It turns out that $700 million can buy a lot of votes in Malaysia. By the same token, the unfolding 1MDB scandal in Malaysia is a prime example of what happens when you mix money and politics.
Apparently, Malaysian Prime Minister Najib Razak will do whatever it takes to win an election. Najib has been engulfed by the growing scandal that emerged this summer when it was revealed that he had spent $700 million that an unidentified source had deposited into his personal bank accounts.
Najib explains his actions in 1MDB scandal
As the scandal widened, and pressure grew on Najib to resign, he met with the senior leaders of his political party to make sure they understood that everyone in the party had benefited from the mysterious money.
Najib claimed that the $700 million was not used for himself. He pointed out that the funds were given to party politicians or dedicated to projects aimed at helping the ruling party win the close 2013 elections, according to an official who was present at the meeting.
“I took the money to spend for us,” Najib said, according to the official.
Did Najib loot 1MDB fund?
An in-depth investigation by the Wall Street Journal showed that Malaysian public entities spent hundreds of millions of dollars on a massive patronage machine to help ensure that Najib’s United Malay National Organization remained in power in the 2013 elections. The payments to Najib were apparently legal, but are clearly a new low Malaysia’s freewheeling electoral system.
The effort relied heavily on the state investment fund Najib controlled, 1Malaysia Development Bhd., (1MDB) according to minutes from board meetings seen by WSJ writers and interviews with employees.
Najib’s UMNO has led every Malaysian government since the country’s independence in 1957. Malaysia has done well economically under Najob, improving living standards and becoming a U.S. ally in Asia.
This dominance has meant Malaysia’s democracy from maturing in a similar fashion, resulting in massive patronage and vote-buying that has consistently worked in UMNO’s favor.
The investigation included interviews with ruling coalition politicians and former government employees and examination of documents related to a state-investment fund Najib set up, noted hundreds of millions of dollars in unreported political spending, much from from public sources or programs set up for other purposes.
The PM is chairman of 1MDB’s board of advisers, claimed that the fund would be an aid to Malaysia’s economy by bringing in foreign capital. However, 1MDB has ended up $11 billion in debt without any major international investments.