Najib - I Took Those Money, So What?

Malaysian Prime Minister Najib Razak broke a cardinal rule in politics. He inadvertently admitted ‘guilt’ when the Malaysian Anti-corruption Commission cleared him of any wrongdoing in accepting a political donation. His position – vulnerable since his ascent to premiership – is no longer tenable as Malaysians question his sincerity and trustworthiness.

On July 2, 2015, the Wall Street Journal alleged that $700 million had gone into a personal bank account of Razak’s. The prime minister offered a non-denial denial:

Let me be very clear: I have never taken funds for personal gain as alleged by my political opponents – whether from 1MDB, SRC International or other entities, as these companies have confirmed.

Razak also labelled the report as political sabotage and threatened to sue the Wall Street Journal (more than a month after the allegation was made, at the time of publishing this article, the prime minister has yet to sue).

As the noose tightened around his neck, Razak went for broke.

On July 20, 2015, the Sarawak Report, a blog that had been systematically publishing reports on corruption and abuse of power in Malaysia, was blocked by the government. An arrest warrant for its founder and editor, Clare Rewcastle-Brown, was subsequently issued.

On July 24, 2015, the government announced that The Edge Financial Daily and The Edge Weekly, which had been reporting extensively on the 1MDB issue, were to be suspended for a period of three months.

On July28,  2015, the prime minister sacked his deputy and four other ministers in a cabinet reshuffle in an effort to strengthen his control of the government and the United Malays National Organisation (UMNO). With the changes to his cabinet, Razak also neutralized the Parliamentary Public Accounts Committee that had been vigorously investigating the 1MDB affair. He also removed the attorney general, who as part of a high-level task force (involving the Attorney General’s Chambers, the Central Bank of Malaysia, the Malaysian Anti-Corruption Commission (MACC) and the Royal Malaysian Police) was believed to have been preparing corruption charges against the prime minister.

After pulling off such a brazen act with a high degree of skill, the prime minister blinked.

On August 3, 2015, the MACC announced that the $700 million channeled into Razak’s personal bank account came from donors. In doing this, Razak inadvertently confirmed the Wall Street Journal’s report and opened Pandora’s box.

This admission of ‘guilt’ has taken the toxicity of the prime minister to an all-time high. But even more damaging than the legal implications of the matter (i.e. was it corrupt for Razak to solicit donations on behalf of UMNO; is it certain that the donations were for UMNO; who donated; what were the donations for; were the donations used at the 2013 general elections; did the donation break Malaysian laws; etc) is the question of trust and legitimacy.

Malaysians will now once again question Razak’s honesty and sincerity in denying all other allegations made against him, his family and his administration. After all, if the Wall Street Journal’s  preposterous allegation is correct, could all the other preposterous allegations also be true?

Malaysians will begin to wonder if there is truth to the preposterous allegations made by the suspended The Edge Finance Daily and The Edge Weekly.

Malaysians will begin to wonder if there is truth to the numerous preposterous allegations made by the blocked Sarawak Report.

Malaysians will begin to wonder if there is truth to the many preposterous allegations on 1MDB made by members of the opposition.

Malaysians may also begin to wonder if there is truth to all other preposterous allegations made about the Prime Minister, his wife and his family.

Malaysians will begin to wonder if there is truth to the preposterous claims being made by Bersih 2.0, namely that elections are neither free nor fair in Malaysia.

UMNO members will begin to wonder if there is truth to the sacked Deputy Prime Minister Tan Sri Muhyddin’s preposterous premonitions about UMNO’s future.

Recently sacked Malaysian Deputy Prime Minister Muhyiddin Yassin speaks at a press conference in his residence outside Kuala Lumpur on July 29. (AP Photo/Joshua Paul)

Having realized this faux pas, the prime minister and UMNO are currently engaged in rear-guard action to correct the mistake. But for an embattled prime minister already suffering a serious trust and legitimacy deficit, this may be too late.

