FP Guide

Najib’s Dirty Money

Is the guilty verdict in the prime minister’s corruption trial a sign of hope or business as usual?

JON BENEDICT ILLUSTRATION FOR FOREIGN POLICY/GETTY IMAGES
JON BENEDICT ILLUSTRATION FOR FOREIGN POLICY/GETTY IMAGES

This week, a Malaysian court found former Prime Minister Najib Razak guilty in the first of what will be several corruption trials. The court sentenced him to 12 years in prison for abuse of power and then 60 additional years on six counts of money laundering and breach of trust. Najib will appeal the verdict, and with allies from his party, the United Malays National Organization (UMNO), in control of the government, his fate will reveal a lot about Kuala Lumpur’s seriousness in tackling corruption.

As the story continues to unfold, we’ve gathered our top reads to explain how Malaysia got here—and what Najib’s legacy means for the country’s future.

Najib became Malaysia’s prime minister in 2009 as part of the UMNO, which had held power in the nation since its independence in 1957. “[L]ike many Southeast Asian countries,” wrote the researcher Aaron Connelly, “it has long charted a careful course between Washington, with which it maintains low-key security cooperation, and Beijing, its largest trading partner.” In turn, “Najib worked hard to form a close personal relationship with his American counterparts; but he also sought financial assistance from Chinese President Xi Jinping.” And, in some ways, that may have sown the seeds of his eventual undoing.

As the journalist Will Doig reported, by the time Najib was sent out of office in 2018, “it’s possible that no one was more dismayed than officials in Beijing. After all, Najib had granted China extraordinary access to Malaysia. Across the country, huge China-backed infrastructure projects were being planned or breaking ground.” And those projects came at a cost. In 2015, “Najib was accused of massive corruption linked to the development fund known as 1MDB. As the [2018] election neared, his opponent, Mahathir Mohamad, alleged that some of the Chinese money pouring into Malaysia was being used to refill the fund’s graft-depleted coffers.”

In time, the 1MDB scandal grew to encompass billions of dollars that had allegedly been siphoned from the fund into Najib’s own accounts. And the case didn’t just touch China. In 2016, the U.S. Justice Department seized $2 billion worth of assets from a Najib associate, Jho Low, in the United States. As Alex Helan, a documentary filmmaker, explained, the move “blindsided Najib and temporarily upended Malaysia’s foreign policy.” After all, Najib and U.S. President Barack Obama had a friendly relationship before that point, even meeting in Hawaii in 2014. In retaliation for the seizure, “Najib’s press secretary accused the United States of imperial overreach … tantamount to ‘domestic political manipulation and interference.’” Soon, Helan wrote, “Najib dropped any pretense of domestic reform and began to appeal to his supporters’ basest political sentiments, racial and religious supremacy, directed against Malaysia’s ethnic Chinese population.” He also tried to gerrymander the country’s electoral map ahead of the May 2018 general elections.

But the prime minister could not recover from the scandal. After a “bungled attempt to fly out the country on a private jet” ahead of the vote, Helan wrote, Najib and his wife were “effectively under house arrest. Days later, police launched dawn searches of their properties in Kuala Lumpur. Photos, probably taken by police and leaked on social media, showed the shattered pair slouched in armchairs, dressed in their fine silks, as officers broke open a series of safes. In scenes reminiscent of Ferdinand and Imelda Marcos’s downfall, inside was $28 million in cash (in 26 different currencies) and $50 million in luxury items including 284 boxes of designer handbags.

All of that hurt Najib and his party at the polls. “At the grassroots, though, everyday incompetence and graft,” wrote the journalist Betsy Joles, “may have taken a greater toll on the BN [the latest incarnation of the old ruling party] vote than high-level corruption.” The prime minister’s defeat was remarkable, representing the country’s first transition of parties in 60 years. As the writer Krithika Varagur explained in 2018, under a new party, “the country’s 92-year-old former prime minister, Mahathir Mohamad, came out of retirement to lead the opposition to Najib Razak.” And Mahathir, who won, was meant to hand the prime ministership to his de facto running mate, the jailed leader Anwar Ibrahim, after Anwar’s release from jail.

If all that sounds less than promising, that is because it was: “Amid the euphoria, it’s worth recalling,” Varagur urged at the time, “that Mahathir’s record as prime minister was hardly that of a champion of democracy. He was hostile to the free press, brutally purged dissenters, and bailed out his friends’ banks.”

By 2020, argued Varagur in a separate article, it was clear that the complicated dealing was holding Malaysia back. “On March 1, Malaysia’s recent political crisis moved to a resolution after nearly two weeks of drama. Muhyiddin Yassin, a member of Parliament, was sworn in as prime minister, ending a chaotic period during which his predecessor, Mahathir Mohamad, resigned; the ruling coalition disbanded; and numerous politicians switched sides and jockeyed for an audience with the king in the hopes of being appointed prime minister.”

In other words, it is politics as usual in Malaysia—and whether UMNO decides to protect Najib and his allies or allow the courts to continue their efforts to bring them to justice will say a lot about how long that status quo will persist.

Kathryn Salam is a deputy editor at Foreign Policy.

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