1MDB Scandal Around Malaysian Prime Minister Najib Puts Spotlight on Wife

Wall Street Journal
Sept. 11, 2016

Documents show $6 million in credit-card spending by Rosmah Mansor

A major financial scandal swirling around the Malaysian prime minister is drawing fresh attention to his glamorous wife, Rosmah Mansor, who newly revealed documents show has racked up at least $6 million in credit card charges in recent years—despite having no known source of income beyond her husband’s salary.

At an anticorruption rally last month in Kuala Lumpur, hundreds of students, young professionals and other demonstrators took to the streets behind a cardboard caricature of a meticulously coiffed woman carrying a Hermès handbag, demanding an investigation into Ms. Rosmah’s finances.

“She said she saved that money since she was small. That is impossible,” said Anis Syafiqah Mohd. Yusuf, a 24-year-old student from the University of Malaya who helped organize the protest.

Ms. Rosmah’s jewel-bedecked public appearances have long made her a polarizing figure in this relatively poor, Southeast Asian country. She is the only child of schoolteachers, hasn’t had a regular paying job in years and her husband, Prime Minister Najib Razak, is a longtime bureaucrat with an annual salary of $100,000.

Ms. Rosmah, 64 years old, says she has a habit of saving. “I have bought some jewelry and dresses with my own money. What is wrong with that?” she wrote in her 2013 autobiography.

But allegations that Mr. Najib received hundreds of millions of dollars siphoned between 2009 and 2015 from 1Malaysia Development Bhd., a state investment fund he set up, are bringing renewed scrutiny of her.

Extensive bank-transfer records reviewed by the Journal showed that large sums from 1MDB wound up in the prime minister’s personal accounts via intermediaries.

The records were also cited in a civil lawsuit filed by the U.S. Justice Department in July seeking the seizure of more than $1 billion of assets from people connected to Mr. Najib. The lawsuit doesn’t name Mr. Najib, but a person with direct knowledge of the investigation said the “Malaysian Official 1” in the complaint is Mr. Najib.

Mr. Najib has denied wrongdoing. His attorney general, without releasing documentation, described the money as a legal political donation from Saudi Arabia, most of which he said was returned. The Saudis have offered only vague statements.

The Wall Street Journal reported this year, citing banking documents, that at least $1 million in purchases made by Ms. Rosmah at jewelry and fashion stores in Europe and the U.S. in 2014 were paid for by Mr. Najib using credit cards that drew on 1MDB funds. The couple declined to comment at the time.

New documents seen by the Journal show those expenses are part of at least $6 million in spending by Ms. Rosmah between 2008 and 2015 on clothing, shoes and jewelry from London’s Harrods department store, Saks Fifth Avenue of New York and elsewhere.

Ms. Rosmah hasn’t commented on that spending. Attempts to reach her and Mr. Najib for this article were unsuccessful.

The prime minister’s office last year said the first family’s spending was commensurate with Mr. Najib’s inheritance from his father, a former prime minister. His four brothers later denied their father had left a big estate, without giving details. Mr. Najib issued another statement describing his father as frugal and a man of integrity, without addressing the inheritance.

When the 1MDB scandal broke in July 2015, Ms. Rosmah advised her husband to tough it out, according to a person who knows the family. “My advice [to Mr. Najib] is to be very, very patient as this is a test from Allah,” she said at an April event, according to local media reports.

The person also said Ms. Rosmah introduced her husband to Jho Low, the Malaysian financier who U.S. officials, in their lawsuit, charge was at the center of the alleged 1MDB scandal.

Ms. Rosmah has longstanding ties to Mr. Low; A decade ago, Mr. Low helped Ms. Rosmah and her son set up a British Virgin Islands company, according to Malaysian investigation documents seen by the Journal.

Attempts to reach Mr. Low for comment were unsuccessful.

Ms. Rosmah is “becoming more prominent” as more details of the 1MDB case come out, said James Chin, a Malaysian academic at the University of Tasmania.

Ms. Rosmah met Mr. Najib, who was chief minister of Pahang state, in the 1980s. She was working for a property company, but stopped soon after they were married.

After Mr. Najib became prime minister in 2009, she drew criticism for her ostentatious style. Photos appeared online of her with a dozen different Hermès Birkin bags, which can cost tens of thousands of dollars.

The U.S. lawsuit, which charges more than $3 billion was diverted from the fund, detailed how Ms. Rosmah’s son from an earlier marriage—a onetime banker named Riza Aziz—allegedly received tens of millions of dollars from 1MDB, which U.S. officials say he used to buy property in London, Los Angeles and New York and to finance a Hollywood film company.

The studio, Red Granite Pictures, has said that to its knowledge, none of its funding “was in any way illegitimate” and that Mr. Aziz “did nothing wrong.”

Zulkiflee Anwar Ulhaque, a cartoonist who has taken potshots at Ms. Rosmah, depicting her with huge rings and massive hair, was charged last year with sedition for questioning the impartiality of Malaysia’s judicial system. He denies the charges. A trial is set to begin this month.

He held a display of works, including more caricatures of Ms. Rosmah, in a field outside Kuala Lumpur this month. The opening was attended by opposition politicians and human-rights workers.

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