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Najib Razak: A Kleptocrat Skilled at the Game
This is part of a three-story package on the upcoming Malaysia election. See Malaysia’s Najib Calls 14th General Election and Mahathir: Malaysia's Prophet of Doom or Second Messiah?
The odds-on favorite to govern Malaysia for the next five years has governed the country for the past nine – Najib Razak, the son of former Prime Minister Abdul Razak.
Despite what may be the most concerted effort by the opposition in the country’s recent history to unseat him, most political analysts in Kuala Lumpur believe the ruling Barisan Nasional, or national coalition headed by Najib’s United Malays National Organization, or UMNO, will return to power, although by a slim margin. The opposition, now headed by former Prime Minister Mahathir Mohamad, has charged that gerrymandering and government restrictions on politicking will make their chances to win the election almost insurmountable. Nonetheless it is running an energetic campaign against extremely difficult odds.
But what the country would be getting in Najib, if the Barisan wins, is a man who since the start of his political career in 1976 has been devoted to corruption, deceit, philandering and venality on a Zimbabwean scale, beginning almost from the time he entered public office, playing havoc with his country’s treasury.
Najib, to be sure, is also a deft politician who has maneuvered to split the opposition by romancing the rural-based fundamentalist Parti Islam se-Malaysia, which has spent decades in the opposition, into believing he will allow the party to implement Shariah law in the only state it controls. He has played on the fears of ethnic Malays, who make up 61 percent of the population, that ethnic Chinese will assume political as well as economic power in the country.
Sometimes he is more direct than deft. Opposition politicians have been threatened with prosecution for sedition and other crimes. Zunar, the news portal Malaysiakini’s irrepressible cartoonist, faces 43 years in prison on sedition charges, mainly for making fun of Najib and his wife. Rafizi Ramli, the 41-year-old vice president of Parti Keadilan Rakyat, faces 30 months in prison for violating the Banking and Financial Institutions Act for exposing details relating to what became known as Cowgate, one of the country’s most embarrassing scandals in which a top United Malays National Organization official and her family – and a Najib ally -- were accused in 2012 of misusing RM250 million (US$63.5 million at current exchange rates) from the National Feedlot Corporation, an ill-starred project that never fulfilled its purpose to supply religiously-approved, or halal beef for Malaysia’s Muslims.
In the meantime, over the past 20-odd years, a long series of stories has appeared in both the local and international press about Najib’s depredations and those of his portly wife, who has been photographed awash in enormously expensive jewelry including a US$27.3 million pink diamond necklace that the US Justice Department would like to get its hands on. Her affinity for Birkin handbags costing up to US$300,000 is legendary.
Najib has managed to beat back all opposition within his own party, the United Malays National Organization, corrupting it unmercifully, reportedly by bribing the party chieftains who vote for the UMNO presidency. He has sacked his party opponents including former Deputy Prime Minister Muhyiddin Yassin and his allies. There is hardly a government contract that has been awarded over the past decade and more that didn’t go to politically connected businessmen, assuring him the loyalty of the Malay establishment.
Two Gigantic Scandals
He is the author of the two biggest scandals in Malaysian history. The first is the US$1.2 billion purchase of Scorpene submarines from the French munitions maker DCNS, which netted a kickback of €114 million (US$141.3 million at current exchange rates) that was funneled to the United Malays National Organization. Although the purchase was finalized in 2002, it is still going on, with Abdul Razak Baginda, a former Razak close friend and ally, under indictment in France today for bribery. Two officials of a DCNS subsidiary have been indicted specifically on charges of bribing Najib Razak.
The case was given additional notoriety over the 2006 execution of a jetsetting Mongolian translator and party girl named Altantuya Shaariibuu, believed to have been the lover of both Razak Baginda and Najib. After a protracted trial, two of Najib’s bodyguards were found guilty of killing the 28-year-old woman. One of the two, in a recorded confession, said they were to be paid RM50,000 for her execution. However, that statement never came up in the trial and enormous effort went into concealing the names and activities of anyone who might have offered the money. Razak Baginda was turned loose by a judge without having to stand trial and fled the country, although he has since returned.
