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1ST NATIONAL CONGRESS ON INTEGRITY CORRUPTION

by Chooi Mun Sou

The organisers have suggested that I share with you the “Legal Perspective” of Corruption being the “weakest link” to this topic of Integrity, the theme of this Congress. It was also suggested that legal definitions of “corruption” or a “corrupt act” be given.

It is interesting to note that there is no definition of the word “corrupt” in the Anti-Corruption Act, 1997 (“AC Act”). In the sections setting out the offences under the AC Act, the provisions read: “Any person who by himself, or in conjunction with any other person – “…corruptly solicits or agrees to receive for himself or for any other person… any gratification as an inducement to or reward for, or otherwise on account of…any person doing or forbearing to do anything… shall be guilty of an offence” under the AC Act.

In interpreting the word “corruptly”, as stated in the AC Act, one should take the ordinary meaning of the word “corruption”. This is defined in the English Dictionary as “lacking in integrity; open to or involving bribery or dishonest practice, morally depraved…”. I believe we do not need to go any further in definitions. We all understand what “corruption” means. It is “rasuah” as used officially in Bahasa or “suap” as used in “pasar Malay”. We come across this in our daily lives.

Let me begin by sharing with you my daily life in this atmosphere of “rasuah”. I live in what used to be a quiet residential area, a house which I was fortunate to have acquired in 1969, in Damansara Heights, which was then considered to be on the outskirts of K.L. To-day, 36 years later, the atmosphere has changed to an extent unrecognisable. The “jalan” I have been living at is still zoned as residential. I begin my morning, each working day, as I leave the front gate of my house having to weave through a street that has been “narrowed” by cars parked on “yellow lines” on both sides. Some days the traffic warden from Dewan Bandaraya Kuala Lumpur (DBKL) would turn up and issue a few parking tickets. He disappears shortly thereafter and the cars reappear. When I return in the evening, the scene gets worse, as there are more cars waiting on the street, double parking, to pick up passengers. Following earlier complaints, DBKL privatised tow trucks would on certain times of the day remove cars illegally parked. Usually there is some relief for a couple of hours. Then more cars arrive and double park and the night mare begins again.

Why? You may ask, has this quiet jalan attracted so many cars during working days.

Firstly, DBKL approved the rezoning of a large part of the neighbourhood to offices. The density of each plot of land for building was increased without taking into consideration the pressure on the limited infrastructure which would normally accompany such rezoning. The applicant was SPPK, a government housing company. The offices that were built included offices occupied by the Ministry of Housing and Local Government, an insurance company, a major accounting firm and one of the PNB units. The infrastructure, width of the roads, car parking were clearly inadequate, but nevertheless the applications were approved and four 12 storey blocks of offices were built.

Following the occupation of these office blocks, residential houses, similar to the one I live in, were slowly being “converted” to “limited commercial use”. Changes in the use of bungalows then took place insidiously at my street with firstly, a flower shop, followed by a nursery school, a spa, a law office, etc. and the ubiquitous nasi lemak stalls sprouted up on the pavements. Motor cyclists drive against traffic flow and park their bikes on pavements, competing with the nasi lemak vendors. I wrote to the Dato Bandar on the 1st May 2000 to enquire whether the use of these houses for commercial purposes have been approved by him. I did not receive a reply. After the 6th reminder, DBKL replied to me on 6th October 2000 informing me that there has not been any change of land use (except for the nursery school) and that enforcement notices have been served on the users of the houses on 12 August 2000. I then wrote to the Jabatan Perancang & Kawalan of DBKL on 23 October 2000, to enquire what actions were being taken. I followed up with 14 reminders. To date I have not received a single reply or acknowledgement.

