Malaysians agog as tables turn on Najib

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Malaysia's former prime minister Najib Razak arrives to give a statement to the Malaysian Anti-Corruption Commission (MACC) in Putrajaya, Malaysia May 22, 2018. Photo: Reuters/Lai Seng Sin

Former Malaysian Prime Minister Najib Razak is under heavy fire as new premier Mahathir Mohamad’s government quickly launches and widens investigations into alleged corruption at the 1Malaysia Development Berhad (1MDB) state development fund that may have cost the nation billions of dollars in pilfered losses.

Najib, whose once-dominant Barisan Nasional (BN) coalition lost resoundingly at May 9 polls, is implicated in an embezzlement racket after suspicious transfers allegedly linked to 1MDB were discovered in his personal bank. He has denied all wrongdoing at the fund he created and oversaw, claiming the US$681 million found in his account was a gift from a Saudi royal.

In recent days, Malaysians have watched agog as Najib’s properties were raided by armed police. Authorities have seized and carted off luxury items, confiscating 284 designer handbags presumably belonging to his wife Rosmah Mansor, and 72 suitcases containing cash in various currencies, watches and jewelry.

Mahathir’s office has quickly established a special taskforce, comprised of members of Malaysia’s anti-graft agency, police and the central bank, to investigate 1MDB. A similar investigative body was established in 2015, but was halted by Najib, who was widely seen as interfering with the domestic probe by removing the attorney general and other probing officials.

Malaysia's Prime Minister Najib Razak of Barisan Nasional (National Front) and his wife Rosmah Mansor show their ink-stained fingers after voting in Malaysia's general election in Pekan, Pahang, Malaysia, May 9, 2018. REUTERS/Athit Perawongmetha - RC11565B16D0

Malaysia’s then Prime Minister Najib Razak and his wife Rosmah Mansor show their ink-stained fingers after voting in Malaysia’s general election, May 9, 2018. Photo: Reuters/Athit Perawongmetha 

On May 22, Najib was summoned to the offices of Malaysia’s anti-graft body to respond to unearthed case files allegedly showing a US$10.6 million transfer to his account from SRC International, a former 1MDB subsidy. It’s a small fraction of the billions of dollars allegedly siphoned from the fund, but apparently the easiest to track because it was funneled through local, not foreign, institutions.

Addressing a news conference following Najib’s arrival today at the Malaysian Anti-Corruption Commission’s (MACC) headquarters, the body’s chief commissioner, Shukri Abdull, told reporters that he had been personally intimidated in 2015 following his agency’s attempts to investigate Najib’s dealings with 1MDB.

“We had our own intelligence sources that I would be arrested and locked up because I was accused as being part of a conspiracy to bring down the government,” Shukri said.

“I was sent a bullet to my house. I never told my wife or my family. I never even made a police report,” he told reporters while shedding tears, offering the most damning account so far by a public official of an orchestrated 1MDB cover-up.

The ex-premier did not address the allegations of intimidation while being questioned at MACC headquarters for several hours. He is set to return for further interrogation on Thursday after complaining of fatigue. Najib, his wife as well as several top 1MDB officials have been barred from foreign travel while probes are ongoing.

The new 1MDB task force will now liaise with agencies in the United States, Switzerland, Singapore and other countries where 1MDB funds are suspected to have been laundered. An audit report classified under a state secrecy law in 2016 was recently opened by investigators, revealing a raft of discrepancies pertaining to the fund’s management.

Malaysian Anti-Corruption Commission (MACC) Chief Commissioner Mohd Shukri Abdull speaks during a news conference in Putrajaya, Malaysia May 22, 2018. REUTERS/Lai Seng Sin

Malaysian Anti-Corruption Commission (MACC) Chief Commissioner Mohd Shukri Abdull, Putrajaya, May 22, 2018. Photo: Reuters/Lai Seng Sin

The report showed how senior officials at the state fund withheld information, presented inaccurate information to interested parties and took decisions without the management board’s approval. Moreover, the audit report showed that funds raised by 1MDB for development projects were often not used for their intended purposes.

In recent public remarks, Mahathir, 92, claimed these anomalies pointed to wrongdoing at the fund that was worse than initially thought. The nonagenarian premier has also linked mismanagement of the country’s finances with Malaysia’s ballooning national debt, which he has claimed now stands at 1 trillion ringgit (US$251.70 billion).

Aiming to calm investors’ nerves, Mahathir has vowed to honor any debt linked to 1MDB if it had been guaranteed by the previous government. He has publically stated that charges would likely soon be brought against Najib as investigators attempt to get to the bottom of the situation.

The disgraced former premier struck a defiant tone in recent days following anti-corruption raids at his home. Addressing supporters during a visit to Pekan, a rural constituency he has represented as a parliamentarian since 1976, he claimed innocence and alleged his political rivals of using slander to weaken his “brand” and to topple BN.

Analysts believe Najib still holds sway with many rural voters who have traditionally supported the United Malays National Organization (UMNO), the lynchpin party of the BN coalition that had ruled uninterrupted for six straight decades. As the anti-corruption probe widens, opinions are divided over how UMNO stalwarts may respond to charges brought against the former party president or other of its members.

