Malaysia’s Corruption Watchdog Under Fire

For weeks, Malaysia’s Anti-Corruption Commission has been embroiled in a scandal over the purchase, under his brother’s name, of millions of shares in two companies by Chief Commissioner Azam Baki (above) in defiance of laws prohibiting the trading of stocks by public servants.

Baki’s explanation of the transactions has mollified no one in the political opposition or the general public and calls for his resignation – in vain – continue to increase. Edmund Gomez, a professor of political economy at Universiti Malaya’s Faculty of Economics and Administration, recently resigned from the MACC’s Consultation and Corruption Prevention Panel in protest of its inaction against Baki’s alleged ownership of the shares.

According to reports by the International News Service starting last October, Azam purchased 1.9 million shares in GETS Global Bhd, a transportation holding company, in April of 2015, and 2.156 million Excel Force MSC Bhd warrants in March 2016. The GETS shares are now worth US559,920 while the Excel Force warrants can be converted into shares at an exercise price of 68 sen (US$0.16) per share for the equivalent of US$344,960. The two together are worth the equivalent of US$904,000, raising questions about how a lifetime civil servant – if he was indeed allowed to purchase shares – was worth that much money.

At that time, Azam was the MACC head of investigations. After the INS disclosure, he said he had loaned his trading account – which under the law he wasn’t supposed to have – to his brother, and had transferred some of the shares to him, although Baki apparently didn’t notify the stock exchange if indeed he had done so, which is required by law. Last week, he threatened to sue INS and the writer of the story.

The MACC’s Anti-Corruption Advisory Board quietly cleared Azam of the conflict allegations on Azam’s explanation, apparently outside its statutory powers under the MACC Act of 2009, without ever conducting an investigation. His deputies also and other staff members have publicly vouched for him, although the explanations have been thin at best.

The furor over the shares and the less-than-transparent manner in which it is being investigated are emblematic of a much deeper malaise, an alarming moral failure at the heart of government. The MACC has a checkered history at best. In September of 2015, a senior prosecutor named Kevin Morais disappeared after leaving his condominium in Kuala Lumpur on his way to work, only to turn up murdered in a barrel of cement in a river in a Kuala Lumpur suburb. His car was found burned in the state of Perak. 

It transpired that Morais had been a secret, major source of information for Clare Rewcastle Brown and the Sarawak Report on the US$13.2 billion – US$4.5 billion stolen and listed outstanding debt of US$7.8 billion 1 Malaysia Development Bhd. scandal. His death has never been adequately investigated, and then-attorney general Mohamed Apandi Ali falsely said Morais had nothing to do with the controversial MACC probe into Prime Minister Najib Razak’s tangled financial affairs. 

There was an attempt to clean up the MACC by the reform Pakatan Harapan government which came to power following the 2018 general election, with the appointment of lawyer Latheefa Beebi Koya as Chief Commissioner in 2019 and the naming of well-known lawyer Tommy Thomas as attorney general. They were both abruptly sacked and replaced when the Pakatan government fell in February of 2020. Azam replaced Latheefa, Idrus Harun replaced Tommy Thomas.

We are now seeing whether the agency, whose job it is to maintain the clean and honest operation of government, has retained its integrity. The allegations against Azam are serious. He has not fully explained how he came to hold millions of shares in publicly listed companies and whether the money, nearly US$1 million, is in his accounts. It may be that Azam has a perfectly reasonable explanation but that is no longer the point.

“Whatever Azam’s fate may be, the moral rot within our institutions will not be easily resolved,” said Dennis Ignatius, a retired senior diplomat and ambassador who has become one of the country’s most visible gadflies. “We have an elaborate system of checks and balances in place to ensure the integrity of our governance systems. We appoint apparently respected public servants to helm our agencies. We shower them with awards, titles, and positions, and yet they betray their office. If we can’t trust them to act with integrity and honor, who can we trust?”

Prime Minister Ismail Sabri Yaakob, who came to power after two years of nonstop political turmoil as head of a coalition government in which the scandal-riddled United Malays National Organization regained power, has shown little interest in the matter, nor has his cabinet.

The MACC, in the midst of all this, remains crucial to the 1MDB scandal. When the Pakatan Harapan government came to power in 2018, the government under Mahathir Mohamad revived the probe into the scandal, re-establishing the moribund special task force that had languished under Najib and UMNO, which was comprised of the MACC, the attorney general, the police and Bank Negara Malaysia, the central bank, and its previous leading members who were short-circuited by UMNO.

There are clear indications that there is little appetite for the current government and its UMNO leaders to resume the aggressive investigation into what had become of that US$13.4 billion.

Najib Razak, the former prime minister who is at the center of the scandal and who has been convicted on peripheral charges and faces 12 years in prison, faces a plethora of additional charges in the central scandal. All indications are that UMNO would like to see the former premier freed or his charges minimized and who despite his conviction is playing a major role in UMNO’s resurgence. It remains to be seen what MACC’’s role will be, especially with its chief enforcement officer in questionable circumstances.

“We have not come to this dark place overnight,” Ignatius wrote on his blog. “The erosion of our moral standards, of our integrity and our honor has been long in the making. For decades, corruption has been covered up, dismissed as an “offset” and even justified on the grounds of some nebulous existential struggle to defend the dominance of a particular ethnic grouping. Cynicism, hypocrisy, and avarice replaced character, principles, and duty.”

As he pointed out, there is a pervasive atmosphere across much of the government in which officials have no qualms about demanding bribes and in which the leading political party appears to do all it can to ignore the fortune that disappeared into Najib’s overseas accounts. Despite his conviction – and a resounding three-judge denial of his appeal – he retains his passport and has traveled out of the country.

“Make no mistake,” Ignatius wrote. “We face an existential moral crisis. If the men and women tasked with ensuring the integrity of our governance system cannot be relied upon to act with honesty, then we have to conclude that the whole system of governance cannot be trusted to function as it was designed to.”

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