A new development took place on 8th June 2005. I was invited together with my neighbours to attend a meeting at DBKL to discuss the “Cadangan penukaran guna secara sementara premis kediaman jenis banglo sedia ada di sekitar Lorong Dungun dan Jalan Gelenggang, Damansara Heights”. At this meeting, the representative from the Jabatan Perancang, who chaired the meeting at the request of the Dato Bandar, casually informed the meeting that 10 of the houses along these two streets were “ILLEGALLY” used for commercial purposes. He then sought our views as owners of the respective units of bungalows. He informed us that following his report after this meeting, the Dato Bandar will decide whether to approve the “conversion” for all or some of the residential units. He went on to say that if the Dato Bandar gives his approval the “illegal” use of the 10 bungalows will become “legal” and no action would be taken against these users. But if the Dato Bandar does not give his approval, then action will be taken against the illegal users of the bungalows.

A large majority of house owners present at the meeting did not agree to the proposal. We are now awaiting the decision of the Dato Bandar. Meanwhile the 10 illegal users (other than the flower shop, which has ceased business) are continuing with the illegal use of the bungalows and each morning I continue to weave through the “narrowed” street as I leave for work and return home each evening enduring the traffic hazard.

According to Malaysian statutes, this failure of DBKL to take action is a blatant dereliction of duty. My neighbours look at it differently. To them this is corruption. “Sure lah, someone has paid someone something. That’s why no action”. That is their reaction and one can understand such perception.

We read headlines like, “Dr M: Corruption becoming culture” in our national newspaper. This appeared on 26 May 2005 in the New Straits Times. I agree with the statement of the former Prime Minister and will go further in saying that “Corruption has become a culture”. The actions or inactions of the Dato Bandar, as perceived by the public, say it all.

It is so easy for every Malaysian in every walk of life to identify “corruption” in their daily lives. It is common to bribe the policeman when caught committing a traffic offence; to pay a bribe, through driving school instructors, to the JPJ examiner to obtain driving licences; to grease the palms of an officer of the customs department for approving a lower assessment of the duty payable for imported cars, if one is able to obtain an approved permit (AP). But one has to belong to a select group to be issued with an AP these days. Our former Prime Minister said this at a press conference lately and asked for the Minister for International Trade & Industry to publish the names of the persons who have been issued APs. She promptly replied that it is not and never has been the practice of her Ministry to publish names of persons issued with APs, “touché.” The matter did not end there as our daily papers are feeding us with comments each day.

The “Report of the Royal Commission to enhance the operation and management of the Royal Malaysian Police” (Report) was released not so long ago. Congratulations to the Prime Minister for this action. The Report confirms the many fears of the people. The Report talks of “serious under-reporting of actual acts of corruption of the PDRM (Police Department)… because the public is probably more apprehensive about reporting corrupt practices involving police personnel.” Our experiences tell us that this reluctance to report is basically because of “fear” of reprisal. One can understand this attitude. It takes a very courageous person to lodge a report at a police station complaining of a corrupt act of another police personnel. The high profile incidence of the former Inspector General of Police (IGP) who physically assaulted the hand-cuffed former deputy prime minister in the police head-quarters sent chills through the bones of every citizen. The subsequent arrest and charge of the IGP and his sentence to some extent reduced this fear factor. But the special treatment accorded to him in the whole prosecution process does not seem to give us much confidence in the police and the judicial system. The Report confirms that a great deal of work has to be undertaken to reform the police force before the public could gain any confidence in our police.

In our daily press we read of corrupt practices at all levels of Malaysian society every day. We all experience it, some time or other or in my case, it stares at me each morning when I leave my house for work.

We would probably say, but this is happening all over the world. Look at the United States, the United Kingdom and Europe, at Enron Corporation and the mega frauds of corporate leaders there. Yes, there are mega frauds in America, the United Kingdom and Europe. But some of the perpetrators are apprehended and brought to Court. The sentences in fines and prison sentences are also in mega proportions. Can we say that this applies in Malaysia?

