When news broke that US$681 million dollars had been transferred to the personal bank account of Malaysia’s then Prime Minister Najib Razak, investigators had already pieced together a trail linking the funds to 1Malaysia Development Berhad (1MDB), a sovereign fund now synonymous with one of the biggest heists in financial history.
Najib, however, had another explanation for where the millions came from: Saudi Arabia. For years, the now ex-premier denied any role in the massive embezzlement at 1MDB, claiming the funds found in his account were a “donation” from a Saudi prince offered in recognition for governing Malaysia according to “Islamic principles.”
Saudi Arabia’s Foreign Minister Adel Ahmed Al-Jubeir vouched for Najib in 2016 when asked about the so-called donation, saying it was “genuine” and “given with nothing expected in return.” He pointed out that the then Attorney General of Malaysia had “found no wrongdoing” during investigations and that he considered the matter closed.
Adel now tells a different story. On a recent three-day visit to Malaysia, the first by Riyadh’s top diplomat since May elections returned Prime Minister Mahathir Mohamad to office, he admitted the millions received by Najib had “nothing to do with the Saudi government,” contradicting his earlier explanation which gave political cover to the ex-premier.
Najib, in response, dismissed the foreign minister’s remarks and posted a series of letters on Facebook, purportedly from a Saudi prince, which he argues are proof that the funds were a donation from the kingdom. He also posted receipts of a fund transfer to him originating from Saudi Arabia’s Finance Ministry.
While investigators have established that US$80 million did indeed originate from the ministry, which Adel did not acknowledge in his comments, investigators from the US Department of Justice (DoJ) maintain that the US$681 million in question came from Tanore Finance Corporation, owned by an associate of fugitive financier Low Taek Jho, rather than Riyadh.
When asked by reporters if Adel’s reversal was aimed at appeasing the ruling Pakatan Harapan government, Mahathir answered: “Maybe, but I don’t know what he was thinking.” Saifuddin Abdullah, Malaysia’s foreign minister, says Adel informed him that Riyadh would be willing to cooperate with the ongoing 1MDB investigation.
The foreign minister’s trip follows a series of measures taken by Mahathir’s government to reverse Najib-era initiatives that brought Malaysia’s foreign and defense policies into closer alignment with Riyadh, moves that were seen as undermining the Southeast Asian country’s traditionally non-aligned foreign policy position.
Najib, known to have been enamored by the wealth of the Gulf region’s royal families, sought investment from the Middle East, including from Saudi Arabia.
As an apparent quid pro quo, he involved Malaysia in Saudi Arabia’s conflict in neighboring Yemen, sending armed personnel and equipment to Riyadh in 2015 and joining a Saudi-led, 34-member Islamic alliance against the Islamic State (IS) terrorist group.
That grouping was nominally formed to counter threats posed by armed extremist groups, though observers regard the Saudi-led alliance as a sectarian military bloc against Shia-majority rival Iran and a boost to the military campaign in Yemen, where the kingdom is pitted against Shiite Houthi rebels who have held the capital Sanaa since 2015.
Najib’s government maintained that Malaysian soldiers were not involved in hostilities and were deployed to Riyadh only to evacuate Malaysian civilians in Yemen. Those claims were called into question by some in Malaysia as armed personnel maintained a presence in Riyadh years after their initial deployment.
Malaysia was ostensibly integrated into the Saudi military fold when it joined the region’s biggest ever military exercises at the invitation of Riyadh. That included the so-called “Northern Thunder” maneuvers in 2016 and the sprawling “Gulf Shield-1” exercise held in April this year.
In 2017, plans were unveiled for the establishment of a Saudi-funded anti-terrorism center – the King Salman Center for International Peace (KSCIP) – slated to be built on 16 hectares of land in Putrajaya, Malaysia’s administrative capital. Though its role and envisioned operations were vague, the facility was touted as a counter to radical ideologies.
Najib and other top officials boasted domestically about the center to boost their Islamic credentials, noting that past Malaysian leaders had never received such acclaim from the kingdom, whose monarch, King Salman bin Abdulaziz Al Saud, claims religious guardianship as custodian of Islam’s holiest sites.
Malaysia has since reviewed its relationship with Saudi Arabia and significantly changed course since Mahathir’s Harapan government came to power. Many credit veteran politician Mohamad Sabu, a long-time opposition parliamentarian who was appointed defense minister earlier this year, for pushing the change.
