Corruption in Malaysia

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According to a 2013 public survey in Malaysia by Transparency International, a majority of the surveyed households perceived Malaysian political parties to be highly corrupt.[1] A quarter of the surveyed households consider the government's efforts in the fight against corruption to be ineffective.[1]

Transparency International's 2020 Corruption Perception Index ranks the country 57nd place out of 180 countries.[2]

Business executives surveyed in the World Economic Forum's Global Competitiveness Report 2013-2014 reveal that unethical behaviours of companies constitute a disadvantage for doing business in Malaysia.[3] Government contracts are sometimes awarded to well-connected companies, and the policies of awarding huge infrastructure projects to selected Bumiputera companies without open tender continue to exist.[4]

Corruption Perceptions Index[]

Corruption is a problem. Malaysia had a corruption score of 51 out of 100 (high scores are less corrupt); Transparency International list Malaysia's key corruption challenges as:

  1. Political and Campaign Financing: Donations (e.g.: USD700Million) from both corporations and individuals to political parties and candidates are not limited in Malaysia. Political parties are also not legally required to report on what funds are spent during election campaigns. Due in part to this political landscape, Malaysia's ruling party for over 55 years has funds highly disproportionate to other parties. This unfairly impacts campaigns in federal and state elections and can disrupt the overall functioning of a democratic political system.
  2. “Revolving door”: Individuals regularly switch back and forth between working for both the private and public sectors in Malaysia. Such circumstances – known as the ‘revolving door’ – allow for active government participation in the economy and public-private relations to become elusive. The risk of corruption is high and regulating public-private interactions becomes difficult, also allowing for corruption to take place with impunity. Another factor which highlights the extent of ambiguity between the public sector and private corporate ownership is that Malaysia is also a rare example of a country where political parties are not restricted in possessing corporate enterprises.
  3. Access to information: As of April 2013, no federal Freedom of Information Act exists in Malaysia. Although, Selangor and Penang are the only Malaysian states out of thirteen to pass freedom of information legislation, the legislation still suffers from limitations. Should a federal freedom of information act be drafted it would conflict with the Official Secrets Act – in which any document can be officially classified as secret, making it exempt from public access and free from judicial review. Additional laws such as the Printing Presses and Publications Act, the Sedition Act 1949 (subsequently replaced with the National Harmony Act), and the Internal Security Act 1969 also ban the dissemination of official information and offenders can face fines or imprisonment.[5] Malaysia suffers from corporate fraud in the form of intellectual property theft.[6] Counterfeit production of several goods including IT products, automobile parts, etc., are prevalent.[6]

In 2013, Malaysia was identified in a survey by Ernst and Young as one of the most corrupt countries in the region according to the perceptions of foreign business leaders, along with neighbouring countries and China. The survey asked whether it was likely that each country would take shortcuts to achieve economic targets.[7]

Types of corruption[]

Corruption in Immigration Enforcement[]

Despite periodic actions by the government to crack down on petty corruption in the Immigration Department, bribe-taking and fraudulent issuance of visas has been a long-standing problem, particularly among immigration officers at the KLIA and KLIA2 terminals of Kuala Lumpur International Airport.[8][9][10] In 2016, the Malaysian Anti-Corruption Commission (MACC) uncovered a scheme in Selangor, in which immigration officers collected passport application fees from travelers and then submitted fraudulent paperwork declaring them disabled, resulting in fee waivers that amounted to over 1 million Malaysian ringgit by the time the scheme was exposed.[11] In a December, 2016 statement to the Malaysian press, Deputy Prime Minister Datuk Seri Ahmad Zahid Samidi estimated that over half of the 1500 immigration officers working in the KLIA and KLIA2 terminals had participated in a range of corrupt practices, including fraudulent issuance of visas, tampering with Immigration Department data, and collusion with human-trafficking agents.[9]

Anti-corruption bodies[]

Former Malaysian Anti-Corruption Commission headquarters

The Malaysian Anti-Corruption Commission (MACC) is a government agency in Malaysia that investigates and prosecutes corruption in the public and private sectors. The MACC was modelled after top anti-corruption agencies, such as the Hong Kong's Independent Commission Against Corruption and the New South Wales Independent Commission Against Corruption, Australia.[12]

The MACC is currently headed by Chief Commissioner Azam Baki. He was appointed to replace former Chief Commissioner Latheefa Koya appointed by the Pakatan Harapan (PH) government after the new Perikatan Nasional (PN) government took over in March 2020.[citation needed] Previously it was headed by Chief Commissioner Datuk Dzulkifli Ahmad. He was appointed on 1 August 2016 to replace former Chief Commissioner Tan Sri Abu Kassim Mohamed.[13][14] Similarly, the agency is currently under the Prime Minister's Department.[12]

