The stage apparently is being set to get former Prime Minister Najib Abdul Razak off the hook for complicity in the biggest theft of public funds in Malaysian history: the loss of US$4.5 billion from the state-backed 1Malaysia Bhd investment fund, which capsized in 2015 with US$11.75 billion in debt, which was assumed by the government.
Omens of the whitewashing of Najib and what has become known as the “court cluster” of United Malays National Organization officials facing criminal allegations have been arising almost since the Pakatan Harapan government lost power in February of 2020. They include the July 2021 appellate decision reversing the conviction of former UMNO Secretary General Tengku Adnan Tengku Mansor on charges of accepting RM2 million (US$476,000) in bribes. It is a case that has been described as basically legalizing bribery in the country.
The vehicle to keep Najib out of jail is likely to be a mistrial, which could be called over new public allegations over the involvement of former Bank Negara Governor Zeti Akhtar Ahmad’s husband, Tawfiq Ayman, in the 1MBD scandal. But his role has been widely known in Malaysian political circles for years, raising the question of the timing in making it public now.
According to reports circulating in Malaysia, the Malaysian Anti-Corruption Commission revealed that Singapore had repatriated US$15.4 million in 1MDB-linked funds to Malaysia that involved a company co-owned by Tawfiq. According to these reports, Singapore authorities alerted Bank Negara about suspicious transactions from the fugitive financier Jho Low to a Tawfiq’s company when Zeti was still heading the central bank.
Zeti, then a widely-respected central bank governor, was a member of the ousted Pakatan Harapan government's Council of Eminent Persons, which played a role in ousting Najib and his United Malays National Organization from power in the 2018 national elections. She was also appointed chairperson of the Permodalan Nasional Berhad investment fund overseeing RM400 billion of public funds. She testified for the prosecution in Najib’s 2019 trial for abuse of power, criminal breach of trust, money laundering, and tampering with the 1MDB audit report, which downplayed allegations of criminality.
In July of 2020, the 68-year-old Najib was convicted on all seven counts and was sentenced to 12 years imprisonment and fined RM210 million. He is the first Malaysian premier ever to be convicted of a crime. Despite that, he has remained free on appeal and has played an instrumental role in a series of elections that have seen the scandal-steeped United Malays National Organization return to power. After recent state elections that resulted in a drubbing for the opposition Pakatan Harapan coalition, one source called him the most powerful man in Malaysia and predicted his return to power despite his role in the 1MDB affair, which the US Department of Justice called the biggest kleptocracy case in the department’s history, which saw the seizure of tens of millions of dollars of property in the US that were beneficially owned by Najib, his wife Rosmah Mansor and others.
The involvement of Zeti’s husband in the 1MDB affair has raised "serious questions" in the charges against Najib, according to the youth wing of the Malaysian Chinese Association, a component party in the Barisan Nasional, the coalition headed by UMNO, because the charges against Najib were filed before investigations into Zeti’s family involvement was completed, MCA Youth said.
Najib is now barred by his conviction from holding public office. But if a mistrial is declared, a pliant judiciary in thrall to the ruling powers is equally likely to find him not guilty, perhaps by throwing the blame for the scandal on other figures like Low Taek Jho, the youthful financial wizard who helped to transform an obscure Terengganu investment fund into the national 1Malaysia Development Bhd. powerhouse that consummated a long string of phony deals with middle eastern potentates who helped to loot it.
The signs of the rehabilitation of the scandal’s chief perpetrators began in May of 2020 when Idrus Harun, the attorney general appointed by Muhyiddin Yassin after Pakatan Harapan fell, freed Najib’s stepson Riza Shahriz Abdul Aziz without being charged with money-laundering over US$248 million allegedly misappropriated from 1MDB to set up Red Granite Pictures, a Hollywood production company that made the bawdy film Wolf of Wall Street and other movies after he agreed to repay several million ringgit to the government. The US government also claimed proceeds from the films in its kleptocracy case.
Then came the Tengku Adnan case, in which the three-man appellate body ruled that although a Chinese businessman had given the UMNO chief the RM2 million, it was a political donation despite the fact that the money had never been handed over to a political organization or a campaign body but had rather ended up in his own pockets.
Then, in late September, Najib met with newspaper editors at a Kuala Lumpur breakfast to announce he would stand for his old Pahang state seat despite his conviction. A mistrial would void that conviction and catapult him back to the top of Malaysian politics. It is a fair bet that the court cluster would follow him back.
Najib, his wife Rosmah Mansor, and fellow accused and UMNO President Abdul Zahid Hamidi have all been given their passports back and have been allowed to leave the country. Najib reportedly was also recently granted RM100 million (US$23.6 million) in the form of a 2.8-acre residential property in one of Kuala Lumpur’s most exclusive neighborhoods to build a new home although the public outcry led to its cancelation.
It is worth reprinting, as we have repeatedly, what police found at Najib’s digs when they arrested him in 2018 on corruption charges. The loot included US$273 million worth of jewelry, handbags and other valuables, the biggest haul in Malaysian history by far and – as we said then – a pretty penny for a man whose salary as prime minister and member of parliament was roughly US$120,000 a year. Police filled five trucks with cash in 26 currencies totaling US$28.6 million, plus 457 handbags (including Hermes bags) worth US$12 million, 423 watches valued at US$19 million, and 234 pairs of sunglasses worth US$93,000. Also included were 1,400 necklaces, 2,200 rings, 2,100 bangles, 2,800 pairs of earrings, 1,600 brooches, and 14 tiaras.
It has never been officially counted, but it’s widely believed that more than US$1 billion of 1MDB money remains in Najib’s bank accounts overseas somewhere. But his success as a politician appears to outweigh that in the eyes of his fellow UMNO officials – enough to cover the massive loss through venality to the state’s treasury.