WSJ: Najib used 1MDB's funds for GE13

4:15PM Jun 19, 2015

A Wall Street Journal (WSJ) report today claimed that 1MDB's funds were used to bankroll Prime Minister Najib Abdul Razak's campaign in the 13th general election.

The report said this was achieved by having 1MDB make overpriced purchase of power assets from Genting Group in 2012.

Genting then made a donation to a foundation controlled by Najib before the 13th general election and it claimed the funds were used for campaigning.

"The 1MDB fund in October 2012 acquired a Genting unit that owned a 75 percent stake in a 720-megawatt gas-fired power plant near Kuala Lumpur.

"The price, which was equivalent to about US$740 million at the time, came to RM2.3 billion.

"A few months after the sale, a unit of Genting called Genting Plantations Bhd made a donation of about US$10 million to a Najib-linked charity, according to a spokesperson for Genting Plantations," said the report.

The foundation, WSJ said, was Yayasan Rakyat 1Malaysia, which lists Najib as chairperson on its website.

"Though set up to help underprivileged Malaysians through education and sport, this charity soon got involved in spending that appeared designed to help Najib retain power in the May 2013 election," it said.

1MDB, which has accumulated RM41.8 billion in debt, is owned by the Finance Ministry, a portfolio held by Najib.

'Spent millions'

WSJ said 1MDB's purchase of Genting's stake in the power asset was around five times what it was then worth.

"The price, which was equivalent to about US$740 million at the time, came to RM2.3 billion.

"Genting later reported it had a 1.9 billion ringgit extraordinary gain on this sale, implying a value for its stake in the power plant of just 400 million ringgit - or less than one-fifth what 1MDB paid for it.

"In a second sign that 1MDB paid a high price, the fund’s financial statement for the fiscal year ended in March 2013 said the power unit’s property, plant and equipment were worth a little under RM500 million at the time of acquisition," it said.
 

WSJ said the "donations" to Yayasan Rakyat 1Malaysia were then poured into the election campaign in Penang for BN's bid to recapture the state.

"It and other charities linked to the government spent millions of dollars before the voting in Penang, a northern state that was an important election battleground.

"Najib visited Penang during the campaign and announced that Yayasan Rakyat 1Malaysia would donate RM2 million to two local schools.

"These schools serve Chinese communities that are not a poor demographic but whose support would be crucial to win votes in the area," it said.

'Goldman pushed to raise money before GE13'

It said regulators found the charity had failed to file its required financial status since 2013.

WSJ added that Goldman Sachs, which received a handsome commission for raising US$3 billion (RM11.22 billion) in bonds for 1MDB, was pressed to do so quickly shortly before the general election.

"Goldman Sachs Group Inc arranged the bond sale and took on extra risk to get the deal done quickly at 1MDB’s request, according to a person familiar with the matter, earning unusually high profits as a result," it said.

Shortly after the general election, Kinibiz reported that Genting made an unexpected RM190 million in donations, believed to be related to the election.

"Analysts were puzzled that the Genting group made such a huge donation, and that too spread out over several companies, in just one quarter, significantly impacting its bottom line.

"They speculated that the so-called donations could be election-related, using charities as fronts. It is normally unthinkable that such large contributions were made to charities, Kinibiz quoted an analyst as saying.

The Prime Minister's Office (PMO) did not directly address the allegation in the WSJ report.

“Unfortunately, the prime minister’s political opponents, unwilling to accept his record or the facts, continue to try to undermine him with baseless smears and rumours for pure political gain," the PMO told WSJ.

WSJ said it was told by 1MDB to refer the matter to Genting. Genting Group declined to comment.

Malaysiakini has contacted the PMO, 1MDB and Genting Group on the WSJ report and is awaiting their responses.

Source: http://www.malaysiakini.com/news/302433

Najib on a Knife Edge

• April 3, 2013, 1:01 p.m. ET

Malaysia's PM faces a struggle to stay in power.

Malaysian Prime Minister Najib Razak dissolved parliament Wednesday, setting the stage for the country's 13th general election, probably at the end of the month. According to the constitution the polls could be held no later than June 27, so Mr. Najib's move was no surprise. The fact that he waited as long as he did is one of many signs that the Prime Minister faces a struggle to stay in power.

Part of the challenge comes from within his own party. After five decades in power, the United Malays National Organization is riddled with corruption and complacency. In the 2008 election, Mr. Najib's predecessor Abdullah Badawi barely held on to a parliamentary majority, and afterward the opposition almost succeeded in tempting enough MPs to cross the aisle to form a new government.

Enlarge Image

Reuters

Malaysia's Prime Minister Najib Razak

That set the stage for Mr. Najib to take over the party leadership and premiership in 2009. He shored up his coalition by pursuing a program of economic and political reforms that tackled many of the issues that the opposition championed in 2008. This government deserves credit for responding to the public's dissatisfaction with corruption, lack of domestic competition and repressive laws left over from the colonial period.

However, these reforms were limited, and while they were good for the country, they may not translate into a victory for Mr. Najib. The population is young and increasingly urban, and many of these voters think the pace of reform has been too slow, especially in reforming the system of affirmative action for the ethnic majority Malays. Meanwhile, the Malays out in the villages who benefit most from the preferences and cash handouts find the changes threatening.

The conservative Malay constituency is well represented by nationalist politicians within UMNO, including Home Minister Hishamuddin Hussein and Deputy Prime Minister Muhyiddin Yassin. Both are potential challengers for Mr. Najib's position, so it's no coincidence that his policies have been undermined from within the party.

