The brazen embezzlement of RM100mil from the Youth and Sports Ministry exposes stark weaknesses in the management of public funds.
THE case of the mid-level civil servant who embezzled more than RM100mil undetected from the Youth and Sports Ministry for years should rightly boggle the mind.
But when it comes to corruption and fraud in the country, most Malaysians aren’t easily baffled anymore. There are more outrageous scandals in our midst, including one best described as the proverbial jumbo in the room.
Still, the misappropriation of RM107mil of public funds by the official is yet another appalling reflection of what has gone wrong in the system.
It does not make sense that the 56-year-old division secretary who was arrested with eight others, including a woman, last Friday, could brazenly make payments to 14 companies for non-existent work without the knowledge of those above or below him.
According to the Malaysian Anti-Corruption Commission (MACC), he pocketed at least RM20mil in kickbacks from the procurement fraud operation which began in 2010 and perhaps even earlier than that.
The money from the National Sports Council was channelled directly to the companies and to his bank accounts – all 69 of them.
Surely he could not have done this all by himself. Under the ministry’s standard operating procedures, who were the others responsible for supervising and approving the payments? The perception is they were either grossly negligent or in cahoots with him. And what about the internal auditors? Were they caught napping too?
As Transparency International-Malaysia president Datuk Akhbar Satar has pointed out, the ministry’s internal auditors should have spotted the stealing.
Let’s not forget that this ministry endorsed the Corporate Integrity Pledge under the Anti-Corruption National Key Results Area initiatives with much fanfare in 2014.
The pledge was made two years after allegations on questionable spending by the media and a Public Accounts Committee hearing in Parliament.
Among the issues raised was a bill amounting to more than RM10mil for the 2012 Hari Belia Negara event.
It was for supplies and services supposedly provided by an events management company for rental of tents, booths, stage, lighting and sound systems and performances by local entertainers and three K-pop groups – Dal Shabet, Teen Pop and U-KISS.
The investigations into the embezzled RM107mil are still at the initial stages. The MACC is now following the money trail and questioning more people, including those in the ministry and former senior officials, under Section 17(a) of the Malaysian Anti-Corruption Commission Act 2009 and the Anti-Money Laundering Act. As for the main suspect, who is under remand for a week along with the eight others, he was clearly living beyond his means.
His audacious showiness and extravagant lifestyle blew his cover.
Among the things seized from his house and office in Putrajaya were 12 luxury cars, a wide assortment of jewellery, including a RM600,000 Cartier ring, paintings, luxury watches and 40 designer handbags.
The MACC has also seized RM8.33mil from the 69 bank accounts. The officer is also believed to have received other kickbacks from the companies in the form of houses, trust fund payments worth millions and supplementary credit cards.
Apparently, he withdrew RM500,000 from one of his bank accounts a day before he was nabbed and used RM200,000 to pay his credit card bills and sent RM40,000 to his son’s bank account in Australia.
Investigations also showed that man and his family had been travelling first class to Australia, Europe and the US at least once a month.
As always, pledges of improving the system are made each time a new financial scandal is uncovered.
Chief Secretary to the Government Tan Sri Dr Ali Hamsa said the Auditor-General’s Department would conduct a check on the Youth and Sports Ministry and its agencies.
He said it would cover financial and procurement processes and identify weaknesses.
But, as Dr Ali said, the secretaries-general of ministries should have been aware of all expenditure in the first place, as they were effectively chief financial officers.
According to him, there should not be any case where an officer could approve funds without authorisation from the secretary-general, adding that a circular on this had been issued for some time now.
So why was this not followed in the case of the Youth and Sports Ministry, where there have been several secretaries-general since 2010? The simple answer is the rules are there but they are not being followed, even at the highest levels.
Our system is broken and this is the main reason why corruption is so rampant in the country and the trust deficit in the Government is growing by the day.
Earlier this month, the Sultan of Perak, Sultan Nazrin Muizzuddin Shah, called for corruption to be fought with more determination.
“It must be tackled without bias, without fear and without favouritism because corruption is corruption no matter who commits it,” the Perak Ruler said in his speech at the Utusan Business Awards presentation on March 1.
Likening corruption to termites eating into the main pillars of the country, he warned that failure to address the scourge would lead to Malaysia’s certain downfall with citizens undergoing suffering like that being experienced in under-developed countries.
“The public must be inculcated with a culture to hate corruption and to reject leaders involved in corrupt practices,” said the Perak Ruler, describing Malaysia’s poor score in Transparency International’s corruption perception index as a cause for alarm.
Malaysia’s current 50th spot is behind Saudi Arabia (48), Jordan (45), Namibia (45), Mauritius (45) and even Rwanda (44). It only scored 50 points in 2015, two less than in 2014.
Last week, Time magazine delivered another damning blow on the level of corruption in the country.
In outlining specifics explaining the state of global corruption, it named five countries led by Brazil. Malaysia was second, followed by South Africa, China and Russia.
Along The Watchtower By M. Veera Pandiyan The Star
Associate Editor M. Veera Pandiyan likes this observation by 4th century Chinese philosopher Zhuangzi who said: “The petty thief is imprisoned but the big thief becomes a feudal lord.”