Recently, we read in the business section of our daily media of a public listed company (PSCI) incurring RM160.5 million consultancy and agency fees in relation to the offshore patrol vessels project (OPV) awarded to them by the Ministry of Defence. The same company incurred another RM143.8 million in expenses for the purpose of securing future projects tied to the OPVs. The recipient of these “mega” payments was stated to be the “ultimate holding company”. My understanding of Company law is that such payments to a “related party” require shareholders’ approval. There was no mention of shareholders’ approval.

The contract for the OPVs which cost taxpayers RM5.4 billion was awarded to a subsidiary of PSCI in 1998. The contract was for 6 vessels. Only two vessels have been completed so far and have been returned by the Royal Malaysian Navy. The report quoted the chairman of the company explaining that the 2 vessels were returned as “there are pre-delivery technical adjustments. It’s just fine-tuning”. The report went on to comment that, call it fine-tuning or failure to deliver, this “delay” has prompted the Minister of Defence to say that “the government is looking into “PSCI’s problems”. Will the public be given a full picture of the “going-ons” of the award of this contract? We will have to wait and see.

There is the case of another public listed company (PLC) announcing a profit in excess of RM100 million resulting from the sale of assets of its subsidiaries to other subsidiaries of the PLC for a particular financial period. The shares of the PLC shot right up. A week or so later, the directors of the PLC, clarified that the announcement was incorrect, as they have been “advised” by the company auditors that the “profit” arising from the sale of assets from one subsidiary to another cannot be taken into account and be treated as a profit by the holding company. This treatment of the accounts, as advised by the company auditors is standard accounting practice and directors of public listed companies ought to be familiar with it. The directors went on to clarify that for that financial period the PLC in fact incurred a loss of about RM10 million. The shares of the PLC plummeted following this announcement. The investing public was outraged. The Securities Commission apparently looked into this.

There appears to be a prima facie case to charge the directors for releasing false information to the public under section 86 of the Securities Industries Act, 1983 (SC Act). The facts of this case may also expose the directors to an offence under section 84(1) of the SC Act, which states: “… no person shall create, or cause to be created, or do anything that is calculated to create, a false or misleading appearance of active trading in any securities on a stock market…” The KLSE records show an increase in trading on the shares of the PLC after the announcements of the RM100 million or more profits. It is unimaginable for the directors to claim an “honest” mistake in the release of the results showing profits when such profits came about from inter-company transactions. Directors of public listed companies have to attend courses organised by the Securities Commission on their duties as company directors and they must hold valid certificates issued by the Securities Commission that they have attended such courses. Perhaps, the Securities Commission should consider a compulsory course on ethics, for all company directors of public listed companies.

Each of these offences is punishable with a fine not exceeding RM1.0 million or to imprisonment for a term not exceeding five years. There is also provision in the Securities Industry Act, for the Chairman of the Securities Commission, with the consent in writing of the Public Prosecutor to compound such offences by accepting from the “person reasonably suspected of having committed such offences a sum not exceeding the maximum fine for that offence”. We have yet to read of any action being taken by the Securities Commission against the directors. Perhaps the minority watchdog group (MSWG) headed by chief executive Abdul Wahab Jaafar Sidek would attend the next Annual General Meeting of the PLC and question the board of directors on this matter.

But I must restrain myself and stop listing endless instances of such practices in the corporate world and the “dereliction of duties” by public authorities. If I don’t and continue along this line, I will get depressed and so will you. Instead, let us be positive and forward looking. I therefore throw you a challenge.

What role have we, as Malaysians, played or are playing in our work place, in our neighbourhood, and in society in general, that has made Malaysia a place where corruption is becoming (as stated by Tun Dr. Mahathir) or has become (in my view) a culture?

Instead of pointing fingers, we could examine our own lives, our actions or inactions. As I am the one throwing the challenge, I will start with my own testimony.

First the easy test, the payment of bribes to the policemen when caught committing a traffic offence. With humility I am pleased to say I passed this test. I have been naughty and have cut corners on a number of occasions. When stopped, my answer to the policeman was “ma’af, saya buat salah”. I was prepared to pay the fine and asked for the ticket. On each occasion, I was let off with a “warning”.

