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Malaysia 1MDB scandal

PM’s party rattled by US taking steps to seize ‘embezzled’ 1MDB assets, MPs poised to defect

PUBLISHED : Saturday, 23 July, 2016, 8:03am
UPDATED : Saturday, 23 July, 2016, 8:03am

The US government’s move to seize assets allegedly stolen from state firm 1 Malaysia Development Berhad (1MDB) has sent shock waves through the ruling Umno party, according to analysts.

The US Justice Department named a close business associate of Prime Minister Najib Razak and his stepson in a civil lawsuit to recover US$1 billion in assets that Washington says were bought by money embezzled from the fund.

US files lawsuit to seize over US$1 billion in assets allegedly stolen from Malaysia’s 1MDB

Several senior Umno members are contemplating defecting to the opposition after Wednesday’s civil lawsuits alleging US$3.5 billion was misappropriated from 1MDB. Najib chaired IMDB’s advisory board until recently and repeatedly denied any wrongdoing.

“Umno is jittery to the core … a few senior leaders have started moves to ‘discuss’ with Dr Mahathir,” said Firdaus Abdullah, former political editor of the government-owned New Straits Times, referring to former prime minister Mahathir Mohamad.

Mahathir, who led the country for 22 years, has been Najib’s harshest critic, calling on him to step down over the 1MDB scandal. Last week, he announced plans to set up a new party to challenge his one-time protégé.

“They are top Umno members, cabinet members and leaders of the ruling coalition component parties,” Firdaus added.

Former Law Minister Zaid Ibrahim said Umno is coming under “some pressure” but it would take a while for its members to jump ship.

“[Umno members] are timid. It will happen but slowly. I think Najib will be charged by the US eventually and then you will see people jumping ship,” said Zaid.

A source with knowledge of the investigation told the South China Morning Post that he expects criminal charges to follow.

“The DOJ wants to ensure that all these dirty money do not vanish into thin air. After this civil action, the criminal indictment commences,” said the source who did not give further details.

One senior Umno member who declined to be named told the Post that the party’s supreme council supports Najib.

“I wouldn’t say [everyone] but the supreme council is backing Najib,” they said.

The Supreme Council is a powerful body within Umno.

While Najib was not named, the US lawsuit said US$681 million from 1MDB was transferred to the account of “Malaysian Official 1”.

Last year, the Wall Street Journal said US$681 million was diverted from 1MDB into Najib’s personal account. Najib insisted the money was a donation from the Saudi royal family and denied any wrongdoing. “Our stand remains that we do not tolerate any act that goes against the law,” Najib was quoted as saying by The Star daily on Friday.

“All Malaysians who can read English knows that Najib is the Malaysian official number 1,” said Kadir Jasin, a close associate of Mahathir.

Mahathir, opposition politicians and activists called upon Umno members to vote Najib out to save the country from turning into a pariah state.

“The house of cards is falling down. Get out before it collapses on your head ... it’s out of your control now,” said opposition MP Khalid Samad of the Amanah party.

“Save yourself and not be convicted of assisting a felon when criminal charges are initiated against Najib and the rest,” added Khalid.

Asked whether he was also reaching out to his own brother, Shahrir Abdul Samad, who is a senior Umno member and former minister, he said:“I sent him a video of [the] US attorney general on this case but he has not responded.”

Fellow Amanah member Dr Dzulkefly Ahmad called on Umno’s supreme council to save the country by voting Najib out.

“After all the efforts of debunking and unseating the PM have failed, the supreme council is the last bastion to get rid of Najib, the man ... is responsible for bringing the country into a tail-spin,” said Dr Dzukelfy.

White House calls for transparency from Malaysia over 1MDB fund scandal

Political observers see Washington’s action as a game changer for the long-running 1MDB saga that has led to Najib sacking party members who questioned him about it and shut down investigative news outlets.

“The game changer is that [Najib] can’t rely on the US to keep him safe from prosecution,”said Jahabr Sadiq, former managing editor of the popular Malaysian Insider news portal which was shut down over its critical reportage of 1MDB.