1MDB and the Downfall of Malaysia’s ‘Bossku’, Najib Razak

Malaysia’s former prime minister Najib Razak has been convicted of abuse of power, criminal breach of trust and money-laundering over the multibillion-dollar looting of the state’s 1MDB investment fund and sentenced to 12 years in prison and ordered to pay a fine of 210m ringgit ($49m). Najib’s conviction has not brought an end to a sordid scandal played out before the world (see Commonwealth Update, July 2015). However, observers have hailed it as a landmark ruling and an emphatic assertion that the rule of law extends to even premiers from the most gilded of backgrounds. ‘For a very long time, not only in Malaysia but in the whole region, it was widely understood and an unwritten rule that if you made it to the number-one political office, you normally are protected from abuse of power prosecution,’ said James Chin, at the University of Tasmania in Australia.

Najib has always denied the allegations and said he would appeal. Last year, as police closed in, the Malay aristocrat made an unlikely attempt to rebrand himself as a man of the people, encouraging the nickname ‘Bossku’ (boss). It worked then among many of his diehard Malay supporters but less is heard of the nickname since he was convicted. He is now on bail awaiting trials on further charges. His wife, Rosmah Mansor, also faces money-laundering and tax evasion charges, to which she has pleaded not guilty. Meanwhile, the US investment bank Goldman Sachs has agreed a $3.9bn settlement with the Malaysian government over its role in the 1MDB scandal. The investigation enveloped 17 of the firm’s current and former bankers, who were charged by Malaysia.

The scale of the looting, which came to light largely through the efforts of Clare Rewcastle-Brown, the British journalist behind the Sarawak Report, is breathtaking. In 2016, the US attorney general called it ‘the largest kleptocracy case’ in American history. In raids on six premises linked to Najib in 2018, police seized items estimated to be worth up to 1.1bn ringgit ($273m). It took 16 days for police to work out the value of roughly 12,000 items of jewellery. They included some 1,400 necklaces; 567 luxury handbags, worth $12.7m alone; 423 watches; 2,200 rings; 1,600 brooches; and 14 tiaras. The hit film The Wolf of Wall Street, which starred Leonardo DiCaprio as a crooked stockbroker, was financed through $100m stolen from 1MDB, according to the US Department of Justice.

Najib’s fall has been all the greater because of his background as a scion of the ruling elite. His father, Abdul Razak Hussein, was the country’s second prime minister and his uncle, Hussein Onn, was the third. A cousin was a minister and a brother ran the country’s second-biggest bank. He became an MP at the tender age of 22 when he inherited his father’s seat on his death. Before that he had been studying at Nottingham University (though Sarawak Report alleged he never actually got the degree he claims to have). The case helped to bring down the ruling Barisan Nasional alliance led by Najib’s party, United Malays National Organisation (UMNO) – the ethnic Malay party that had ruled Malaysia since independence (and which owed its constitutional supremacy to Najib’s father).

Anwar Ibrahim, the opposition leader and former deputy prime minister, told CNBC: ‘It is a renewed hope for Malaysians in general who were upset with the recent political development but at least they believe now that the climate for change and, finally, the voice of the people must be heard.’ Anwar was one of the first to raise the alarm about the looting of 1MDB and was jailed on trumped-up charges in 2015. He warned that the appeal process could result in an overturn of Najib’s conviction, but added: ‘We hope for the best.’

While welcoming the conviction, the Guardian warned in an editorial of dark days ahead for Malaysia without new elections and a party such as Anwar’s multiracial and secular People’s Justice Party (PKR) in power. As James Chin said in The Conversation: ‘As long as the governing system is built on the notion of racial and religious superiority and discrimination, Najib’s verdict will be seen by the Malay elite as a story of personal greed rather than a failure of the system … Najib’s guilty verdict will not bring even an iota of change to the country’s political and economic system. What is needed in Malaysia is the abandonment of the racist Ketuanan Melayu Islam [Malay Islamic supremacy] ideology.’

The opposite may well happen, though. The Economist suggested that Najib’s conviction may push his former deputy, Muhyiddin Yassin, to leave Bersatu, (the Umno-like ethnic nationalist bloc he founded after he was expelled from the then ruling party when he confronted Najib over the 1MDB scandal) and returning to Umno.

For now, though, most Malaysians are celebrating. Bridget Welsh, of the University of Nottingham Malaysia, said: ‘There is a sense of euphoria among the citizens that justice is being served.’