Last Updated: Monday, 19 September 2005, 11:45 GMT 12:45 UK
The send-off for Abdul Halil Abdul Mutalib, who retires next month, is now the subject of an official inquiry.
But Mr Abdul Halil said he had no idea how much was being spent and accused his staff of trying to smear his name.
He said they were an "ungrateful lot" and threatened to lodge a police complaint against them.
The controversy began when the New Straits Times newspaper ran a front-page article alleging that the customs and excise department had asked officials to donate 1,000 ringgit ($265; £147) each for Mr Abdul Halil's party on 3 October.
'Over the top'
Most of the 5 million ringgit for the event was to come from department funds, the paper said.
The Malaysian finance ministry said an inquiry into the affair would be completed within a week.
Malaysia's Prime Minister Abdullah Ahmad Badawi said the reported cost of the party was "over the top".
Not even former Prime Minister Mahathir Mohamad had had such an extravagant send-off when he left office last year after 22 years, he said.
Mr Abdul Halil proclaimed his innocence, saying: "I don't know how much they collected. I don't know what they did."
He added: "You are not supposed to investigate me. You should investigate those organising the event."