The other easy test is that of my having to deal with DBKL. I have told you of my letter writing. But is that enough? May be it is, if I am not a practising lawyer. But, I am a lawyer and in active practice. One of my partners suggested that I take the matter to Court as a good citizen ought to. Take out a Writ of Mandamus, that is obtain a Court Order against DBKL ordering DBKL to take action against the culprits. I am still considering this course of action. There are so many excuses I can come up with as to why I should not file action. But I know in my heart that they are merely excuses. If I am pro-active I have to act, however unpleasant and inconvenient it may be for me.

The more difficult tests come in my practice as a lawyer. I will quote one example. One may be asked from time to time, in banking work, to be more “creative” in giving legal opinions so that it would be acceptable to the bankers and the client could then “draw-down” on the loan facility. This is really a test of one’s “intellectual honesty” and “integrity”. It is so easy to play around with words and justify one’s opinion to please the client and therefore ensure one gets the work done to the client’s satisfaction and ensure more work in the future. My experience tells me that, deep down in our hearts, if we are honest with ourselves, we know when we are asked to compromise with a less than honest opinion. I have had to deal with this problem, again and again, and I confess that the only way I could remain true to my beliefs and keep my integrity is to be transparent. I am fortunate that I have partners in practice in my firm who share these same values and when each of such situations arise, I would call for an open debate with my partners to confirm that the legal opinion is honest. With such backing from my partners I could then face the client with that decision even at risk of his displeasure.

Now, I think I should stop here and adjourn to the “confessional box” with Bishop Paul Tan and let him listen to the rest of my experiences under the cloak of the “sacrament of reconciliation”. …

As my allocated time is fast running out, let me share with you some ideas as to actions we could take.

I have been warned, in my younger days, to beware of the desire to change the world. It is easy to paint a negative global picture of the world with all its problems. But what of the solutions? Take the current drive to wipe out corruption. Our Prime Minister, Datuk Seri Abdullah Ahmad Badawi, pledged to the Malaysian electorate that his priority is to wipe out corruption in the country. He received the biggest mandate from the people in the last general election. This fact speaks volumes.

Let us look at the task facing our Prime Minister. He has taken many positive actions from the very day he took office. Some big names have been charged in our Courts for corrupt practices. The trials are ongoing in our Courts. Mega projects that are obviously not economically viable but profitable to the contractors securing such contracts were scraped. The setting up of the Royal Commission to enhance the operation and management of the Royal Malaysian Police and the publication of its Report are positive actions. The Prime Minister has kept his campaign promise.

After being confirmed as President of UMNO, Dato Abdullah put the disciplinary board of UMNO to work and they have been very busy. A vice president has been found guilty of “money politics” and sentenced to a suspension of his membership for six years. He has filed an appeal. However, he is currently retaining his cabinet post. He is the Minister overseeing the Dato Bandar of KL. Other members of UMNO, including a Member of Parliament, have also been found guilty and received various punishments.

What does “money politics” mean? We read in the press that, the vice president was found guilty of paying sums of money to delegates to “buy” their votes. To the man in the street, that is “corruption”.

Section 10 of the AC Act reads:

“Any person who by himself, or by or in conjunction with any other person-

(a) Corruptly solicits or receives or agrees to receive for himself or for any other person, or

(b) corruptly gives, promises or offers to any person whether for the benefit of that person or of another person,

any * gratification as an inducement to or a reward for, or otherwise on account of-

(aa) any person doing or forbearing to do anything in respect of any matter or transaction, actual or proposed or likely to take place; or

(bb) any officer of a public body doing or forbearing to do anything in respect of any matter or transaction, actual or proposed or likely to take place, in which the public body is concerned,

shall be guilty of an offence.

* “gratification” is defined to include money, donation, gift, reward,…etc, any office, dignity… payment, release, discharge of loan, etc.”

