Malaysia's Najib's Money Laundering Case Disappears
Removal of charge another signal of growing erosion of reform
The “discharge not amounting to an acquittal” granted on one pending case today to former Prime Minister Najib Razak, one of the architects of the biggest financial scandal in Malaysian history, represents a slow chipping away at the potential punishments he faces, and along with it a slow chipping away at the reputation of the current prime minister, Anwar Ibrahim, who came to power two and a half years ago on a long-promised platform of reformasi.
“Well,” said a disappointed senior political analyst, “they’re only following the example of the Land of the Free and the Brave,” a reference to US President Donald Trump’s pardon of many of his close political associates.
The always-dapper 71-year-old Najib, the scion of one of Malaysia’s most prominent political families, has been in prison since August of 2022, when he was convicted on charges of abuse of power, money laundering and criminal breach of trust for illegally receiving US$10 million from SRC International, a company connected to the state-backed 1Malaysia Development Bhd sovereign fund. 1MDB collapsed in 2016, leaving US$5.4 billion lost to mismanagement and corruption. Najib’s alleged co-conspirator, the flamboyant Penang-born Low Taek Jho, known as Jho Low, has been on the run and wanted by Interpol since 2016, reportedly in China.
Najib remains reportedly in a luxury cell in Kuala Lumpur’s Kajang Prison, his 12-year jail term cut in half in February 2024 from 12 years to six by the Pardons Board and with his RM210 million (US$49.8 million) cut to RM50 million, the first reduction of the considerable punishments he has faced. The main case against him for his role in the scandal has yet to commence, and there are growing questions if it ever will. The scandal was called the largest kleptocracy case in history by the US Department of Justice in 2016. The formerly high-flying Goldman Sachs banker Tim Leissner was sentenced on May 29 to two years in prison for his role in the scandal.
The judge, K Muniandy, said the current case, involving three counts of receiving RM27 million (US$6.3 million) through three personal AmBank accounts in July of 2014, had been repeatedly postponed by the prosecution, indicating they were not ready to proceed. The circumstances of the case “lean in favor of the accused whereby the prosecution, as of today, is not ready to proceed with the trial of the preferred charges against the accused,” the judge was quoted as saying by local media.
Even in prison, Najib, known as “Bossku,” or “our boss,” remains a potent figure, connected to the political infrastructure of the United Malays National Organization, a weakened but still powerful component of Anwar’s ruling Pakatan Harapan coalition. During his reign as premier, Najib, the son of Malaysia’s second prime minister Abdul Razak, allegedly engineered charges that put Anwar in prison on sexual perversion allegations. He still is believed to control vast sums available for political machinations, although he has withheld them while in prison. If he were to receive a royal pardon, many believe he has the pull among ethnic Malays to again become premier.
Najib’s erstwhile lieutenant, Ahmed Zahid Hamidi, the UMNO president, is Anwar’s deputy prime minister after also being freed, and also via DNAA, while standing trial for 47 charges of looting a charity he started. A DNAA, or discharge not amounting to acquittal, gives the prosecution the option of reinstating the charges at some future point.
There have been persistent unsuccessful attempts to get Najib out of prison altogether by his followers and to allow him to serve the rest of his diminished sentence under house arrest. He has repeatedly sought the enforcement of a royal decree supposedly issued by the former king, Pahang Sultan Abdullah, that he be released under house arrest during a January 2024 meeting of the Pardons Board. The meeting was held one day before Sultan Abdullah ended his reign as Malaysia’s monarch.
The slow erosion of the charges against Najib, who was notorious for his involvement in a range of other scandals, has alarmed civil society organizations that had backed Anwar’s three-decade slog to power, including two stints in prison on sexual perversion charges widely regarded as trumped-up detour to his ambitions.
But since Anwar took power as head of the Pakatan coalition, charges of corruption against UMNO leaders –and against Najib’s grasping wife Rosmah Mansor – have faded into the background. Although his government gets high marks for luring international investment sand rebuilding the economy through his Madani philosophy, he has been accused of allowing corruption to continue to flourish and using undemocratic methods to silence critics including the press via his information minister, Fahmi Fadzil, who has gone after bloggers and online publications that express criticism of the government via the strict Communications and Multimedia Act (CMA), which has often been used to stifle dissent online by blocking social media posts and critical websites.
In particular, Anwar has faced criticism for keeping on Azam Baki, the chief of the Malaysian Anti-Corruption Commission, who has been accused of illegal stock transactions, and using the MACC against political enemies including Muhyiddin Yassin, the 78-year-old president of the opposition Parti Pribumi Bersatu as well as others, and the children of his longtime nemesis, former Prime Minister Mahathir Mohamad, who succeeded several times in thwarting Anwar’s political career.
“Founder of the reformasi movement in 1998 that inspired a generation of Malaysians, [Anwar] returned to government after the 2022 general election, as prime minister at last,” wrote Ariel Tan in a report for the Australian Institute of International Affairs in a May 25 report. “But he has since disappointed those who had hoped for a vigorous implementation of political reforms, chiefly, to eradicate corruption, democratize the political system, and adopt a more meritocratic and multiracial approach to governance.”
Five civil organizations held a joint press conference last July to charge that Anwar's government was undermining civil liberties and the protection of human rights, pointing to refusal to accept recommendations from the UN Human Rights Council. The organizations, including Civicus, Suaram, the Center for Independent Journalism, Forum-Asia, and Article 19, said that “Since the Anwar Ibrahim government came to power, our organizations have documented how the state has continued using these laws to criminalize human rights defenders, the opposition, and critics.”