FBI opens investigation into 1MDB activities as pressure on Najib grows

KUALA LUMPUR — The American Federal Bureau of Investigation (FBI) is conducting an investigation into beleaguered state investment firm 1Malaysia Development Berhad (1MDB) over alleged money laundering activities, reported The Wall Street Journal (WSJ) today (Sept 20), as international pressure on Prime Minister Najib Razak continues to grow.

Citing an anonymous source, the WSJ said the FBI has since opened an investigation paper into 1MDB’s activities. But the publication said that its source did not specify the subject of the probe.

The WSJ pointed out, however, that in its July report alleging that US$700 million (S$980 million) was funnelled from 1MDB-linked companies into Mr Najib’s personal bank accounts in 2013, the transactions in question had involved American and Swiss banks.

Mr Najib, who is also Finance Minister and chairman of the 1MDB advisory board, has been under intense political pressure over the more-than-RM42 billion (S$13.9 billion) of debt racked up by the company.

In response to the WSJ’s allegations in July, Mr Najib has repeatedly denied any misappropriation of funds. The Malaysian Anti-Corruption Commission stated last month that the money was a political donation from the Middle East.

Former United Malays National Organisation (UMNO) Batu Kawan Division vice-chairman and 1MDB critic Khairuddin Abu Hassan has been playing an active role in drawing international attention to the alleged improprieties of the firm. He is said to have attempted to contact American government officials to seek their aid for investigations into 1MDB. The FBI’s New York office told the WSJ, however, that no agent in the office had arranged to speak with Mr Khairuddin, or had any previous contact with him.

Mr Khairuddin, who was sacked from his division vice-chairman post earlier this year, is also believed to have drawn the attention of Swiss, Hong Kong and British authorities into 1MDB’s irregularities, resulting in separate investigations being launched against the firm.

Meanwhile, former Malaysian prime minister Mahathir Mohamad — who has been calling for Mr Najib’s resignation over the 1MDB scandal and other issues — noted that the latter could be arrested by Interpol if other countries begin to investigate him for money laundering.

“He (Mr Najib) could be arrested if he left the country. So, he has to remain here, like how he withdrew the passports of some people and barred them from going overseas,” the veteran statesman said in a video uploaded on the website of a pro-UMNO blogger. In the video recorded on Friday, Dr Mahathir said that domestic laws were applicable only if the 1MDB-related offences were committed in Malaysia.

“But if a crime has some connection with a foreign country, that nation has power (to investigate and prosecute),” he said.

Dr Mahathir cited the fate of Sudanese President Omar Bashir, who is now wanted by the International Criminal Court to stand trial on various charges such as the genocide in Darfur.

He added that if countries such as Switzerland, the United Kingdom and the United States believe Mr Najib had allegedly been involved in money laundering, they could enlist Interpol to arrest him.

Over the weekend, Malaysian authorities announced that Mr Khairuddin had been detained in connection with activities detrimental to parliamentary democracy.

“He (Khairuddin) was remanded starting from today (Saturday) onwards until Thursday under Section 124C of the Penal Code ... I can’t reveal further information because an investigation is under way,” said Federal Police Criminal Investigation Department Director Mohmad Salleh.

Mr Khairuddin had complained on Friday that he was prevented by authorities from boarding a flight bound for New York, where he planned to lodge a complaint with American authorities against 1MDB. AGENCIES