Graft ruling for Malaysian ex-leader a test for government
KUALA LUMPUR, Malaysia -- An important court ruling Monday in the first corruption trial of former Malaysian leader Najib Razak will be a test of the legal system and of the credibility of the prime minister who brought about his shocking ouster from office last year.
Najib is charged in five separate cases over the alleged billion-dollar looting of the 1MDB fund that was supposed to finance development in his country. His wife, several officials from his government, and the U.S. bank Goldman Sachs face charges related to the scandal that led to investigations in several countries.
Najib's first trial began in April on seven graft charges related to 42 million ringgit ($10.1 million) that allegedly went into his bank accounts from a former 1MDB unit. Prosecutors wrapped up their case after calling 57 witnesses, and the High Court on Monday will decide whether to acquit Najib or call him to enter his defense.
"The Nov. 11 decision is not just about the individuals, but a test for the rule of law in Malaysia and for domestic legal systems in tackling international financial crimes," said Bridget Welsh, Asian expert at the John Cabot university in Rome.
Najib, 66, has denied any wrongdoing and could face years in prison if convicted. The patrician former leader, whose father and uncles were the country's second and third prime ministers respectively, accuses the new government of seeking political vengeance.
Prime Minister Mahathir Mohamad, leading an alliance that campaigned on an anti-corruption platform, won a history victory in the May 2018 elections that led to Malaysia's first change of government since independence from Britain in 1957.
Mahathir, 94, was premier for 22 years until his retirement in 2003 but made a political comeback amid anger over the 1MDB fiasco. His government soon reopened 1MDB investigations that had been quashed under Najib.
U.S. investigators say Najib's associates pilfered more than $4.5 billion from 1MDB between 2009 and 2014 and laundered the money through layers of bank accounts in the U.S. and other countries to finance Hollywood films and buy hotels, a luxury yacht, art works, jewelry and other extravagances. More than $700 million from the fund allegedly landed in Najib's bank account.
Truckloads of luggage stashed with cash, jewelry and hundreds of expensive designer bags worth a staggering 1.1 billion ringgit ($265 dollars) were seized from Najib's and his wife's home and other properties.
In all, he faces 42 charges of criminal breach of trust, graft, abuse of power and money laundering in the five criminal cases. His wife Rosmah Mansor and several former senior government officials have also been charged with graft. Malaysia also charged U.S. bank Goldman Sachs for allegedly misleading investors over bond sales it organized for 1MDB.
Far from being vanquished, Najib has fought back with a political makeover on social media to transform his image from an out-of-touch elitist to a leader for the working class, tapping on disappointment especially among majority ethnic Malay Muslims against the new government.
His second trial, the biggest and most complex, started in August. Najib faces four counts of abusing his power to receive more than $731 million from 2011 to 2014, and 21 other charges of receiving, using, and transferring illicit funds linked to 1MDB.
An acquittal for Najib in the first trial will be "a big setback on both the ongoing effort to prosecute the alleged 1MDB perpetrators, as well as the overall credibility of the new government," said Oh Ei Sun, senior fellow with Singapore's Institute of International Affairs.
"If Najib's defense is not called, it would give hope to his similarly not having to enter defense for his other trials as well. The converse is also true," Oh said. "Regardless of which way the verdict is going, he and his supporters are likely to claim victimhood or persecution to further consolidate sympathy support."
Najib lawyers say he is the victim of a conspiracy by rogue bankers including one identified by U.S. investigators as the mastermind behind the 1MDB fiasco. Prosecutors say Najib was the real power behind the fraud in the fund and its local unit.
Prosecutors can appeal an acquittal ruling. If Najib's defense is called, it is unclear when it would begin. His second trial may last many more months and dates have been set for his other trials.