The New York Times
BANGKOK — A United States Justice Department
complaint filed in federal court this week directly contradicts
repeated assertions by the Malaysian prime minister, Najib Razak, about
the origins and purpose of hundreds of millions of dollars that ended up
in his personal bank accounts.
While
Mr. Najib and other Malaysian officials have insisted that the money
was a gift from an unidentified Saudi donor, the Justice Department said
that it was stolen from a Malaysian government investment fund that Mr.
Najib oversaw. Mr. Najib has said he never received any money from the
fund.
The court filing, one of several complaints filed Wednesday in a federal money-laundering investigation,
provides the first official public documentation of transactions that
challenge Mr. Najib’s version of events in a scandal that has battered
his government for the past year.
The
revelations could undermine his credibility and give new ammunition to a
movement to force him from office. However, he maintains firm control
over his governing party and has successfully stifled opposition with
the firing of critics from party posts, the closing of online news
outlets and the criminal prosecution of social media detractors and
political opponents.
Mr.
Najib, who has acknowledged receiving the money but said he broke no
laws and took nothing for personal gain, told reporters on Thursday that
his government would “fully cooperate” with the Justice Department
action.
“Allow the process to take its course,” he said, “but I want to say categorically that we are serious about good governance.”
A
spokesman for Mr. Najib, reached late Thursday, said that the prime
minister had not changed his position that the money he received was a
gift from a Saudi donor and that he gave most of it back because he did
not need it.
The
Justice Department complaint alleges in 136 pages of blow-by-blow
detail that huge sums were diverted from the government fund, routed
through bank accounts in various countries and then spent on high-end
real estate, artwork, gambling and various luxury goods by Mr. Najib’s
stepson, friends and associates.
The
court filing seeks to recover more than $1 billion in assets bought
with money that prosecutors say was stolen from the fund, known as
1Malaysia Development Berhad, or 1MDB.
Those
assets, Attorney General Loretta E. Lynch said Wednesday, “are just a
portion of the more than $3 billion that was stolen from 1MDB and
laundered through American financial institutions in violation of United
States law.”
The
case, she said, should be seen as a sign of the country’s “firm
commitment to fighting international corruption” and the department’s
determination “to protect the American financial system from being used
as a conduit for corruption.”
The United States is among several governments, including Malaysia, Singapore and Switzerland, that have investigated 1MDB. The inquiries began last year after an investigative report
in The New York Times traced the purchases of about $150 million in
residential properties and artwork in the United States to relatives or
associates of Mr. Najib.
While
the federal complaint does not identify Mr. Najib by name, it cites
$731 million in funds that came from 1MDB that were deposited into
accounts belonging to a government official identified as “Malaysian
Official 1.”
However, Mr. Najib is clearly recognizable in the descriptions and actions attributed to that official.
Large
transactions by “Malaysian Official 1” described in the complaint are
identical to those previously acknowledged by Mr. Najib. The complaint
describes the official’s role in managing the fund, which matches Mr.
Najib’s role. And it says “Malaysian Official 1” is a relative of Riza
Aziz, Mr. Najib’s stepson.
A
person with knowledge of the case, who spoke on the condition of
anonymity because he was not authorized to speak publicly, confirmed
that “Malaysian Official 1” was Mr. Najib.
The
complaint does name Mr. Aziz, and a family friend, Jho Low, who played a
key role in establishing the fund. Both are cited as possessing assets
bought with money stolen from 1MDB.
Mr.
Najib’s advisers have said Mr. Najib received about $1 billion in 2013,
most of it donations from a member of the Saudi royal family to help
him fight a tough election campaign that year.
That
explanation of a Saudi gift was repeated by Mr. Najib’s attorney
general, Mohamed Apandi Ali, who closed a government investigation into
the money in January saying that he had found no evidence of wrongdoing.
On
Thursday, Mr. Apandi issued a statement asserting that no investigation
had found evidence that 1MDB funds had been misappropriated. He said he
had “strong concerns at the insinuations and allegations” against Mr.
Najib in the Justice Department complaint.
The Saudi gift was also confirmed by Saudi Arabia.
Foreign
Minister Adel al-Jubeir told reporters in April that Mr. Najib had
received a “genuine donation” from a Saudi donor. He did not specify the
amount or provide any details.
A Saudi Foreign Ministry spokesman did not respond Friday to requests for comment.
The Justice Department complaint mentions no such gift.
The
complaint says that $681 million transferred to Mr. Najib in 2013 came
from a Singapore bank account held in the name of Tanore Finance
Corporation. It says the money originated from $3 billion in bonds
underwritten for 1MDB by Goldman Sachs.
The Singapore account was controlled by Tan Kim Loong, also known as Eric Tan, an associate of Mr. Low, the complaint says.
Four
months after receiving the $681 million, Mr. Najib transferred $620
million back to the same Tanore account, according to the complaint.
The
complaint offers no explanation for why the prime minister received the
money, held it for four months, then returned part of it. It is also
unclear what happened to the $61 million he kept, although advisers have
said he needed money for parliamentary elections that year.
Mr.
Low and Mr. Tan used money from the Tanore account to buy expensive
artwork and an interest in the Park Lane Hotel, a luxury hotel
overlooking Central Park in Manhattan, the complaint says.
The
complaint also says that “Malaysian Official 1” received $20 million in
stolen 1MDB funds in 2011. The money, the first he received from the
fund, was transferred from an account held in the name of a Saudi
prince, the complaint says. It does not identify the prince.
He received $30 million in 1MDB money in 2012 from a separate account, the complaint says.
The prime minister’s office did not respond to inquiries about those two deposits.
The
two transactions bring to $731 million the amount of money Mr. Najib is
said to have received from the government fund he oversaw.
Mr.
Najib created 1MDB in 2009 to promote Malaysia’s economic development.
He oversaw the fund as chairman of its advisory board, a position he
recently relinquished, and as finance minister, a position he still
holds. The fund is wholly owned by the Finance Ministry.
The
fund’s goal was “improving the well-being of the Malaysian people,” Ms.
Lynch said in announcing the civil action. “But unfortunately, sadly,
tragically, a number of corrupt 1MDB officials treated this public trust
as a personal bank account.”
The
F.B.I. and the Internal Revenue Service took part in the investigation
and relied in part on bank transfer data, 1MDB memos and internal
emails. Special Agent Darryl Wegner, chief of the F.B.I.’s International
Corruption Unit, said that leaders of the Malaysian Anti-Corruption
Commission showed “tremendous courage” in pursuing the investigation.
The Malaysian Anti-Corruption Commission’s investigation was shut down by Malaysia’s attorney general.
In
Washington, the White House spokesman Josh Earnest said Thursday that
President Obama had discussed the scandal with Mr. Najib during a visit
to Malaysia last fall.
“The
president reiterated how important it is, particularly for a
fast-growing country like Malaysia, to be transparent, to demonstrate a
commitment to fair play and good government and a business climate that
will allow that country’s economy to continue to succeed,” Mr. Earnest
said.
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