Malaysian ex-premier hit with 25 new criminal charges including receiving, using and transferring illegal proceeds in what may prove to be the world’s biggest ever financial scam
By Nile Bowie
New charges were leveled today against Malaysia’s former Prime Minister Najib Razak in connection with an international corruption scandal at the 1Malaysia Development Berhad (1MDB) state development fund, which accumulated billions of dollars in debts while the ex-premier served as its advisory board chairman.
Twenty-five charges were laid against Najib, 64, whose nine-year premiership was repudiated by voters at this year’s May 9 polls, related to a US$681 million transfer made into his personal bank account in 2013. Najib does not dispute the transfer but claims the funds were a “political donation” from a Saudi royal and not subject to regulation under Malaysian law.
Investigators, however, believe the funds were pilfered from 1MDB in one of the world’s biggest ever financial scandals. Charges unveiled today include nine counts of receiving illegal proceeds, five counts of using illegal proceeds, seven counts of transferring the proceeds to other entities and four counts of power abuse.
The former premier, who faces a maximum 20-year prison sentence if convicted, has pleaded not guilty to all charges so far and has denied any wrongdoing.
Graft probes are underway in at least six countries and investigators at the US Department of Justice (DoJ) believe Najib’s associates embezzled and laundered US$4.5 billion from the fund from 2009 to 2014.
Malaysia’s new administration, led by Prime Minister Mahathir Mohamad, re-opened investigations into the scandal shortly after taking office, barring Najib and his wife, Rosmah Mansor, from international travel. Both figures have been interrogated by investigators from the Malaysian Anti-Corruption Commission (MACC) in recent months.
Najib’s court appearance today marks the third time he has been charged since July. Other charges levelled against the former premier include three counts of criminal breach of trust, three counts of money laundering and an abuse of power charge in connection with US$10.14 million that allegedly flowed from SRC International, a former 1MDB unit.
Local media reports indicate that money laundering charges are soon expected to be brought against Rosmah, whose penchant for luxury goods made her a symbol of opulence and excess. A recent Wall Street Journal report characterized her as a “political force and central actor” in the 1MDB scandal.
Najib, who was Malaysia’s sixth prime minister from 2009 to 2018, was taken in custody on September 19 afternoon and brought to MACC headquarters in Putrajaya, the administrative capital. He is expected to be released after posting bail, which was set at 1 million ringgit (US$247,000) following his arrest in July.
Lead Prosecutor Gopal Sri Ram has called for bail to be set at 5 million ringgit (US$1.2 million) to reflect the severity of Najib’s alleged crimes. Judge Azura Alwi set bail at 3.5 million ringgit (US$845,600). Najib was free to leave the court following the judge’s orders that bail money be paid in full by September 28.
Around 50 protestors assembled outside the MACC headquarters on September 19 night in support of the embattled former premier. Lokman Noor Adam, a member of the United Malays National Organization (UMNO) political party formerly led by Najib, told reporters the anti-corruption agency was being used by “Mahathir’s regime” to exact revenge against the ex-premier.
Najib, the only former Malaysian prime minister to have been indicted in court, has remained publically defiant since his election loss, publishing lengthy Facebook posts criticizing new Finance Minister Lim Guan Eng for management of the economy. Educated in Britain as an economist, the ex-premier was also finance minister during his premiership.
In an attempt prove his innocence, Najib recently posted bank documents and letters on Facebook, which he claimed were sent by Saudi Arabia’s Prince Abdulaziz Al-Saud, detailing a US$100 million sum described by the Saudi royal as a “gift” offered in recognition of the then-premier governing Malaysia according to “Islamic principles.”
Documents suggest that funds described by Najib as a “political donation” reportedly originated from Riyadh’s Finance Ministry, as well as the bank account of Prince Faisal Turkey Al-Saud, acting on behalf of former Saudi monarch, King Abdullah bin Abdulaziz, who had promised the Malaysian premier financial assistance in a letter dated February 1, 2011.
According to Najib, funds provided by Saudi Arabia in 2011 went toward paying his lead defense lawyer, Muhammad Shafee Abdullah, who was earlier this month charged with money laundering over two checks worth US$2.3 million received from the former premier, allegedly for legal services rendered to UMNO over several years.
Najib criticized the arrest of his lead counsel as “an attempt to intimidate or disqualify him and other lawyers from representing me in my case,” adding that the charges represented “a very dangerous legal precedent for all lawyers, professionals and businesses” who would not be safe “if the government chooses to victimize or politically persecute” them.
Malaysian police investigating the 1MDB scandal are questioning more than 50 people believed to have received payments from the sum deposited into Najib’s personal bank account from the Saudi government in 2011. Police claim a total of 132 money-laundering transactions have been identified and further investigations are ongoing.
Tom Wright, a WSJ journalist, questioned Najib’s Facebook posting on the Saudi transfer, claiming the ex-premier was “not offering anything new” and that the documents shared had “nothing to do with US$681 million in 2013 that came from 1MDB, not to mention tens of millions more from the fund.”
Wright and journalist Bradley Hope are co-authors of the recently released book “Billion Dollar Whale”, which chronicles the 1MDB scandal and offers a striking investigative profile of fugitive Malaysian financier Low Taek Jho, regarded by many as the mastermind behind a scandal believed to have cost Malaysia billions in pilfered losses.
Wright claims the Penang-born businessman was the only person who had a “360 (degree) view of what was going on” and that he was responsible for coordinating the transfers into Najib’s personal bank accounts, including the US$681 million transfer first exposed in 2015, which the ex-premier has since claimed to have returned to Saudi royal donors.
Though Low lacked a formal position at the state fund, Wright claims he was “running the show” while Najib himself was “disengaged from the day-to-day processes” though likely aware that 1MDB was being used as a “political slush fund.” The author believes Low was emboldened by links to the Malaysian premier, allegedly leading to ever larger sums being siphoned from the fund.
Libel lawyers from London-based law firm Schillings representing Low have recently sent threatening letters to independent bookstores in Britain and elsewhere in an apparent bid to thwart the distribution of “Billion Dollar Whale.”
Legal action has not been taken against the book’s publisher Hachette, or its authors, though a report in the Guardian indicates that the book has been effectively blocked from distribution in the United Kingdom as a result of Schillings’ sustained legal campaign targeting bookshops that have published the book’s synopsis on their websites.
Low’s whereabouts are unknown, though some Malaysian lawmakers and enforcement officials believe the fugitive financier and his family are living in China. A Malaysian court in Putrajaya charged Low in absentia with eight counts of money laundering In August. He maintains his innocence and claims it would be “impossible” to get a fair trial in Malaysia.
The fugitive Malaysian businessman recently launched a website proclaiming his innocence, which includes six press statements, including a personal letter pledging to provide “court documents, excerpts from media reports, and other material” in an attempt to “restore balance” and “provide the true story.”
As far as Malaysians are concerned, Low can best set the record straight by returning to Malaysia and answering the charges laid against him in court. As the 1MDB dragnet tightens around Malaysia’s former first family, few are surprised that Low has used his widely-regarded-as ill-gotten gains to silence critics with litigious proceedings from the shadows.