Malaysia: Former PM Najib Razak Sent to Jail After Losing Final Appeal in Graft Case

Investigators have said some $4.5 billion was stolen from 1MDB – co-founded by Najib during his first year as Prime Minister in 2009 – and that over $1 billion went to accounts linked to Najib.

Kuala Lumpur: Malaysia’s top court ordered former Prime Minister Najib Razak to begin a 12-year prison sentence on Tuesday, August 23, after upholding a guilty conviction on charges related to a multi-billion dollar graft scandal at state fund 1Malaysia Development Berhad (1MDB).

The Federal Court ruling caps the stunning downfall of Najib, who until four years ago governed Malaysia with an iron grip and suppressed local investigations of the 1MDB scandal that has implicated financial institutions and high-ranking officials worldwide.

Investigators have said some $4.5 billion was stolen from 1MDB – co-founded by Najib during his first year as Prime Minister in 2009 – and that over $1 billion went to accounts linked to Najib.

Najib, wearing a dark suit and tie, sat in the dock as the verdict was read out. His wife, Rosmah Mansor, who is also facing corruption charges, and three children were seated behind him.

Security officials then gathered around the bespectacled former premier and he was later seen leaving court in a black car with police escort.

A court official and sources close to Najib said he was taken to Kajang Prison, about 40 km away from capital Kuala Lumpur.

“This is unprecedented. Najib will be remembered for his many firsts, the first Prime Minister to lose a general election, the first to be convicted,” said Adib Zalkapli, director at political risk consultancy BowerGroupAsia.

Also read: Former Malaysian PM Najib Razak to Face 21 More Money Laundering Charges

The British-educated son of Malay nobility held the premiership from 2009-2018, when public anger over the graft scandal brought election defeat, and dozens of corruption charges were lodged in following months.

Najib, 69, was found guilty by a lower court in July, 2020 of criminal breach of trust, abuse of power and money laundering for illegally receiving about $10 million from SRC International, a former unit of 1MDB. He had been out on bail pending appeals.

The former premier, who had pleaded not guilty, was sentenced to 12 years’ jail and a 210 million ringgit ($46.84 million) fine.

The wide-ranging 1MDB scandal prompted the US Department of Justice to open what became its biggest kleptocracy investigation.

Opposition leader Anwar Ibrahim said the verdict proved the power of the people.

“The people made the decision in 2018 to ensure an independent judiciary and that the country is clean of bribery. That decision allowed proceedings to be brought professionally,” he said.

Various recipients of the siphoned 1MDB funds, including a fugitive financier named Jho Low, used the money to buy luxury assets and real estate, a Picasso painting, a private jet, a superyacht, hotels, jewellery, and to finance the 2013 Hollywood film, The Wolf of Wall Street, US lawsuits have said.

Knocking back Najib’s final appeal, the court also denied his request for a stay of sentence.

“The defence is so inherently inconsistent and incredible that it has not raised reasonable doubt on the case… We also find that the sentence imposed is not manifestly excessive,” Chief Justice Tengku Maimun Tuan Mat said.

The panel of judges had unanimously dismissed Najib’s appeals, she said.

The court had earlier rejected a last gasp effort by Najib to forestall the final verdict by requesting the removal of the chief justice from the panel.

Addressing the court moments before the final verdict was delivered, Najib said he was the victim of injustice.

“It’s the worst feeling to have to realise that the might of the judiciary is pinned against me in the most unfair manner,” Najib told the court.

Najib, who faces several more trials over the allegations, has consistently denied wrongdoing.

He could apply for a review of the Federal Court decision, though such applications are rarely successful. He can also seek a pardon from the king. If successful, he could be released without serving the full 12-year term.

But the conviction means Najib will lose his parliamentary seat and cannot contest elections.

While Najib still has supporters among his base, many ordinary Malaysians welcomed the court decision.

“He did a lot of things wrong for this country when he’s supposed to be responsible for our nation. He’s supposed to bring in money but instead he robbed money,” said tennis coach Farhan Raj, adding he was “very very happy” with the judgement.

(Reuters)

Malaysia: Najib Razak Convicted on All Charges in First 1MDB Graft Case

Najib faced seven charges of criminal breach of trust, money laundering and abuse of power for allegedly illegally receiving nearly $10 million from former 1MDB unit SRC International. He had pleaded ‘not guilty’.

Kuala Lumpur: Former Malaysian prime minister Najib Razak was found guilty on Tuesday on all seven corruption charges in his first trial linked to a multi-billion-dollar scandal at state fund 1Malaysia Development Berhad (1MDB).

