Former Malaysian strongman Mahathir Mohamad says the opposition alliance campaigning to topple the country’s corruption-tainted leader can win the next general elections and pull Malaysia back from a slide into kleptocracy, AP reports:
The energetic 92-year-old, Asia’s longest-serving leader before stepping down in 2003, has made a high-profile return to politics in a bid to oust his protege, Prime Minister Najib Razak, who has clung to power despite an epic corruption scandal that involved hundreds of millions of dollars passing through his bank accounts. Mahathir told The Associated Press in an interview that the disparate opposition coalition he has spearheaded to contest elections due by mid-2018 is tapping into anger at the corruption scandal and the rising cost of living.
“Lots of people feel that Najib has destroyed much that has been built for this country,” he said. “People are calling our leader a crook. That is not something I would like to see perpetuated. It must change back to the days when we were doing well.”
Najib has been struggling to contain the fallout from one of the largest corruption scandals in modern history: the theft of billions of dollars from 1MDB, an economic development fund administered by the Malaysian government.
Kleptocracy and corruption are distinct, said analyst Oliver Bullough. The former is always multijurisdictional – a feature of globalization – and invariably features three key stages – “Steal, obscure, spend.” This provides an opportunity because offshore money laundering tends to be connected to rule of law jurisdictions, but it’s also a threat because the cross-border liquidity of assets incentivizes kleptocrats, he told the NED event on The Globalization of Venality: Kleptocracy’s Corrosive Impact on Democracy.
Russia is distinctive because the Kremlin has weaponized kleptocracy for funding allies in the Donbass, Syria and troll farms and its efforts to subvert the West through hybrid warfare, said Ambassador Daniel Fried of the Atlantic Council. Much of this is new to the institutional memory of the US Government, he said, suggesting a need to revisit the Foreign Corrupt Practices Act, expose and anathematize Russia’s purchase of politicians, including the “racket” of Speakers Bureaus.
Approximately $700 million of the stolen 1MDB funds found its way into Najib’s own bank accounts and other funds were used by his son to finance a Hollywood movie, the “Wolf of Wall Street,” said Cynthia Gabriel of Malaysia’s Center to Combat Corruption and Cronyism. The scandal confirms how kleptocrats benefit from enablers in western democracies, she added.
Politico recently noted that the “Wolf of Wall Street” case is a product of the Justice Department’s Kleptocracy Asset Recovery Initiative, “an effort to pursue the proceeds of foreign corruption and return such monies to the public in the affected countries.”
Given the international dimensions of kleptocracy, civil society groups need more cross border mechanisms, expertise on transnational crime, and collaboration in working on asset recovery, for instance, but they are impeded by secrecy laws, she told the NED forum.
Congo’s Life President Denis Sassou-Nguesso (right) is the quintessential kleptocrat, but no different than other sub-Saharan African leaders in the likes of Angola or the DRC who tend to use the same four tools, said Brett Carter of the University of Southern California:
- The strategic capture of politicians
- Capturing multilateral institutions
- Media outreach and laundering image
- Manipulating the financial sector, especially through money- laundering banks
Paris-based African diasporas are engaged in exposing and countering kleptocracy, Carter added, but democratic actors lack resources and democratic institutions are hollowed out.
Stanford University’s Larry Diamond lamented the insufficient outrage over 1MDB in Malaysia as a result of ethnically-based patronage politics and called for a prohibition on kleptocrats hiring lobbyists in democracies like the United States.
Across the world, money laundering on an epidemic scale is undermining American foreign policy: crippling development, threatening democracy, damaging Western soft power and fueling state collapse, argues analyst Ben Judah. There is only one way to block the illicit flows that empower kleptocrats and undermine democracy: Ending anonymous shell companies must become a national security priority for the U.S.