Monday, January 16, 2017

Bar perturbed about deteriorating state of atfairs?

Press Release | Openness, Transparency and Accountability are Indispensable to Eradicate Corruption

Friday, 13 January 2017 11:16am
ImageThe Malaysian Bar is very perturbed by recent reports that the Malaysian Anti-Corruption Commission (“MACC”)’s special operations division is being downsized[1], six of its senior officers are being transferred,[2] and its director Bahri Mohamad Zin has taken optional retirement, reportedly due to his unhappiness over the alleged inaction in respect of investigations into SRC International Sdn Bhd, a former subsidiary of 1MDB.[3]  The division reportedly handled high-profile cases relating to 1Malaysia Development Berhad (“1MDB”) and Federal Land Development Authority (“FELDA”).

These developments are disquieting because they reinforce the public perception that although one-and-a-half years have passed since it was revealed that funds of about USD700 million (approximately MYR2.7 billion) were transferred between private banks, offshore companies and funds linked to 1MDB, and then deposited into the personal accounts of the Prime Minister in AmIslamic Bank Berhad,[4] the authorities are reluctant or unwilling to get to the bottom of the serious allegations of financial impropriety concerning 1MDB, and bring action against those guilty of any wrongdoing.

This is in stark contrast to the developments in at least 11 countries — Australia, British Virgin Islands, Hong Kong, Luxembourg, Saudi Arabia, Seychelles, Singapore, Switzerland, United Arab Emirates, United States of America, and Venezuela — where there have been investigations, measures imposed on financial institutions, criminal prosecutions and convictions, and proceedings for forfeiture of assets.

These actions raise serious questions regarding the investigations that are apparently being conducted in our own jurisdiction, and expose the lack of transparency regarding the findings.  It is indeed unsettling that no one has yet been prosecuted in Malaysia for any of the allegations

The Auditor General[5] and the Public Accounts Committee of Parliament were tasked with enquiring into the allegations of serious financial impropriety concerning 1MDB.  It is inexplicable that the Auditor General’s report has been classified as an “official secret” under the Official Secrets Act 1972 and is thereby prohibited from public disclosure,[6] particularly in light of repeated assurances by the Prime Minister that the report would be made public.[7]  This purported classification of the Auditor General’s report is being challenged in court.[8]   

The Public Accounts Committee’s report, which was made public, unequivocally calls on law enforcement agencies to carry out further investigations on Datuk Shahrol Azral Ibrahim Halmi[9] — the then-Chief Executive Officer of 1MDB — and others from the 1MDB management who are implicated.  

To this end, the police have completed the first phase of investigations, according to news reports.[10] The Inspector General of Police had said that the investigations would involve interviewing persons overseas and would require the mutual assistance of law enforcement agencies in those foreign countries.  There has been little or no subsequent information on the purportedly ongoing police investigations.  

It has also been reported that our Attorney General has refused to accede to a request from the Office of the Attorney General of Switzerland for mutual assistance — notwithstanding earlier assurances by both the Prime Minister and the Attorney General that Malaysia would cooperate with investigations by both the United States and Swiss authorities.[11]   

This is a troubling development that does not bode well for our commitment — as a State Party to the United Nations Convention against Corruption[12] — to assist other States Parties to investigate and prosecute crime and detain suspected criminals.

Further, there appears to be an attempt to deny or restrict the flow of information to Malaysian citizens on matters concerning the allegations made against 1MDB.  On 17 October 2016, the Speaker of the Dewan Rakyat reportedly decided that Ministers need not answer questions in Parliament in relation to the complaint filed by the United States Department of Justice,[13] citing the sub judice rule.[14]  The complaint is “to forfeit assets involved in and traceable to an international conspiracy to launder money misappropriated from 1Malaysia Development Berhad (“1MDB”)”.[15]  Malaysians are surely entitled to full disclosure of all available information pertaining to this undoubtedly weighty public interest matter.

It is difficult to see how proceedings in the United States could be influenced by proceedings in the Malaysian Parliament.  Moreover, our High Court recently decided that, as a matter of general principle, “debates on important public interest issues should not be stifled or be readily sacrificed on the altar of sub judice.”[16] Thus, the sub judice rule must not be used as a convenient cloak to conceal relevant information concerning the Department of Justice’s serious allegations

It is alarming that the attitude of our authorities towards these grave allegations appears to be one of indifference, which has fuelled widespread concerns of complicity with the wrongdoers.

