Former Malaysian Prime Minister Found Guilty Of Looting Sovereign Fund

Jul 28, 2020
Originally published on July 29, 2020 12:48 am

Malaysia's former Prime Minister Najib Razak has been found guilty on all counts in the first of his multiple corruption trials over a massive scheme to divert billions from a state investment fund to several personal accounts, including his.

The landmark criminal case involving the 1Malaysia Development Berhad, or 1MDB sovereign wealth fund, has not only ensnared Najib, but other prominent Malaysian figures and Goldman Sachs, one of the world's largest investment banks.

"After considering all evidence in this trial, I find that the prosecution has successfully proven its case beyond a reasonable doubt," Kuala Lumpur High Court Judge Mohamad Nazlan Mohamad Ghazali said.

Outside the courtroom, hundreds of supporters of the former prime minister gathered to call for his release.

The long-running case is considered one of the largest financial scandals in history, spanning 10 countries and billions of dollars in plundered assets.

Najib, who held the dual posts of prime minister and finance minister until he was voted out of office two years ago, was found guilty on seven counts of money laundering, abuse of power and criminal breach of trust. Each charge carries 15 to 20 years in prison. He pleaded not guilty.

Najib, 67, has vowed to appeal the conviction and his lawyers are seeking a delay in sentencing. In at least two more trials in the looting of 1MDB, the former prime minister faces dozens of additional charges.

The trial that ended Tuesday is the first of several that the former premier faces. In it, prosecutors said he received $10 million from the 1MDB fund, but cumulatively Najib is believed to have siphoned the equivalent of about a billion dollars from the fund.

"This decision actually reaffirms that the rule of law is working," says Bridget Welsh, a research associate and expert on Malaysia with the University of Nottingham.

"The judge was very careful in laying out his decision," she said. "And with that, there has been a sense of justice."

Among other things, prosecutors traced the money to the purchase of a megayacht, a Picasso painting and an investment in the 2013 Hollywood film The Wolf of Wall Street.

Last week, the U.S.-based Goldman Sachs reached a $3.9 billion settlement with Malaysia over its role in arranging and underwriting 1MDB. Malaysia accused Goldman of misleading investors over three multibillion-dollar bond sales to raise money for the fund.

Revelations of the massive scheme led to Najib's governing coalition being swept from office in May 2018. Days after his loss at the polls, police descended on one of Najib's residences in a pre-dawn raid, confiscating dozens of suitcases containing cash, jewelry and hundreds of designer bags in connection with the 1MDB probe.

Najib and his lawyers have argued that the charges against him are politically motivated and that he was the victim of a financial scam and was misled by fugitive financier Jho Low and others who stood to gain from the scheme.

Jho Low, who maintains his innocence, has been charged in both the U.S. and Malaysia. However, he remains at large.

A lawsuit filed by the U.S. Justice Department in 2016 sought to seize dozens of properties tied to 1MDB, alleging that more than $3.5 billion was misappropriated. Last year, the Justice Department announced that it had reached a settlement to recover some $700 million of that sum.

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All right. A Malaysian court has found former Prime Minister Najib Razak guilty. He's been sentenced up to 12 years in prison. This was in his first corruption trial connected to the plundering of the so-called 1MDB state investment fund. This is part of one of the largest, most far-reaching financial scandals in history. It involves at least 10 countries, including the United States. Michael Sullivan reports.

MICHAEL SULLIVAN, BYLINE: Things could have gone a lot better for Najib today - the judge finding him guilty on all seven counts of abuse of power, criminal breach of trust and three counts of money laundering in a trial widely seen as a test of Malaysia's commitment to the rule of law.

BRIDGET WELSH: I think it's a good day for Malaysia.

SULLIVAN: Bridget Welsh is a research associate with the University of Nottingham and an expert on Malaysian politics, speaking from the capital, Kuala Lumpur.

WELSH: This decision actually reaffirms that the rule of law is working. The judge was very careful in laying out his decision. And I think that there was the sense that the decision moved forward in a very uncertain political environment, and the judiciary at least has ruled the day. And with that, there has been a sense of justice.

SULLIVAN: Najib's fall from grace has been swift. Just two years ago, then-Prime Minister Najib's party was dealt a shocking defeat in the general election, in part because of the public's disgust with the 1MDB scandal, which saw billions siphoned off from the government investment fund into individual bank accounts including, prosecutors say, Najib's. Najib has maintained his innocence and said on Facebook last night that he was misled by others and that the charges against him are political in nature.

WELSH: It's going to be a long process of appeals, and there are two more cases. And it may be a number of years, but, you know, he will basically not be allowed to contest for an election during this process.

SULLIVAN: And that's important, Bridget Welsh says, and helps Malaysia's current prime minister, Muhyiddin Yassin, who heads a shaky coalition that includes Najib's party. She says Muhyiddin will gain the most from today's rulings because he will be seen as putting the country before politics.

WELSH: Malaysia's restoring its reputation internationally. You know, it used to be in the top 10 countries for corruption. Now this makes it stand tall. And I think that is - that really serves Malaysia well.

SULLIVAN: For NPR News, I'm Michael Sullivan in Chiang Rai, Thailand. Transcript provided by NPR, Copyright NPR.