The landmark case has been widely seen as a test for the country’s efforts to stamp out corruption and could have big political implications for the Southeast Asian nation.

“After considering all evidence in this trial, I find that the prosecution has successfully proven its case beyond a reasonable doubt,” Kuala Lumpur High Court Judge Mohamad Nazlan Mohamad Ghazali said.

Najib faced seven charges of criminal breach of trust, money laundering and abuse of power for allegedly illegally receiving nearly $10 million from former 1MDB unit SRC International. He had pleaded ‘not guilty’.

Each of the charges carries hefty fines and jail terms of up to 15 or 20 years. Najib‘s lawyers are seeking a delay in sentencing. Najib said that he would appeal any decision at the federal court.

The former prime minister, who was voted out in a historic 2018 election, still faces multiple criminal charges over allegations that $4.5 billion was stolen from 1MDB.

Prosecutors allege more than $1 billion of the funds made its way into his personal accounts.

The former premier arrived in court to shouts of “long live Najib” by hundreds of supporters who had gathered outside.

Wearing a mask and flanked by top leaders of his party, Najib offered prayers just outside the courtroom.

Najib‘s lawyers say he was misled by Malaysian financier Jho Low and other 1MDB officials into believing that the funds banked into his accounts were donated by the Saudi royal family, rather than misappropriated from SRC as prosecutors have alleged. Low denies wrongdoing.

Allegations of corruption over 1MDB have hung over Najib for more than five years. But the criminal charges came only after his defeat in the 2018 election when his successor Mahathir Mohamad reopened investigations.

The closely-watched case is seen as a test of Malaysia’s efforts to root out corruption, after Najib‘s party was returned to power in February as part of an alliance led by Prime Minister Muhyiddin Yassin.

The verdict could have far-reaching political implications.

The guilty verdict could boost Muhyiddin’s credibility with the public, but weaken his coalition, which counts Najib‘s United Malays National Organisation (UMNO) as its biggest component – and potentially trigger snap polls.

The court’s decision comes just days after Malaysia reached a $3.9 billion deal with Goldman Sachs over its role in helping 1MDB raise money.

(Reuters)

Malaysia to Begin Multi-Billion Dollar Scam Trial Involving Ex-PM Najib

Former PM Najib Razak is facing 42 criminal charges of graft and money laundering at state fund 1Malaysian Development Berhad and other state entities.

Kuala Lumpur: Malaysia’s former prime minister, Najib Razak, on Monday faces the biggest of five trials linked to a multi-billion-dollar scam at state fund 1Malaysian Development Berhad (1MDB), although lawyers are seeking a delay to allow time for the completion of a previous trial.

Najib, who lost a general election last year, has been hit with 42 criminal charges of graft and money laundering at 1MDB and other state entities.

1MDB, founded by Najib in 2009, is being investigated in at least six countries, and the US Department of Justice says about $4.5 billion was misappropriated from the fund.

In his second trial at the Kuala Lumpur High Court, Najib will have to fight 21 charges of money laundering and four of abuse of power for receiving illegal transfers of about 2.3 billion ringgit ($550.8 million) between 2011 and 2014.

He has pleaded not guilty and says the charges are politically motivated.

Also read: What Just Happened in Malaysia, and What Will Happen Next?

On Friday, prosecutors handed to the defence thousands of pages of documents related to the case, government lawyer Ahmad Akram Gharib told Reuters.

“Under the rules, a trial can only begin at least two weeks after all the related documents are handed over,” he said, adding that about 60 witnesses were expected to be called in the second case.

The first trial, which began in April and revolves around former 1MDB unit SRC International, was adjourned on 14th August after Najib contracted an eye infection, halting the cross-examination of the prosecution’s final witness.

That case is also expected to resume on Monday, and lawyers from both sides hope the second trial can be delayed to allow prosecutors to wrap up the first.

“The accused can only be at one place at a time,” Najib’s lawyer, Harvinderjit Singh, said. “We are hoping the judge will allow us some leeway in this matter.”

After the shock election loss, Najib and his wife Rosmah Mansor were barred from leaving Malaysia and their luxurious lifestyle came under scrutiny, with the discovery of nearly $300 million worth of goods and cash at properties linked to him.

Also read: What Najib Razak’s Corruption Trial Means for Malaysia

Rosmah, known for her designer handbags and jewellery, has also been charged with corruption. She has pleaded not guilty.

Najib’s lawyers say he had no knowledge of the transfers into his accounts and was misled by Malaysian financier Low Taek Jho and SRC’s former chief executive, Nik Faisal Ariff Kamil, who are both at large.

