FBI opens 1MDB probe: Report

Men walk past a 1 Malaysia Development Berhad (1MDB) billboard.
Men walk past a 1 Malaysia Development Berhad (1MDB) billboard.PHOTO: REUTERS

WSJ says scope of investigation into allegations of money laundering is unclear

A probe has been launched by the US Federal Bureau of Investigation into allegations of money laundering at 1Malaysia Development Berhad (1MDB), the Wall Street Journal reported yesterday.

This comes after former premier Mahathir Mohamad warned that Prime Minister Najib Razak risked being arrested abroad if ongoing investigations by foreign countries into the debt-ridden 1MDB proved wrongdoing.

The scope of the FBI probe into 1MDB, whose advisory board is chaired by Datuk Seri Najib, was not clear, said the WSJ, which cited "a person familiar with the matter". The report followed the arrest last Friday of a former Umno official who said he was scheduled to meet FBI agents in the US.

A diplomatic source told The Straits Times the investigation had been discussed internally, but could not confirm any further details of the case. The reported probe is the latest by foreign authorities, following investigations initiated in Switzerland, Hong Kong, Britain and Singapore.

These probes may open the Prime Minister to arrest abroad if wrongdoing is proven, said Tun Dr Mahathir, who has been leading calls for Mr Najib to resign.

"Those countries - Switzerland, Britain, America - if they find Najib doing any money laundering (activities), they can ask Interpol to arrest him if he goes overseas," Dr Mahathir said at a meeting with Malay NGOs last Friday.

"If a crime has some connection with a foreign country, that nation has power (to investigate and prosecute)," he added in a video uploaded on the "Din Turtle" blog.

However, he did not specify how the probes were directly linked to Mr Najib, who has maintained the government is committed to completing Malaysia's own probes into 1MDB.

In July, the WSJ reported that US$700 million (S$980 million) linked to 1MDB had been deposited into the private bank accounts of Mr Najib, who denied taking state funds for personal gain. Malaysia's anti-graft agency later said the money was a "political donation" from Middle East sources.

Sacked Umno grassroots leader Khairuddin Abu Hassan and his lawyer Matthias Chang, a known Mahathir associate, were prevented by immigration officials from flying to the US last Friday.

The WSJ said the FBI's New York office clarified that none of its agents had arranged to meet Datuk Khairuddin or had any previous contact with him.

Mr Khairuddin said in a Facebook post that police wanted to question him for passing to the Swiss Attorney-General evidence related to 1MDB, which has racked up RM42 billion (S$14 billion) in debt in just five years.

The government has accused him of lodging "false and politically motivated police reports" and for pushing Dr Mahathir's agenda to topple the Prime Minister.

Mr Najib yesterday had an audience with Johor Sultan Ibrahim Iskandar at Istana Bukit Serene. It was their first meeting since Mr Najib dropped Tan Sri Muhyiddin Yassin from his Cabinet in late July for criticising the government's handling of 1MDB.

The Sultan, whose son has made thinly veiled attacks against Mr Najib for having "everything to hide" on 1MDB, had given Mr Muhyiddin an audience just days after the latter was sacked as Deputy Prime Minister.

A version of this article appeared in the print edition of The Straits Times on September 21, 2015, with the headline 'FBI opens 1MDB probe: Report'. Print Edition | Subscribe