During its term, Pakatan Harapan had appointed a controversial figure, Lateefa Koya, a former member of the ruling coalition party, People's Justice Party to head the anti-corruption agency. She was appointed shortly after her resignation from the party.[15]

On 3 July 2018, former Prime Minister Najib Razak was arrested by the Malaysian Anti-Corruption Commission (MACC), investigating how allegedly RM42 million (US$10.6 million) went from into Najib's bank account. Police seized 1,400 necklaces, 567 handbags, 423 watches, 2,200 rings, 1,600 brooches and 14 tiaras worth $273 million.[16] On 28 July 2020, the High Court convicted Najib on all seven counts of abuse of power, money laundering and criminal breach of trust, becoming the first Prime Minister of Malaysia to be convicted of corruption,[17][18] and was sentenced to 12 years' imprisonment and fined RM210 million.[19][20]

1MDB scandal[]

See also: 1Malaysia Development Berhad scandal

The 1Malaysia Development Berhad scandal (1MDB scandal) has been described as "one of the world's greatest financial scandals"[21][22] and declared by the United States Department of Justice as the "largest kleptocracy case to date" in 2016.[23]

The year before, Malaysia's then-Prime Minister Najib Razak had been accused of channelling over RM 2.67 billion (approximately US$700 million) from 1Malaysia Development Berhad (1MDB), a government-run strategic development company (masterminded by Low Taek Jho), into his personal bank accounts.[24] Dismissal of charges over this triggered widespread outrage among Malaysians,[25] with many calling for Najib Razak's resignation – including Mahathir Mohamad,[26] one of Najib's predecessors, who later defeated Najib in the 2018 general election and returned to power.

After the 2018 election, the newly elected prime minister, Mahathir Mohamad, reopened investigations into the 1MDB scandal.[27] Malaysian Immigration Department barred Najib [28] and 11 others[29] from leaving the country, while the police seized more than 500 handbags and 12,000 pieces of jewellery estimated to be worth US$270 million from property linked to Najib.[30] Najib was charged with criminal breach of trust, money laundering and abuse of power, while Low Taek Jho (commonly referred to as Jho Low), was charged with money laundering. The U.S. Department of Justice pursued its own investigation into 1MDB, alleging that more than US$4.5 billion was diverted from 1MDB by Jho Low and other conspirators including officials from Malaysia, Saudi Arabia and the United Arab Emirates.[31] Najib was subsequently found guilty of seven charges connected to SRC International, a dummy corporation associated with 1MDB, and was sentenced to twelve years imprisonment.[32]

In September 2020, the alleged amount stolen from 1MDB was estimated to be US$4.5 billion and a Malaysian government report listed 1MBD's outstanding debts to be at US$7.8 billion.[33] The government has assumed 1MDB's debts, which includes 30-year bonds due in 2039.[34]

As of 5 August 2021, in an ongoing effort to fight global kleptocracy, the U.S. Department of Justice recovered and returned a total of US$1.2 billion of 1MDB funds misappropriated within U.S. jurisdiction to the people of Malaysia,[35] joining a list of several countries which have initiated recovery or that have already repatriated smaller recovered amounts.[36]

See also[]

References[]