Mohamad, who is better known as Mat Sabu, is a prominent critic of Saudi policies who before being elected into government published several scathing commentaries last year cautioning against the perceived dangers posed by Najib’s close embrace of the Gulf kingdom, which he claimed shattered Malaysia’s neutrality.
“Malaysia is playing with fire,” he wrote in a commentary published last December taking aim at the KSCIP and ridiculing moves to partner with Saudi Arabia to counter terrorism and extremism when the kingdom’s own literalist strands of Islam – known as Salafism and Wahhabism – are known to have influenced an array of militant groups.
He condemned 33-year-old Crown Prince Mohammed bin Salman for showing “animosity against all who don’t agree with him” and argued that Malaysia should keep Riyadh at arm’s length. “By being close to Saudi Arabia, Malaysia must sacrifice its relationships with Qatar, Iran, potentially, even Turkey, too,” he wrote.
Shortly after taking the reins as defense minister, Mat Sabu announced that Malaysian soldiers would be withdrawn from Saudi Arabia due to Putrajaya’s opposition to the military conflict in Yemen. Malaysia, he said, would bring the troops home and stood opposed to involvement in “a war with another Muslim nation.”
He then ordered the immediate closure of the KSCIP and appointed an agency under the defense ministry’s umbrella to assume the center’s counter-terrorism role, prompting objections from Hishammuddin Hussein, Malaysia’s former defense minister, and Najib, who said the cancellation would “offend” the kingdom and complicate ties.
In the wake of moves to decouple itself from the previous administration’s alliance with Saudi Arabia, some suggest Putrajaya is moving toward a period of cooler relations with Riyadh. Experts who spoke to Asia Times believe that while there is little danger of a full rupture of Saudi-Malaysia ties, the relationship is indeed changing.
“Malaysia is not seeking to fracture its relations with Saudi Arabia, but rather to carve sufficient diplomatic space to have good relations with other countries in the Islamic world as well, most notably Iran and Turkey,” says Mustafa Izzuddin, a fellow at the ISEAS-Yusof Ishak Institute in Singapore.
“The Yemen pull-out can be seen in that regard, including the fact that the Pakatan Harapan leaders felt that being part of the warring coalition was not in the national interest of Malaysia, which is to be non-aligned in its foreign policy,” said Mustafa, who believes Saudi Arabia viewed Malaysia as a gateway to bolstering its religious legitimacy in Southeast Asia.
Malaysia is in the midst of reorienting itself to “allow it the necessary diplomatic room to cultivate relations with as many countries in the Islamic world as possible,” he says. As such, the new government under Mahathir is “unlikely to be as close to Saudi Arabia as compared to the previous government under Najib.”
“There has been, in other words, a reset in relations,” says James Dorsey, a senior fellow at the S Rajaratnam School of International Studies in Singapore. “Look at the pattern of what Mahathir is doing. He’s positioning Malaysia much more independently, whether its versus Saudi Arabia or versus China.”
The Najib government “saw Islam as a political utility, as a tool” and was welcoming of Saudi money flowing into religious and educational institutions that promoted “an ultra-conservative, anti-Shiite, anti-Iranian strand [of Islam],” he said. “Most of the funding went through official channels and semi-official channels.”
“Mahathir is moving to null Malaysia’s sedition laws and redefining to some degree the relationship between Islam and an ostensibly more liberal form of democracy,” says Dorsey. “Obviously, that’s not the direction Saudi Arabia is going in. I wouldn’t read too much into the notion that relations are cooling or strained, but they are changing without question.”
Amid a global outcry prompted by the death of Saudi journalist Jamal Khashoggi, who Riyadh admits was killed in its consulate in Turkey on October 2, Malaysia’s reaction initially appeared diplomatic. Foreign Minister Saifuddin said that Malaysia would await the result of investigations and that bilateral ties with Saudi Arabia “remain strong.”
When asked by reporters the following day, Mahathir appeared to contradict his foreign minister’s position, calling Khashoggi’s killing “an extreme and unacceptable act of tyranny” that could not be condoned. He added the journalist’s death was something that his government deemed “unacceptable.”
Saudi Arabia’s monarch, King Salman Abdulaziz Al Saud, reportedly extended a personal invitation to Mahathir to visit the Gulf kingdom following the Saudi foreign minister’s visit. Malaysia’s foreign minister told reporters that the premier would “consider the right time for the visit as he is busy right now.”