A World of Scandal Descends on Malaysian Prime Minister

Some political leaders might hope that by blocking media reports of investigations into corruption can eliminate the consequences, but the efforts often draw more global attention. Malaysia’s Prime Minister Najib Razak has been linked to investigations, some on arms deals, in Switzerland, France and Saudi Arabia. John Berthelsen of Asia Sentinel describes a “government desperately scrambling to contain a widening scandal.” Still, the Najib government attempts to block news at home with online restrictions and arrests of journalists. “The mainstream media, including radio, television and newspapers, all of which are owned by government-aligned political parties, have been put on notice to be careful of what they air or print,” Berthelsen writes. “The government has charged opposition politicians with sedition for seeking to investigate the various scandals and sought to curb public statements of critics by threatening them with jail.” More investigations on corruption in Malaysia are anticipated from the United States and other countries. The country of 30 million is the 20th largest export economy in the world. – YaleGlobal

A World of Scandal Descends on Malaysian Prime Minister

Malaysia’s Najib is beset by investigations in Switzerland, France, Saudi Arabia – with more investigations anticipated
John Berthelsen
Wednesday, February 3, 2016

The world outside of Malaysia appears to be coming apart for Prime Minister Najib Razak, with announcements on Jan. 26 by Swiss authorities that as much as US$4 billion has been stolen from the state-backed 1MDB investment fund, and a report in France that two officials of a state-owned defense contractor were indicted in December for bribing Najib in the 1996 US$1 billion purchase of French submarines.

The events followed a disastrous press conference on Jan. 26 by Attorney General Mohamed Apandi Ali supposedly clearing Najib of wrongdoing over RMB2.82 billion (US$681 million) that had ended up in his personal bank account in 2013. Enterprising news photographers using telephoto lenses caught pictures of the papers he was waving during the press conference. The papers actually described a money trail of millions of ringgit of public money that flowed into Najib’s personal accounts.

Apandi Ali’s assertion that the money came from the Saudi royal family has been met with widespread derision.  In all, the aftermath of the attorney general’s press conference presents a picture of a government desperately scrambling to contain a widening scandal. The Saudi government is said to be investigating the assertion that the royal family had made the donation, which is felt to be highly unlikely, especially in the light of the Swiss investigation.

Najib Stonewalls

If the world outside is coming apart for Najib, however, he has done his level best to try to contain news of the scandal inside the country, blocking critical international news organizations including Asia Sentinel and Sarawak Report. This week the government also blocked the enormously popular blog platform Medium for reprinting Sarawak Report articles, although those articles represent a tiny fraction of the blog platform’s output by thousands of bloggers, many of whom merely publish recipes or stories about their cats.

In addition to blocking Asia Sentinel and Sarawak Report, the government in July 2015 suspended the influential business publication The Edge and its sister paper for three months for printing details of the 1MDB mess. Police in May arrested journalists from the news portal Malaysian Insider and in November raided the offices of another, Malaysiakini. It has recently toughened laws against online media. Nonetheless, both published the news of the Swiss action.

The mainstream media, including radio, television and newspapers, all of which are owned by government-aligned political parties, have been put on notice to be careful of what they air or print. The government has charged opposition politicians with sedition for seeking to investigate the various scandals and sought to curb public statements of critics by threatening them with jail – including the 90-year-old former Prime Minister Mahathir Mohamad, the man who engineered his ascent to the top job by driving his predecessor, Ahmad Abdullah Badawi, from office.

Najib and Apandi Ali have silenced Malaysian Anti-Crime Commission investigators and pigeonholed an investigation into the movement of money by Central Bank Governor Zeti Akhtar Aziz.

Any of the scandals would have driven another person from office. But Najib, backed by his tenacious wife Rosmah Mansor, has stonewalled all challenges, charging racism or a cabal by unknown dark forces outside the country to push him out. He is said to be seeking a public relations firm to polish his image in preparation for elections in 2018.

But Stonewalling Won’t Stop Outside Probes

But the tone of the two new investigations by prosecutors in international courts may be something else. Other probes are moving forward by the US government for money-laundering and in other countries as well. While Najib continues via patronage, bribes or makework jobs to receive the solid backing of the UMNO cadres who elect him, the international problems he faces could make it a new ballgame. It is too early to tell.

The Swiss in particular were upset with Apandi Ali’s announcement that the investigation had ended, issuing a terse one-page press release late on Jan. 29 saying the Swiss authorities had requested cooperation with Malaysia for mutual assistance in a criminal investigation of two former officials of 1MDB and “persons unknown,” presumably Taek Jho Low and Najib, for misconduct in public office, money laundering and criminal mismanagement.

The Swiss authorities said the Swiss Attorney General had met with Apandi Ali in September to discuss mutual cooperation into the 1MDB investigation.  In conversations with the Wall Street Journal, they said they were surprised and disappointed that the Malaysian attorney general had closed the case, saying the lack of cooperation would hamper their efforts to get to the bottom of the scandal.

“The sum suspected to have been misappropriated amounts to around USD 4 billion,” the Swiss statement said. “So far it has been ascertained that a small portion of the money was transferred to accounts held in Switzerland by various former Malaysian public officials and both former and current public officials from the United Arab Emirates.”

Cherchez Le Premier

Meanwhile, in Paris yesterday, Agence France Presse quoted judicial sources as saying Bernard Baiocco, 72, former president of Thales International Asia (Thint Asia), a unit controlled by the French munitions manufacturer DCN, was indicted on Dec 15. for “active bribery of foreign public officials on people including Najib Razak.”

Najib was defense minister at the time of the alleged bribe, amounting to €114 million which appears to have been passed on to the United Malays National Organization. Baiocco was held in custody for 48 hours, according to AFP, together with the Directorate of Naval Construction (DCN) for the sale, who was also indicted for complicity in misuse of corporate assets, the sources said.

DCN weapons sales across the world were the subject of astonishing scandals that stretched across half the earth to Pakistan, Taiwan, Malaysia, India and untold numbers of other countries whose defense ministries bought armaments from the French defense giant around the turn of the century. At least three of those sales have been dogged with stories of bribery and the murder or unexplained deaths of 19 people. According to other revelations, the sale of submarines to India is also suspected of “non-compliance” with the OECD Convention on Bribery.

“This is an important and encouraging step,” William Bourdon, the crusading French lawyer who brought the case on behalf of Suaram, the Malaysian reform NGO, told AFP. Suaram took the case to Bourdon on the basis of stories written by Asia Sentinel after the death of a Mongolian woman named Altantuya Shaariibuu in 2006 at the hands of two of Najib’s bodyguards.

“The French judges show, even if the investigation goes on, their ability to dissect complex corruption mechanisms, Bourdon said. “In some respects, the investigation is just beginning.”

Bourdon was kicked out of Malaysia when he flew there in 2013 to attempt to interview witnesses involved in the case.

In Paris, according to AFP, the prosecuting judges suspected sums from a firm called “C5 Commercial Engineering” provided for payment by DCNI, a subsidiary of DCN, of €30 million to Thales International Asia, for “selling expenses for export (FCE).”

Another company, the Hong Kong-based Terasasi Hong Kong Ltd., whose main shareholder was Razak Baginda, received almost the same amount for consultations. Investigators suspect the consultations of being a front for bribes.

Copyright © 2016 Asia Sentinel

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