One should not, however, dismiss Razak outright. It goes without saying that a dead man walking can be very unpredictable and dangerous.

Note: It appears that the government and its agencies (e.g. the Attorney General’s Office, the MACC, the Central Bank) are divided on 1MDB. It appears that some have aligned their efforts to protect the prime minister, while others are intent on removing him, and some who are just doing their work. I discuss this in next week’s article.

MH370: Najib vs French Prosecutor

Part of the aircraft wing found on Reunion Island is from the missing MH370 plane, Malaysian Prime Minister Najib Razak has confirmed. Mr Najib said experts examining the debris in France had "conclusively confirmed" it was from the aircraft.

But the investigators have stopped short of confirming the link, saying only that it is highly likely.
The Malaysia Airlines plane carrying 239 people veered off course from Kuala Lumpur to Beijing in March 2014. Can we still trust this man Najib?

The debris was found on the remote French Indian Ocean island a week ago and was taken to Toulouse for testing. The plane is long believed to have crashed into the southern Indian - though no evidence had been found despite a massive search operation.

The debris was found last week on the Indian Ocean island of Reunion

"It is with a very heavy heart that I must tell you that an international team of experts has conclusively confirmed that the aircraft debris [...] is indeed MH370," Mr Najib told reporters in Kuala Lumpur.

"We now have physical evidence that [...] flight MH370 tragically ended in the southern Indian Ocean," he added.

Mr Najib said he hoped the discovery "will at least bring certainty to the families" of the victims, saying the burden they had faced was "unspeakable".

French prosecutor Serge Mackowiak later confirmed the wing fragment, known as a flaperon, was from a Boeing 777 - the same make and model as the missing Malaysian airliner.

He said initial tests showed there were "very strong indications" that it was from flight MH370. But he said confirmation would only come after further tests on the fragment, which would begin on Thursday.

"[Investigators] will try to do it as soon as possible in order to provide total and reliable information to the family of victims, who are on our minds at the moment," Mr Mackowiak added.
Grey line

Analysis: Hugh Schofield, BBC News, Paris

The Paris prosecutor failed to be as categorical as the Malaysian prime minister in asserting that the wing piece does come from MH370. All he said was that there are very strong reasons to presume that it is from the missing plane.

That does not mean that the prosecutor has any reason to doubt the prime minister's conclusion - simply that he is exercising supreme legal caution.

In the coming days there will be more tests on the flaperon and it's expected that these will prove the piece's origin. After that, it will probably be many months before deeper analysis allows any tentative deductions about how the plane may have come down.

Perkasa supporting the MACC

Ultra-Malay extremist group Perkasa has joined the unlikely alliance around the nation’s anti-corruption agency as it struggles to sustain an investigation into funds flowing around Prime Minister Najib Razak. Perkasa, often labelled a front for the most extreme ­Malay elements of the ruling United Malays National Organisation, has joined its opposition targets to claim “hidden hands” are trying to kill of the investigation. With 6 officers hauled in by police in the past week, Malaysian Anti-Corruption Commission investigations into the 1MDB affair swirling around Mr Najib have been “somewhat jeopardised”, deputy chief commissioner Mustafa Ali conceded. The investigation into alleged leaks from MACC to Mr Najib’s critics has been authorised by police chief Khalid Abu Bakar. But Perkasas integrity bureau secretary Azrul Akmal Sharudin has accused “enemies of the state … trying to suppress the truth through threats and intimidation of MACC officers”.

Najib's Brother Nazir Criticized Najib

Nazir Razak has taken another dig at his elder brother and Prime Minister Najib Razak with an Instagram post saying, “we should fear god more, government less.” Nazir, the group chairman of CIMB , posted a picture of himself at a panel discussion at the Asian Institute of Finance Symposium 2015 here yesterday with the message: “AIF Symposium panel on ethics, transparency & professionalism in banking. Concluded that we should fear God more,

Government less!” A day earlier, Nazir posted a photo of himself with Bank Negara Malaysia governor Zeti Akhtar Aziz, who is embroiled in an imbroglio over 1Malaysia Development Berhad, and International Monetary Fund chief Christine Lagarde with the note: “My moment with 2 icons of global finance”.

