Malaysian Prime Minister faces multi-million fund scandal: State agency calls it political donation, but doubts linger

It seems the Asia Pacific is caught in a season of political storm with influential politicos holding high offices facing allegations of breach of norms and impropriety in conducting themselves in high offices. The tag of corruption is hitting them hard as flawed handling of tax payers’ money is coming to spotlight.

After the Choppergate scandal in Australia that saw the resignation of parliament speaker Bronwyn Bishop, in Malaysia, the Prime Minister Najib Razak himself landed in a scandal, that also had matter of money--transfer of millions of dollars into his personal account. While the Wall Street Journal, which broke the news claimed the amount, $700 million (AUD962 million) came from state owned Malaysia Development Berhad or 1MDB, the core issue under debate is—what is the source of funds and is it appropriate to receive such funds in PM's personal account, since he is holding a high political office. Malaysia Development Berhad is a state investment fund headed by the Prime Minister.

The paper reported on July 2 that Malaysian investigators had come across millions of dollars as deposits into what is believed to be Mr Najib's personal bank accounts. The report angered the Mayalsian PM, who threatened to sue the paper and denied the alegation that he had taken any money for personal gain.

Clean Chit

The allegation has the potential to take a political toll on the Prime Minister’s future. The latest twist is that the country's anti-corruption body has given a clean chit saying the amount was indeed deposited into Razak’s personal bank account. But it was not from 1MDB. The Malaysian Anti-Corruption Commission has vouched that the money was a "donor's contribution" but refused to disclose the name of the donor or its purpose. The MDB has already denied transferring any money to the Prime Minister’s account. The Prime Minister did not react to the anti-corruption commission's latest statement.

Certainly the allegations has started spoiling Mr Najib's credibility and image, who has been in power since 2009. The scandal has already created fissures in the ruling United Malays National Organisation with the PM sacking four ministers for seeking his answers on the scandal. Mr Najib has ruled out his resignation pending the outcome of the investigation by describing the allegation as a plot to force him out of office.

Unconvincing

Though ruling party officials have defended Mr Najib by saying that the PM is fully entitled to handle political donations as the party president, former prime minister Mahathir Mohamad is unconvinced and called for Mr Najib's resignation. Mahathir said hundreds of millions of dollars is too big an amount for campaign expenses. He also reminded that when he was prime minister he never deposited election funds in his personal accounts. Now the anti-corruption body is claiming that it has referred its findings to the Attorney-General’s office for further action.

Australian Scandal

There are a few parallels in both the Malaysian scandal and the one in Australia. Both had top politicos involved in inappropriate handling of public money. While the Australian speaker quit in disgrace, after allegations of splurging taxpayers’ money on private travel, the political damage was more for the Prime Minister Tony Abbot whose preaching of austerity was at odds with the defence of an extravagant speaker. The former speaker allegedly spent £2,500 (AUD 5285) to charter a helicopter for a 50-mile trip to a party fundraiser. In Malaysia, the entire ruling party has been shaken as the top leader has come under a shadow, notwithstanding the government agency's clean chit, which is lacking in convincing details.

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