The second, of course, is 1Malaysia Development Bhd., which opposition spokesman Tony Pua called “the mother of the mother of the mother of all scandals,” and which was looted for at least US$4.5 billion in what the Swiss Attorney General called a “Ponzi scheme.” It has been called by US Attorney General Jeff Sessions the biggest kleptocracy case ever brought by the US Justice Department.
Attempt to Bribe Trump Justice Department
The case popped to the surface again in March with a report by the Wall Street Journal that Elliott Broidy, a top Republican fundraiser close to US President Donald Trump apparently asked as much as US$75 million from Najib’s confederate, businessman Low Taek Jho, to get the US to stop investigating the 1MDB scandal. So far the US Justice Department has confiscated at least US$1.2 billion in stolen property, but hasn’t got its hands on US$681 million that appeared temporarily in Najib’s own bank account before it was hurriedly transferred out to somewhere unknown.
Messages now in the hands of the US Special Prosecutor looking into Russian influence on the 2016 election “include draft agreements” between Broidy’s wife’s California law firm and Jho Low’s representatives “that explore a US$75 million fee if the Justice Department quickly drops its investigation.” Although Najib has golfed with Trump and visited with him at the White House, the odds that the investigation will be dropped are minuscule to nonexistent.
The US Justice Department’s confiscations of stolen property are astonishing, including, on Feb. 28, Jho Low’s 300-foot superyacht the Equanimity, worth US$250 million. The Justice Department has sequestered millions of dollars in profit from several movies produced by Red Granite Productions, co-owned by Riza Aziz, the son of Najib’s second wife Rosmah Mansor, as well as Jho Low’s Bombardier Global 5000 jet in Singapore, jewelry worth millions of dollars gifted to celebrities Australian Miranda Kerr and Taiwanese Elvia Hsiao, and several properties in New York, artwork, film rights and a US$107 million interest in EMI Music Publishing and a Picasso to Leonardo DiCaprio, plus an Oscar once owned by Marlon Brando that was gifted to the actor by the Red Granite owners.
The start of a long and winding career
But Najib’s first depredations began when he was appointed chief minister of the state of Pahang, the once heavily-forested state directly to the east of Kuala Lumpur where, according to sources in Malaysia, he began making land and timber deals that benefited him directly. He is said to have been close to a now-defunct company whose representative was Rosmah Mansor, a sociology graduate of Louisiana State University in 1968.
The two divorced their respective mates and married in 1987, after he joined then-Prime Minister Mahathir Mohamad’s cabinet as minister of culture, youth and sports. While married to Rosmah, he did take time out to be caught in a hotel room in the town of Port Dickson, according to the website Malaysia Today, with an actress-model. As Malaysia Today reported, a photographer caught pictures of Najib clad only in a towel with the woman and turned the pictures over to Mahathir. They have never surfaced.
It was in 1991, when Mahathir made him Minister of Defense, that Najib’s career as a kleptocrat really got underway. Despite the fact that the country’s borders have been largely secure for 40 years, Malaysia’s Defense Ministry embarked on a whirlwind round of purchases that allegedly provided a river of money for the ruling United Malays National Organization and helped to solidify his position as an eventual prime minister contender.
Three Corrupt Contracts
Three separate contracts stand out. All three, approved under Najib, have been widely cited by the opposition. Opposition and defense figures told Asia Sentinel in 2007 that the three, one for Russian Sukhoi jet fighters, a second for the French submarines and a third for navy patrol boats, appear to have produced millions for UMNO cronies, Najib’s friends and others – and Najib himself. The “commission” for defense purchases across Southeast Asia was estimated to range from 10 to 20 percent by Foreign Policy in Focus, a think tank supported by the Institute for Policy Studies in Washington, DC.
