Malaysia’s 1MDB financial scandal – the biggest in its history – has seen its first conviction but not one that will bring any cheer to those questioning Prime Minister Najib Razak’s pet project, which has run into at least RM50 billion in debt. Instead, the government says it will jail one of its most effective critics and whistleblowers.
Although the state-backed investment fund is under investigation in a half dozen countries and Najib himself has been accused of channeling more than RM2.67 billion (nearly US$700 million) into his personal bank accounts, a Malaysian court has sentenced Rafizi Ramli, the vice president and secretary-general of the opposition Parti Keadilan Rakyat, to 18 months’ jail for releasing a classified government audit of the controversial state investor.
Rafizi, who was sentenced on Nov. 14, announced he would appeal the sentence, which could see him disqualified from running for parliament for five years after his prison release. His party chief, Anwar Ibrahim, is also in prison on a second sodomy conviction that has been widely criticized as trumped up to wreck his political career.
Remember the beef?
The 39-year-old Rafizi, a chartered accountant who once held several important positions at the state-owned Petronas energy giant, has been a thorn in the side of the United Malays National Organization, which leads the government, almost since he got interested in politics in 2012. Besides exposing substantial wrongdoing at 1MDB, he deeply embarrassed the government in 2013 by exposing extensive corruption at a state-backed enterprise to raise halal beef in Malaysia.
“Cowgate,” as the National Feedlot Corporation scandal was known, ensnared Shahrizat Abdul Jalil, the Women, Family and Community Development minister and a close ally of Najib. Shahrizat, then the head of the women’s wing of UMNO, and her family were accused of misusing RM250 million in public funds, buying expensive cars, flats in Singapore and Kuala Lumpur and taking overseas trips. Shahrizat was cleared by the Malaysian Anti-Corruption Commission in an action that was interpreted as a cover-up.
Rafizi was threatened with exposing official secrets in that case as well. Nonetheles, he went on to reveal a long list of other government missteps, including awarding overpriced closed tender projects and purchasing overpriced assets from UMNO cronies.
“Rafizi Ramli’s sentence should be quashed immediately and he should be protected against any retaliation stemming from the disclosure of information that shows wrongdoing,” Amnesty International said in a prepared release that threatened to name him a Prisoner of Conscience. “By invoking the Official Secrets Act, the Malaysian authorities are yet again taking the cover of national security to stop people from raising legitimate questions about the 1MDB funds and obstructing the society from receiving such information.”
I expected it
“I expected a jail sentence and planned my life along that,” Rafizi wrote in his Twitter account, hours before the sentence was imposed. “We all have a responsibility to right the wrong within the time and space given to us.”
Just after his sentencing, Rafizi posted that “I am not shocked, sad, angry, afraid or anything. No such feelings. Just another day. Been like this. What doesn’t kill u makes u stronger.”
Rafizi was found guilty of violating Malaysia’s Official Secrets Act (OSA) by possessing and disclosing part of a government audit report on the debt-laden 1MDB, which was set up by Najib in 2009 as a joint-venture with a Saudi firm to finance strategic industries.
Lawyers have questioned the court proceedings as the alleged government audit leak was heavily redacted when shown in court and prosecutors had relied on videos to prove Rafizi possessed and disclosed the alleged classified document.
Whistleblower website Sarawak Report has said it had the entire government audit and had also uploaded it on the Internet. The website has been blocked in Malaysia after revealing 1MDB’s financial irregularities.
1MDB has been at the center of investigations in the United States and several countries amid allegations of a global embezzlement and money-laundering scheme reaching the highest echelons of government.
Najib, with the help of young financial wunderkind Jho Taek Low, restructured 1MDB with a joint venture from Saudi Arabia out of a Terengganu state fund shortly after taking office in 2009 ostensibly to promote strategic development projects but the venture accumulated billions in debts over the years.
The US Justice Department has said that at least US$3.5 billion has been stolen from 1MDB by several people close to Najib including Jho Low, as he is universally known, and initiated civil action last July to seize US$1.3 billion that it said was taken from the company to buy assets in the United States.
The US civil action also identified the US$700 million plus that landed in the accounts of “Malaysian Official 1 (MO1)” – who was not named but the Federal Bureau of Investigation (FBI) said later it referred to Najib.
Government minister and Najib’s party communications strategist Abdul Rahman Dahlan has also told the British Broadcasting Corporation (BBC) that it was obvious that Najib was MO1 but said the prime minister had nothing to do with the scandal.
Najib spoke to Japanese weekly Nikkei Asian Review this week, however, claiming he initiated the investigations into the 1MDB scandal. “It was I who first instructed multiple authorities in Malaysia to conduct investigations,” said Najib in remarks published by the weekly on Nov. 15.
Najib is now on a three-day visit to Japan, two weeks after he a high-profile visit to China that has been interpreted as a swing to Beijing away from the US after the US probe into his affairs.
The prime minister said the 1MDB issue had been highly politicized by “certain elements within Malaysia” attempting to exploit the issue for their personal “political benefit”, in an apparent reference to predecessor Mahathir Mohamad, who has been campaigning to unseat Najib since the scandal erupted last year.
Rights groups have denounced Rafizi’s conviction, saying it was “dangerous chill” on free speech that could lead to a more repressive and unaccountable government.
Malaysia’s Lawyers for Liberty rights group called the sentence harsh and excessive, saying Rafizi was just performing his duties as a politician and questioned the reasons for the Auditor-General’s 1MDB report being classified as an official secret.
The Auditor-General’s reports on government ministries, departments, agencies and firms are usually tabled in parliament and deliberated by the Public Accounts Committee (PAC), which can direct further investigations although it has no say over prosecution and punishment.
Malaysia’s Attorney-General Mohamed Apandi Ali has said there is no wrongdoing by the prime minister but investigations will go on. His office has also refused a request for assistance from Swiss authorities, citing on-going investigations.
But police have yet to issue any progress reports on the investigations, except to probe those speaking out against 1MDB, leaving critics to assume that the government intends to shut down talk of the scandal.
Malaysia’s Ministry of Finance has said it will take over 1MDB’s businesses and shut down the debt-plagued company after all debts are cleared. 1MDB has sold its energy and utilities assets and land to Chinese investors to pare down the debts.