Malaysian Government Change Casts Doubt on Initiative to Stop Graft

Malaysia’s new prime minister installed a tableau of advisers this month, not long after his shock appointment to become the country’s top leader. The new government marks a return of the party that ran Malaysia for five decades, which analysts say raises the specter it will abandon its drive against corruption, most notably through the 1MDB investigation.

Prime Minister Muhyiddin Yassin began his term last week by naming dozens of new ministers and officials, including former bank executive Zafrul Aziz as finance minister, Ismail Sabri Yaakob as senior minister for defense, and Annuar Musa as federal territories minister.

Most of the new officials are in the United Malays National Organization, or in coalition with UMNO, which ruled Malaysia for half a century until voters tired of corruption tossed it from power in 2018.

“The shock 2018 election victory gave Mahathir [then Prime Minister Mahathir Mohamad] a clear mandate to clear up corruption, which had worsened under his predecessor, Najib Razak,” according to Gareth Leather, a senior Asia economist at Capital Economics.

Mahathir's government was investigating Najib for allegedly using 1MDB, the state wealth fund, to help steal billions of dollars from Malaysians.

Mahathir’s term was surprisingly cut short in February, though, and with a new government now taking over, there is a risk that “bad habits” will re-emerge, Leather said.

“Corruption could also get worse,” he said.

Tellingly, Najib is more confident he’ll get a favorable result from the investigation now that the old guard from his UMNO party is back in the office. Most notably, his cousin, Hishammuddin Hussein, a party faithful, returns, this time as foreign minister. And one of the key women investigating 1MDB, Latheefa Koya, will not be staying on as head of the Malaysian Anti-Corruption Commission under the new government.

The scale of alleged theft via 1MDB was so vast that at least six countries have investigated it, including the United States. The U.S. Justice Department is in the process of returning some of the stolen funds to Malaysia. Aiding those investigations was one of Mahathir’s priorities while he was prime minister for the last two years. Now that he has lost his internecine battle to keep power, he is warning the U.S. to “think twice” about where those funds will end up.

When we took over, the DOJ was willing to give it to us because we overthrew the people who stole the money," he told Reuters, which reported the U.S. is delaying the return of the funds. "Now, the people who stole the money are going to get back the money they stole.”

In addition to embezzlement, Najib was accused of locking up Malaysians who criticized his involvement in 1MDB and sacking officials who disagreed with him. He denies all charges against him.

Such intolerance for free speech must not return under the new government, said Amnesty International regional director Nicholas Bequelin. He noted the regime under Mahathir had made progress on relaxing limits on freedom of expression and peaceful assembly.

Bequelin is urging the current administration to continue the move toward transparency and accountability. “It would be disastrous," he said, "for a new government to come into power and reverse this reform agenda.”