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.