It would appear that, based on the scanty facts made public, “money politics” fall within the ambit of Section 10 of the AC Act. Is the Anti Corruption Agency looking into this?

We also read in the daily newspapers of yet another out-burst from Tun Dr Mahathir on the problems of our national car, Proton, and the issue of Approved Permits (APs). He repeated his complaint that a large number of APs were issued to a few companies benefiting only certain individuals. At this latest public press conference held on the 5th July 2005, he also made allegations of the “dereliction” of duty by a Minister without naming the person (who was serving during Tun Dr Mahathir’s tenure as prime minister) in not “investigating” the import of foreign cars at a “ridiculous price”, even when directed by him to do so. He did not explain why he did not “fire” the Minister for the “dereliction” of duty. The New Straits Times identified the Minister of International Trade and Industry, Datuk Seri Rafidah Aziz, as the minister referred to by Tun Dr Mahathir. This drama is current, as events are enfolding each day. The Minister of International Trade & Industry, we read in the press on 7 July 2005, has been directed by the Government Cabinet to “explain” to Tun Dr Mahathir in writing. She has sent her “explanation” on 9th July 2005. The matter appears “settled”. Could this be? This appears to be a very unusual procedure for a Cabinet to adopt. Will the Malaysian people be told on what basis the issue is settled?

Yes, the task faced by our Prime Minister is immense.

How can we help? What role can we play?

Every single person I have spoken to on this subject, supports the actions of our prime minister, Datuk Seri Abdullah Ahmad Badawi. Right then, let us show our support with concrete actions and not mere lip service.

Let us start by lifting the Blanket of Fear that many of us have been using as our excuse. Ever so often we point to the obnoxious piece of legislation, the Internal Security Act, ISA. Even President Bush has copied us. Look at what they can do to suspected terrorists. The British, who “invented” the ISA and bequeathed it to us here in Malaysia when they gave us “Independence” in 1957, are also using this piece of legislation. Yes, the ISA is there but let us not be threatened by it to excuse ourselves from taking concrete steps to fight corruption. Let us credit our Minister of Home Affairs with some responsibility. We have yet to read of someone being detained under the ISA for reporting a corrupt act , be it to the police or to the ACA.

Our Prime Minister in his election campaign called on us to work with him. We gave him a resounding mandate. He has kept his campaign pledge. Let us respond to his call and work with him. If we don’t, we will have to share the blame for the continuing state of this culture of corruption.

Many of us want to respond positively. But we ask, what about the hurdles facing us? Let me illustrate what it would take to fight corruption with concrete examples.

Take a case of a teenager applying for a driving licence. The driving instructor at any driving school will tell you that if you adopt the “usual” practice by paying a higher fee which includes a bribe for the examiner at JPJ, you will pass your test at the first go. It will be simple enough for you to say no. But, the consequence would probably be that you will then have to do the test several times. Saying no and not paying the bribe is not too difficult, but are we prepared to go one step further and report this to the authorities? In this case, it will be the Anti-Corruption Agency (ACA).

Take another example. Someone proposes to change the use of his or her residential house to commercial use, to a flower shop, law office or spa. The basic requirement is the approval of the Planning department of Dewan Bandaraya. There is no response from DBKL even after several reminders. At the department a hint is dropped which leads one to understand to mean that with a little “inducement” one’s plans will be shortly approved. Does one take the hint or lodge a complaint with the police or ACA?

In these cases cited above, we should be reminded that, if we give the “inducement” or bribe, we in fact would be encouraging corruption. We have no alternative really, if we say we want to end corruption. We have to start by saying no to bribery and then taking the positive step of lodging complaints.

After reading the Report of the Royal Commission, it is understandable if one decides not to lodge a report with the police.

Will this be different with the ACA?

The director general of the ACA is answerable to the Prime Minister. Human Rights group have suggested that this line of command be changed and make the ACA answerable to Parliament. This could be a right move. In the public perception, the ACA would appear more independent.

