Besieged Malaysia PM Sacks Enemies

Under fire from a spreading scandal, Malaysian Prime Minister Najib Razak ordered a sudden, wholesale housecleaning of top officials on Tuesday, July 28. Those getting the boot include the deputy prime minister, attorney general, head of the police special branch intelligence unit and others. The move may come to be seen as either bold or reckless depending on whether Najib survives in office.

Najib is trying to evade a tightening noose related to financial irregularities involving the 1MDB state-owned investment fund. Fired Attorney General Abdul Gani Patail has been leading a government investigation into the fund.

Last week, Najib ordered the suspension of The Edge Financial Daily and its sister paper after they printed that the equivalent of U$1.83 billion was allegedly stolen by company officers and others from the troubled fund; he also ordered the suspension of the passports of some journalists and opposition figures. A report in the Wall Street Journal earlier said US$700 million from 1MDB had found its way into Najib’s personal bank account.

Although the sacking of Deputy Prime Minister Muhyiddin Yassin had been expected after Muhyiddin broke with Najib over 1MDB on July 26, the replacement of Gani Patail, a career United Malays National Organization loyalist, was a surprise. Well-placed sources in Kuala Lumpur said he was poised to charge Najib with corruption. Akhil Bulat, the head of the Special Branch, had also grown increasingly critical of Najib in private circles.

Muhyiddin has been replaced by Ahmad Zahid Hamidi, a deep party loyalist who was once Najib's party secretary, as deputy prime minister. He is also home minister and is regarded by many as mercurial.

Time to sweep up

The decision to clean house was precipitated by a speech Muhyiddin gave to a suburban Kuala Lumpur UMNO branch, saying that Najib must answer questions over 1MDB. “If the parliament is dissolved tomorrow, we won’t win the general election,” he said.

Despite the scandal, the prime minister maintains the loyalty of a majority of the 190-odd UMNO division chiefs and most of the cabinet through an intricate system of patronage and rent-seeking contracts. Asked to sum up Najib's ability to survive, one well-placed Malaysian political observer said, "It's like the man says, 'Cash is king.'"

There has been no public protest so far and the political opposition is hamstrung by internal dissension. “The guys who had to be removed have been removed,” a political analyst told Asia Sentinel. The only constituency Najib has to worry about, with elections three years away, are the UMNO cadres, 160 of whom swore loyalty to Najib earlier this year.

Opposition Democratic Action Party Leader Lim Kit Siang described the reshuffle as "not designed to produce a more competent, efficient and professional cabinet which can save Malaysia from becoming a failed state because of rampant corruption, socio-economic inefficiencies and injustices, and the failure of good governance, but to give Prime Minister Datuk Seri Najib Razak a new lease of political life by removing from the cabinet ministers who threaten his political future."

But it's doubtful that opposition statements will have any major impact.

Can’t remove everybody

The announcement of Gani Patail’s ouster said he had been removed for health reasons, although he told friends in Kuala Lumpur that he had no idea it was coming. He is due for retirement on October 6 but now has been shunted into a position as judicial and legal services officer. He was replaced by a former federal court judge, Mohamed Apandi Ali, who was described by a source as an UMNO stooge despite his position on the bench of the country’s highest court.

The sackings are a vivid indication of the growing crisis over 1MDB, which according to a spate of officially unreleased investigations has looted hundreds of millions of US dollars that were said to have been diverted into accounts of financier Low Taek Jho, a close Najib family friend. Another US$680 million was traced from 1MDB-linked companies into Najib’s personal account at AmBank in Kuala Lumpur. The money was believed to have been used to fund the 2013 general election for the Barisan Nasional. As nearly as can be determined, 1MDB has the equivalent of US$11.8 billion in liabilities, an unknown amount of that unfunded. The fund, backed by Malaysia’s Ministry of Finance, is having trouble meeting its debt obligations and money has been steered from various government accounts to 1MDB to try to cover the losses.

The surprise ouster of Gani Patail may be an indication that the official tide is turning against Najib, as is the removal of the Special Branch chief. However, along with the others who have been removed, including cabinet ministers, Najib has neutralized – for now at least – almost everybody who opposed him.

Najib also has sought to remove Zeti Akhtar Aziz, the governor of Bank Negara Malaysia, the country’s central bank, since 2000. The widely respected Zeti is said to be a special target of Rosmah Mansor, Najib’s wife, who has been trying to forestall a Bank Negara-ordered probe into 1MDB. The central bank governorship by law is an independent position and not subject to disciplinary action by the government.

Gani Patail has been a strong UMNO loyalist since 1998, when he was the lead prosecutor in the corruption and sodomy trial of opposition leader Anwar Ibrahim, a trial widely criticized by human rights organizations across the world. He joined the government as a deputy public prosecutor in 1979 and he has been accused of short-stopping a long string of legal cases ever since.

As chief public prosecutor, he was also responsible for a sudden change of the prosecution team during the trial of Sirul Azhar and Azilah Hadri, two of Najib’s bodyguards, for the murder of Mongolian translator Altantuya Shaariibuu in 2006. The lengthy trial seemed designed to make sure that no speculation would emerge on who ordered the killing of the high-flying party girl.