The cable, posted on WikiLeaks, quotes former Malaysians for Free and Fair Elections (Mafrel) chief Malek Husin as claiming that Rashid confessed this to him during a private meeting at Rashid's house on Oct 25, 2006.
In the cable marked confidential, Malek is said to have told US Embassy officials that Rashid (left) also confirmed Umno's launch of a "shadowy" campaign in the 1990s to wrest political control of Sabah - held until 1994 by then opposition front PBS.
"During that decade, Umno granted citizenship and Malaysian identity cards to over 600,000 foreign migrant workers (predominantly Muslims from Indonesia and Mindanao in the Philippines) in Sabah, in exchange for their votes in state assembly elections.
"According to Husin, Rashid 'admitted to personally issuing over 60,000 fraudulent Malaysian ICs in Sabah', to help Umno assume political control there," the cable says.
Up to the time of writing, Malaysiakini was unable to get an answer to calls or a text message sent to Abdul Rashid's mobile phone.
Instant citizenship and voting rights for illegal immigrants have long been an issue in Sabah, with local leaders within and outside the BN coalition having repeatedly demanded a solution from the federal government.
However, nothing has come of their demands.
It is claimed that the situation became acute in the 1990s, with the blame placed on then prime minister Dr Mahathir Mohamad for allegedly launching what is now called 'Projek IC' - a clandestine operation said to involve the National Registration Department, related government agencies and their agents - to artificially boost votes in favour of Umno and the BN.
In the 1994 state election, PBS - which had held Sabah as an independent opposition front since 1985 - saw its majority hold of the state assembly reduced to a razor-thin margin over the BN.
Although PBS was eventually toppled with a string of defections to the BN by party stalwarts, many blamed the contentious 'Projek IC' for playing a major role in the success of BN's hostile takeover of Sabah.
Wan Ahmad is 'anti-reform'
The cable, created on March 16, 2007, also includes Malek's claim that Rashid had described EC deputy chief Wan Ahmad Wan Omar as "an Umno member who is anti-reform".
Malek is said to have told US Embassy officials that Rashid had intended to stay on as EC chief until "the number two is gone", with the aim of easing in then EC secretary, Kamaruzaman Mohd Noor, as his successor.
In a separate meeting with Kamaruzaman, the cable quoted him as telling US Embassy officials that the EC was not in a position to push for reforms, as each and every proposal had to go through the Prime Minister's Office for approval.
Kamaruzaman is also reported to have said that the EC has no power to investigate election day abuses, with it having to refer allegations of fraud or election tampering to either the police or the Anti-Corruption Agency, the predecessor of the Malaysian Anti-Corruption Commission.
Battle for polls reform 'very steep'
Based on meetings among US Embassy officials and the EC, Mafrel, Bersih and several academicians, the cable summarised that electoral reforms in Malaysia faced a "very steep uphill battle" as it moved towards the March 2008 general election.
It ironically proved to be a watershed outing for opposition parties, which were able to deny the BN a two-thirds majority in Parliament.
The cable described the "Umno-led BN governing coalition" as keeping a tight rein over all important levers of power, including the EC, leaving little wiggle room for any efforts to open up elections to greater transparency and fairness.
It pointed out that, despite concerted efforts by Mafrel and Bersih to push for grassroots engagement in their bid for a revamp of an electoral system heavily tilted in BN's favour, "their best efforts will almost certainly not produce meaningful reforms", at least in the medium term.
"Umno, in power since independence, faces no effective public, opposition party or internal pressure to reduce its overwhelming powers of incumbency," the cable states.