July 8, 2015 – 2:09 pm

Najib Razak said by Wall Street Journal and Sarawak Report to have diverted US$700 million in 1MDB funds into his own accounts. Here is a summary of events.

Follow the money. Since the release of the 1976 movie, All The President’s Men (about the Watergate break-in and leading to the resignation of Richard Nixon), “follow the money” is what’s needed to trace corruption in high places. And the July 2, 2015 publication of devastating articles in the Wall Street Journal and the Sarawak Report tying Malaysian Prime Minister Najib Tun Razak to the diversion of nearly US$700 million from the state-backed 1Malaysia Development Bhd (1MDB) into his own accounts could be the final blow to bring down a leader who has been bullet proof from years of charges against his integrity.

In response, Najib Razak has denied taking any money from the fund, adding that the allegations are part of continuing “political sabotage” against him. On July 5, the Malaysian prime minister said he would decide in days to come on whether he will take legal action against the allegations.

As Forbes reported, the fund was already an embarrassment to him - not only has it run up $11.6 billion in debts and attracted inquiries by four different institutions, from the auditor-general to the police, but Najib himself chairs the fund’s advisory board.

If it is proven that the funds did indeed go into an account bearing his name, it is difficult to see how Najib can survive. But even if it isn’t proven, the allegations have come at a very difficult time for the Malaysian prime minister. The UMNO (United Malays National Organisation) party, which he represents, is in a period of internal turmoil as it recognises that it no longer has an automatic right to expect to win every election, and wonders whether Najib is the right person to lead it in this newly competitive political environment. Malaysia’s economy is struggling, particularly in an era of falling commodity prices; the country is one of the few in Asia to be a net exporter of commodities.

According to the Wall Street Journal and the Sarawak Report, government investigators in Malaysia have traced the money in deposits from 1MDB into Najib’s personal bank accounts. The investigators’ findings apparently were leaked, possibly through former Prime Minister Mahathir Mohamad, who has been on a two-year crusade to drive Najib from office and put him in jail.

There have been many smoking guns in the past, including detailed evidence by French investigators of bribes to buy French submarines when Najib was defense minister. Given the considerable details of the information now in print, Mahathir may well succeed. Indeed sources in Kuala Lumpur have told Asia Sentinel that Mahathir has considerably more information.

The investigation documents, made available to the two publications, mark the first time Najib has been connected personally to irregularities over the fund, which has amassed RM43 billion [US$11.3 billion] in liabilities, as much as RM25 billion of it believed to be unfunded.

Four separate Malaysian agencies are probing the fund. According to the reports, the bulk of the money was transferred by wire from the $ingapore branch of the Swiss Falcon private bank, owned by the Abu Dhabi-based Aabar fund, into Najib’s private AmBank account in Kuala Lumpur in March 2013, just prior to the government’s calling the last general election. By far the largest transactions were two deposits of $620 million and $61 million.

Najib has withstood a continuing barrage of difficult questions about the fund for more than two years, blaming political enemies and repeatedly rounding up the divisional warlords of UMNO to back him, primarily because he has provided them with vast amounts of money for their personal operations, much of it flowing from the 1Malaysia Foundation.

Equally devastating stories about the activities of Najib’s wife and money steered to the 2013 election in the New York Times and the Wall Street Journal respectively have been shrugged off without apparent serious damage to the prime minister although he recently delayed the UMNO party elections for 18 months to forestall any challenge from Mahathir’s forces in the party.

The 90-year-old Mahathir has become the point man in the effort to bring Najib down. According to sources in Kuala Lumpur, he has amassed a substantial amount of information in addition to what has been leaked to him by government investigators who have not been able to break through the UMNO embargo.

Asia Sentinel reports that the confrontation between Mahathir and Najib has reached a crescendo in recent weeks with the arrest by Thai police of a Swiss national named Xavier Justo. The arrest was closely orchestrated by a Middle Eastern oil exploration firm called PetroSaudi, to which 1MDB loaned at least US$1 billion. Justo had been an official with PetroSaudi and left the company several years ago with a mysterious US$5 million payoff. Two years after he left, he was able to break into PetroSaudi’s computers and download 2 million emails.

Those emails were passed to Clare Rewcastle Brown, the editor of Sarawak Report, and reportedly to Mahathir. Justo’s arrest and accusations that he had tampered with them to make them more damaging is considered to be part of a move by Najib to discredit Mahathir before he could feed more documents and evidence to the press. Mahathir is believed to have additional evidence of illegal transfers of money out of the country by Rosmah Mansor, Najib’s wife, with the help of Jho Taek Low, the flamboyant young financier who helped Najib set up 1MDB in 2009.

He is said to also have additional information about the mysterious death of Altantuya Shaariibuu, the Mongolian translator and party girl who was shot to death by two of Najib’s bodyguards in 2006. The murder remains one of the most sensational in recent Malaysian history.

For more: Visit Asia Sentinel for the full report.

Sarawak Report: Oh No Jho Low! - Scoop Photo Tells All (click here)

Sarawak Report: On The Trail Of The Missing Billions - Jho Low’s Swiss Accounts In $ingapore (click here)

Malaysia Chronicle: Son of slain AmBank founder talks of ‘KARMA’ & Najib’s RM2.6 bil ‘private Ambank account’ (click here)

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