4 May 2013

Malaysia elections: the dark forces of corruption

Foreign Affairs Correspondent

As Malaysia counts down to its general election, corruption still looms large. Our foreign affairs correspondent, Jonathan Miller, reports on one scandal that has horrified electorates.

For the first time in more than half a century, Malaysia’s corruption-tainted ruling coalition – which has held power since independence from Britain – looks like it could be in serious trouble. No political party in the world has been in power for longer than the United Malays National Organisation (UMNO).

But now an opposition victory on Sunday promises sweeping change for nearly 30 million Malaysians and for the foreign investors who have helped transform the country into one of Asia’s leading “Tiger” economies… against the odds.

Against the odds because Malaysia is a country where corruption is endemic. Big corruption. The opposition, led by former deputy prime minister Anwar Ibrahim, has campaigned for clean government – and it could yet turn out to be a winning ticket.

Corporate misbehaviour

Malaysia has an appealing edifice of modernity and sophistication.

But when it comes to corporate bribery, that image shatters. The country was last year ranked the world’s worst offender in Transparency International’s bribe payers’ survey. Many Malaysians were shocked by this, though unsurprised… if it’s possible to feel both at the same time.

Another survey last year by international corruption watchdog Global Financial Integrity ranked Malaysia as the world’s third largest source of illicit financial flows – an estimated US$285bn in capital flight in the decade up to 2010.

An untaxed financial haemorrhage, depriving the exchequer of funds that could have been used to improve Malaysians’ living standards.

Exposing the culprits

But over the past few years, Malaysians have also seen their corrupt officials exposed, one after another. Some scandals have been about little brown envelopes or vote-buying. Others have been pretty exotic.

One even embroiled the man who is now Malaysia’s prime minister in a murky saga involving the mysterious murder of a Mongolian model and alleged kickbacks on French submarines.

“At one point it was a scandal a week,” Ambiga Sreenevasan, former president of the Malaysian bar council, told Channel 4 News. “People are truly sick and tired of it, and the sheer amount of money bleeding from the system.”

At one point it was a scandal a week. People are truly sick and tired of the sheer amount of money bleeding from the system. Ambiga Sreenevasan

Dato’ Ambiga now heads Bersih 2.0 – a group campaigning for free and fair elections – whose name means “clean” in Malay.

Bersih wants an end to corruption and to stop dirty politics. “Since 2008, we’ve had a strong opposition and they’ve raked up so much dirt, exposed a lot of misdeeds of public officials. Everyone knew it was happening, but to see the details? It’s horrified everyone.”

One particular scandal has horrified more than most. It has exposed corruption on a grand scale and has, in Ms Ambiga’s view, “disgusted voters.”

Case of the ‘timber godfather’

At its heart is a greedy politician who has accumulated vast wealth at the expense of the people he was supposedly elected to serve.

This scandal surrounds the godfather of the timber trade, who, for 32 years has plundered the forests of the country’s biggest – but second-poorest – state, Sarawak, on the island of Borneo have been plundered.

His family and closest associates were the subject of a spectacular sting operation by environmental investigators from the London-based group Global Witness.

The timber “godfather” just happens to be Sarawak’s chief minister, Taib Mahmud.

It has been widely reported in Malaysia that Taib serves as private banker to some of Malaysia’s political elite and that his millions help bankroll the ruling party, UMNO. He seems to have has long considered himself untouchable.

Political stranglehold

Sarawak sounds remote – even to many living on Peninsular Malaysia – but it is central to how political patronage works in Malaysia.

Barisan Nasional, UMNO’s ruling coalition, has long had a stranglehold on state politics in Sarawak, and Taib’s voters there have long-delivered one fifth of BN’s seats in the federal parliament. That’s just how it works.

And that is why the Taib timber scandal is so important in this, Malaysia’s 13th general election. A voters’ revolt in Sarawak will have a national impact.

The Global Witness sting revealed the extent of the alleged corruption.

Even the Wikileaks cables included repeated references to him as “highly corrupt” and to his relatives as having cashed in on “most major commercial logging contracts”.

In the weeks running up to the general election, the Global Witness video went viral, receiving 1.3 million hits on YouTube (800,000 for the English version, 470,000 for the Malay-language version).

The reason it will have an impact on election arithmetic is that in order to gain power, the opposition needs just 30 more seats in the federal parliament. There are 31 up for grabs in Sarawak and 25 in next-door Sabah.