Low, who faces charges in the United States of America and Malaysia over his alleged central role in the 1MDB case, has consistently denied wrongdoing. A spokesman for Low did not respond to a request for comment.

Nik Faisal, who has never publicly commented on the matter, could not be reached for comment.

(Reuters)

Movie Review: ‘The Kleptocrats’ Is a Compelling Dive Into the 1MDB Scandal

The filmmakers have managed to get access to some fascinating footage and, through sheer doggedness, capture stunning revelations.

Sometimes nonfiction cinema, just by virtue of its form, is riveting, for it can distill an incredible true story on screen. But The Kleptocrats – a new documentary that premiered on American channel Starz this Monday – goes a step further: it pursues the pursuer, folding one story on another, making the backstage action, in full-blown chaos, as compelling as the main story.

The movie follows a few investigative journalists (from the New York Times, the Wall Street Journal and the Hollywood Reporter) sniffing the trails of a huge financial scandal, 1Malaysia Development Berhad (1MDB), involving then Malaysian Prime Minister Najib Razak.

Complementing the nature of the scandal – marked by backdoor dealings and hushed conversations – the filmmakers, Sam Hobkinson and Havana Markin, display a similar economy of expression. The Kleptocrats opens with New York Times journalist Louise Story getting intrigued by a shell company buying a penthouse on the top floor of Time Warner Center, in New York. As Story explains her investigation – she began in 2013 – the camera plays the role of a companion, giving visuals to her words.

Also read: What Najib Razak’s Corruption Trial Means for Malaysia

Quite soon, the documentary morphs into a ‘howdunnit’ of sorts. The movie spells out the main perpetrators right at the start – literally pinning their photographs on a soft board – and segues to find connections among them. Hobkinson and Markin revel in this intricate web, peeling one layer after the other. The first suspects are Jho Low, a Malaysian financier who became mysteriously rich; Riza Aziz, the co-founder of Red Granite, a film production company based in Los Angeles; and his partner, Joey McFarland, a “talent broker” from Kentucky.

None of them, from their histories, were known for remarkable wealth, let alone enough to produce a Hollywood movie, in 2013, nominated for five Academy Awards. A movie that “nobody wanted to touch”. A movie about, according to its lead, “hedonism, debauchery, and excess” – “an adult American epic about our state of culture”. A movie about money laundering, defrauding gullible citizens and duping law enforcement. That movie was The Wolf of Wall Street – why do you need fiction when you have life?

Hobkinson and Markin not just tell a compelling story but also manage to get access to some fascinating footage and, through sheer doggedness, capture stunning revelations: the several parties thrown by Low, whose guest list – Leonardo DiCaprio, Robert De Niro, Britney Spears, Jamie Foxx, Kim Kardashian, Paris Hilton, among several others – reads like a “movie credits scroll” (his birthday bash in particular, reportedly costing “$100 million”, was “the most expensive party Las Vegas” had “ever seen”); a meeting between Razak and Low in a plush New York hotel; a phone conversation between a Hollywood Reporter journalist and De Niro (whose son, Raphael, had met Low for a “property sale”), which ends with the actor shouting, “I don’t care whether my name is associated. Get the fuck outta here. Goodbye.”

The documentary, though, isn’t just shock and pomp. Like any serious piece of nonfiction, The Kleptocrats hovers over the macro, dives into the micro, showing the true aftermaths of the scandal: the squashing of individual and institutional liberties (the Attorney General, investigating Razak, is sacked; the leaders of opposition parties are threatened; so are the cartoonists), but equally important, also documents the plight of ordinary Malaysians, whose hard-earned money was treated as loose change by Razak, Low and their cohorts. One of the many affecting scenes involve the camera first gazing, and then panning, the modest living quarters of Malaysian working class – the contrast is striking and shameful.

Also read: The Week That Malaysian Leader Najib Razak’s World Fell Apart

In another scene, using documents obtained from the US Department of Justice’s civil forfeiture complaints, a Malaysian opposition leader, Tony Pua, says that with the “1MDB money they bought a 22-carat, $27 million diamond necklace for the wife of the Prime Minister”. Pua takes out his phone, does some math, and gives context: that necklace alone could finance 3,333 Malaysian teachers in a year. Even that amount is a patch on the total money swindled: nearly $700 million.

Like The Wolf of Wall Street, The Kleptocrats doesn’t end on an easy, comforting note. Sure, the scandal resulted in some arrests and steep penalties, but none of the accused – neither Razak or his wife nor Low or his associates – admitted to any wrongdoing (let alone expressed remorse). Low, in fact, has been a fugitive for quite some time and his lawyers have sent threatening letters to distributors and platforms asking them to remove the documentary from their catalogues.

