How Malaysia’s 1MDB probe was flawed

How Malaysia’s 1MDB probe was flawed

Investigations ordered by Malaysia’s leader into graft allegations at a state-development fund have been undermined by political pressure and a lack of transparency, according to documents and interviews with people involved.

Evidence possibly central to the probes was placed off limits or ignored, The Wall Street Journal found. Potentially crucial clues weren’t scrutinised. And at least one key figure, Malaysian Prime Minister Najib Razak himself, wasn’t interviewed by investigators.

The promise of a thorough and transparent accounting of what happened at the fund, 1Malaysia Development Bhd, or 1MDB, has helped Mr Najib fend off domestic criticism. Now, though, with six foreign countries investigating allegations of corruption at 1MDB, pressure is rising at home for greater transparency.

Mr Najib in March 2015 pledged an independent probe into 1MDB, which he founded to spur economic development. He ordered the auditor general, an investigative agency whose findings are typically public, to compile a report on the fund’s activities. And he ordered the contents to be reviewed and debated by the Public Accounts Committee, a parliamentary body.

But the auditor general’s report into 1MDB, completed in March, was classified under Malaysia’s Officials Secrets Act, shielding it from public view.

The auditor general separately provided some information in a presentation to the Public Accounts Committee, said people who were present. Tony Pua, an opposition lawmaker who sits on the committee, said in a statement this month that the auditor general “has specifically confirmed that $US7 billion of 1MDB assets and transactions overseas cannot be verified or traced.”

The committee, however, made no mention of the $US7 billion estimate when it published its report on 1MDB in April and said only that an unspecified amount of money was unaccounted for.

“The issues are of such public importance that there cannot be any excuse for making the auditor general’s report an official secret,” said Razaleigh Hamzah, a senior politician with the United Malays National Organization, Mr Najib’s ruling party.

Hasan Arifin, a ruling-party politician who heads the committee, didn’t call Mr Najib to testify even though Mr Najib was chairman of 1MDB’s board of advisers and also is Malaysia’s finance minister, giving him ultimate oversight over the fund. Other participants in the inquiry repeatedly asked him to seek Mr Najib’s testimony, said Mr Pua and two current and former ruling-party politicians on the committee.

The auditor general didn’t respond to requests for comment.

When asked by Malaysian journalists why Mr Najib had not been called as a witness, Mr Hasan said, “I have to earn a living.” He later said the remark was a joke. Mr Hasan didn’t respond to requests for comment for this article.

Mr Hasan also didn’t inform the Parliamentary committee of evidence from a senior central bank official — transmitted in an April 6 letter to Mr Hasan — that $US1 billion in 1MDB funds had been transferred to an offshore company owned by a close associate of Mr Najib, said Mr Pua and the current ruling-party member. They said Mr Hasan never shared with the committee any of the contents of the letter, a copy of which was reviewed by the Journal.

How Malaysia’s 1MDB probe was flawed
May 27, 2016 – The Australian


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for the triumph of evil
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