In 2007, opposition DAP leader Lim Kit Siang pointed out that the 18 Sukhois had cost US$50 million each for the same plane models that Vietnam purchased for US$25 million each, while the Indian Air Force had paid US$40 million. “That is US$10 million more (per plane) compared to India, so times 18, you get US$180 million or about RM600 million entering someone’s pocket. But if you compare with price paid by the Vietnamese government, it would be a cool RM1.8 billion (US$460.8 million at current exchange rates). I wonder whose pocket is that?” Lim asked.
The question has never been answered.
The second case was detailed by Malaysia’s Auditor General in a report that alleged that a contract to build naval vessels given to PSC-Naval Dockyard, a subsidiary of Penang Shipbuilding & Construction Sdn Bhd, which is owned by another UMNO crony, Amin Shah Omar Shah, was hopelessly botched. It involved PSC-Naval Dockyard, which was contracted to deliver six patrol boats for the Malaysian Navy in 2004 and complete the delivery in 2007. They were supposed to be the first of 27 offshore vessels ultimately to cost RM24 billion plus the right to maintain and repair all of the country's naval craft.
But only two of the barely operational patrol boats had been delivered by mid-2006. There were 298 recorded complaints about the two boats, which were also found to have 100 and 383 uncompleted items aboard them respectively. The original RM5.35 billion contract ballooned to RM6.75 billion by January 2007. The auditor also reported that the ministry had paid out RM4.26 billion to PSC up to December 2006 although only Rm2.87 billion of work had been done, an overpayment of Rm1.39 billion, or 48 percent.
In addition, Malaysia’s cabinet waived late penalties of Rm214 million. According to the Auditor General, 14 “progress payments” amounting to Rm943 million despite the fact that the auditor general could find no payment vouchers or relevant documents dealing with the payments.
Financial Mismanagement, Incompetence
The auditor general attributed the failure to serious financial mismanagement and technical incompetence stemming from the fact that PSC had never built anything but trawlers or police boats before being given the contract. Once called “Malaysia’s Onassis” by former finance minister Daim Zainuddin, Amin Shah was in trouble almost from the start, according to a report in Singapore’s Business Times in 2005. The financial crisis of 1997-1998 meant he was desperate to find funds to shore up ancillary businesses, Business times reported. After a flock of lawsuits, the government ultimately cut off funding in 2004 amid losses and a net liabilities position. Boustead Holdings effectively took control from Amin Shah, reducing him to non-executive chairman.
In 2008, opposition leaders complained in Parliament that Najib’s defense ministry had vastly overspent for 12 Eurocopter Super Cougar EC727 helicopters to replace their 40-year-old helicopter fleet. Brazil paid only RM84 million for the same helicopters bought by Malaysia for RM141 million. Opposition leaders alleged that the aircraft weren’t shortlisted before they were purchased and that the price had zoomed, nor did the air force test-fly the craft. A demand for the parliament’s Public Accounts Committee investigate the purchases resulted in a full exoneration of the deal, as every other single scandal has ended.
Those are only a few of a never-ending list of scandals. (It should be noted, however, that Najib is hardly alone. Malaysia has been visited by so many scandals that Wikipedia maintains an exhaustive list. They can be found here, ranging into the billions of dollars.)
Najib's various subsidy cuts, while sound economic policy, have contributed to soaring living costs, while fluctuating oil prices and a threat to palm oil prices as the European Union has voted to ban the oil, as well as other issues, have led to a steady depreciation of the ringgit from RM2.993 to US$1 in 2013 to RM3.90 today. According to the Merdeka Centre opinion research firm, “Economic issues, comprising worries over rising cost of living, economic hardship, jobs and other related matters, remained the top most concern voiced by 72 percent of voters across the country.”
Najib’s English public-school manners and accent and his reputation as a moderate Muslim leader have stood him in good stead internationally despite the scandals. But although US President Donald Trump welcomed to the White House last year – as Malaysia described billions of dollars in commitment to purchase US airplanes and other items, the president visibly turned away from Najib and Rosmah at the APEC meeting in Manila last November. It remains to be seen if Malaysia’s voters do the same.
John Berthelsen is Asia Sentinel’s Editor