by Thomas Fuller
New York Times
OCT. 7, 2015
KUALA LUMPUR, Malaysia — In a rare and explicit intervention in politics, the sultans of nine of Malaysia’s states have called for a swift and transparent investigation into a political scandal involving Prime Minister Najib Razak, saying his failure to resolve allegations of corruption had created a “crisis of confidence” in the country.
Malaysia’s central bank and anticorruption officials are investigating whether millions of dollars transferred into Mr. Najib’s accounts came from companies linked to a government fund that Mr. Najib oversees.
The statement by the sultans, who have a largely ceremonial role, was their most direct intervention in politics in recent history. Analysts said it was likely to provide support for the embattled officials who are investigating the scandal and buttress the position of the growing ranks of Mr. Najib’s political opponents.
“The findings of the investigation must be reported comprehensively and in a transparent manner so that the people will be convinced of the sincerity of the government, which shall not at all conceal facts and the truth,” said the statement, which was released late Tuesday and circulated by Bernama, the national news agency.
The statement added that the scandal was “adversely affecting the world’s view of Malaysia” and was seen as “among the causes for the plunge in the value of the Malaysian ringgit, impacting the country’s financial market and economic climate.” The national currency, the ringgit, has fallen to its lowest value in more than a decade.
John Pang, a senior fellow at the S. Rajaratnam School of International Studies in Singapore, said Mr. Najib, who faces significant opposition in his party, now appears more isolated. “The statement adds to the sense that he has lost the confidence of the Malay rulers, along with other important sectors of society,” Mr. Pang said. The sultans, he said, “have never spoken so specifically on a matter of government.”
Their intervention “will embolden both the civil service and civil society groups that are dismayed by the scandal,” he said.
Even in a country where money politics have long been rife, the scale of the suspected graft in the scandal, which centers on the sovereign wealth fund, 1Malaysia Development Berhad, or 1MDB, has alarmed Malaysians. One set of transfers into Mr. Najib’s account, according to a statement by Malaysia’s anticorruption commission, was for nearly $700 million.
Mr. Najib has denied any wrongdoing, but he has not publicly explained the source or purpose of the money. Instead, his government has hobbled inquiries against him, raiding the homes of investigators, removing the attorney general, aggressively pursuing leaks and banning the publications of a leading news media group that was investigating the case.
Opposition politicians on Wednesday seized on the statement by the state leaders and urged them to do more. One member of Parliament for an Islamic opposition party, Mahfuz Omar, was quoted in the news media as saying that the rulers should pressure Mr. Najib to step down. The government is run like the “mafia,” Mr. Mahfuz said, and those who challenge Mr. Najib are “cut off” and “threatened.”
One case against Mr. Najib focuses on a transfer of 27 million ringgit, around $6 million, into his account last year. Documents produced by investigators indicate that the money originated with SRC International, which was set up as a subsidiary of the sovereign wealth fund and is now owned by the Ministry of Finance. The case is particularly contentious because SRC received financing from a state pension fund.
Rohaizad bin Yaakob, the communications director for the anticorruption commission, said that the case remained open but that investigators could not proceed without the cooperation of Nik Faisal Ariff Kamil, a man they describe as the manager of Mr. Najib’s accounts.
Immigration records show that Mr. Nik Faisal left the country, but his whereabouts is unknown, Mr. Rohaizad said.
“We have documents, but who is going to talk?” Mr. Rohaizad asked.
The government crackdown has centered on the anticorruption commission, ostensibly to find the sources of leaked documents in the case. The homes of three investigators, as well as the commission’s main office, were raided in August.
A member of Mr. Najib’s party, Khairuddin Abu Hassan, who has turned against the prime minister and filed documents related to the graft scandal with financial authorities in Europe and Asia, was prevented from leaving the country in September and has remained in detention. Authorities in Switzerland, Hong Kong and the United States have opened investigations related to the scandal.
Mr. Najib has denied that he profited personally from any funds related to 1MDB, which has debts amounting to tens of billions of dollars. His allies say the nearly $700 million transferred into his account in 2013 was a donation from Middle Eastern royalty. The anticorruption commission says that it has documentation from the donor and that its officials met him in France.
Critics of Mr. Najib question whether the donor exists.
The Sarawak Report, a website based in Britain that has been investigating the scandal, reported this week that the documents provided to Mr. Najib’s Malaysian bank identified the donor as Saud Abdulaziz Majid al-Saud. A spokesman for the anticorruption commission did not answer a query on that report.