Who is 'Malaysian Official 1'? Case closed

  • 1 September 2016
  • From the section Business
A caricature of Malaysian Prime Minister Najib Razak and his wife Image copyright EPA
Image caption Caricatures of Mr Razak and his wife have been displayed by protesters

The allegations shocked the world. In July, the US Department of Justice filed a lawsuit to seize the assets it says were bought with more than $3.5bn stolen from Malaysian national wealth fund 1MDB.

US Attorney General Loretta Lynch laid the case out clearly: "Unfortunately, sadly, tragically, a number of corrupt officials treated this public trust as a personal bank account."

The lawsuit alleged that those named in the suit were responsible for the fraud. But it also mentioned a "Malaysian Official 1" more than 30 times, and alleged that this official received some $681m of the stolen money, and returned most of it.

From the details in the suit, it was widely understood that "Malaysian Official 1" is Malaysian Prime Minister Najib Razak, but it was never officially confirmed.

Media captionPM Najib named as 'Malaysia Official 1' in 1MDB scandal

But in an interview with me, Abdul Rahman Dahlan, a senior government minister in Mr Najib's cabinet, said "I agree that 'MO1' is the prime minister".

"I've said it openly. Obviously if you read the documents, people say it is the prime minister," he said.

"But when I have been asked this question, I always ask back: why didn't the DOJ name him by his proper name? That reason is because he is not part of this investigation.

"It is not about him. It is about a bunch of people who have been named…. and the Department of Justice will take this to the courts and let the courts decide."


What is the 1MDB scandal?

  • The 1Malaysia Development Berhad, originally overseen by Mr Najib, was set up to boost Malaysia's economy through investments and infrastructure deals with foreign entities.
  • It began attracting attention after running up debts of $11bn and missing repayments, and has been the focus of several national and international investigations.
  • The US alleges that $3.5bn in 1MDB money was misappropriated, and laundered through accounts in Singapore, Switzerland and the US.
  • 'Malaysian Official 1' allegedly received $731m of the misappropriated funds, though later returned $620m.

In itself, the admission simply confirms what most Malaysians - at least those who know about the 1MDB scandal - already believe. The DOJ's report led to outrage on social media, with many netizens cheekily asking for the real "Malaysia official 1" to "please stand up".

Media captionProtesters demand the arrest of "Malaysian Official No.1"

The frustration is slowly but surely spilling out onto Malaysia's streets. Just a few days ago, a protest organised by students and activists called for the arrest of Malaysian Official 1.

Carrying posters of Mr Najib with the words "MO1" emblazoned on them, protesters said he must step down even if he isn't directly involved in the fraud, because it took place under his watch.

Image copyright AP
Image caption Many Malaysians had no doubt that Mr Najib was the unnamed official in the US court papers

Mr Najib set up 1MDB in 2009 and, until recently, was the chair of the advisory board. The fund was supposed to promote economic development in Malaysia, but ran into billions of dollars of debt and has been considered a financial failure.

But when I asked Mr Dahlan whether the prime minister should take responsibility for the fund's failure, the answer was a categorical no.

"He took responsibility...he has put a new team in 1MDB," he said. "But just to say because a few NGOs or opposition against the PM are asking the PM to vacate his position is a bit too much."

It is true that the protest was much smaller than organisers expected and it's unclear whether any more will follow.

Reputational damage

Image copyright Reuters
Image caption Mahathir Mohamad says the case has made Malaysia a laughing stock

It's unlikely that Mr Najib will be hurt by these sorts of demonstrations: for now at least, they're too insignificant to make much of a difference.

But there has been some damage to his international reputation, and that of Malaysia's, according to those who want him out.

Former Prime Minister Mahathir Mohamad is leading the charge. "Today people laugh at Malaysia, they say what has happened to your country?" he told me in an interview in his office in Kuala Lumpur.

It's hard not to be sceptical about his sudden distaste for the current leader. After all, Mr Najib was handpicked and groomed by Mr Mahathir as his successor.

And Mr Mahathir's critics argue that the corruption that he is now attacking flourished under his watch.

"Yes there was corruption. Corruption is found everywhere," he said to me. "I admit there is some corruption in my staff - not me. During my time, we don't have corruption on this scale, described by the US as the biggest fraud and money laundering they have ever seen."

Mr Najib's supporters say that Mr Mahathir's desire to push him out is driven by hidden motives - that he wants to secure a political legacy for his son, and that he is using the 1MDB case as a way to fuel anger amongst the Malaysian public.

If it wasn't 1MDB, they say, it would be something else.

But the fact remains that Mr Najib's reputation is now intricately tied to the way the 1MDB saga pans out.

For now, Malaysians appear to be resigned to the news that their prime minister was in some way involved in this scandal.

And the vast majority of Malaysians who live in the countryside have yet to fully understand the financial complexities behind what happened at 1MDB.

But elections are expected in the next 12-18 months. This battle is just beginning.

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