How Malaysia’s push to stifle scandal questions backfired as journalists deported

By Philip Sherwell
Asia Editor
16 Mar 2016

Malaysia’s embattled prime minister Najib Razak is cracking down on critics as international probes into funding scandal intensify

The Malaysian administration has waged an increasingly heavy-handed campaign to muzzle dissent and divert attention as a funding scandal and corruption allegations shake his administration.

Earlier this week, Malaysia deported two Australian journalists who attempted to question the embattled prime minister Najib Razak about a $680 million payment into his bank account.

The reporter and cameraman from the Australian Broadcasting Corporation were detained and threatened with charges after they approached the Malaysian leader at a public event to which media were invited.

And Malaysian Insider, an outspoken news website critical of the prime minister, closed this week a few days after the government suspended its operations.

The ABC journalists Linton Besser and Louie Eroglu were held overnight and told they faced charges of “obstructing a public servant” after they allegedly “aggressively tried to approach the prime minister”.

But the two men, who denied crossing any security line, were abruptly kicked out of the country on Tuesday. Video footage released by ABC after their release appeared to confirm that they had merely called out questions to Mr Najib about the “hundreds of millions of dollars in your account”.

The prime minister walked past stony-faced but the response of his security detail served to draw further attention to the scandal that has engulfed him for months.

“The original knee-jerk reaction to arrest them demonstrates the incredible lengths that the authorities are prepared to go to protect prime minister Najib from any sort of hard questions about his actions,” said Phil Robertson, deputy Asia director of Human Rights Watch.

“It’s shameful that the Malaysian government is apparently willing to shred the country’s already diminished reputation as a rights-respecting democracy to shield one man from serious allegations of malfeasance.”

Mr Najib has consistently denied any wrongdoing or personal gain in connection with the $680 million payment. His attorney-general also cleared him after concluding that the money was a “political donation” from the Saudi royal family.

The mystery payments came to light during investigations into 1MDB, a debt-laden state investment fund that Mr Najib founded and oversees as chairman of the advisory board. The prime minister has also denied any inappropriate behaviour linked to the fund.

With official explanations doing little to assuage the criticisms, Mr Najib’s woes have mounted in recent days. Even a social media campaign launched by supporters to publicise their backing for the beleaguered leader backfired badly.

#RespectMyPM campaign hijacked

But the attempted feel-good initiative rapidly turned to humiliation after the motto “#RespectMyPM” was hijacked and morphed into “#SuspectMyPM”.

His family’s taste for the high life was thrust back in the spotlight after one of the world’s best-known disc jockeys complained that he was kicked off the turntables at Singapore’s top nightclub to make way for the prime minister’s son.

In Britain, Malaysian students have launched a petition for the removal of Mr Najib’s portrait from a campus wall at the University of Nottingham, from where he graduated in industrial economics in 1974.

And at home, Mahathir Mohamad, the country’s long-standing former prime minister and ex-Najib mentor, has launched a campaign with the Malaysian opposition to oust him.

That new initiative by old political foes has infuriated Mr Najib whose spokesman declared the effort to “topple the democratically-elected government” was “against the law and the constitution”.

But Mr Najib’s greatest challenge seems now to be posed by fast-moving developments in the growing array of foreign investigations into 1MDB, which has consistently denied any wrongdoing.

US investigators intensify 1MDB investigation

It emerged last week that America’s famously dogged white-collar crime federal investigators have issued a subpoena to Tim Leissner, a former Goldman Sachs high-flyer in South East Asia.

Mr Leissner returned to the US late last year for “personal leave” and then left the company this month. He had been in charge of the Wall Street giant’s operations in Malaysia when it advised 1MDB on a series of lucrative deals.

The FBI and Justice Department now wants to speak to him as it gathers information about the role of Goldman Sachs as part of its investigation into 1MDB’s finances.

Mr Leissner has not been available for comment when approached for his response to the investigation and subpoena. Neither the bank or its former executive have been accused of any wrongdoing.

During their time in the region, Mr Leissner and his wife Kimora Lee Simmons, the fashion designer and former model, became close to Mr Najib and Rosmah Mansor, his wife.

Ms Simmons, who was previously married to the hip-hop impresario Russell Simmons, used social media to publicise her friendship with Ms Rosmah, who is renowned for her overseas shopping trips.

American officials are broadening their investigations as they also dig into a Malaysian-linked money trail through New York.

Malaysian playboy connection to artwork auctions

They are reported to have been looking at a multi-million dollar New York shopping spree associated with Low Taek Jho, a playboy financier who is a close friend of Malaysia’s first family.

Jho Low, as he is known to all, burst into the Manhattan’s gossip columns when he sent 23 bottles of Cristal champagne to the table of Lindsay Lohan as she celebrating her 23rd birthday at a nightclub.

He was reported to have spent $160,000 on bottle service in just one evening at another New York haunt and was regularly photographed in the company of glamorous young stars.

Mr Low was a close friend of Mr Najib’s step-son Riza Aziz from their days at boarding school in Britain. In his early 20s, he made his name as a major investor and he soon started to attract interest in New York not just for his nightlife antics but also for his acquisition of up-market apartments and art masterpieces.

He is widely believed to be the buyer who laid out at least $141 million last May for Picasso’s “Women of Algiers”— the most expensive painting ever purchased at auction. He was also said to have conducted some head-spinning property deals.

Mr Low has insisted that he has not acted improperly. His spokesman said last year that he helped set up 1MDB’s forerunner, but he denied reports that he acted as an informal adviser to the fund and said that he made his fortune as an investor.

