Press Statement by Charles Santiago in Parliament on Thursday, 5^th November 2009:

Government on trial in the PKFZ financial fiasco?

Once again we see the shadow play by the government, spiced with all the local ingredients of cronyism, rhetoric, cocktail of business and politics and topped with total disregard for accountability.

This pretty much sums up the shocking non-committal statement made by Prime Minister Najib Tun Razak who opined that the government would consider legal action against those recommended by the Public Accounts Committee (PAC) for implications in the Port Klang Free Zone (PKFZ) scandal only if there is a need to do so.

The PAC after much inquiry strongly suggested that the government investigates former Transport Minister Chan Kong Choy and former Port Klang Authority (PKA) general manager O.C.Phang for criminal breach of trust.

Najib's response is to wait for the special task force, set-up under the Chief Secretary to the Government, to determine if legal action is needed against the two.

Conventional wisdom has it that there would be no conflict of interest where members of the high level committee are concerned. But here, we see the exact opposite as ministry officials serving in the committee were also sitting on the PKA and PKFZ board.

They were privy to the back door deals and yet did nothing to uphold their responsibility as representatives of the state and failed to protect and promote the interests of the state and its people.

The PKFZ financial fraud is a RM 12.5 billion scandal, made worse with the leak of a cabinet paper, which revealed the government was fully aware that Chan had breached regulations when issuing letters of support. This is turn, helped PKFZ's developer Kuala Dimensi Sdn Bhd to raise billions in bonds.

The PAC concluded that both Chan and Phang had breached the Financial Procedure Act 1957 and other government regulations by issuing the letters of support and three letters of undertaking without the approval of the Finance Ministry.

But Najib wants more proof. Either that or he is hoping that the scandal would simply go away because clearly the Ministry of Finance and the Ministry of Transportation must have been aware of the financial manipulations and yet did not even make a feeble attempt to stop the abuse.

Given the dynamics and scale of the financial misappropriation, Najib's mere assurance that the government "would not cover up any weaknesses or offence committed" is not enough. While investigations by the special committee is akin to those sitting on the panel investigating themselves, Najib's insistence could only be translated as a fervent effort to cover-up.

Najib’s suggestion also undermines the PAC and the democratic process. Here, a government special task force is empowered to overrule the highest policy making body in the country. In fact, the PAC would potentially be subordinated to the whims and fancies of Najib’s special task force.

The call for a Royal Commission of Enquiry is welcomed. However, given the Lingam tape fiasco and IPCMC recommendations that came to a naught, this offers no solution for justice to Malaysians. In fact, the commission would be an absolute waste of time and resources.

My view is that the government machinery is culpable and thus on trial in this case. Reports were made to the Malaysian Anti-Corruption Commission (MACC), police and Securities Commission about the financial embezzlement but nothing was done.

Instead we need a thorough neutral probe. Therefore, I strongly suggest that Najib hands over the PAC report to the Attorney-General, Abdul Gani Patail, with strict instructions to start proceedings against Chan, Phang and other government officials named.

Najib must personally oversee that Abdul Gani acts on his orders as the country's highest judicial officer was also well aware of the PKFZ scandal but chose to remain silent instead of prosecuting the culprits.

If Najib and Abdul Gani fail to act, Malaysians would contend with my observations and it would also suggest that 1Malaysia is synonymous with corruption. We might either get a glimpse of justice or be confronted with the fact that political survival has, once again, determined the course of the government's politics.

* Charles Santiago, Selangor DAP Vice Chairman & MP for Klang