  1. ^ a b "Global Corruption Barometer 2013". Transparency International. Archived from the original on 10 May 2016. Retrieved 25 February 2014.
  2. ^ e.V., Transparency International. "Corruption Perceptions Index 2020". www.transparency.org. Retrieved 9 December 2021.
  3. ^ "Global Competitiveness Report 2013-2014". The World Economic Forum. Retrieved 25 February 2014.
  4. ^ "Malaysia Country Profile". Business Anti-Corruption Portal. Archived from the original on 10 May 2016. Retrieved 14 July 2015.
  5. ^ Darryl S. L. Jarvis (2003). International Business Risk: A Handbook for the Asia-Pacific Region. Cambridge University Press. p. 219. ISBN 0-521-82194-0.
  6. ^ a b Darryl S. L. Jarvis (2003). International Business Risk: A Handbook for the Asia-Pacific Region. Cambridge University Press. p. 220. ISBN 0-521-82194-0.
  7. ^ "Archived copy". Archived from the original on 10 October 2014. Retrieved 14 March 2014.CS1 maint: archived copy as title (link)
  8. ^ Reuters Editorial. "Malaysia cracks down on corruption at immigration". U.S. Retrieved 11 July 2018.
  9. ^ a b "Over Half Of Malaysian Immigration Officers Found To Be Corrupt And Dealing Directly With Human Traffickers - The Coverage". thecoverage.my. Retrieved 11 July 2018.
  10. ^ Desk, The Star (8 August 2017). "Malaysia Immigration Department signs corruption-free pledge". Asia News Network. Retrieved 11 July 2018.
  11. ^ "MACC: Immigration officers' RM1m passport fraud may be tip of iceberg | Malay Mail". Retrieved 11 July 2018.
  12. ^ a b "Government Directory: Prime Minister's Department". Office of the Prime Minister of Malaysia. 8 July 2011. Retrieved 28 July 2011.
  13. ^ "Siapa Datuk Dzulkifli Ahmad Ketua Pesuruhjaya SPRM baharu". www.astroawani.com (in Malay). 30 July 2016. Retrieved 30 November 2017.
  14. ^ "Ketua Pesuruhjaya SPRM". SPRM (in Malay). Retrieved 30 November 2017.
  15. ^ Reporters, F. M. T. (4 June 2019). "Lawyer Latheefa Koya appointed as MACC chief". Free Malaysia Today. Retrieved 24 September 2020.
  16. ^ 1MDB scandal explained: a tale of Malaysia's missing billions Published by The Guardian on October 25, 2018
  17. ^ "Former Malaysia PM Najib Razak found guilty of all 7 charges in 1MDB trial". Channel News Asia. 28 July 2020. Archived from the original on 29 July 2020. Retrieved 28 July 2020.
  18. ^ "Najib Razak: Former Malaysian PM guilty on all charges in corruption trial". BBC News. 28 July 2020. Archived from the original on 28 July 2020. Retrieved 28 July 2020.
  19. ^ "Ex-Malaysian PM Najib gets 12 years' jail in 1MDB-linked graft trial". The Straits Times. 28 July 2020. Archived from the original on 28 July 2020. Retrieved 28 July 2020.
  20. ^ "Former Malaysia PM Najib Razak sentenced to 12 years in jail following guilty verdict in 1MDB trial". Channel NewsAsia. 28 July 2020. Archived from the original on 29 July 2020. Retrieved 28 July 2020.
  21. ^ "1MDB: The playboys, PMs and partygoers around a global financial scandal. It is one of the world's greatest financial scandals". BBC. 9 August 2019. Retrieved 24 August 2021.
  22. ^ "Shorenstein Journalism Award Winner Tom Wright Recounts Story of Global Financial Scandal". The Freeman Spogli Institute For International Studies, Stanford University. 6 November 2020. Retrieved 24 August 2021.
  23. ^ "International Corruption - U.S. Seeks to Recover $1 Billion in Largest Kleptocracy Case to Date". Federal Bureau of Investigation. 20 June 2016. Retrieved 24 August 2021..
  24. ^ "Malaysian taskforce investigates allegations $700m paid to Najib". The Guardian. 6 July 2015. Retrieved 24 March 2018.
  25. ^ "Dismissal of Corruption Charges Against Malaysian Prime Minister Prompts Scorn". Time. 27 January 2016. Retrieved 27 August 2021.
  26. ^ "Former Malaysia PM Mahathir calls for removal of PM Najib Razak". BBC news. 30 August 2015. Retrieved 27 August 2021.
  27. ^ "Mahathir Picks Lim as Finance Minister, Returns Zeti to Council". Bloomberg.com. 12 May 2018. Retrieved 18 May 2018.
  28. ^ "Former Malaysia PM Najib Razak banned from leaving country". BBC. Retrieved 24 November 2020.
  29. ^ "12 people on Malaysia's travel blacklist over 1MDB probe". The Straits Times. 18 May 2018. Retrieved 23 August 2021.
  30. ^ "Malaysia's former first lady Rosmah Mansor's seized handbags damaged and government should pay, lawyer tells court". South China Morning Post. Retrieved 24 November 2020.
  31. ^ "US DOJ says pursuing investigations related to Malaysia's 1MDB". The Star. Retrieved 22 May 2018.
  32. ^ Singh, Sharanjit; Khairulrijal, Khairah N. Karim and Rahmat (28 July 2020). "Najib sentenced to 12 years' jail, RM210 million fine | New Straits Times". NST Online. Retrieved 28 July 2020.
  33. ^ "Malaysia's 1MDB state fund still $7.8 billion in debt - government report". Reuters. 6 November 2020. Retrieved 11 July 2021.
  34. ^ "How `Insolvent' 1MDB's Debt Stacks Up and Who's Saddled With It". Bloomberg News. 6 November 2020. Retrieved 26 August 2021.
  35. ^ "Over $1.6 billion in misappropriated 1MDB funds repatriated to Malaysia so far". Straits Times. 6 August 2021. Retrieved 6 August 2021.
  36. ^ "Singapore to return $11 million in 1MDB-linked funds to Malaysia". Reuters. 10 September 2018. Retrieved 7 August 2021.

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