Malaysia preparing new rules to bar foreign political donations

[KUALA LUMPUR] Malaysia is reviewing plans to bar foreign political donations after Prime Minister Najib Razakbecame embroiled in a scandal over a US$681 million contribution that ended up in his personal bank account.

A Malaysian committee working on a framework to regulate political funding also determined that anonymous donations should not exceed RM1,000 (US$242) and contributions must be held in a bank account that could be audited, said Paul Low, a minister in the Prime Minister's Department.

"Political donations from foreign interest and sources should be prohibited," Low, who chairs the National Consultative Committee on Political Funding, said in a statement. "This is necessary as a safeguard against foreign influence on local politics as well as the sovereignty of the nation."

Najib is facing his biggest political crisis since coming to power seven years ago as questions linger over the donation before the 2013 election that the government said came from the Saudi royal family. Attorney General Mohamed Apandi Ali in January cleared Najib of wrongdoing over the "personal contribution" and said the premier had returned US$620 million that was not utilized. Najib has consistently denied any wrongdoing and has never explained what happened to the remaining US$61 million.

The Malaysian Bar association said Tuesday it was seeking a judicial review of the attorney general's decision not to pursue a criminal case against Najib. Under the constitution, a decision to start criminal prosecution lies solely with the attorney general.

Najib announced the formation of the committee in August, more than a month after news broke that the US$681 million had passed through his personal accounts. The premier, 62, has denied taking money for personal gain and said the funds were earmarked to meet the party and community's needs. Accepting such funds isn't a new practice and the furor was part of a campaign to force him from office, he said.

The prime minister said last year that the country needed to urgently regulate political financing to ensure accountability as Malaysia had no laws to determine wrongdoing over donations even though there are some rules in place on election expenditure.

Low said the political funding committee is on track to complete its work within the set time frame of a year. Najib has said the work of the group is targeted for implementation before the next general elections due by 2018.

BLOOMBERG