“Perhaps there is an attempt to maintain support amongst rural Malays as this community is seen to have always been in support of UMNO,” says Serina Abdul Rahman, a visiting fellow at the ISEAS-Yusof Ishak Institute in Singapore.

“[Najib] playing the victim card and perpetuating the possibility of conspiracy and fake news might be part of the larger strategy of ensuring that UMNO remains in existence,” she said. The ex-premier last week called for police to put him under witness protection, claiming his life was being threatened by unspecified individuals.

Malaysia's Sport Minister Khairy Jamaluddin speaks during a press conference ahead of the opening ceremony of the 29th Southeast Asian Games (SEA Games) in Bukit Jalil on August 17, 2017.The opening ceremony for the 29th Southeast Asian Games (SEA Games) will be on August 19. / AFP PHOTO / Mohd RASFAN

Malaysia’s UMNO party member Khairy Jamaluddin regrets not speaking out, August 17, 2017. File: AFP/Mohd Rasfan 

Within UMNO, figures such as youth chief Khairy Jamaluddin have voiced regret over “not speaking up,” blaming the party’s political culture for stifling expression favoring reform. Some in UMNO have since claimed they knew the party required an urgent overhaul, while others still support Najib and the decisions made during his tenure.

Both stances “seem to be an attempt to consolidate power” inside the divided party, says Serina. Others believe most UMNO stalwarts are willing to sacrifice Najib for the party’ and their personal survival, and are now waiting for an opportune moment to fully withdraw their support.

“Najib needs to understand that his level of abuse inside the system crossed the line for even those who use public office for personal wealth. His greed and excess was not acceptable,” says Bridget Welsh, a Malaysia expert at Italy’s John Cabot University.

Reports indicate that Mahathir’s widened anti-graft probes have reinvigorated ongoing overseas probes into 1MDB. The US Department of Justice’s (DoJ) probe is now tracing the whereabouts of Malaysian financier Low Taek Jho, who is believed to have been an unofficial adviser to 1MDB. Others regard him as the mastermind behind the scandal.

The Wall Street Journal recently reported that US Federal Bureau of Investigation (FBI) agents have travelled worldwide interviewing witnesses in connection with Low, who is now allegedly the bureau’s main target. The exact whereabouts of the scandal-plagued businessman, known for his flamboyant lifestyle and celebrity ties, remain unknown.

Malaysian businessman Jho Low in a file photo. Photo: AFP

Malaysian businessman Low Taek Jho, in a file photo. Photo: AFP

As Malaysia’s anti-corruption investigators now have a free hand to probe, observers expect several past scandals that temporarily dogged Najib’s tenure to resurface. One such case involves alleged kickbacks linked to the Malaysian government’s 2002 purchase of two French-built Scorpene-class submarines when Najib served as defense minister.

Altantuya Shaariibuu, a Mongolian model and translator believed to be having an affair with Abdul Razak Baginda, a close associate of Najib and his former advisor, was murdered by bombing in 2006. Her remains were found in a forest on the outskirts of Kuala Lumpur, having been blown to pieces using military grade explosives.

Though there is no direct evidence linking Najib to the case, Altantuya allegedly played a role in securing the French submarine deal and sought financial commissions from Razak Baginda, who was acquitted in 2008 on charges of abetting the murder. Two former police officers from Najib’s security detail were sentenced to death for the murder.

It remains unclear who ordered Altantuya’s killing. Sirul Azhar Umar, one of the convicted officers, was released on bail during an appeal and fled to Australia, where he is now detained in Sydney at immigration detention. He has vowed to cooperate with the new Malaysian authorities by revealing his knowledge of the incident, provided he receives a full pardon.

Protesters holding cut-out drawings depicting 1MDB-linked businessman Low Taek Jho, murdered Mongolian translator Altantuya Shaariibuu and Prime Minister Datuk Seri Najib's daughter, Nooryana Najwa. 28 March, 2015. (Photo by Chris Jung/NurPhoto)

Protesters hold cut-out drawings depicting 1MDB-linked businessman Low Taek Jho, murdered Mongolian translator Altantuya Shaariibuu and then Prime Minister Najib Razak’s daughter, March 28, 2015. Photo: AFP/ Chris Jung

Mongolian President Battulga Khaltmaa recently called on Malaysian authorities to reopen the case in a congratulatory message to Mahathir. Malaysia’s Defense Minister Mohamad Sabu has said he plans to review the controversial Scorpene deal after his ministry conducts an internal investigation into the matter.

“As investigations into 1MDB, the Scorpene submarines or the Altantuya murder get underway seriously, second-tier leaders within [UMNO] may be expected to move against [Najib],” said Ooi Kee Beng, executive director at the Penang Institute, a think tank. “There are many who feel it is their calling to reform UMNO and become its new leaders,” he said.

Ooi told Asia Times that the potential for ongoing investigations to spark instability was unlikely and that the new Mahathir administration has so far followed the rule of law in its pursuit of the scandals.

“There was no political instability when [then opposition leader Anwar Ibrahim] was investigated and jailed in 2012. And he was a much more popular leader then than Najib is now,” he said.

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