MACC proposes new laws to tackle misuse of public funds, NGO donations and political financing gaps in Malaysia

PETALING JAYA: The Malaysian Anti-Corruption Commission (MACC) has proposed the introduction of three new laws to address gaps in public funding, including donation collections by non-governmental organisations (NGOs), in a bid to curb large-scale corruption that could harm the nation.

Chief Commissioner Tan Sri Azam Baki said targeted legislation is necessary to close loopholes that enable the misappropriation of funds and corruption involving substantial sums.

The first proposed law is an act on misconduct in public office, aimed at preventing improper conduct among government officials that could lead to serious criminal offences.

The second proposal is a Welfare Act.

“This act is intended to address the misuse of funds collected through public donations by individuals claiming to represent NGOs, who raise money purportedly for the underprivileged,” he told Berita Harian.

The third proposal involves legislation on political financing, which Azam described as vital in preventing conflicts of interest, corruption and undue influence within the country’s political system.

“The introduction of a Public Office Misconduct Act would clearly criminalise various forms of misappropriation or negligence by government personnel involving public funds.

“This act would specifically tackle leakages and misconduct involving funds meant for the public, as highlighted in the Auditor General’s Reports,” he said.

On the proposed Welfare Act, Azam suggested establishing a Welfare Commission to oversee and prevent the misuse of donation funds or NGO contributions sourced from the public and corporate entities.

He noted that MACC has observed increasing concerns over the misuse of such funds by parties with access to them.

“Political financing is not a new issue, as it was discussed prior to the 15th General Election but has yet to be implemented. Nevertheless, it remains a concern and continues to prompt calls for stricter laws.

“This includes the need for disclosure of political contributions and loans to prevent conflicts of interest, corruption and undue influence,” he added.

Last Wednesday, it was reported that the misappropriation of public funds and charitable donations has become more serious, with MACC currently investigating more than five NGOs, including those collecting donations for Palestine.

Social media influencers have also been found actively raising funds through crowdfunding, which Azam said often lacks transparent checks and balances.

He said investigators have identified various methods of operation after opening investigation papers into those suspected of involvement.

“Public fundraising and crowdfunding activities are becoming increasingly widespread, creating opportunities for misuse due to the absence of transparent oversight mechanisms,” he said.

On existing legislation, Azam noted that Malaysia already has several laws addressing misuse of public funds, including the MACC Act 2009 and the Penal Code.

However, he pointed out that there is no standalone law specifically governing public funds, unlike in some other countries, which may allow large-scale corruption to occur more easily.

“The MACC Act 2009 remains the primary anti-corruption law in Malaysia and covers offences related to misappropriation and abuse of power involving public officials or individuals managing public funds,” he said.

He added that the Penal Code includes provisions for offences such as criminal breach of trust, including Section 409, which can be applied to public servants or individuals who misuse public funds.

Azam also highlighted the Financial Procedure Act 1957 and the Public Finance and Fiscal Responsibility Act 2023 (FRA 2023) as key laws in addressing misconduct and misappropriation.

“FRA 2023 is an important piece of legislation aimed at ensuring fiscal discipline, transparency and the sustainability of national finances, particularly in managing deficits, government debt and public expenditure.

“It serves as a national financial discipline framework to ensure the government does not spend public funds irresponsibly,” he said.

He added that the law also seeks to prevent the creation of off-balance-sheet liabilities, such as government guarantees, concession compensations and bailout practices involving government-linked companies (GLCs) and large-scale projects.

“It also ensures that major fiscal decisions are not made without a proper long-term legal framework,” he said.

 The Sun Malaysia