If a complaint is lodged with the ACA, investigation is to commence or the ACA on its own volition could commence to investigate even if there is no complaint. However, the public perception of this working arrangement is that, if the party involved is a VIP, clearance must first be obtained from the “top” before the ACA will make its move. Would the ACA act on its own volition?

Upon completion of the investigation, if it gets to that stage, a report is submitted to the Public Prosecutor, the Attorney General (AG) for decision as to whether a charge is to be instituted. The AG is answerable to the Prime Minister and not to Parliament.

The public is aware of a very high profile case pending before our Courts. The former managing director of a government owned company was finally charged for criminal breach of trust. This charge was in relation to one of the several fraudulent acts highlighted by the investigating accountants made public in 1997. Action was taken only after the change of the top post in government. It is hard to believe that it would take 6 to 7 years to investigate a complaint of such nature. This incidence lends credence to the perception that the Director General of the ACA only waits for his “cue” from the top.

Does the ACA have the resources, both in man power and funds to carry out its duties? We do not know and have no official means of finding out. Inside sources tell me that they have the manpower and a fund with no ‘cap’, for use to investigate and secure evidence or the cooperation of witnesses. This is relevant, I believe, as from time to time, it would be necessary to give rewards and make payments in the course of “doing deals” with accomplices, however unsavoury such accomplices may be, to secure evidence to charge and obtain the conviction of a culprit. I am advised that the funds do not come under the scrutiny of the auditor general. There is danger here and I am reminded of the expression, Quis custodat ipsos custodes? (Who guards the guards?)

Is it clear that the Prime Minister not only needs the support of the people, but he also needs the support of every officer in the Civil and Judicial Services. There are presently too many corrupt elements within the administration who are working to subvert the Prime Minister. How and what can we do to change this?

The mind-set of every citizen in this country must change. We must speak up resolutely and refuse to give in to bribery. Let us remind ourselves of the words of St. Augustine: “Remember, you will be faulted not because you are ignorant against your will but because you neglect to seek out what it is that makes you ignorant”.

The Prime Minister must appoint individuals with integrity to “police” the Nation. These individuals must be given authority, unhampered to exercise their duty. The whole system of administration must be changed. Officers, in positions of trusts and great responsibilities must be better trained and be given appropriate remuneration. Their terms of services must be up-graded.

Recently, while in Shanghai, I was told that, the local government, in an effort to wipe out corruption in the police force, upgraded the force by increasing the basic salaries. This move attracted personnel with higher educational background. These officers with better terms of employment and with higher educational training value their jobs and would not dream of taking a bribe. This move has proved successful. We see this system being satisfactorily implemented in Hong Kong in the late 1970s. The mere mention of the Independent Commission Against Corruption (ICAC) is sufficient deterrent to corporate executives and civil servants. Our immediate neighbour, Singapore, has likewise used the same formula not only for the police force but the entire civil service and the judiciary. Can we not learn from the experiences of others?

We can have good laws. We can have resolute individuals with integrity. But if good laws are administered by individuals without integrity or individuals with integrity are prohibited from performing their functions there will be not be an efficient government, the culture of corruption will remain.

I am reminded of the words of a great Chinese reformer, Wang An-Shih (A.D. 1021-1086) who said: “… history proves that it is impossible to secure proper government by merely relying on the power of the law to control officials when the latter are not the right men for the job. It is equally futile to expect efficient government if, having the right men in their proper positions, you hedge them about by a multitude of minute and harassing prohibitions.”

Does this not ring true today in Malaysia?


Let me close by congratulating the two organisations, the Graduates Christian Fellowship and the National Evangelical Christian Fellowship for organising this Congress. It is timely.

And may I then leave you all with a note of HOPE.

In moments of despair or in a state of helplessness I am always comforted with the words of our Lord in the Gospel of St. Matthew, when asked by his disciples, “Then who can be saved? But Jesus looked at them and said, for mortals it is impossible, but with God all things are possible” - Chapter 19, verse 26.

16 July 2005
Kuala Lumpur