Charity and politics a potent mix - The Sun

Charity and politics a potent mix
by Josie M. Fernandez

THE integrity and accountability of charities and foundations linked to politicians has always been a concern everywhere. TheSun’s front-page story ("RM10 million gone in three days", April 25) underscores a key concern about the nexus between politically-linked charities and government decisions, namely the possibility of abuse of power. It is noteworthy that Transparency International defines corruption as abuse of power.

The case in the news is that of Balkis, the Association of Wives of State Assemblymen and Members of Parliament, which held an EGM on March 11, three days after the 12th general election, dissolved the association and next day closed its accounts and transferred the RM9.9 million to an account under Bakti, the Association of Wives of Federal Ministers. All this was done with the advice of a sitting judge.

The dissolution of an organisation is a serious matter and there are several procedures under the Societies Act 1966 that must be followed before the assets of an association could change hands.

The roles of the association’s auditors and the banks involved, in what the Bar Council has described as a case of criminal breach of trust, require a probe.

Another politically-linked foundation was in the news recently, raising questions of ethics and integrity in relation to its accounts. The Women’s Sports and Fitness Foundation Malaysia had spent RM2.1 million for meals, RM242,000 for volunteers’ allowances and RM858,000 for travel and transportation according to its annual report. Its patron is Datuk Seri Azalina Othman Said, former minister of sports and current minister of tourism. The Anti-Corruption Agency has cleared her of any wrongdoing.

In view of the current scrutiny on politically- linked foundations, it would be useful to recall recent events involving public accountability around the region. In Indonesia, the chief of a bank, a legislator and a deputy governor have been detained by the Corruption Eradication Commission in a high profile case, according to report on April 18 in the Jakarta Post. Burhanuddin Abdullah, the outgoing chief of the central bank (Bank Indonesia), Hamka Yamda, legislator and Anthony Zeidra Abidin, deputy governor of Jambi province are suspects in a case on misuse of funds in a foundation linked to the bank. They are suspected of using foundation funds to make illegal payments to parliamentarians.

The Supersemar Foundation, set up by Suharto, the late former president of Indonesia, was on March 28 found guilty of misusing funds meant for scholarships and fostering children all over Indonesia. Supersemar had given the funds from the foundation to companies managed by Suharto and his cronies.

Development funds in the Philippines according to corruption watch groups have often been diverted for corrupt purposes. Many foundations were established by wives of politicians in the Philippines for political purposes, particularly after the fall of Marcos when donor money poured into the country.

Corruption happens as we have seen around Asean and elsewhere when funds are broken apart and transferred into private possession. In the case of Balkis, some of the money came from the state government’s development funds, so it must be ensured that they are used for the public purposes for which they are intended.

Interestingly, according to the Sunday Star of April 27, Baiduri, the Perak association of state assemblymen’s wives, changed its name to Perak Barisan Nasional State Assemblymen’s Wives Association before the elections!

Does the money of the association belong to the BN?

Corruption watchdogs in Australia point out that often civil servants suppress, cover up and lie about misuse of public funds to protect their political masters.

Sometimes politicians see themselves as some sort of Robin Hood dipping into the public till for the welfare of children and their constituents. With the establishment of numerous foundations by politicians and their wives, we have in Malaysia a form of state-based philanthropy.

This situation raises questions on financial transparency and accountability which are vital for the sustainability of organisations. Sustainability does not end when husbands are not in power!

Accountability is an acknowledgment of the organisation’s responsibility to taxpayers, donors, the public and recipients of philanthropic aid. There are various critical elements of accountability which must be highlighted in annual reports such as identifying the donors including state agencies, the quantum and purpose of the donation and how the money has been spent.

Compliance with the rules of accountability is a matter of public concern particularly when state funds have been diverted to organisations managed by wives of politicians or where politicians are patrons and advisers.

Charitable institutions linked to politicians can lift a politician’s image and help win votes. Such institutions create opportunities for abuse of power.

Prime Minister Datuk Seri Abdullah Ahmad Badawi announced several significant reforms to combat corruption in Malaysia at the recently held Asean Integrity Dialogues 2008 in Kuala Lumpur. But these reforms are not enough to address all the many dimensions of corruption.

One dimension of abuse of power is the management of politically-linked philanthropic organisations. Reforms are urgently needed to demand greater accountability and transparency from entities that have been established by politicians, their wives and cronies for whatever purposes.

Legislation may be required to prohibit chief ministers, mentris besar and ministers from channelling development funds to organisations, charities and foundations linked to them. Charity and politics make a potent cocktail for abuse of power.


The writer is a founder-director of Philanthropy Asia, which advocates good governance in philanthropy and social investment. Comments: email to:feedback@thesundaily.com