Abysmal greed; authoritarianism; helpless, hapless citizens; a Hollywood biopic; and the rich and famous dancing around the dubious flame of wealth like drugged fireflies – The Kleptocrats unfolds like a dystopia that has come to life a little too soon.

Anwar Ibrahim Wins Malaysia By-Election, Steps Closer to Premiership

The victory marks Anwar’s official return to political life, five months after he was freed from jail.

Kuala Lumpur: Malaysia‘s Anwar Ibrahim won a by-election engineered for his return to parliament by an overwhelming majority on Saturday, bringing him closer to the premiership that has been promised to him by former foe, Mahathir Mohamad.

The victory marks Anwar’s official return to political life just five months after he was freed from jail, and will also be the first time that both he and Mahathir are members of parliament under the same banner after a bitter feud lasting over 20 years.

Anwar, who has been the face of Malaysia‘s Reformasi or Reform movement over the past twenty years, won the seat by a majority of over 23,500 votes despite a low voter turnout on polling day in the coastal parliamentary seat of Port Dickson.

“Reform doesn’t end in one month, or four months, or a year. Reform means cleaning up and freeing the media, removing corruption, making ethical behaviour a culture in politics,” he told supporters at a victory rally, broadcast live on social media.

“I would like to tell all of you who voted, and our friends from all over the country, I will not waste this trust given to me,” he said to cheers from hundreds gathered.

In May, Mahathir, 93, led the Pakatan Harapan, or Alliance of Hope, coalition to a spectacular victory in a general election, unseating his former protege Najib Razak and ending the 61-year rule of the Barisan Nasional coalition.

Also read: What Just Happened in Malaysia, and What Will Happen Next?

Anwar could not contest as he was in jail on a 2015 sodomy conviction, but his renewed partnership with Mahathir was key to the election win, after which Mahathir secured a royal pardon for Anwar.

The pair have had an acrimonious relationship over two decades sparked when Mahathir, during his previous tenure as prime minister, sacked Anwar as his deputy in 1998. A year later, Anwar was convicted of corruption and sodomy.

Anwar and his supporters maintain that all the charges were trumped up to end his political career.

Mahathir, now in his second stint as prime minister, has since publicly declared that he will step down in two years and make way for Anwar to become the country’s eighth prime minister.

Malaysia’s Former PM Najib Charged With Three Counts of Money Laundering

As part of a probe investigating money missing from a Malaysian state fund, former Prime Minister Najib Razak was charged with three counts of money laundering.

Kuala Lumpur: Malaysia’s embattled former Prime Minister Najib Razak was charged on Wednesday with three counts of money laundering as part of a probe into money missing from state fund 1Malaysia Development Berhad (1MDB).

The charges, read out in a lower court, were related to three electronic transfers amounting to 42 million ringgit ($10 million) from SRC International, a former 1MDB unit, into Najib‘s personal bank account.

The judge transferred the case to the high court to be heard later on Wednesday, along with previous charges.

The money laundering offence carries a penalty of a jail term of up to 15 years and a fine of not less than five times the value of the proceeds of any illegal transfers, or five million ringgit, whichever is the higher.

Last month, Najib was arrested and charged with abuse of power and criminal breach of trust following a probe into SRC International. He has pleaded not guilty to those charges and was released after posting bail, but his passport was held.

He and his wife, Rosmah Mansor, have been barred from leaving the country since he lost an election in May and the new prime minister, his mentor-turned-foe, Mahathir Mohamad relaunched an investigation into 1MDB.

Earlier, Najib arrived at the courthouse in a four-car motorcade accompanied by his children. He was dressed in a grey suit and sat in the dock looking calm.

Money allegedly siphoned off from SRC represents only a small fraction of the billions of dollars the US Department of Justice has said was misappropriated from 1MDB.

Najib had founded 1MDB and headed its advisory board.

Lawsuits filed in US courts by the DOJ allege that an estimated $4.5 billion was misappropriated from 1MDB by high-level officials of the fund and their associates.

1MDB is being investigated by at least six countries, including Singapore, Switzerland and the US, over alleged money laundering and graft.

(Reuters)

Former Malaysian PM Pleads Not Guilty to Corruption Charges

Razak was charged with abuse of power and three counts of criminal breach of trust as part of an investigation into a transaction involving SRC International, a former unit of 1MDB.

Kuala Lumpur: Malaysia’s former prime minister Najib Razak on Wednesday pleaded not guilty to criminal charges related to a probe into allegations of corruption at state fund 1Malaysia Development Berhad (1MDB), less than two months after he was ousted in election.

