In US, investigators open federal inquiry on Malaysian PM
(MMO) – The embattled prime minister of Malaysia, facing mounting political turmoil and a parade of inquiries at home and abroad into a sovereign wealth fund that he oversees, is now coming under the scrutiny of American investigators as well.
A federal grand jury is examining allegations of corruption involving the prime minister, Datuk Seri Najib Razak, and people close to him, according to two people with knowledge of the investigation.
The inquiry, being run by a unit of the Justice Department that investigates international corruption, is focused on properties in the United States that were purchased in recent years by shell companies that belong to the prime minister’s stepson as well as other real estate connected to a close family friend, said the people knowledgeable about the case, who asked for anonymity because they were not authorized to discuss it. Investigators are also looking at a US$681 million (RM2.9 billion) payment made to what is believed to be Najib’s personal bank account.
Pressure in Malaysia on Najib intensified on Monday as two separate courts dealt him legal setbacks. And the head of the country’s central bank, which is investigating transactions involving the sovereign wealth fund, said it had submitted its findings to the Malaysian attorney general.
“Right now, we know that the public wants answers to these questions, and they deserve to get the answers,” said the head banker, Tan Sri Dr Zeti Akhtar Aziz, according to the Malaysian Insider news site.
The Justice Department investigation is still in its early days, and it could take years to determine if any federal laws were broken. It was opened partly in response to an examination by The New York Times of condominiums at the Time Warner Center in Manhattan whose ownership is hidden behind shell companies, according to the people with knowledge of the case.
In one article, The Times documented more than US$150 million in luxury residential properties connected either to Najib’s stepson, Riza Aziz, or to the family friend, a businessman named Jho Low. Low, The Times found, has also been involved in business deals with Malaysia’s sovereign wealth fund, which is a government investment fund.
That fund, called 1MDB, has run into serious financial problems in part because of aggressive borrowing. Investigators in several countries are examining allegations that money from the fund is missing. This month, Swiss authorities said they had frozen several individuals’ bank accounts, and inquiries are underway in Hong Kong and Singapore as well as in Malaysia.
Najib’s office did not comment on the Justice Department inquiry. A representative for Aziz said he was not involved in any investigation, adding that “there has never been anything inappropriate” about his business activities. A spokesman for Low said that he had not been notified that he was the subject of any investigations, and that his business “adheres to all relevant regulatory requirements.” A spokesman for the Justice Department declined to comment.
The details of the corruption allegations involving Najib and people connected to him are complex and multifaceted. Authorities in each country are focusing on the aspects that fall in their jurisdictions.
In the United States, officials are examining the real estate tied to Najib’s stepson and to Low, which could be seized if a case could be made that the properties had been purchased with the proceeds earned in corrupt practices, according to the people familiar with the investigation. The US$681 million payment being investigated falls under US jurisdiction because it was routed through Wells Fargo, an American bank.
