(May 18): Malaysian Prime Minister Mahathir Mohamad’s government is considering investigating former leader Najib Razak for abuse of power, as it intensifies efforts to seek evidence of wrongdoing at scandal-plagued state fund 1MDB just days after taking office.
The Malaysian Anti-Corruption Commission laid out in recent days a comprehensive list detailing the potential scope of investigations into 1MDB, according to people who have seen the document. Examples of potential abuse of power by Najib that the agency identified include witness suppression and the blocking of a central bank criminal case.
Najib had indicated at the outset that he was "prepared and willing to extend his fullest cooperation to the relevant authorities," his lawyer Harpal Singh Grewal said in a statement Thursday in response to a raid on his client’s home. A spokesman for Najib referred Bloomberg News to this statement when asked for comment. A spokesperson for the anti-graft agency couldn’t immediately comment when reached on Friday.
Among the other areas the commission is looking into:
Whether criminal breach of trust was involved in a letter of support from the Ministry of Finance for 1MDB bonds Alleged fraudulent investment by the fund An unauthorized bond issuance by the fund outside of its Articles of Association Funds flowing into Najib’s personal account.
The move to lay out the scope of a renewed probe underscores how fast Mahathir’s government is moving to revive an investigation into 1MDB, which was set up in 2009 under Najib’s watch to support local infrastructure projects. Since the 92-year old defeated Najib’s government in a shock election victory last week, he has barred his former protege from leaving the country; and police have searched Najib’s home and seized documents from his former office this week.
Mahathir said Wednesday he will seek to recover funds diverted from 1MDB by reaching out to authorities in Switzerland, the U.S., Singapore and other jurisdictions. A parliamentary committee in 2016 identified at least US$4.2 billion in irregular transactions by the fund.
On Thursday, he set up a separate committee to look into matters relating to the fund, whose full name is 1Malaysia Development Bhd. The same day, Mahathir said he was appointing Mohd Shukri Abdull to helm the anti-corruption commission, after the former chief, Dzulkifli Ahmad, resigned last week. Shukri was deputy chief commissioner at the agency until he retired in 2016.
“Until and unless the issue of 1MDB is resolved, there will be questions that undermine public confidence in the government and its institutions,” according to a statement issued by Mahathir’s press office on the formation of the 1MDB committee.
Mahathir, who was Najib’s long-term ally and who is back in power after a prior stint as premier from 1981 to 2003, accused him on the campaign trail of being a “thief” over alleged graft at 1MDB. Najib has denied any wrongdoing and was cleared by the attorney general at the time, while the fund has repeatedly denied any misconduct.
The 1MDB scandal spawned global probes as investigators tracked a money trail stretching from Switzerland to Singapore and the U.S. The Department of Justice alleges US$3.5 billion from the fund went missing.
The Malaysian machinery is now springing into action.
Documents seized from Najib’s former office are related to the ongoing investigation into 1MDB, Commercial Crime Investigation Department Director Amar Singh Ishar Singh said Friday. Police also searched two condominium units in Kuala Lumpur as part of the 1MDB probe, seizing 284 boxes containing handbags, and 72 luggage bags containing valuable items such as cash and jewelry.
This comes after a nighttime search at Najib’s home this week, when police seized personal items, including several boxes of items like handbags, clothes and personal belongings as evidence, his lawyer said. Police mentioned possible money laundering offenses but didn’t mention 1MDB, he said, adding there was “no indication at all” that Najib would be arrested.
Mahathir said Thursday that he didn’t order the search and had no information, adding he has tasked the police to investigate all criminal cases regardless of who is implicated.
Asked about the anti-graft commission’s investigations into 1MDB and Najib, Daim Zainuddin — a member of Mahathir’s council of eminent persons — said Friday: "That one I don’t know, it’s up to them. We have no control over MACC."
Daim said the council believes that Malaysian financier Low Taek Jho, known as Jho Low, would be the "best witness" with regards to 1MDB. He said he "roughly" knows where Low is and "he should come back and assist us."
Low, who did consulting work for 1MDB, is portrayed by U.S. prosecutors as a central figure who set up shell companies to collect proceeds from the fund and arranged the withdrawal of tens of millions of dollars to pay Malaysian government officials and for his own lavish spending.
Low said in July that attempts to link him to recent guilty pleas in 1MDB-related probes in Singapore are based on “unfounded assumptions.” He had previously denied wrongdoing.