Razak, 64, was charged with abuse of power and three counts of criminal breach of trust as part of an investigation into a transaction involving SRC International, a former unit of 1MDB.

Each of the four charges carries a prison sentence of up to 20 years. The abuse of power charge carries a fine of not less than five times the “value of gratification”.

Razak was granted bail set at one million ringgit ($247,000).

“As a public official, which is prime minister and minister of finance, (Razak) used (his) position for self gratification (for a) total of 42 million ringgit,” attorney general Tommy Thomas said referring to the abuse of power charge.

The charges relate to funds that allegedly went from SRC International into Razak’s personal bank account, but are only a fraction of the billions of dollars the US Department of Justice has said was misappropriated from 1MDB.

Razak has consistently denied wrongdoing in relation to 1MDB.

In a stunning fall from grace, Razak was arrested from his house on Tuesday as part of the investigations into 1MDB revived by his successor and mentor-turned-foe Mahathir Mohamad who succeeded Razak in the surprise May 9 election.

Razak, who spent the night in detention, arrived at the court complex in the capital Kuala Lumpur wearing a dark blue suit and a red tie.

Crowds of media and onlookers jostled to catch a glance of the former prime minister, while some members of Razak‘s United Malays National Organisation party chanted and held up placards in support of their former leader. Some of Razak‘s children were also present in court.

Initial focus

Razak came to power in 2009 and soon founded 1MDB which is being investigated in at least six countries for alleged money laundering.

SRC, created in 2011 by Razak‘s government to pursue overseas investments in energy resources, was a unit of 1MDB until it was moved to the finance ministry in 2012.

SRC has been the initial focus of Malaysian investigators as all suspicious transactions involving SRC were made through Malaysian entities, unlike other 1MDB related transactions that went through foreign banks and companies.

A spokesperson for Razak said on Tuesday that the SRC charges and the 1MDB investigations were “politically motivated”, and that Razak would contest the charges and clear his name in court.

Mohamad told Reuters last month that embezzlement and bribery using government money were among the charges being considered against Razak, adding that his former protege was fully responsible for the 1MDB scandal.

Since his election loss, Razak has been barred from leaving the country and investigators have seized luxury handbags, jewellery and other items worth millions of dollars from properties linked to his family.

In a pre-recorded message posted on Twitter after his arrest, Razak said that he was not perfect and that “not all the accusations against me and my family are true”.

“Let investigations be carried out. I have not had a chance to defend myself,” he added.

($1 = 4.0440 ringgit)

(Reuters)

Former Malaysian PM Najib Razak Arrested for Embezzlement

Since a shocking election loss to his mentor-turned-foe Mahathir Mohamad in May, Razak has been barred from leaving the country and has had millions of dollars of items seized from properties linked to him as part of the probe into 1MDB.

Kuala Lumpur: Malaysian anti-corruption agents arrested former prime minister Najib Razak on Tuesday following a probe into how money went missing from a state fund he founded almost a decade ago. Authorities said he would be charged in court on Wednesday.

Since a shocking election loss to his mentor-turned-foe Mahathir Mohamad in May, Razak has been barred from leaving the country and has had millions of dollars of items seized from properties linked to him as part of the probe into 1Malaysia Development Berhad (1MDB).

The 92-year old Mohamad said in an interview with Reuters last month that embezzlement and bribery with government money were among the charges that Malaysia was looking to bring against Razak, adding they had “an almost perfect case” against him.

Razak‘s arrest was in relation to a probe into SRC International, a former 1MDB unit, a task force investigating the fund said on Tuesday. One source close to Razak’s family said he was expected to be charged with abuse of power at SRC.

Anti-graft agents picked up Razak from his home after serving him with a remand order, sources close to the family said. Spokesperson for Razak did not immediately have a comment but Razak has consistently denied wrongdoing.

Founded by Razak in 2009, 1MDB is being investigated in at least six countries for alleged money laundering and graft.

Civil lawsuits filed by the US Department of Justice allege that nearly $4.5 billion from 1MDB was laundered through a complex web of transactions and shell companies.

But the initial focus of the Malaysian Anti-Corruption Commission (MACC) investigation focused on how 42 million ringgit ($10.6 million) went from SRC International to Razak‘s account.

SRC was created in 2011 by Razak‘s government to pursue overseas investments in energy resources, and was a unit of 1MDB until it was moved to the finance ministry in 2012.

MACC has been able to track the money trail from SRC more easily because transactions were made through Malaysian entities, whereas most other transfers of 1MDB funds went through foreign banks and companies.