These two states should not be Malaysia’s poorest. First, there’s oil – but the east Malaysian states don’t apparently see much of the revenue.

Since 2008, we’ve had a strong opposition and they’ve raked up so much dirt, exposed a lot of misdeeds of public officials. Everyone knew it was happening, but to see the details? It’s horrified everyone. Dato’ Ambiga

Then there are the trees. For the past 30 years their tropical forests have been plundered, causing breathtaking environmental destruction.

Sarawak boasts just half of 1 per cent of the world’s tropical rainforest but in 2010 its tropical timber trade comprised a quarter of the world’s total hardwood exports.

The native Dayak tribespeople, whose ancestral lands have been destroyed can no longer fish or hunt.

Today just 5 per cent of Sarawak’s rainforest remains intact. Despite this, more deforestation still occurs there than anywhere else in the world, according to Global Witness.

This wholesale looting has enriched a tiny elite surrounding chief minister Taib Mahmud.

The native Dayak tribespeople, whose ancestral lands have been destroyed can no longer fish or hunt.

Then, there are the trees. For the past 30 years their tropical forests have been plundered, causing breath-taking environmental destruction.

Sarawak boasts just half of one per cent of the world’s tropical rainforest but in 2010 its tropical timber trade comprised a quarter of the world’s total hardwood exports.

The native Dayak tribespeople, whose ancestral lands have been destroyed can no longer fish or hunt.

Today just five per cent of Sarawak’s rainforest remains intact. Despite this, deforestation still occurs there than anywhere else in the world

This wholesale looting has seemingly enriched a tiny elite surrounding chief minister Taib Mahmud.

The native Dayak tribespeople, whose ancestral lands have been destroyed can no longer fish or hunt.

Taib is Malaysia’s longest-serving chief minister and has held power since 1981.

Since then, his relatives, known widely as “Sarawak’s royal family”, have apparently cashed in on an entire jungleful of tropical hardwood, despite of the fact that he also holds the posts of state finance minister and resource planning, land allocation and environment minister.

The video evidence from the Global Witness investigator posing as a foreign investor features Taib’s close associates and family explaining exactly how it’s been done.

A representative of one of Sarawak’s biggest timber tycoons said the chief minister would receive a multimillion dollar kickback from one deal.

His relatives were caught red-handed trying to sell off land they’d been allocated for a 3,600 per cent markup. They proposed illegal transactions designed to evade Malaysian tax.

The Malaysian anti-corruption commission – which was already investigating Taib – has said it will act on the evidence, as part of its formal investigation into Taib for corruption.

It has raided the offices of one of the lawyers featured in the Global Witness film, who represents some of Taib’s family companies.

He who doth protest

Taib himself has dismissed the MACC as “naughty” and accused it of “victimising” him. He’s said he won’t cooperate with its investigationand says that he never demands or accepts bribes for the grant of leases or licences and that he has not issued any ‘directive’ illegally to benefit his cousins.

Judging from many of the comments under the Global Witness video on YouTube, many Malaysians just don’t buy his protestations.

The video has been translated into Dayak tribal dialects and distributed as VCDs in indigenous upriver communities throughout Sarawak.

News of the sting has been reported in tribal languages on the foreign-based Radio Free Sarawak too.

“The film showed for the first time what people in Malaysia have long suspected, that Chief Minister Taib and his family have grown spectacularly rich through their systematic abuse of his public office,” Alex Helan, forests campaigner for Global Witness, told Channel 4 News.

“It has had a profound impact because this kind of corruption is a massive concern for ordinary people in Sarawak and Malaysia more broadly.

This kind of corruption is a massive concern for ordinary people in Sarawak and Malaysia more broadly. Alex Helan

“They are tired of seeing the elite cash in on their natural resources and they want to halt the destruction and hold their politicians to account.”

What next?

The scandal will have international resonance – if only because it has now triggered a treasure hunt for the ill-gotten gains, much allegedly being laundered through Taib family companies in the British Virgin Islands, Canada and London.

But will it be enough to turn the tide on Sunday? There’s no doubt that it’s all sickened many educated Malaysian city-dwelling voters.

The question is whether it has sufficiently disgusted the residents of Sarawak’s tribal longhouses. The trees may have gone but it’s still a jungle out there. A jungle where dirty money has a habit of delivering votes.

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