Najib Razak, Malaysia’s Ex-Prime Minister, Is Arrested Amid Corruption Inquiry

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Former Prime Minister Najib Razak was blocked from leaving Malaysia after his election defeat in May.CreditVincent Thian/Associated Press

By Hannah Beech and Austin Ramzy

July 3, 2018

BANGKOK — Najib Razak, the former prime minister of Malaysia who was ousted in an election two months ago, was arrested by anticorruption officials on Tuesday, amid an investigation involving billions of dollars diverted from a state investment fund.

Atop a political machine that had governed Malaysia since its independence in 1957, Mr. Najib and his allies used political influence, cash handouts and news media repression to try to keep corruption accusations at bay for years.

But in May, voter anger over the scandal at the investment fund, 1Malaysia Development Berhad, led to a sweeping victory for a sprawling opposition movement that came together to oust Mr. Najib.

His successor as prime minister, Mahathir Mohamad, campaigned on bringing Mr. Najib to justice, and after his inauguration, officials moved to block Mr. Najib and his wife, Rosmah Mansor, from leaving the country.

American prosecutors have accused Mr. Najib, 64, of diverting into his personal bank account $731 million from the state investment fund, which he supervised for years. Money siphoned from the fund, known as 1MDB, was then spent on luxury goods, such as a $27.3 million pink diamond necklace that was worn by Mr. Najib’s wife, American investigators said.

The United States Justice Department said that at least $4.5 billion from 1MDB was laundered through American financial institutions and misspent by Mr. Najib, his family and associates.

Mr. Najib has denied any wrongdoing.

He will be spending the night in lockup at the Malaysian Anti-Corruption Commission headquarters in Putrajaya, the country’s administrative capital, officials said. He is expected to appear in court on Wednesday morning, where he is likely to face charges.

In a statement, a Malaysian government task force probing the 1MDB affair said that Mr. Najib had been arrested in connection with SRC International, a onetime subsidiary of 1MDB. In late May, Mr. Najib was questioned for five hours on how tens of millions of dollars from SRC International appeared to have ended up in his private bank account.

The Malaysian police said last week that they had seized cash, jewelry, purses and other valuables worth as much as $273 million from properties of Mr. Najib and Ms. Rosmah. The catalog of seized jewelry included 567 handbags, 2,200 rings and 14 tiaras.

Mr. Mahathir, who was inaugurated as prime minister in May, described Mr. Najib, his former protégé, as a “kleptocrat” in an interview with The New York Times.

“It is obvious that he has stolen money,” Mr. Mahathir said. “We have enough evidence. It’s not a question of seeking revenge, no. It is just the application of the rule of law.”

Mr. Najib is the son of one Malaysian prime minister and the nephew of another. With his gilded upbringing, among the elite of the United Malays National Organization, Malaysia’s longtime governing party, he seemed destined for leadership.

But even before he became prime minister in 2009, scandal dogged him.

The Mongolian mistress of one of his aides was killed in 2006, and two of Mr. Najib’s bodyguards were convicted of her murder. Mr. Najib has also been investigated by French officials in connection to $130 million in kickbacks on a deal to purchase French submarines.

The 1MDB scandal surfaced in 2015, and American prosecutors say that money diverted from the fund was spent on staggering acquisitions, such as a $250 million yacht owned by a friend of Mr. Najib’s stepson.

Malaysian investigators are also looking into whether money from 1MDB was used to fund Mr. Najib’s re-election campaign.

Mr. Mahathir said that in a private conversation in 2015, Mr. Najib told him that “cash is king,” a reference to money politics in Malaysia.

“When he said that cash is king,” Mr. Mahathir said of Mr. Najib, “what he was saying is that corruption is O.K.”

Hannah Beech reported from Bangkok, and Austin Ramzy from Hong Kong. Sharon Tan contributed reporting from Kuala Lumpur, Malaysia.