Malaysia PM cleared of corruption over $681 million Saudi \'donation\'

Friday 22/01/2016
He still faces potential threat from foreign investigations

KUALA LUMPUR - The Saudi royal family was the source of a $681 million "donation" that has engulfed Malaysian Prime Minister Najib Razak in scandal, his attorney general said on Tuesday in a statement clearing the premier of graft allegations.
Mohamed Apandi Ali said a review of evidence compiled by the country's anti-graft agency showed that the money was a "personal donation from the Saudi royal family".
He gave no further details on the source.
Najib, 62, has for months fended off accusations that the huge payment made into his personal bank accounts in 2013 was syphoned off from a now-struggling state-owned company that he had launched.
But until now, the origin of the money has not been specified, other than claims by Najib's government that it came from unnamed Middle Eastern donors.
"I am satisfied that there is no evidence to show that the donation was a form of gratification given corruptly," Apandi, who was installed by Najib after the scandal broke last year, said in a statement.
He added that "no criminal offence has been committed by (Najib)", and that he would instruct the anti-corruption agency to "close" the case.
The fund transfers were revealed last July just as Najib was battling allegations that hundreds of millions of dollars were missing from deals involving the state company, 1Malaysia Development Berhad (1MDB).
Najib, who chairs 1MDB's board of advisers, and the company strenuously deny wrongdoing.
But the political opposition and even critics within Najib's ruling party have demanded independent investigations, accusing the premier of sabotaging official probes.
Shortly after the fund movements were revealed, Najib provoked fierce criticism by sacking Malaysia's previous attorney general -- who was investigating the matter -- and appointing Apandi, who has ties to the ruling United Malays National Organisation (UMNO).
Najib's "donation" alibi has been widely derided by Malaysians accustomed to regular UMNO scandals, and the self-proclaimed reformer's image has been severely battered.
Speculation is rising that the scandal could be the final straw that dumps his ruling coalition from power.
UMNO-controlled coalitions have governed for nearly six decades, but the party is in crisis as swelling numbers of voters have rejected it at recent polls over graft, its hardball political tactics, and accusations of rights infringements.
The next elections are due by 2018.
The opposition and rights groups accuse Najib of seeking to stem that tide through an escalating crackdown on opponents that has seen dozens of arrests on charges such as sedition over the past two years, and the introduction of tough new security laws.
Parliament held a special session on trade matters Tuesday and reporters were unable to immediately obtain comment from Najib or key opposition leaders on Apandi's announcement.
Najib still faces a potential threat from foreign investigations.
US authorities are reportedly looking into 1MDB-related overseas fund flows, while Swiss, British, Singaporean and Hong Kong authorities have acknowledged scrutinising the affair.
Early last year, a New York Times investigative report detailed multi-million-dollar purchases of luxury US real estate by a close Najib family associate and alleged millions of dollars in jewellery purchases for Najib's wife, Rosmah Mansor.
Najib has responded to the 1MDB scandal by purging powerful critics within UMNO and he retains a solid grip on the party, winning its renewed endorsement at a party congress in December.