Malaysia’s Corruption Watchdog Faces Questions Over Effectiveness

Almost a year and a half ago Malaysia’s Pakatan Harapan (PH) coalition came to power on a reform and anti-corruption agenda, an agenda that has stalled and that some critics argue is even going backwards. However, recently a deputy minister Hannah Yeoh tweeted “Despite all the criticism and complaints we hear about the new government, no one can deny that the government today fights corruption more seriously.”

So how actually effective is the Malaysian Anti-Corruption Commission, the country’s lead agency in handling corruption cases? Since the Pakatan coalition won the last general election, a series of high-profile corrupt officials have been investigated and arrested. Former Prime Minister Najib Razak is on trial over the 1Malaysia Development Bhd (1MDB) scandal. Nonetheless, Malaysia has dropped from 55th place in 2016 to 61st place in 2018 in the Transparency International Corruption Perception Index.

Latheefa Beebi Koya (pictured above), a 46-year-old India-born human rights activist and lawyer appointed to take over the long-suspect MACC, is the point person. She faces a challenging time. So far, despite the arrests of former UMNO and Barisan figures, there is a popular perception that the government is using the MACC to slay its political enemies and protect its friends.

An MACC investigation of the rural Islamist Parti Islam seMalaysia, or PAS, begun last February after it began to migrate away from the ruling Pakatan coalition toward an alliance with the United Malay National Organization headed by the still-free Najib Razak, is regarded as politically motivated by critics. The prosecution of Najib Razak himself – despite the magnitude of the case against him -- is more and more being seen as selective when other politicians who may be potentially important to keeping Bersatu in power are spared.

There have been other cases put on the back burner, including members of the Barisan who crossed over to Pakatan in Sabah who have had their investigations for corruption put on hold. There have also been enduring complaints about the children of Prime Minister Mahathir Mohamad, who critics claim was built on patronage. His son Mokhzani, 58, for instance, is rated Malaysia’s 16th richest executive by Forbes magazine with a fortune estimated at more than US$600 million. Mirzan, 60, holds shares both in Petron Malaysia (PEM) and its parent concern, Petron Corporation. He is also a stakeholder in San Miguel Corporation, a Philippines based food and beverage giant that owns 68.3 percent of Petron Corporation. Mahathir has stoutly insisted the children have enriched themselves through their own efforts.

Further complicating Koya’s efforts, sources close to the cabinet have told Asia Sentinel that many Pakatan ministers are enjoying the trappings of power. Some ministers are said to realize that Pakatan’s time in power, without significant reform and restructuring, will be short and there are now signs of corrupt practices.

At the top of that list is Economic Affairs Minister Mohamed Azmin Ali, a member of Latheefa's own party, a close Mahathir associate and a rival of Anwar Ibrahim for power who formerly was Selangor chief minister prior to joining the government. He is accused of widespread personal spending. a travel firm, YHA Travel and Tours, is suing him for RM328,901 (US$79,336) for flights over nine months ending in June, which the travel agency said is about normal for his family spending.

The MACC is already investigating claims that an aide to the Defense Minister Mohamed Sabu received RM80,000 in payments from parties to discharge his bankruptcy. The political secretary of Works Minister Baru Bian is alleged to have abused his position by promising contracts to PKR members, and the political secretary of the Agriculture and Agro-based Industry Minister was remanded for allegedly receiving a luxury watch as a bribe. Stories are circulating about ministerial corruption which will surface in the not-too-distant future, leaving Latheefa in the position of having to investigate and prosecute some of her old colleagues in Parti Keadilan Rakyat, from which she joined the government.

As an indication of the public cynicism that has greeted the government, an MACC-commissioned survey has shown that a majority of students questioned would participate in corrupt activities given the opportunity. Further, the students questioned said they feel no shame in corruption. MACC’s Koya elaborated on the findings, saying that young civil service officers are in the majority of those caught for corruption now.

Najib, going to and from his trial, smiling on camera and campaigning publicly, energetically and often effectively for UMNO political candidates, is regaining his popularity. Many voters put little weight on corruption in deciding how they vote as the last few by-elections have illustrated. The culture of corruption is manifested by deputy ministers of the new government attacking and threatening whistle-blowers rather than taking allegations of corruption seriously.

Other members of the Pakatan cabinet are silent when allegations are made against their ministry, or act nonchalantly when caught out. Real investigative journalism on corruption is almost non-existent in the local media, leaving it to a few independent critics and foreign-based publications to investigate and expose corruption.

