I am out of the country (currently in Thailand for a wedding). I read this in the local Asian WSJ, an article about money and patronage in the Malaysian political process. And while I suppose I was supposed to think "wow, Malaysia is sure screwed up" -- all I was really left with at the end of this article was "how is this any different from the US?" How does 1MDB differ from, say, various green energy funds at the Federal level or community development funds at the local level?
Malaysian Prime Minister Najib Razak was fighting for his political life this summer after revelations that almost $700 million from an undisclosed source had entered his personal bank accounts.
Under pressure within his party to resign, he called together a group of senior leaders in July to remind them everyone had benefited from the money.
The funds, Mr. Najib said, weren’t used for his personal enrichment. Instead, they were channeled to politicians or into spending on projects aimed at helping the ruling party win elections in 2013, he said, according to a cabinet minister who was present.
“I took the money to spend for us,” the minister quoted Mr. Najib as saying.
It still isn’t clear where the $700 million came from or where it went. But a six-month Wall Street Journal examination revealed that public entities spent hundreds of millions of dollars on a massive patronage machine to help ensure Mr. Najib’s United Malays National Organization stayed in power. The payments, while legal, represented a new milestone in Malaysia’s freewheeling electoral system, according to ruling-party officials....
The effort relied heavily on the state investment fund Mr. Najib controlled, 1Malaysia Development Bhd., according to minutes from 1MDB board meetings seen by The Wall Street Journal and interviews with people who worked there.
The prime minister, who is chairman of 1MDB’s board of advisers, promised repeatedly that the fund would boost Malaysia’s economy by attracting foreign capital. It rolled up more than $11 billion in debt without luring major investments.
Yet Mr. Najib used the fund to funnel at least $140 million to charity projects such as schools and low-cost housing in ways that boosted UMNO’s election chances, the Journal investigation found.
The minutes portray a fund that repeatedly prioritized political spending, even when 1MDB’s cash flow was insufficient to cover its debt payments.
This illustrates one (of many) reasons why those lobbying to reduce campaign spending are on the wrong track. Because no matter how much one limits the direct spending in elections, no country, including the US, ever limits politicians from these sorts of patronage projects, which are essentially vote-buying schemes with my tax money.
The reason there is so much money in politics is because supporters of large government have raised the stakes for elections. Want to see money leave politics? -- eliminate the government's ability to sacrifice one group to another while subsidizing a third, and no one will spend spend a billion dollars to get his guy elected to public office.
By the way, in this current Presidential election we are seeing a vivid demonstration of another reason campaign spending limits are misguided. With strict spending limits, the advantage goes to the incumbent. The only people who can break through this advantage are people who are either a) already famous for some other reason or b) people who resort to the craziest populist rhetoric. Both of which describe Donald Trump to a T (update: Trump has spent virtually no money in this election, so he should be the dream candidate of clean elections folks, right?)