Malaysia’s Disgraced Former PM Najib Guilty

Former Malaysian Prime Minister Najib Razak has been found guilty on seven counts of abuse of power and money laundering in what a political rival once called “the mother of the mother of the mother” of all Malaysian scandals – the loss of U$4.6 billion to theft and mismanagement of the state-backed 1Malaysia Development Bhd. investment fund.

The main immediate effect will probably be to keep the former premier from registering as a candidate in snap elections that could be called before the 2023 date by which the parliament must be dissolved under the Westminster parliamentary system. Although he keeps his seat in parliament, his conviction renders him unable to run for office again and thwarts his ambition to take back the presidency of the United Malays National Organization.

Nonetheless, he remains free with some cynics suggesting he could win an appeal — or that the appeal process will segue into the same kind of never-ending legal morass that has that has kept the Marcos family out of jail in the Philippines for decades. Certainly, if the past is any prologue, he will continue to campaign for UMNO candidates, as he has done successfully since he was arrested in 2018, maintaining the loyalty that has accrued to him during his years in power. 

Given the vast resources he has marshaled from his decades as an UMNO leader and a scion of the Malay aristocracy – his father was the country’s second prime minister – the 67-year-old Najib despite the conviction is likely to remain a kingmaker and a major force in Malaysian politics. On June 4, he, his brothers and fellow accused felon Ahmad Zahid Hamidi, the current UMNO head, allowed themselves to be photographed at Zahid’s home, ostensibly planning a political comeback despite the charges.

If snap elections were to return an UMNO-led coalition to power, a distinct possibility given the disarray of competing political forces, there remains the chance the vast array of charges against him could be reduced or nullified. So far, his stepson, Reza Aziz, was freed by the attorney general without being charged for misusing 1MDB funds to set up a Hollywood company that produced the notorious Wolf of Wall Street and other films. Another ally, the former chief minister of Sabah, Musa Aman, was also freed without being charges in June despite considerable evidence of corruption.

After 95 days of testimony by 76 witnesses, 57 from the prosecution and 19 from the defense in a case that began in April of 2019, High Court Judge Mohd Nazlan Mohd Ghazali said it was far-fetched to believe the former premier had been conned by Low Taek Jho, the flamboyant Penang-born financier who dreamed up the idea of converting an obscure Terengganu state investment fund into a US$11 billion government-backed vehicle that would serve as a cash drawer for Najib and his wife, Rosmah Mansor, Jho Low himself, a variety of middle eastern potentates and others in what the US Justice Department called the biggest kleptocracy case ever brought by the agency.

The judge also discarded Najib’s contention that the money that had flowed into his personal accounts at AmBank Malaysia had been donated to him by Saudi princes as a bulwark against Islamic extremism, rather bluntly pointing out that Najib had never sent back a note of thanks in exchange for the billions.

The 38-year-old Jho Low remains at large, a chubby international fugitive from investigations in Singapore, the United States and Malaysia. He is believed to be in China and has in turn said Najib is the culprit, that he knows nothing about the corruption despite apparently amassing hundreds of millions of dollars and buying a US$300 million yacht that has since been confiscated.

The soft-spoken Najib, who flaunted his British education as an economist and relished his appearances as a moderate Muslim before the United Nations General Assembly and who golfed with US President Barack Obama before his downfall, appeared in court clad in a tan-colored suit and coronavirus facemask. He had told family and friends that he expected to be convicted. He could face decades in prison after his expected sentencing on August 3 unless politics intervene.

The current case involved a relative pittance – RM42 million (US$9.88 million) stolen from 1MDB and a subsidiary, SRC International Sdn Bhd. A minimum of 40 other charges confront him in at least five cases involving money laundering, criminal breach of trust, abuse of power and others involving the looting of the fund.

Nonetheless, he received a hero’s welcome from hundreds of supporters outside the courtroom who cheered him on, and from leaders of UMNO, which he led for nine years, behind him inside the court. He had been an UMNO powerhouse for decades before that as defense minister, a position he used skillfully to amass tens of millions in funds channeled to the party from defense procurements.

The welcome was despite massive evidence compiled by authorities that recovered items worth up to US$233.4 million from his home and that of his grasping wife including US$28 million in 26 different currencies as well as handbags, gold chains, rings, earrings, tiaras, a US$1.23 yellow gold necklace with white diamonds, watches and sunglass brands. The only thing missing was the US$681 million that passed through his Ambank account and disappeared. In addition, the US Justice Department recovered or assisted in the recovery of nearly $1.1 billion in assets associated with 1MDB in houses, airplanes, paintings, jewelry and other assets amassed by the Najibs in the United States and returned to the Malaysian government. 

It is a case that perhaps says as much about Malaysia as it does about theft and mismanagement.  It was clear as long ago as the 2013 general election that something was spectacularly wrong with 1MDB and that the Najibs and Jho Low were looting it, leading former Prime Minister Mahathir Mohamad to accuse Najib of corruption. Jho Low was reported in New York papers to be cavorting with celebrities including Lionel Ritchie and Paris Hilton with Rosmah in tow and pouring magnum bottles of Cristal champagne into a succession of Broadway blondes.

Nonetheless, UMNO leaders who accepted outright bribes kept Najib in power for the next five years despite the accusations and others going back more than a decade of corruption involving defense purchases when he was defense minister. The party had become steeped in corruption and rent-seeking with lucrative contracts even for back-benchers with government-linked companies. 

UMNO was finally brought down after six decades in power in 2018 elections won by the reformist Pakatan Harapan headed by Mahathir, only to have Mahathir and others squander the victory through mismanagement, indecision and infighting and to be ousted from power by his deputy, Muhyiddin Yassin, who remains in tenuous command of a shaky coalition.

Najib has shown no contrition whatsoever. Immediately after the May 2018 general election, he began campaigning for candidates in by-elections across the country despite his status as an accused criminal responsible for the biggest financial scandal in the country’s history. Ethnic Malay voters remain seduced by the complicated racial mix in the country into fearing that the ethnic Chinese could dominate politics as they do economics.

The DAP, critics say, contributed to those fears with an arrogant performance as a member of the Pakatan Harapan coalition that took power in May 2018 and fell in February. Malays have continued to place their bets with UMNO as a defender of Malay rights, scandals or no scandals. 

That is at least partly because before there was a Najib, there was a Mahathir. The former prime minister throughout his 22-year reign placed Malay power before probity, covering up a massive US1 billion scandal at a Hong Kong unit of the state-owned Bank Bumiputra that included the murder of an auditor sent to ferret out the details of the theft. 

A long string of other scandals ensued, many of them catalogued by the late Asian Wall Street Managing Editor Barry Wain, in his book, Malaysian Maverick, which detailed as much as RM100 billion that went up in smoke from mismanagement and graft without anybody being arrested and tried in Malaysia.

Perhaps that gave Najib and his UMNO associates the confidence that, despite reports of investigations stretching almost all the way around the planet, they could pack their millions out the door and the voters would forgive them.

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