Are Umno divisions the main beneficiaries of the additional RM600 million allocated for rural development under the Ninth Malaysia Plan (9MP)?

On Nov 13, the eve of the recently concluded Umno general assembly, party president and Prime Minister Abdullah Ahmad Badawi announced that the sum was to top up the RM1.5 billion allocated for rural development under the 9MP.

Immediately after Abdullah's press conference, Deputy Finance Minister Awang Adek Hussin told reporters that each of the parliamentary constituencies would get RM3 million from the RM600 million bonanza.

He reportedly said the funds would rejuvenate the Class-F contractors, adding that the allocations should be spent within six months upon disbursement.

However, a letter allegedly signed by Deputy Works Minister Mohd Zin Mohamed on Nov 13 - the day the announcement was made - tells a slightly different story, claims DAP central committee member Ronnie Liu.

In instructing Works Department director to expedite the directive, the letter also states that the funds are only meant for small projects in rural areas in Peninsular Malaysia and Sabah only, and not Sarawak.

Liu claims that the explanation for this is simple - Umno has no presence in Sarawak.

"There are 191 Umno divisions in Peninsular Malaysia and Sabah. Should each division be granted RM3 million worth of projects, it would amount to RM573 million," said Liu when contacted today.

According to Mohd Zin's letter, the money must be utilised by the end of this year, which meant in six weeks.

The majority of Umno division leaders automatically qualify for Class-F contractor licences, which allow them to be awarded projects involving road works, paint jobs at government buildings and drainage works among others.

These contracts are worth a maximum of RM200,000 and are exclusively for bumiputeras.

Police report lodged

Liu said that it was likely that the RM600 million disbursement was a party decision, rather than a consensus arrived at cabinet level.

For starters, Mohd Zin's letter was copied to the prime minister, works minister and second finance minister, but not Rural and Regional Development Minister Abdul Aziz Shamsudin, although the funds were meant for rural development.

Adding fuel to Liu's suspicion is the reply by Deputy Rural and Regional Development Minister Zainal Abidin Osman in Parliament on Nov 15 - two days after Abdullah's announcement.

The deputy minister was responding to a question by Kubang Kerian MP Salahuddin Ayub who asked if the RM600 million would be distributed in RM3 million packages to Umno divisions.

Zainal Abidin said then that he had no knowledge of the RM600 million until he read media reports. He denied that the funds would be channeled to Umno division leaders.

Liu alleged that the allocation was not approved by either Parliament, unlike the 9MP, or the cabinet.

"The way public money being handled in this case is unlawful," said Liu, who believes that the money will end up being channeled to Umno divisions through contracts to bolster support for the party's leadership.

"All money (that) belongs to the government belongs to the rakyat. We have no reason to sustain the patronage system in Umno with our money," stressed Liu.

Liu lodged a police report on the matter today which was attached with a copy of Mohd Zin's letter. A copy of the letter was also made available to malaysiakini.

"The allocations did not follow laws and regulations of the government because it was not approved by cabinet and Parliament, but approved by Umno's leadership.

"This is money politics and we are lodging this report to the police so an immediate investigation can commence to stop the misappropriation of funds," said Liu in his police report.