Malaysian police say they have seized nearly $275 million worth of jewellery, handbags, watches and cash from premises linked to Razak, while authorities have frozen more than 400 bank accounts as part of the 1MDB probe.

Razak‘s wife, Rosmah, has been quizzed by anti-graft investigators in relation to 1MDB and Razak‘s stepson, Riza Aziz, was also giving a statement to the MACC when news broke of Razak‘s arrest.

Riza is the co-founder of Red Granite Pictures, a company that US prosecutors say financed three Hollywood films, including the 2013 Martin Scorsese movie The Wolf of Wall Street, with funds misappropriated by 1MDB.

(Reuters)

Money Missing from Malaysia State Fund Linked to Former PM

The items seized from six properties linked to Najib Razak totalled nearly $275 million. However, the former prime minister has denied any wrongdoings.

Kuala Lumpur: Malaysian police said on June 27 the total value of jewellery, handbags, watches and other items seized from premises linked to former prime minister Najib Razak totalled nearly $275 million.

Authorities are investigating Najib as part of their probe into how billions of dollars went missing from state fund, 1Malaysia Development Berhad (1MDB), which was founded by the former premier.

Since unexpectedly losing a general election to Mahathir Mohamad in May, Najib has been barred from leaving the country, questioned by the anti-graft agency and has had his personal and family houses searched as part of the 1MDB probe.

Amar Singh, head of the police commercial crime division, told a news conference that the retail cost of all the items seized from six properties linked to Najib totalled 900 million ringgit to 1.1 billion ringgit ($224 million-$273 million).

“We couldn’t do the counting at the premises because the numbers were too huge,” Singh said, adding that the seizures were the biggest in Malaysian history.

It took three days, six cash counting machines and 22 officials from the central bank to count the cash found at the premises, he said, adding the cash totalled 116.7 million ringgit.

Jewellery accounted for the biggest portion of the seizure – 12,000 pieces of jewellery that Singh said would cost 660 million to 880 million ringgit at retail prices.

The single most expensive item was a diamond necklace with yellow gold – worth 6.4 million ringgit at cost price, he said.

Authorities are yet to establish who the owners of the seized items are, Singh said, adding that Najib and his wife Rosmah Mansor would “soon” be called in for questioning.

Singh also said the police seized a total of 567 handbags in 37 different brands. The Hermes bags alone were worth 51.3 million ringgit, he said.

The police also found 423 watches worth 78 million ringgit and 234 pairs of sunglasses.

Mahathir, in an interview with Reuters last week, said Najib was fully responsible for the 1MDB scandal and that authorities have “an almost perfect case” against the former leader.

Najib, who led the country for almost a decade, has consistently denied any wrongdoing, having explained three years ago that the nearly $700 million transferred into his account had been a donation from an unnamed Saudi royal.

The U.S. Department of Justice has said the money came from 1MDB, and that a total of $4.5 billion was misappropriated from the fund.

Speaking to Reuters exclusively last week, Najib said he shouldn’t be blamed for the alleged stealing from 1MDB, and declared he knew nothing about the money from the state fund appearing in his bank account.

($1 = 4.0250 ringgit)

What Just Happened in Malaysia, and What Will Happen Next?

The sub-plots to the recent Malaysian elections are as important as the larger story of who won and who lost, and will have a long-term effect on the dynamics of the Federation.

If there is one news headline that has dominated the aftermath of Malaysia’s surprise general elections, it is that a coalition of secularist, Islamist and ethno-nationalist led by a former strongman with the backing of civil society, defeated a corrupt administration and destroyed a coalition of parties that has held power for over six decades.

While largely accurate, the sub-plots in this Malaysian story – bucking global trends on the wind back of democratic politics – are equally important and will have a long-term effect on the dynamics of the Federation.

Before we get to Mahathir Mohamad, the 92-year-old (and his age is important) former prime minister who came to lead the charge against the ramparts of the incumbent Najib Razak’s United Malays National Organisation-led government, his erstwhile enemy Anwar Ibrahim with whom he forged an unlikely alliance and the nominally democratic electoral system that made the surprise results possible, we must look at the less celebrated political shifts that ended one of the most resilient regimes in the developing world, the Barisan Nasional (BN).

The east is red

While the media paid a lot of attention to popular anger towards the rising cost of living and allegations of the massive corruption of the Najib Razak and his wife, this was a narrative confined to West Malaysia, the peninsular that has dominated the politics of the Federation.

Resource-rich Sabah and Sarawak on the island of Borneo are two of the three territories that form modern Malaysia – Singapore left in 1965. Over the last decade have become increasingly restless with the label electoral “safe deposits” for the BN, and have agitated for greater state’s rights but within the terms of the coalition’s behind-closed-doors bargaining culture.

