Royal Commission of Inquiry to conduct public inquiry into the funding, politics of money and corruption of all political parties

YAB Datuk Seri Dr.Mahathir Mohamed,
Perdana Menteri,
YAB Datuk Seri,

Royal Commission of Inquiry to conduct public inquiry into the funding, politics of money and corruption of all political parties

I am writing in regard to the UMNO Baru Youth allegation which you took up on Saturday that opposition parties are funded from overseas by ‘foreigners harbouring ill-intentions against the Government” and the Government wants to conduct investigations into the funding of opoosition parties.

I wish firstly to put on record the DAP refutation of this UMNO Baru Youth allegation as completely untrue, baseless and the height of irresponsibility and to remind YAB that such UMNO Baru Youth allegation cannot be accepted on its face value without any substantiation.

This is particularly so as YAB had admitted in Parliament last Wednesday during the debate on the Constitution (Amendment) Bill that even such a high-ranking leader as the UMNO Baru Secretary-General, Datuk Mohamed Rahmat (also Minister of Information), could tell lies and send out a circular dated Sept.15, 1989, to all UMNO Baru divisions about the decision of the UMNO Baru Supreme Council meeting on the previous day about voters’ registration exercise, which you said was “ baseless and irresponsible”.

If the UMNO Baru Secretary-General could send out a “baseless and irresponsible” circular to all UMNO Baru Divisions, the UMNO Baru Youth is more than capable of making a “baseless and irresponsible” allegations.

The DAP is not afraid of investigations, as we have not received any money from foreign countries-although you have said there was nothing wrong in political parties getting funds from foreign sources. This raises the question whether UMNO Baru and other Barisan Nasional component parties have been receiving finds from foreign countries, and if so, the amounts involved.

The DAP is not afraid of investigations because we have never changed our style of operations and never had “lavish ways of spending.”

The DAP does not have a World Putra Trade Centre or a building like the MCA building or even the MIC building.

Your Saturday statement about investigations into the source of funds of opposition parties was therefore based on a completely false premise emanating from the “baseless and irresponsible” allegations of UMNO Baru Youth.

If the Barisan Nasional Government conducts such an investigation into the opposition parties, it would be like a multi-millionaire conducting an investigation into how the poor has money to keep his body and soul together!

It cannot do the country’s international image any good for the government to furnish another example of abuse of power to harass and persecute the political opposition, when those political parties which should be investigated about their source of funds are the ruling ones, as they are loaded with unexplained wealth.

I am very keen that there should be a full-scale and public investigation by a Royal Commission of Inquiry into the funding, the politics of money and corruption in political parties in Malaysia.

If the Government is prepared to establish such a Royal Commission of Inquiry into the funding, the politics of money and corruption in all political parties in Malaysia, the DAP pledges our full co-operation.
Such a Royal Commission of Inquiry should conduct its proceedings in public.

It should deal with all aspects of improper funding, whether from local or foreign sources especially whether there had been abuse of government positions to extract or extort financial political contributions whether from local or foreign sources.

Firstly, the Royal of Commission should examine one very important aspect of improper political funding and the politics of money- corruption.

Only on February 28, 1990, a senior Anti-Corruption Agency officer, Encik Zakar Mohamed Esa, testified in the Kuala Lumpur High Court in a defamation suit that he was directed to stop investigations and close the case of a million-dollar corruption case against UMNO Johore and the then Deputy Prime Minister, Datuk Musa Hitam, in 1982.

Last November, I raised in Parliament the police report about another million-dollar UMNO Baru Johore scandal involving the grant of a logging concession in Muar by the Johore State Government in 1988.

The people also want to know the truth of the allegation by London Observer that UMNO Baru received $300 million for the coming general elections from the $4 billion British arms purchase deal.

An inquiry is also called for to investigate the connection between the tens of millions of ringgit of losses suffered by KOBENA and UMNO Baru Youth.

Secondly, such a Royal Commission of Inquiry should investigate into the funding of political parties through privatisation and award of government contracts to companies controlled or owned by political parties, in particular UMNO’s investment arms, Fleet Holdings and Hatibudi.

The Royal Commission can use the book, “UMNO’s Corporate Investments” written by Edmund Terence Gomez, as a basis for its investigations, and pay particular attention to the following major findings of the study on UMNO’s politics of money:

“It is clear from the case studies that the development of all UMNO’s investment arms are primarily attributable to government patronage.
The recent government policy of privatisation, in particular, has been especially favourable for Fleet Holdings and Hatibudi. Two notable example in the case of Fleet Holdings are: the award of the licence for the country’s only private television network (TV3) to Fleet Group in 1983, and more recently the award of the licence for the country’s second mobile telephone service to Celcom, a joint-venture company in which Fleet Group has a 49 per cent stake. In the case of Hatibudi, the award of the $3.4 billion North-South Highway project, to UEM, Hatibudi’s main publicly-listed company, is the most blatant example of abuse of government patronage. Other major privatised projects have been contracted to UEM, e.g. the National Sports Complex consultancy project and the Peninsular Gas Utilisation (PGU) Phase II management consultancy project.” (p.167)

Thirdly, the Royal Commission of Inquiry should look into the politics of money in all party elections of all political parties.

Fourthly, there should be investigation into the monies spent by the political parties during general elections. The Prime Minister said UMNO Youth had complained about foreign funding of opposition parties. I wish to tell the YAB that DAPSY had complained that the Barisan Nasional spent hundreds of millions of ringgit during the general elections.

The Royal Commission of Inquiry can be constituted either by three or five eminent Malaysians whose integrity, independence and impartiality are accepted by all political parties.

Alternatively, it could be constituted by each political party nominating a representative, headed by a non-partisan Chairman. All members of the Commission will have full powers as Commissioners to pursue whatever line of party funding that most interest him.

The establishment of a Royal Commission of Inquiry to conduct public investigations into improper funding of political parties will do a great good to raise public integrity and check political corruption, and for this reason, I suggest that you convene an all-party conference on this subject.

I am also asking for an appointment with you on the proposal for the establishment of a Royal Commission of Inquiry to conduct a public investigation into improper funding, and the politics of money and corruption in political parties.

Many thanks.

Yang benar,
Lim Kit Siang
(Parliamentary Opposition Leader)