The MACC has long been ill-starred. It grew out of the Anti-Corruption Agency (ACA), then under the Prime Ministers’ Department, and which was corrupt itself. Many investigations were stifled when the then Director General and/or officers within his office pulled case files out of the system to protect friends before they went to the Attorney General for a decision on prosecution. Sometimes complaint files were even leaked to the subjects, who took retribution against the complainants. In 2009, a much larger unit was born independent of the Prime Ministers’ Department MACC, with five separate committees overseeing and scrutinizing its activities.

However, the MACC’s reputation, never very savory, was tarnished with the death of a witness in an alleged corruption case involving the then-opposition Pakatan state councilor Ean Yong Hian Wah in Selangor. Teoh Beng Hock was interrogated for more than nine hours straight in the MACC Selangor office and was found dead on the 5th floor of Plaza Masalam after falling from the 15th floor which housed the MACC office in the adjacent building. A verdict of suicide has long been questioned by reform organizations.

During the Najib years the MACC budget was cut by almost 10 percent. In addition, the 1MDB investigation, in which US$4.8 billion disappeared in what the US Justice Department called “the biggest kleptocracy case it has ever handled,” was quashed in Malaysia with the abrupt sacking of then attorney general Abdul Gani Patail, who was also the public prosecutor and who had prepared a charge sheet against Najib following the MACC investigation. Kevin Morais, a 55-year-old prosecutor seconded to the MACC to work on the 1MDB investigation, was kidnapped and killed, his body found later in a cement-filled barrel in a river. He had been believed to be a major source for Clare Rewcastle Brown, a crusading journalist who uncovered much of the 1MDB case.

The newly installed attorney general, Mohamed Apandi Ali, an UMNO stalwart cleared Najib of any charges, overriding the MACC investigation. The Morais death has never been adequately explained. Consequently, the MACC has been perceived as being partial in the investigations it takes on and under the control of the prime minister.

Today, the commission has a large head office complex in Putra Jaya, large branch offices in every state and sub-branch offices in some of the larger states. It is comprised of a number of functional divisions. The intelligence division utilizes multiple sources of information to detect corruption. The investigation division investigates potential bribery, deception, tendering offences, and abuse of power cases. The anti-money laundering division investigates money laundering, money laundering for terrorism purposes, and income from illegal sources.

These branches are supported by a forensics division and a financial analysis division undertaking accounting analysis for corruption cases. The prosecution division prepares prosecution documents and handles court trials.

Two divisions are concerned with prevention. The inspection and consulting division assists ministries, government departments and agencies improve upon work practices and checks and balances against corruptive practices. The community education division conducts public education programs about corruption eradication. The MACC also has an anti-corruption academy that runs programs in investigation, intelligence, research, the law, prosecution, and running cases.

The MACC was allocated RM286.8 million (US$64.58 million) in the 2020 budget, a 15.8 percent increase from the year before and has also been allocated another 100 places, which will bring the total workforce to almost 3,000 officers and support staff.

However, despite its expanded jurisdiction over the private sector, and only 87 percent of posts filled, the organization still has a massive shortage of white collar corruption investigators, forensic accountants, and corporate lawyers to cope with the scope of corruption occurring today across all levels of government, agencies, GLCs, and the private sector.

A MACC officer told Asia Sentinel that tipoffs are the prime source of leads in any corruption investigations. While many come in through letter, and email, many whistle-blowers fear walking directly into MACC offices in case they are seen. Many people will be willing to talk off the record and MACC officers have a fair idea about where corruption is taking place. Their frustration is getting people to talk. Some provide safe-houses in another town of state for whistleblowers to make complaints. There are current weaknesses in the Whistleblower Act where whistleblowers aren’t provided adequate protection against retribution from their superiors.

About 20 percent of tipoffs lead to investigations and about 25 percent of investigations lead to some form of prosecution, officials say. The annual level of prosecutions before the 1MDB scandal broke in 2014 was around 800 per year. After the MACC investigation was terminated by the attorney general, prosecutions fell to around 500 during 2014 and 2015 respectively. Prosecutions rose back to around 900 in 2016, 2017, and 2018. As of October 2019, prosecutions stood at 995.

The weak link in the agency’s independence is that all prosecutions must be sanctioned by the public prosecutor, the attorney general. The International Commission Against Corruption in Hong Kong and Indonesia’s Corruption Eradication Commission, for instance, are not answerable to the standard court systems. They operate independently.

In Malaysia these are political positions as the person who fills them is selected by the prime minister. The dismissal of Abdul Gani Patail by Najib indicates this, as does the decisions, or lack of decisions made by the present attorney general Tommy Thomas as public prosecutor, who does have a sterling reputation for honesty.

But how much bite the MACC has totally depends upon the attorney general who is part of the executive government. Should there be any future realignment of political parties in the parliament, the MACC as a political tool is there.