KUALA LUMPUR (May 4): Malaysia needs to take urgent steps to strengthen laws on political funding and asset declarations as the next election cycle approaches, an anti-corruption watchdog warned on Monday.

Transparency International Malaysia (TI-M) said recent testimony in court, where significant sums from multiple companies were allegedly channelled into a political party account, had again exposed structural weaknesses in the country’s governance framework.

"Without prejudging ongoing judicial processes, these developments reinforce a critical reality: Malaysia can no longer sustain a system where political funding remains opaque, and asset declarations lack a strong, enforceable legal framework,” TI-M said in a press statement.

Last week, the High Court heard that 29 transactions totalling RM19.5 million from a construction firm to Parti Pribumi Bersatu Malaysia (Bersatu) were flagged as suspicious by a bank, due to the amount and the frequency of the transfers.

Tan Sri Muhyiddin Yassin, the president of Bersatu, faces four charges of using his position to obtain RM225.3 million in bribes linked to the Jana Wibawa project, as well as three counts of money laundering involving RM200 million allegedly channelled to the party.

Despite repeated policy commitments, TI-M flagged that the government's long-standing reform agenda on political financing and asset declaration remained incomplete. Key gaps also persist as recent efforts must be translated into decisive legislative action, the watchdog stressed.

TI-M called for a political financing act to mandate full disclosure of political income and expenditure, impose restrictions on anonymous donations, and establish independent oversight with enforcement powers.

Further, there has to be a binding asset and interest declaration regime covering ministers, members of Parliament and politically exposed persons, with verification, sanctions, and appropriate public transparency, the watchdog said.

“Political corruption is often the source of wider systemic corruption — and when political financing remains hidden, risks of patronage, policy capture and conflicts of interest inevitably follow,” TI-M said. “These rules must be in place before the next general election — not after the next scandal.”

The issue of political financing is not new but scrutiny has been rising following a scandal involving former prime minister Datuk Seri Najib Razak who received RM2.6 billion in his personal bank accounts misappropriated from a state investment fund.

In 2023, Prime Minister Datuk Seri Anwar Ibrahim had pledged to enact a political donation law ahead of the 16th general election. However, progress has been sluggish with Deputy Law Minister M Kulasegaran saying in January that a public perception study on the bill is still ongoing.

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