Earlier this year, scrambling for funds to make payment on its RM42 billion debt, the struggling 1Malaysia Development Bhd. turned to the government-backed Muslim pilgrim fund, which pays to send thousands of Malays on the haj to Mecca each year.
1MDB sold an acre and a half of land from the 70-acre land bank 1MDB acquired from the government for RM188.5 million (US$52.3 million) – coincidentally about the sum due for a late payment to its bankers. That was almost as much as the state-backed investment fund paid – RM194.1 million (US$55 million) – for the entire 70 acres of prime land on an abandoned airfield slated to be a high-level financial district called the Tun Razak Exchange.
The revelation set off a firestorm of criticism in Kuala Lumpur not just from the opposition, for a change, but from cadres inside the United Malays National Organization and a wide array of the public. Critics said 1MDB, the brainchild of Prime Minister Najib Tun Razak and his young Chinese tycoon sidekick Taek Jho Low, was flailing around desperately to empty government coffers to protect its losses.
The reaction of the government was immediate and stern. It unleashed the police under the country’s colonial-era Official Secrets Act – not to determine if government money had been misused, but to look for who leaked the details of the transaction to an opposition website, “The Blindspot,” and other blogs that uploaded documents describing embarrassing details of the purchase.
Protecting official corruption
It is uncertain if the Official Secrets Act covers the operations of Tabung Haji, as the pilgrim fund is known in Malay. But it isn’t the first time the act has been used to go after whistle-blowers. As the widening allegations of corruption have swirled around UMNO and Najib, use of the act has picked up considerably, along with a stiffened sedition act that has resulted in charges against scores of individuals, almost all of them from either the opposition or good-government organizations.
The Official Secrets Act gives the state the power to withhold information from the public without judicial review but the act of determining what is a secret and what is not appears to have expanded well beyond its original purpose of protecting the state. That now seems to include protecting blatantly illegal acts on the part of high-ranking politicians and government servants. As an added deterrent to publicizing such wrongdoing, the act also allows for hefty fines and jail sentences up to life imprisonment upon conviction. There is also no such thing as a freedom of information act in Malaysia despite years of attempts to push one through.
Transparency International-Malaysia criticized the use of the OSA against the leakers of the Tabung Haji transaction, saying the charges illustrate how the law is abused to hide corruption – although it has also been used for such seemingly arcane reasons as forbidding the disclosure of the height of the Bakun Dam in Sarawak and daily air pollution readings in Kuala Lumpur,
“This episode also serves to show how the Official Secrets Act can be misused for the wrong reasons,” said the NGO’s president, Akhbar Satar, in a statement. ““Instead, priority should be given to investigate whether any irregularities occurred in the business transactions, if the purchase was made according to standard procedure and if the price paid by Lembaga Tabung Haji was reasonable and fair value.”
The champion of breaking the OSA rules seems to be Rafizi Ramli, the secretary general of the opposition Parti Keadilan Rakyat, who has been charged repeatedly with both sedition and violation of the secrets act. In 2012, Rafizi was hauled up for alleged secrecy violations for publicizing documents detailing the prime minister’s own alleged attempts to influence a lucrative light rail contract linked to the French defense manufacturer Thales — which played a role in a massive scandal revolving around the sale of Scorpene submarines to Malaysia.
Rafizi was charged later that year after making public a hugely embarrassing scandal, which became known by the catchy title Cowgate, involving the country’s National Feedlot Center, the contract for which was given to the family of Shahrizat Abdul Jalil, UMNO’s highest-ranking woman politician, the Minister for Women's Affairs and a close associate of the prime minister.
Shahrizat and her family were found to have diverted funds from the RM250 million project to fatten beef domestically instead of importing it from Australia, steering huge amounts instead into luxury flats, expensive cars and other misuses. She was eventually forced to resign although she was ultimately cleared and reinstated. Critics declared the acquittal was rigged to protect her.
Use of the OSA is nothing new. James Clad, then a Kuala Lumpur correspondent for the Far Eastern Economic Review, was likely the first target when he was fined RM10,000 in October 1985 for writing a report on Malaysia’s relations with China. “Such episodes suggest the government’s motivation had less to do with economic harmony and a democratic way of life…than with maintenance of state power,” wrote William Atkins in his book The Politics of Southeast Asia’s New Media, published in 2002 by Routledge..
Down memory lane
Use of the law was threatened at other times against the now-defunct Review for reporting on the graft-riddled purchase of Sibmas armored cars. Malaysian specifications required a wheeled armored car that could be loaded into an airplane and flown to East Malaysia in case of trouble with Indonesia or Singapore. But the contract for the South African Sibmas armored personnel carriers came up with a vehicle so big that the tires had to be deflated before it could be loaded into the Royal Malaysian Air Force’s biggest planes.
In another case, the purchase of British Alvis Scorpion tanks was supposed to produce a lightly armed, fast-firing and lightly armored vehicle. But gun runners dealing with Malaysian defense officials lumbered the Scorpions by exchanging the recommended Rolls-Royce gasoline engines with slower diesel ones because the engine manufacturer managed get to the procurement team.
Another gun runner contracted to exchange the original recommended .75 millimeter gun for a .90 millimeter one so big that it had to be leveled each time a new shell was jacked into the chamber, meaning it was slow-firing. The gun was so heavy that the turret’s aluminum races had to be replaced with steel ones, making the vehicle so top-heavy that troops using it were afraid it would topple over. So instead of a fast-firing, lightly-armed and maneuverable weapon, the Malaysian army ended up with a tank that would only go about 60 km/hour instead of 90 and had to be stopped virtually every time it fired, which would have made it a sitting duck for an enemy, had there been one in the first place. The story was buried after threats of use of the official secrets act.
It is difficult to figure out the rationale for many of the arrests. An aide to Anwar Ibrahim was arrested in 2007 for allegedly violating the act for editing a book on the conflict between former Prime Minister Mahathir Mohamad and Abdullah Ahmad Badawi, the successor that Mahathir drove from office. In 1995, police arrested two reporters for obtaining what was held to be classified information on the kidnapping and murder of an industrialist’s son. The reporters and their source were eventually released and the charges were dropped.