The PM’s step-son and the Wolf of Wall Street

His friend Mr Aziz meanwhile emerged as a Hollywood financier, most notably helping to bankroll The Wolf of Wall Street starring Leonardo DiCaprio as an unscrupulous financial fraudster.

His production company issued a statement noting that he and his business had not engaged in any “inappropriate” activities after the Wall Street Journal reported that the FBI was looking into its funding.

The investigations into the 1MDB fund that Mr Najib set up in 2009 are not limited to the US.

In Switzerland, prosecutors said last month that they believed as much as $4 billion may have been stolen from Malaysian state-owned companies in funding that was earmarked for economic and social development projects.

British, Hong Kong and Singaporean authorities are also investigating 1MDB’s activities.

French submarine investigation

And in a separate inquiry, French officials are pursuing allegations that bribes were paid in a lucrative submarine deal when Mr Najib served as defence minister.

That French investigation has also put the spotlight back on one of the most salacious episodes in recent Malaysian history – the 2006 murder of a Mongolian model who was the girlfriend of a Najib associate involved in the submarine deal.

Two government bodyguards, one of whom had once protected Mrs Najib, have been convicted of killing her and blowing up her body with explosives amid speculation that she was threatening to go public with damaging allegations.

‘The bodyguards have confessed,” said Dr Mahathir. “Bodyguards normally follow orders. So did someone give those orders?”

Mr Najib has denied any involvement in the bribery allegations surrounding the Scorpene contract, but the French investigation is providing another challenge as the country also suffers a sharp economic economic slide.

The prime minister hoped that he had put the scandals behind him last month when his attorney-general cleared him of any wrongdoing over the $680 million payment found in his bank accounts during the 1MDB investigation.

But the explanation – that the money was a gift from the Saudi royal family for political purposes, that Mr Najib did not receive any personal benefit and that $620 million was later returned – did little to assuage questions.

In an interview with The Telegraph, Dr Mahathir was scornful of that version. And he repeated his claim that the Najib-appointed attorney general had “no credibility” for clearing his boss of criminal wrongdoing.

That assertion brought him a recent visit from the police as they investigated the country’s former leader for possible criminal defamation.

“The police came here to my office, but I refused to answer their questions,” he said. “I told them that if they wanted to question me, they should do it in court, where everyone can hear what I have to say and my lawyers can question them.”

He smiled and shook his head when asked if he was worried about a possible prosecution. “If I’m made to appear in court, I’ll be happy to answer,” he said. “They are trying to rule by intimidation, but I am ready for it.”

Mahathir Mohamed’s ‘martyrdom mission’ to topple former protege

Dr Mahathir became an increasingly fierce critic of Mr Najib as the financial scandal deepened. “But he’s now moved into a martyrdom mission,” one political observer told The Telegraph. “He’ll do anything to bring down Najib.”

The provincial doctor who went on to become the father of modern Malaysia laid out his plans in an interview in his cavernous office on the 86th floor of the Petronas Towers, the world’s tallest buildings when they were constructed during his rule.

“I’ll work with anyone who shares the objective of getting rid of Najib Razak as prime minister,” he said. “Our country can no longer take this corruption.”

Dr Mahathir talked to The Telegraph shortly after quitting the United Malays National Organisation, the party that has ruled Malaysia for the six decades since independence from Britain in 1957. A few days earlier, his son Mukhriz was forced out as a state chief minister by Najib loyalists.

‘The party is Najib vehicle’

“The party has become a vehicle dedicated to preserving and supporting Najib in office, protecting him despite all the wrong things he is doing,” he said.

“It became embarrassing to be a member and staying in the party would be a hindrance to what I need to do now.”

Dr Mahathir said that a stream of “visitors” urging him to use his power and influence had called at his office, where arrivals are greeted with panoramic views of the modern city that he helped create.

“People come to see me and asked me to act,” he said. “It’s my duty. They say that the prime minister is destroying the country.”

The show of unity by anti-Najib forces was greeted with derision by a spokesman for the prime minister. “Mahathir and his former enemies have demonstrated the depth of their political opportunism and desperation,” he said, noting the Mr Najib’s critics must wait for the next general election, due in 2018, if they want to replace him.

Malaysia’s ‘Game of Thrones’

Mr Najib’s own brother has described this landscape of internecine warfare, where former foes unite and erstwhile allies feud, as Malaysia’s “Game of Thrones” – a reference to the television series about warring mediaeval nobility.

The prime minister has maintained his tight grip on power since the scandal began by purging cabinet critics and cracking down on dissent from media and academics.

As part of the crackdown, the authorities last year blocked access to Sarawak Report, a website run by former British prime minister Gordon Brown’s sister-in-law Clare Rewcastle Brown. The Malaysians later issued an arrest warrant for the London-based journalist, who was born in colonial Malaya.

The government also blocked Malaysian Insider after it published a story saying that the state anti-corruption agency had found “credible evidence” to charge Mr Najib.

The latest moves even prompted the United States to issue a rare but stern rebuke to Malaysia, a Western partner on trade and security deals, over its muzzling of the free press.

Dr Mahathir has now plunged back into the tumult of Malaysian politics at 90, an age when most former leaders would be enjoying a comfortable retirement, to throw his weight behind Mr Najib’s critics.

“I expected more of him,” said Dr Mahathir of the politician he helped manoeuvre into power. “He has let us all down. We cannot let this continue.”

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