Expert: Malaysia's anti-corruption efforts undermined by questions about scandal

A 1Malaysia Development Berhad billboard at the Tun Razak Exchange development in Kuala Lumpur, Malaysia.
A 1Malaysia Development Berhad billboard at the Tun Razak Exchange development in Kuala Lumpur, Malaysia.PHOTO: REUTERS

PUTRAJAYA, Malaysia (Thomson Reuters Foundation) - Malaysia's commitment to fighting corruption cannot be taken seriously as long as it does not explain how millions of dollars ended up in Prime Minister Najib Razak's bank account, the head of the world's largest anti-graft organisation said on Wednesday.

Mr Jose Ugaz, chair of Transparency International, said Malaysia had taken many measures and initiatives to tackle corruption but that none of its claims to tackle corruption would be credible until it provided answers to the finance scandal.

"We want to see more progress but that cannot happen while there are unanswered questions about the ... millions that made its way into the prime minister's personal bank account," Mr Ugaz told the International Anti-Corruption Conference.

A media report in July said investigators looking into alleged mismanagement at debt-laden state fund 1Malaysia Development Berhad (1MDB) traced a payment of more than $600 million to an account under Najib's name.

"There are two questions that need to be answered: Who paid the money and why? Where did it go?," said Mr Ugaz, a Peruvian lawyer with a history of tackling grand corruption.

Mr Ugaz said that one man could answer that question, referring to Najib, who had pulled out of giving a keynote speech at the conference, which is attended by more than 1,000 delegates from 130 countries.

"If that does not happen then only a fully independent investigation, free from political interference, can uncover the truth," Mr Ugaz told the conference in Putrajaya, Malaysia's federal administrative capital.

The scandal sparked a political crisis in the Southeast Asian nation. A rally at the weekend drew tens of thousands of people to the streets of the capital Kuala Lumpur to call for Mr Najib's resignation.

Fighting back against his critics, Mr Najib, who denies any wrongdoing, sacked his deputy and other ministers who had publicly questioned him, and the attorney-general who was investigating 1MDB was replaced.

Authorities also suspended two newspapers and blocked access to a website that had reported on 1MDB. "These are not the action of a government that is fighting corruption," Mr Ugaz told the audience.

Datuk Paul Low, a minister in the prime minister's cabinet, said Malaysia's economic success, with growth rates above the global average and low unemployment, had not kept pace with the development of its political institutions.

"Malaysia has had strong growth but what we have not done is to reform our political institutions, that is our weakest point," he told delegates.

A committee set up by Mr Najib last month to set guidelines on political funding and ensure any money received for the purpose of politics is done so with "integrity" was a step in the right direction to address this weakness, he said.