Three days earlier, Nazir posted a picture of Najib and former deputy prime minister Muhyiddin Yassin at his bank’s Hari Raya open house, calling it “the last supper”. The picture was taken a day before Najib dropped Muhyiddin as his deputy in a Cabinet reshuffle on July 28. Nazir is said to be linked to New Hope Movement (Gerakan Harapan Baru) which has been set up by disgruntled leaders of PAS.

There has also been talk that Nazir and several like-minded individuals, who are concerned over the country’s present socio-political landscape would be setting up an NGO.

Muhyiddin Yassin Supposed to be Arrested?

The night after Muhyiddin Yassin was sacked as Malaysia's deputy prime minister, his wife was gripped by rumours that her husband was about to be arrested. Muhyiddin then called his successor, Ahmad Zahid Hamidi, to seek confirmation. When Zahid called back at 2am, Muhyiddin asked: "So is your first job as the new deputy prime minister to catch an old one?" Recounting his post-sacking experience to a gathering of party supporters in his home state, Johor, Muhyiddin said: "He [Zahid] told me not to believe rumours, saying, 'You can sleep peacefully tonight'." Indeed, Muhyiddin strikes a cool composure.

Despite losing his government post, he pledged his loyalty to the party. But he let it be known that he was still the elected deputy president of Umno - the main party in the country's ruling coalition - second only to Prime Minister Najib Razak, who sacked him late last month for being openly critical on the scandal involving 1MDB, a state investment fund advised by Najib. As the crisis gets more convoluted, two significant developments have emerged. The first is the growing split within Umno, with reports of a possible revolt by Muhyiddin loyalists. Three days after the bombshell sacking, there was a second shift - the admission of an Umno political fund. Top Umno leaders gradually conceded there is a party trust account held in Najib's personal account, but Umno's party constitution allows this; and finally, the funds are not from 1MDB but are "political donations".

The anti-corruption commission, with uncharacteristic speed, declared that the 2.6 billion ringgit (HK$5.1 billion) Najib received was a political donation from a secret person in the Middle East. The political fund narrative, not surprisingly, opened up a new hornet's nest. It was immediately criticised by the opposition as a tactic to deflect attention from the 1MDB issue. Najib's fiercest critic, former prime minister Mahathir Mohamad, however, disclosed that, in his time, there was no such thing as a personal account for party funds, but trust accounts held by three trustees. Mahathir said if the donations had funded Umno's campaigns in the 2013 general election, the huge amount could have been in breach of election rules on limits of political funding.

If true, there could also be other implications on the legitimacy of the 2013 elections. The new controversy over political funding appears to have given Najib some time as he manoeuvres to buttress his position and possibly even crush his critics. True enough, a warrant of arrest has been obtained for journalist Clare Rewcastle-Brown, the founder of the website Sarawak Report, which triggered the 1MDB exposé.

 The high-powered special task force set up in the aftermath has now been disbanded. To add to the convolution, police have arrested investigators from the anti-corruption team, provoking accusations of questionable police interventions. Indicative of what is to come, a commentary in the mainstream New Straits Times hinted at more changes afoot, "including changes in key Umno positions at the party headquarters and state liaison chiefs".

 Further, it said, some "top-level reshuffle involving key government entities and government-linked companies is also being planned". Going by this commentary, Najib's next move appears to be a counter-offensive painting himself the victim of an international "conspiracy" out to "criminalise" him. While Najib appears to have strengthened his hand for now, the political crisis has only just begun. Even if Najib survives this, it is hard to imagine how he would emerge unscathed. The big question is whether the ruling coalition can retain power in the next general election. Malaysian politics is entering yet another explosive and unpredictable phase.