The opposition coalition has its own cohesion problems that will probably come to the fore if it wins this election. But it has done a creditable job of ruling the four states under its control, undermining the government's argument that only it has the chops to keep Malaysia stable and growing.

Malaysia's system of holding back the dynamic Indian and Chinese minorities has turned it into a bastion of mediocrity in a fast-growing region. The country's best and brightest leave because the cronyism and racial quotas in education and employment hold them back.

Mr. Najib probably recognizes the need to move faster, but he can't afford to alienate his Malay base. In the coming weeks, UMNO's list of candidates will tell the electorate much about internal party politics. If the Prime Minister doesn't move aggressively to sideline the Malay nationalists and put his own reformers in place, voters may reasonably conclude that it's time to give the opposition its chance to overcome Malaysia's feudal past. A competitive economy ultimately demands plural politics.

Source: http://online.wsj.com/article/SB10001424127887323646604578400102073472358.html?mod=WSJ_article_comments#articleTabs%3Darticle

Malaysia's U.S. Propaganda

• Updated March 8, 2013, 6:20 p.m. ET

Kuala Lumpur paid American conservative journalists to smear an opposition leader.

A general election is expected next month in the Southeast Asian nation of Malaysia, and that usually means political shenanigans—abuse of national security laws, media manipulation and character assassination. After the last election in 2008, when the ruling coalition barely held on to power, public anger at such practices prompted Prime Minister Najib Razak to redraft laws and reform the electoral system. However, new revelations that his government paid American journalists to attack opposition leader Anwar Ibrahim raise questions whether those changes went far enough.

In January, conservative American blogger Joshua Treviño belatedly registered under the Foreign Agents Registration Act, revealing that from 2008-2011 he was paid $389,724.70, as well as a free trip to Malaysia, to provide "public relations and media consultancy" services to the Malaysian government.

These consisted of writing for a website called Malaysia Matters, now defunct, as well as channeling $130,950 to other conservative writers who wrote pro-government pieces for other newspapers and websites. When questioned in 2011 by the Politico website about whether Malaysian interests funded his activities, Mr. Treviño flatly denied it: "I was never on any 'Malaysian entity's payroll,' and I resent your assumption that I was."

Enlarge Image

Associated Press

Malaysian opposition leader Anwar Ibrahim

The campaign was more targeted than the Malaysian ruling coalition's domestic attacks on Mr. Anwar. Mr. Treviño's site mainly went after the opposition leader for anti-Semitic remarks and his alliance with the Islamist party PAS, and even accused him of links to terrorists through the International Institute of Islamic Thought. Mr. Anwar has made anti-Semitic comments—though that's in part to fend off domestic accusations that he's too cozy with Zionists. He also has ties to organizations that have taken Saudi money, but the suggestion that he somehow has "ties to terrorism" is preposterous.

The site also defended an outrageous charge of sodomy brought against Mr. Anwar from 2008-2012, and it criticized the U.S. State Department and The Wall Street Journal for taking Mr. Anwar's side. These postings were clearly aimed at sowing doubt among other would-be Anwar defenders in the U.S., especially on the right of the U.S. political spectrum.

Mr. Treviño paid other writers who know almost nothing about Malaysia but mimicked his propaganda. The New Ledger, edited by Ben Domenech, was even more vociferous, calling Mr. Anwar a "vile anti-Semite and cowardly woman-abuser." One posting was entitled, "Muslim Brotherhood's terrorist money flowing to Anwar Ibrahim." According to Mr. Treviño's filing, he paid Mr. Domenech $36,000 for "opinion writing." Three contributors of anti-Anwar items to the New Ledger—Rachel Motte, Christopher Badeaux and Brad Jackson—were paid $9,500, $11,000 and $24,700 respectively.

Mr. Treviño was initially paid by public relations multinational APCO Worldwide, which had a longstanding contract with the Malaysian government. APCO's Kuala Lumpur representative through 2010, Paul Stadlen, now works in Prime Minister Najib's office. David All, who at the time ran his own PR firm and collaborated on Malaysia Matters, also provided cash.

But from 2009-11, the Malaysian money came through Fact-Based Communications, which under the leadership of journalist John Defterios produced programs on client countries for CNN, CNBC and the BBC. After this was revealed in 2011, the three networks dropped all FBC programs, and Atlantic Media Company President Justin Smith resigned from its board.

Influence-peddling has a long and sordid history in Washington, and governments that use repressive methods at home yet want to remain on friendly terms with the U.S. typically have the biggest bankrolls. It's not unheard of for PR operators to pay less reputable journalists and think-tankers to write favorable coverage, as the Jack Abramoff case in the mid-2000s showed.

The Malaysian scheme, however, is notable because it drew in respected writers such as Rachel Ehrenfeld, who has contributed to the Journal in the past and took $30,000, Claire Berlinski, who got $6,750, and Seth Mandel, an editor at Commentary magazine, who was paid $5,500. Some of the articles appeared in well-known publications such as National Review and the Washington Times.

Mr. Najib's falling popularity at home suggests his days as Prime Minister could be numbered. The irony is that he was more democratic and played a more responsible role in the region than his predecessors. Even opposition figures have quietly admitted to us that he has steered Malaysia in the right direction. That should have been more than enough for a legitimate public relations operation to work with. Resorting to underhanded tactics to undermine the opposition has only backfired for Mr. Najib, at home and abroad.

A version of this article appeared March 9, 2013, on page A12 in the U.S. edition of The Wall Street Journal, with the headline: Malaysia's U.S. Propaganda.

Source: http://online.wsj.com/article/SB10001424127887323628804578343823870357116.html?mod=SEA_MIDDLETOP