Sabah and Sarawak have very different dynamics but both represent the rise of regional identity politics that found their political moment in the last general elections.

Sabah-based parties of a variety of political persuasions, lead by a former cabinet member and high ranking UMNO leader who had been sacked by Najib, took the state assembly and delivered a good number of parliamentary seats that bolstered the victory at the Federal level. With the win, Najib’s coalition almost immediately bled from the defection of parties who see no reason to remain with BN. Sabah’s former chief minister, who tried allegedly illegal means to hold on to power, is now on the run from the law, apparently in exile.

A woman passes a live telecast of Malaysia's former Prime Minister Najib Razak addressing the nation on the dissolution of Parliament at a electronics shop in Port Klang, Malaysia April 6, 2018. Credit: Reuters/Lai Seng Sin

A woman passes a live telecast of Malaysia’s former Prime Minister Najib Razak addressing the nation on the dissolution of Parliament at a electronics shop in Port Klang, Malaysia April 6, 2018. Credit: Reuters/Lai Seng Sin

BN went into the general elections of May 9 with 14 political parties, but currently has only four parties.

The more dramatic defections from BN comes form the territory of Sarawak, where the contest was only for parliamentary seats. Sarawak-based parties control the state and hoped to contain what observers calls the toxic fall-out from the Najib administration. BN in Sarawak had hoped that a combination of money politics and tight control on communications would keep the largely rural voting population within them, despite analysts noticing a swing in rural votes over several cycles.

The dramatic gains of the Sarawak-based Pakatan Harapan parties at the parliamentary level, and fears of the reversals at the upcoming state elections, has led the Sarawak BN parties to leave, declaring that they would cooperate with the new central government.

From 79 seats in the 222 seat Federal assembly, the BN is now down to 60.

The new configuration in both Sabah and Sarawak will not be easy for the new central government and we can expect more bargains to be struck, for a part of the populace that feels they have been marginalised for 60 years. However, elite politics still dominate the dynamics at the state level, and critics note that without institutional reform, the increased autonomy for the state governments will not benefit ordinary people and corruption and patronage politics will remain, perhaps even flourish.

The east is green

Another winner in an electoral result with apparently many winners is the Islamic party, PAS (Malaysian Islamic Party). Despite expectations that they would be wiped out, it managed to retain control of one state, gain control of another and almost played kingmaker in two others. The geographical spread of these gains are primarily in the northeastern states of the peninsular.

This is significant because the party sough to play role of kingmaker in what looked like it might be a three-way fight for the votes of Malay Muslims who not only make up the demographic majority in the peninsular but because the electoral system is designed to accentuate their political heft.

PAS had been in the previous two electoral cycles allies of the Pakatan coalition, but were lured away by Najib with a promise to enhance the Islamic agenda specifically through the enactment of Shari’ah punishments. This shift in alignment split PAS, with a breakaway party forming and staying with Pakatan. Today the leader of the breakaway party, Amanah, is the defence minister.

People sit next to a mural of the late former Party Islam Se-Malaysia (PAS) president, Tuan Guru Nik Abdul Nik Mat at Medan Ilmu in Kota Bharu, Kelantan, Malaysia April 13, 2018. Credit: Reuters/Stringer

People sit next to a mural of the late former Party Islam Se-Malaysia (PAS) president, Tuan Guru Nik Abdul Nik Mat at Medan Ilmu in Kota Bharu, Kelantan, Malaysia April 13, 2018. Credit: Reuters/Stringer

Malay Muslims were the core of Najib’s UMNO control of Malaysian politics, though Malay Muslims have been represented at points in the political spectrum from left to religious right.

Today, PAS believes that their gains in the first-past-the-post system are solid and are backed by popular vote numbers that show them holding just under 20% of the Malay Muslim vote nationally.

What they are not saying is that both the party and the Islamic agenda hold no sway in the territories of Sabah and Sawarak, where it got less than 1% of the vote. This will stymie any national ambition with the current electoral set-up and political calculus.

Still, one PAS leader crowed that after the clean-up of government by the current government, they will take power at the next general election.

Is that likely? It is also worth noting that PAS went into the elections with an implicit pact with UMNO that helped them make those gains, but will those conditions hold at the next elections?

And with the Pakatan central government choosing to restore petroleum royalties to the states controlled by the Islamic party, Pakatan could win support in states where it came in a distant third.

