Malaysia: Democracy Won, But Will Justice Prevail?

Mahathir Mohamad’s stunning electoral win in Malaysia is a victory for the country’s democracy and for anti-corruption. But will it be a victory for justice?

Mahathir, who had governed Malaysia as Prime Minister from 1981-2003, became increasingly outraged over the last two years. The reason was mounting evidence that his one-time protégé, Prime Minister Najib Razak, was at the center of mysterious dealings that saw the disappearance of at least $4.5 billion of government development funds.

In response, Mathathir, 92, formed a coalition of Razak’s opponents and they have just won a parliamentary majority. But can they now discover where all the cash went?

Razak’s personal bank account holds over $700 million of cash that he said was a gift from a friend in the Middle East. His failure to explain fully, plus many efforts to quash investigations, threaten opponents, muzzle the media, as well as a far-ranging investigation by the U.S. Department of Justice, all combined to make corruption the number one election issue.

Mahathir’s coalition government contains many people who long opposed him, but Razak’s crimes have bound them together. Razak will strive to convince some of these politicians to switch sides, thus placing the new government’s majority in jeopardy. This will be Razak’s first line of defense. The question is whether the new government will hold power for long.

The facts

The facts, according to the U.S. Justice Department in mid-2017, are that “from 2009 through 2015, more than $4.5 billion in funds belonging to 1Malaysia Development Berhad (1MDB) was allegedly misappropriated by high-level officials of 1MDB and their associates.

1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment.”

As some details of the multi-year fraud scheme emerged in 2016, the country’s citizens took to the streets in Kuala Lumpur to demand explanations. But Razak dug in.

He replaced law enforcement officials and members of the anti-corruption commission with his own loyalists. He moved rapidly to crush opposition in civil society and in the media. His cover-up efforts were so blunt that they outraged the former leader Mahathir Mohamad, whose national prestige placed him beyond Razak’s reach.

It is ironic that Mahathir should be the one who is now being lionized for his anti-corruption virtue. In the two decades when he was prime minister there were many major grand corruption schemes that he did not investigate, let alone stop (for example, see Global Witness’s investigations of corruption and deforestation in Malaysia).

The new Prime Minister knows he must move fast and that he is likely to find that many law enforcement officials will seek to place obstacles in the path of a full investigation of the missing billions.

Many of Razak’s senior officials probably personally prospered from IMDB cash and the new government may be challenged to remove them quickly from office. They will need to be replaced by more honest people, which could take time.

It is likely that the new Malaysian government will swiftly call on the FBI and U.S. Justice authorities to assist with the investigations, while also encouraging cooperation with the justice authorities in Singapore, who have been looking at various dealings between investment firms and banks there and the 1MDB fund.

U.S authorities ready to help

The U.S. authorities are ready. They have been working on the case for over two years and they have been frustrated by the lack of cooperation by the Malaysian government. They know what questions to ask, who needs to be interviewed and what documents need to be found.

Razak was a golfing buddy of President Trump’s and enjoyed a lavish welcome to the White House when he visited Washington last year (his official entourage stayed at the Trump Hotel, located right next door to the Department of Justice). Razak may hope that Trump will block the FBI, but the timing is not good. After all, the U.S. president has major fights of his own right now with the FBI and the Justice Department.

So long as Mahathir is leading the government, there is a chance that investigations will proceed, that it will be discovered where most of the money went (so far about $1.5 billion has been found in the U.S. by the U.S. authorities) and that Razak will have his day in court.

But Mahathir is 92 and may gradually feel bound to hand over to Wan Azizah Wan Ismail, who ran as deputy prime minister. She is the wife of Anwar Ibrahim – once a deputy prime minister himself. However, he fell out with Mahathir and was jailed on phony charges of sodomy.

Anwar is due to leave prison next month. His political comeback will create controversy.

There are a lot of political enemies binding together against the common enemy. That won’t keep Razak from plotting right now to divide his opponents and thereby escape justice.