parties?
Former Umno treasurer Tengku Razaleigh Hamzah revealed to TI that Umno was initially receiving funds from coalition partner MCA, which was then more connected to the business world. Razaleigh recounted how he was tasked with finding investments for Umno to ensure the party’s financial independence.
By Ding Jo-Ann, The Nut Graph
EVER wondered where political parties get their money? And what they use it for? While skeptics may think that political parties just use their money for handouts and bribes, in fact, they also legitimately need money to carry out proper functions.
For example, political parties need to maintain their party machinery, conduct voter education and identify and train new candidates. During elections, they legitimately need to run operation centres, publish advertisements, print banners, hold public events, and incur other miscellaneous expenses such as transportation and accommodation.
Malaysian political parties, however, receive no state funding, unlike in other countries such as South Africa and Germany. There are also no requirements for political parties in Malaysia to declare their sources of funding. This means political parties are mostly left to their own devices to look for sufficient financing. With this in mind, how have Malaysian political parties been funding themselves, and how has the financing of parties influenced the political landscape?
Rich parties, poor parties
Political parties such as Umno traditionally relied on membership fees and donations from private individuals, as documented in Transparency International (TI)-Malaysia’s new book Reforming Political Financing in Malaysia, launched in May 2010. Over the years, however, Umno became more reliant on its investments and its business interests through ownership of corporations and shares.
TI’s book describes how Umno’s membership base changed considerably over the years. “In its early years, about half the members were teachers and another quarter was from the civil service,” it said. “However, by 1987, the number of teachers had been reduced to about a fifth of the membership, and the majority is now made up of business [figures], entrepreneurs and corporate figures.”
Tengku Razaleigh (Wiki commons)
Former Umno treasurer Tengku Razaleigh Hamzah revealed to TI that Umno was initially receiving funds from coalition partner MCA, which was then more connected to the business world. Razaleigh recounted how he was tasked with finding investments for Umno to ensure the party’s financial independence. He also acknowledged the existence of a covert Umno political fund which academic Barry Wain said was worth RM88.6 million in 1984.
Umno’s assets have grown considerably since then. Former Umno president and Prime Minister Tun Dr Mahathir Mohamad told TI that when he stepped down in 2004, he handed his predecessor Tun Abdullah Ahmad Badawi RM1.4 billion worth of property, shares and cash.
TI also interviewed current MCA president Datuk Seri Dr Chua Soi Lek, who said the MCA profited from The Star, which contributes about RM50 to RM60 million annually to the party’s income. TI estimates the MCA’s current assets to amount to about RM2 billion.
“No money to invest”
TI also interviewed Pakatan Rakyat members, who painted a rather contrasting picture. When asked about the party’s investment, DAP national publicity secretary Tony Pua answered thus: “The only thing close to commercial that DAP does is own properties … in some cases they are rented out so there are some rental incomes here and there. It is marginal … We don’t have anything to invest. There is no money to invest, so we don’t have ventures.”
PAS’s Kamarudin Jaafar also said the party had no business venture or any corporate enterprise. “If we have properties, it is for our own use,” he said.
TI’s research indicates that Pakatan Rakyat parties still depend largely on grassroots support. They raise funds through a combination of membership fees, fundraising dinners, donations, publications and forums. Additionally, the DAP’s elected representatives are required to contribute a portion of their official allowance to the party coffers.
