Anwar’s purge? Malaysia’s corruption crackdown has PM’s rivals in its sights

But at the end of a stunning week in Malaysian politics, which also saw a new king ascend the throne and disgraced former leader Najib Razak have his 12 year jail sentence halved by the pardons board, Anwar appears to be sitting pretty.

While the 72-year-old prime minister’s timing may be right, he has taken on formidable – if aged – rivals with the money and motive to come back at him.

Why are rivals of Malaysia’s PM Anwar ensnared in a corruption investigation?

Daim, the 85-year-old former finance minister under Mahathir and patriarch of one of Malaysia’s most connected business families, was charged on Monday with failing to disclose assets.

The MACC has also hauled in two of Mahathir’s sons, ordering them to reveal their wealth or also face legal action. Speculation is now mounting that their 98-year-old father could be next.

“It’s a smart move to go after Mahathir and Daim,” analyst James Chin told This Week in Asia. “Put yourself in Anwar’s shoes: the people that give you the most trouble are obviously Mahathir and Daim, people with money, so you go after them.”

Anwar with Deputy Prime Minister Ahmad Zahid Hamidi (right) during a press conference after state polls in August last year. Photo: EPA-EFE

Anwar came to power at the head of a unity government after an election in November 2022 that revealed more about Malaysia’s political fault lines than the public’s appetite for him to fulfil his lifelong ambition of becoming prime minister.

The former student radical made big promises to crack down on corruption, but has faced accusations of using his power for political leverage after charges against key ally Deputy Prime Minister Ahmad Zahid Hamidi were abruptly dropped last year.

Anwar denies interfering in Ahmad Zahid’s case, as well as the MACC’s investigations into Daim and Mahathir.

So far he has weathered the accusations, as well as a growing challenge from the country’s Islamist opposition and an apparent plot to unseat him by luring lawmakers from his coalition, dubbed the ‘ Dubai Move’, which was rumoured to have had the backing of both Mahathir and Daim.

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After his sons’ brush with the authorities, Mahathir is on the defensive and could himself be caught in the dragnet, analyst Azmi Hassan argued, if authorities caught a whiff of any wrongdoing on his end.

“It would be bad for the government if it did not implicate Mahathir if there is proof that he also accumulated wealth illegally,” Azmi said.

While such proof – if it exists – has yet to be unearthed, Anwar went on the offensive as early as last year accusing his two-time predecessor of spending “22 years and 22 months” in office to enrich his family and children, leading Mahathir to sue him.

The political landscape, meanwhile, is tilting in Anwar’s favour.

Late last month, a sixth MP from opposition party Bersatu declared support for Anwar, adding to the 153-seat super majority he claims in the 222-seat parliament. The six lawmakers have said their move was motivated by a desire to ensure political stability – and secure government funding for their constituencies while remaining Bersatu members.

The endorsements have dented the opposition’s attempts – driven by Mahathir and the Malay nationalist Perikatan Nasional bloc, of which Bersatu is a member – to topple Anwar’s government through defections.

Perikatan Nasional supporters and members wave flags near a polling station in Selangor during last year’s state elections. The Malay nationalist bloc has helped drive attempts to topple Anwar’s government. Photo: Bloomberg

At the same time, the courts are going after the money of Daim and Mahathir, Anwar’s former cabinet colleagues.

“The idea is to hit both of them hard,” said a politician who served inside Mahathir’s last government, requesting anonymity.

“It works well with the people too,” he added. “The minute the names of Daim and Mahathir are mentioned, Malaysians feel that their long-standing grouses against these figures and their suspicion of their supposed ill-gained wealth are vindicated.”

Decades of bad blood

Daim, who the MACC says has assets spanning luxury cars and a vast portfolio of properties and hotels, has decried the investigation into his family’s wealth as a hatchet job driven by Anwar.

He has accused the prime minister of abandoning earlier promises to break with Malaysia’s bitter past of political recriminations and favour-trading.

Anwar’s pursuit of past vendettas has blinded him to a worsening economy and weak ringgit as “the sufferings of ordinary Malaysians are ignored”, Daim said.

A customer counts out ringgit notes at a money changer. Anwar’s rivals claim his pursuit of past vendettas has blinded him to a worsening economy and weak currency. Photo: Reuters

Worse still, he has alleged that Anwar’s scramble into office by way of a unity pact following an inconclusive election has stripped his claims to clean leadership of all credibility.

“For the sake of becoming the prime minister, Anwar made a person facing corruption charges as the deputy prime minister,” Daim said, referring to Ahmad Zahid.

