By John Berthelsen
Asia Sentinel
July 3, 2015

Najib said by Wall Street Journal and Sarawak Report to divert US$700 million in 1MDB funds into his own accounts

The publication today, Friday July 3, of devastating articles in the Wall Street Journal and the Sarawak Report tying Malaysian Prime Minister Najib Tun Razak to the diversion of nearly US$700 million from the state-backed 1Malaysia Development Bhd into his own accounts could be the final blow to bring down a leader who has been bullet proof from years of charges against his integrity.

The danger is that there have been so many smoking guns in the past, including detailed evidence by French investigators of bribes to buy French submarines when Najib was defense minister, that yet another won’t matter. Nonetheless, according to the two publications, government investigators in Malaysia have traced the money in deposits from 1MDB into Najib’s personal bank accounts. The investigators’ findings apparently were leaked, possibly through former Prime Minister Mahathir Mohamad, who has been on a two-year crusade to drive Najib from office and put him in jail.

Given the considerable details of the information now in print, he may well succeed. Indeed sources in Kuala Lumpur have told Asia Sentinel that Mahathir has considerably more information. Attempts to reach the former premier in the past have been uniformly unsuccessful.

“If this is true, it’s a TKO for Najib,” said a Kuala Lumpur-based lawyer. “Go to jail, do not pass go. It looks like the Tun [Mahathir] has dropped the nuke.”

It’s all a plot

A spokesman for Najib denied any wrongdoing to the Wall Street Journal and said the allegations had been fabricated by his political enemies. Nonetheless, the investigation documents, made available to the two publications, mark the first time Najib has been connected personally to irregularities over the fund, which has amassed RM43 billion [US$11.3 billion] in liabilities, as much as RM25 billion of it believed to be unfunded.

Four separate Malaysian agencies are probing the fund. But government agencies are notoriously beholden to the United Malays National Organization, the leading component of the Barisan Nasional, the ruling national coalition. According to the reports, the bulk of the money was transferred by wire from the Singapore branch of the Swiss Falcon private bank, owned by the Abu Dhabi- based Aabar fund, into Najib’s private AmBank account in Kuala Lumpur in March 2013, just prior to the government’s calling the last general election.

Najib has withstood a continuing barrage of difficult questions about the fund for more than two years, blaming political enemies and repeatedly rounding up the divisional warlords of UMNO to back him, primarily because he has provided them with vast amounts of money for their personal operations, much of it flowing from the 1Malaysia Foundation. Equally devastating stories about the activities of Najib’s wife and money steered to the 2013 election in the New York Times and the Wall Street Journal respectively have been shrugged off without apparent serious damage to the prime minister although he recently delayed the UMNO party elections for 18 months to forestall any challenge from Mahathir’s forces in the party.

The 90-year-old Mahathir has become the point man in the effort to bring Najib down. According to sources in Kuala Lumpur, he has amassed a substantial amount of information in addition to what hs been leaked to him by government investigators who have not been able to break through the UMNO embargo.

Crescendo

The confrontation between Mahathir and Najib has reached a crescendo in recent weeks with the arrest by Thai police of a Swiss national named Xavier Justo. The arrest was closely orchestrated by a Middle Eastern oil exploration firm called PetroSaudi, to which 1MDB loaned at least US$1 billion. Justo had been an official with PetroSaudi and left the company several years ago with a mysterious US$5 million payoff. Two years after he left, he was able to break into PetroSaudi’s computers and download 2 million emails.

Those emails were passed to Clare Rewcastle Brown, the editor of Sarawak Report, and reportedly to Mahathir. Justo’s arrest and accusations that he had tampered with them to make them more damaging is considered to be part of a move by Najib to discredit Mahathir before he could feed more documents and evidence to the press. Mahathir is believed to have additional evidence of illegal transfers of money out of the country by Rosmah Mansor, Najib’s wife, with the help of Jho Taek Low, the flamboyant young financier who helped Najib set up 1MDB in 2009.

He is said to also have additional information about the mysterious death of Altantuya Shaariibuu, the Mongolian translator and party girl who was shot to death by two of Najib’s bodyguards in 2006. The murder remains one of the most sensational in recent Malaysian history.

Given the gossip in Kuala Lumpur, Najib’s forces know what Mahathir has and are seeking to discredit him, Brown and The Edge Malaysia, the Kuala Lumpur-based financial publication, which has aggressively pursued the 1MDB story. The Edge has been issued a show-cause letter by the Home Ministry for allegedly publishing articles “that have created confusion and doubt about the government and financial institutions” and relying on Sarawak Report for its articles.

Articles in the UMNO-owned New Straits Times have accused the “heavily-tattooed” Justo of maliciously attempting to bring down the Malaysian government by altering emails to incriminate Jho Low, as he is known, and other 1MDB and PetroSaudi officials. The din over Justo has been immense in the government-owned press as Najib’s forces have attempted to discredit his enemies in the press and politics. Both the UMNO-owned television and radio have also vilified Justo.