With Trump meeting, Malaysia’s PM seeks to put 1MDB scandal behind him

September 10, 2017 - 6:51 PM
PM Najib Razak looks on at the last Merdeka Day rites in Malaysia on August 31, 2017. REUTERS

KUALA LUMPUR – In a room packed with Malaysian civil servants, foreign ministry secretary general Ramlan Ibrahim raised his right hand as he read out an anti-corruption pledge.

He was among thousands of state officials nationwide to take such an oath in the past several weeks, part of an anti-graft campaign called by Prime Minister Najib Razak.

“The citizens are becoming more informed … they ask for public service which is more efficient, transparent and fair,” Ramlan said after the event in Putrajaya, the administrative capital.

The campaign comes as Najib prepares to meet President Donald Trump in the United States this week, where the Justice Department and the Federal Bureau of Investigation are pursuing investigations into 1Malaysia Development Berhad (1MDB), a state fund the prime minister oversaw.

Najib must also call a general election by mid-2018 although some commentators have suggested he could do so this year itself.

The Malaysian Anti-Corruption Commission (MACC) has arrested dozens of top officials under the anti-graft campaign, including officers at national oil company Petronas and state-controlled palm oil firm Felda. More than 600 arrests were made just this year, MACC data showed.

The actions are unusual in the Southeast Asian country, where corruption is seen as widespread. Four out of five Malaysians aged 18-35 cited corruption as the most serious issue facing the country, according to a survey released last month by the Global Shapers Community, a programme under the World Economic Forum.

But critics say the campaign ignores the elephant in the room: 1MDB.

The state fund is being investigated in at least six countries for money-laundering and misappropriation of funds, including an alleged $681 million transfer into the prime minister’s personal account.

Malaysia’s attorney-general closed the 1MDB probe in January 2016, and cleared Najib of any wrongdoing.

The US Justice Department has sought to seize about $1.7 billion in assets allegedly bought with stolen 1MDB funds. Its lawsuits say those involved included Najib’s step-son Riza Aziz and his close associate Jho Low.

In court filings last Tuesday, the FBI, which is conducting a criminal investigation, alleged that potential witnesses in the case fear for their safety and need protection.

But investigations into 1MDB in Malaysia appear to have shut down. MACC had “a roomful” of files on 1MDB, a former MACC official told Reuters, but the commission could not pursue it once Malaysia’s attorney-general declared the case closed.


“In a way, this campaign is the MACC trying to show that it is doing its job. Even if they cannot secure a conviction (against their targets), the MACC can show that it has done all it could to stamp out major corruption,” said the former official, who declined to be identified due to the sensitivity of the matter.

Cynthia Gabriel, director of the Kuala Lumpur-based Center to Combat Corruption and Cronyism (C4), said there was “enough substance” for MACC to reopen the case on 1MDB.

MACC declined to comment on whether the commission would reopen its 1MDB investigation.

“No comment on that, we are very fair in investigating anybody here, whoever they are,” deputy chief commissioner Azam Baki told reporters in Putrajaya.

Anti-corruption campaigners say they fear Trump’s invitation to Najib to visit the United States may affect the investigations in the United States.

“Territorial influence and geopolitical interests of the United States appears to have hollowed out its commitment to fight international corruption, much to the detriment of the future of Malaysia and the world,” Gabriel said.

US-based Human Rights Watch (HRW) said Trump’s invitation was “particularly inappropriate”, given Najib’s use of repressive laws to stifle critics.

“There’s little doubt that Najib will use this White House visit to burnish his credentials going into next year’s election in Malaysia, and redouble his repression of critics using the stamp of approval from this visit,” HRW’s deputy Asia director Phil Robertson told Reuters.

Najib has said he hopes his visit will drum up more trade and investment for Malaysia.

“I would like to see this as a two way mutually beneficial partnership,” he told reporters on Friday. “I hope the US sees Malaysia as a reliable partner on issues such as trade and investment, security partnership, counter terrorism and I also hope that US companies see us as among the best countries to invest in.”

A government source said a defense agreement was also on the table, although no details were immediately available.


Senior leaders of the ruling United Malays National Organisation (UMNO) are concerned the party may suffer election losses from the string of graft scandals linked to Najib, a source aware of discussions within the party said.

With Najib and the MACC’s clean-up campaign, the source said, the party hopes to appease Malaysians frustrated with the corruption and draw back foreign investors who fled as the probe into 1MDB expanded.

Besides diverting attention from 1MDB, critics say Najib is also using MACC’s anti-graft campaign to target political opponents such as Lim Guan Eng, an opposition leader who is the top elected official in Penang province. He has been charged with abuse of power in the purchase of a bungalow.

“You are going after all sorts of offenses, but the biggest one, it stinks to high heaven,” said Lim, the secretary-general of the Democratic Action Party. “Everyone can smell it, except you.”