We have witnessed the finding of guilt by the Sessions Court for charges under the Official Secrets Act 1972 for the unauthorised possession of page 98 of the Auditor General’s report, and for exposing the content of the report at a media conference at Parliament.[17]  This is despite recurrent assurances that the Official Secrets Act 1972 was not meant to cover up wrongdoing.[18] 

This series of events is troubling, as it portrays a government that continues to operate in an environment in which freedom of information is denied, transparency of governance is eschewed, and accountability to the public is shirked.  Such are the hallmarks of a mindset mired in the past, where governments purport to decide what is good for the people to know.  This degree of  condescension is antithetical to the development of a mature democracy where the government serves — rather than rules — the people.

We should be mindful of the words of prominent Malaysian economist Jomo Kwame Sundaram, who pointed to a deficit of confidence resulting from the 1MDB scandal: “What is of concern is that over the last one-and-a-half years or so, the ringgit has been steadily declining. . . . There are many other factors behind it, including a loss of confidence in the government as more and more revelations are made about 1MDB.”[19]  The call for transparency and accountability in Malaysia should not be regarded as merely a pious platitude, but a call to protect our economic interests as well. 

The Malaysian Bar calls for a new paradigm of open, transparent, and accountable governance, to eradicate corruption and affirm the rule of law.  We would do well to remember the words of Justice Louis Brandeis who said, “If the broad light of day could be let in upon men’s actions, it would purify them as the sun disinfects.”[20] The scandal engulfing 1MDB must be resolved promptly and its wrongdoers prosecuted to the fullest extent of the law, to restore confidence in the administration of justice. 

Steven Thiru
Malaysian Bar

13 January 2017

[1] “MACC division that probed SRC allegedly being downsized”, Malaysiakini, 30 December 2016.

[2] “Six MACC officers involved in SRC probe transferred”, Malaysiakini, 31 December 2016.

[3] “MACC denies Bahri resigned due to SRC International”, Free Malaysia Today, 3 January 2016.

[4] (a) “Malaysian Anticorruption Body to Look Into Flow of Money to Najib”, The Wall Street Journal, 3 July 2015;

(b) “Malaysia Orders Freeze of Accounts Tied to Probe of Alleged Transfers to Prime Minister Najib”, The Wall Street Journal, 7 July 2015; and

[5] “1MDB audit begins”, The Sun Daily, 10 March 2015.

[6] “
1MDB audit report ‘secret’ until tabled in Parliament
”, Free Malaysia Today, 7 March 2016.

[7] “
Najib: Auditor-General will present full report on 1MDB
”, Free Malaysia Today, 10 July 2015.

[8] The Malaysian Bar is aware that this is the subject matter of a pending judicial review action by Selangor Menteri Besar (Chief Minister) Dato’ Seri Mohamed Azmin Ali in the High Court.

[10] (a) “
Special task force formed to investigate 1MDB: IGP
”, The Sun Daily, 14 April 2016; 

(b) “
IGP: 1MDB probe progressing, foreign interviews starting soon
”, Malay Mail Online, 21 July 2016; 

(c) “
IGP says in talks with AGC over 1MDB probe results
”, Malay Mail Online, 19 August 2016; and 

(b) “
Malaysia will cooperate with ‘lawful investigations’ of 1MDB, Najib’s office says
”, CNBC, 20 July 2016; and

[12] Malaysia signed the Convention on 9 December 2003, and ratified it on 24 September 2008. Switzerland signed it on 10 December 2003, and ratified it on 24 September 2009.  The Convention entered into force on 14 December 2005.

[14] “
Pandikar: Subjudice to discuss DOJ lawsuit against 1MDB
”, The Sun Daily, 17 October 2016.

[15] DOJ civil suit, para 5.

[16] Khairul Azwan Harun v Mohd Rafizi Ramli [2016] 6 CLJ 49, at para [33].

[17] YB Rafizi Ramli, the Member of Parliament for Pandan, was sentenced to 18 months’ jail for each offence, to be served concurrently.  The Sessions Court granted a stay pending disposal of his appeal to the High Court.

[20] Letter, Louis D Brandeis to Alice Goldmark (26 February 1891), in Louis D Brandeis, Letters of Louis D. Brandeis Volume I, 1870-1907, edited by Melvin I Urofsky and David W Levy (1971), p100.

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