Got ‘em by the crown jewels

Malaysia and Malaysians received much praise for the orderly and peaceful transfer of power, with the new prime minister sworn-in within 24 hours of the victory. This much dreaded moment, the tactic threat of violence if BN should lose, was even addressed by the outgoing Prime Minister Najib, who said in his belated acknowledgement that rumours that he had convened a National Security Council meeting to declare a state of emergency were attempts to slander him.

If talk that the ‘deep state’ – embodied no less by Mahathir himself – had abandoned Najib was true, there was still discernible resistance to this victory from some royal houses, in particular the rotating position of constitutional monarch who, while denying it, has proven to be uncooperative. What is interesting to note is that one active and popular royal house in the southern state of Johor that had been beating the drum of state identity threw its support to Najib and his administration. The backlash from his ‘loyal subjects’ caught the monarch off-guard and later with the loss of his state to the Pakatan coalition, has had a bracing effect on the monarchy for now.

The monarchy, along with the religion of Islam and the discourse of ethnic community bound by shared interest, has been the mainstay of UMNO’s politics though under the 22-year leadership of Mahathir. UMNO curtailed royal constitutional powers significantly.

What Mahathir was not able to do was to keep royals out of business and politics, practices which some observers say could be the ultimate undoing of system of sultans. Under Najib, several royal houses flexed their political muscle but today they are on the back foot, with leaked stories of alleged corruption and profligate spending making the rounds in the media.

And after tense stand-off when the monarch seemed to be refusing to accept the government’s choice of attorney general – a well known constitutional lawyer of Syrian Christian Kerelalite ancestry – Mahathir’s government won both the institutional battle as well as a symbolic one against a Malay Muslim majoritarian logic in governance.

It must be noted that neither Sabah nor Sarawak have sultans, and nor two of the 11 states of the peninsular.

On the road to a real democracy?

A side-show to the May 9 victory has been some rancour over who gets to claim to be one who “saved Malaysia”.

On one hand, is Anwar Ibrahim: his sacking by Mahathir 20 years ago precipitated the crisis of legitimacy for the ruling coalition, and who by some unexpected political choices, created a political coalition that was able to take and hold power for the last two years and whose court-room handshake with Mahathir forged the strongest challenge to BN.

On the other is Mahathir, a johnny-come-lately to the democratic moment, whose inclusion and subsequent leadership of Pakatan was opposed by many civil society leaders, but whose ability to demoralise UMNO’s rank and file took Pakatan over the top in an electoral system fixed to favour the ruling party.

Mahathir Mohamad, former Malaysian prime minister and opposition candidate for Pakatan Harapan (Alliance of Hope) reacts during a news conference after general election, in Petaling Jaya, Malaysia, May 9, 2018. Credit: Reuters/Lai Seng Sin

Mahathir Mohamad, former Malaysian prime minister and opposition candidate for Pakatan Harapan (Alliance of Hope) reacts during a news conference after general election, in Petaling Jaya, Malaysia, May 9, 2018. Credit: Reuters/Lai Seng Sin

Despite attempts to pit the two men against each other abound, the Pakatan’s pre-polls promise was to first make Mahathir leader, who would then give way to his then jailed successor Ibrahim.

But this question – who saved Malaysia  – is needless to say a false one, considering the complex history for the last two decades from the crack in the BN armour and, if one wants to be true to the complexity of politics, one must add a longer history of democratic dissent stretching back six decades.

It is notable that finance minister Lim Guan Eng and defence minister Mat Sabu were political detainees during the Mahathir era.

Spectre haunting Pakatan

Having said that, both Mahathir and Ibrahim were stalwarts of the UMNO, the party they conspired to overthrow. Now they have done so, with little outward rancour or sentimentality, will UMNO’s bruised body return to haunt them?

While it is the largest single party in the Federal parliament, Malaysia’s political calculus, its plural society and first-past-the post system demands coalition-building to capture Federal power.

Within these constraints, what will be UMNO’s message and strategy going forward?

A long-time observer of Malaysia politics recently warned that if Mahathir and Pakatan move too forcefully and quickly on institutional reform, there will be a backlash and that UMNO and Islamist PAS will reap benefits from the whirlwind.

Media owned by UMNO say that there is large-scale buyers regret among Malay Muslim voters and attempts to whip-up fear of the Christianisation of Malaysia or attacks on Malay institutions have, for now, been met with tepid support.

No doubt this dynamic could change very quickly and the present government will needless to say be on the watch out for both external and internal threats to its stability.

One truth that most Malaysians have grown accustomed to is that our politics abounds in ironies. And that, perhaps, is not a bad condition to labour under.

Sharaad Kuttan is a journalist with a radio station, BFM89.9