By Ray Sherman
A Malaysian official said Tuesday that Prime Minister Najib Razak was not involved in the 1MDB scandal, a day after the U.S. attorney general called the sovereign wealth fund “kleptocracy at its worst.”
Speaking in Washington at the Global Forum on Asset Recovery, Attorney General Jeff Sessions revealed that the United States had seized or restrained $3.5 billion (14.2 billion ringgit) tied to corruption, of which, nearly half was from Department of Justice (DOJ) lawsuits connected to 1Malaysia Development Berhad (1MDB).
“Allegedly corrupt officials and their associates reportedly used the funds for a lavish spending spree,” the top American law official said.
In Kuala Lumpur, Abdul Rahman Dahlan, the minister in the Malaysian Prime Minister’s office, said Najib had no role in the 1MDB scandal.
“Well, I have been saying all the time that the civil suit has nothing to do with the prime minister,” he told reporters.
The debt-laden 1MDB is the target of money-laundering investigations in at least a half-dozen countries, including the United States, Switzerland and Singapore, but no legal action has been taken in Malaysia. Najib established the fund in 2009 to promote economic development in Malaysia.
In July 2015, his name was tied to the scandal when reports emerged that nearly $700 million in 1MDB-linked money was deposited into his private bank accounts. The prime minister denied any wrongdoing, saying the money was a “personal donation” from Saudi Arabia’s royal family.
As he opened the three-day forum in Washington on recovering assets tied to corruption, Sessions pointed to huge amounts of 1MDB-tied money that were spent in the United States: $200 million (812 million ringgit) was spent on real estate in California and New York; $130 million (528 million ringgit) for artwork; $100 million (406 million ringgit) for a music company; and $265 million (1 billion ringgit) for a yacht.
The DOJ has filed a series of lawsuits, the most recent in June, seeking to seize assets valued at $1.7 billion (6.9 billion ringgit) and allegedly purchased with stolen funds.
“In total, 1MDB officials allegedly laundered more than $4.5 billion (18.2 billion ringgit) in funds through a complex web of opaque transactions and fraudulent shell companies with bank accounts in countries ranging from Switzerland and Singapore to Luxembourg and the United States,” Sessions said in prepared remarks. “This is kleptocracy at its worst.”
“Today, the U.S. Department of Justice is working to provide justice to the victims of this alleged scheme,” he said.
Malaysian Attorney General Apandi Ali, who had cleared Najib of wrongdoing regarding 1MDB and noted that Najib was not named in DOJ lawsuits, could not be reached for comment on Tuesday.
However, the prime minister is a person referred to in the U.S. suits as “Malaysian Official 1,” according to a U.S. government source.
On Saturday, Deputy Prime Minister Ahmad Zahid Hamidi issued a written statement that Malaysian police had resubmitted its 1MDB investigation report to the attorney general.
“Police have carried out (additional) investigations as instructed by Apandi and have referred the investigation paper back to the Attorney General Chambers (AGC),” he said. “The police are awaiting further instructions from AGC.”
Malaysian police have not assisted the U.S. investigation because it is not a criminal case.
Meanwhile, Malaysian electoral watchdog Bersih responded to Sessions’ comments.
“Surprisingly, there is pin-drop silence by the prime minister, cabinet minister and the ministry of finance on the pointed allegations made by the U.S. attorney general.
“We reiterate our call to all international communities to continue to support our effort on assets recovery of the stolen 1MDB funds and for it to be returned to what is rightfully the money of every Malaysian,” Bersih said in a statement.
Hata Wahari and N. Nantha in Kuala Lumpur contributed to the report.