(Bloomberg) – As Malaysia’s most powerful man, Najib Razak worked hard to keep the public from accessing information about a multi-billion dollar scandal at state fund 1MDB. Now they just might find out all the juicy details.
Only three days after 92-year-old Mahathir Mohamad secured a shocking election win, he barred Najib from leaving Malaysia and said he’d reopen a graft probe targeting the fund. He also said he was replacing the attorney-general who cleared Najib and instructed the auditor-general to declassify a 1MDB report that was protected by the Official Secrets Act.
It’s a stunning turn of events for Najib, who has long denied any wrongdoing and aggressively hit back at detractors after 2015 revelations that around $700 million — alleged to be 1MDB funds — appeared in his personal accounts before the prior election in 2013. Najib had fired his top prosecutor, expelled four cabinet ministers who defied him, filed defamation lawsuits and blocked websites of critical news outlets.
A revitalized probe would reverberate around the world, with investigations ongoing in a number of countries. The U.S. has alleged the fund’s officials laundered more than $4.5 billion through a complex web of opaque transactions and fraudulent shell companies located from Switzerland to Singapore to the U.S. — a scheme U.S. Attorney General Jeff Sessions in December called “kleptocracy at its worst.”
Shedding light on 1MDB is only one part of Mahathir’s move to root out corruption after a scandal that even Najib admitted hurt Malaysia’s international reputation. Mahathir is investigating government agencies and barring all civil servants from receiving material gifts and donations.
The Department of Justice has sought to seize about $1.7 billion in assets it says were illegally acquired with 1MDB cash, including art, real estate, a luxury yacht and proceeds from Hollywood movie “The Wolf of Wall Street.” Meanwhile Singapore and Switzerland reprimanded banks such as UBS Group AG and JPMorgan Chase & Co. for anti-money laundering lapses.