“Soon after, like magic, the DPM’s 47 corruption charges were dropped. Is this the new Malaysia that was promised?”

Anwar and Ahmad Zahid attend Umno’s general assembly in June last year. Photo: Twitter/@AnwarIbrahim
The courts dropped all charges against Ahmad Zahid, which were connected to a charitable foundation that he founded, last year following an application by the attorney general to discharge the senior leader.

The support of Umno, which Ahmad Zahid helms, was a deciding factor in Anwar’s appointment as prime minister as it gifted him a clear majority in parliament.

The ill will that exists between Anwar and Mahathir-Daim has bled across decades of Malaysian political history.

In his first 22 years as prime minister from 1981 to 2003, Mahathir won plaudits for steering aggressive economic expansion, with Daim as his finance minister.

Malaysia charges ex-Mahathir aide Daim Zainuddin with failure to declare assets

But as the Asian financial crisis of the late 1990s sent Malaysia’s economy into meltdown, critics blamed crony capitalism for stuffing the pockets of a rapacious business elite as it left ordinary Malaysians to pick up the tab.

Before his time in government, Daim was a renowned businessman with interests ranging from property development to snack-food production, manufacturing and banking. Yet throughout his two terms as finance minister – the last from 1999 to 2001 – he managed to divert interest away from his fortune.

When Anwar took charge of the finance ministry for the first time in 1991, it was Daim who showed him the ropes, according to veterans of the long-ruling Umno party to which all three men belonged at the time.

But when then-prime minister Mahathir decided in 1998 to sack Anwar as deputy leader, Daim famously sided with the older man. Anwar was later jailed on Mahathir’s watch for corruption and sodomy, charges he and his supporters maintain were trumped up.

Anwar waves to his supporters in 1998 as he leaves the High Court in Kuala Lumpur after being charged with sodomy. Photo: Reuters
Mahathir would go on to broker a royal pardon for Anwar in 2018, three years after his one-time protégé had been jailed for a second time on a separate sodomy charge. But the die had already been cast on a relationship that continues to define Malaysian politics.
The MACC says its corruption investigation predates Anwar’s rise to power, maintaining that the probe stems from the revelations about high-profile politicians and businessmen made in the Pandora Papers and Panama Papers leaks.

The 2021 Pandora Papers’ data dump of financial information on the global rich, in particular, gave the Malaysian public a glimpse of the sort of money that Daim and his family have accrued – alleging that he, his wife Naimah and two of their sons were beneficiaries of a trust holding assets worth US$52.5 million spanning properties in Britain and the US.

The MACC said in a statement late last month that it launched investigations into all entities implicated in the Pandora Papers leak in August 2022 – three months before Anwar had managed to claw his way back into high office.

The longer term effects [of the crackdown] are the perpetuation of a cycle of using power against opponents

Bridget Welsh, political analyst

Anwar has denied allegations that he is getting even with long-standing rivals, despite hinting at as much when he told reporters months before the elections in 2022 that Daim would have “sleepless nights” should he become prime minister.

Now he is in the top job, political watchers warn that vengeance may yet prove to be a double-edged sword.

The short term is personal – settling scores of the past and present – and to shore up support, particularly from a generation of Malaysians who deeply resent Mahathir for his impact on governance,” political analyst and long-time Malaysia watcher Bridget Welsh told This Week in Asia.

“The longer term effects are the perpetuation of a cycle of using power against opponents – like Mahathir – and exposing those who have assets in the political economy.”

All about timing

Mahathir has said the crackdown now “threatened him”, calling it a clear case of selective persecution in which those not aligned with the prime minister are investigated for corruption while his allies are cleared of all charges.

“Back when he was in the opposition, he [Anwar] talked about Reformasi, freedom of speech,” Mahathir said with typical bombast, referring to Anwar’s reform movement launched after his 1998 sacking.

“I would like to tell the whole world to not come to Malaysia. If they [the government] want to investigate, it is done without any explanation. This is the new regime.”

Mahathir Mohamad speaks during a news conference at his office in Putrajaya on January 22. Photo: AP

But experts say the Malaysian public no longer puts much stock in Mahathir’s words, with his increasingly cantankerous media appearances appearing to fall flat.

Now is also a shrewd time for the current prime minister to defang the threat posed by Daim, according to one political insider.

“Anwar is essentially cutting the head off the snake by capturing the weaker links in Bersatu to his side, cutting funding by going after Daim, and curbing potential threats through the full use of government machinery,” the insider said, requesting anonymity. “All this seems to be working well for him.”

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Malaysians have been yearning for a stable government that puts people’s pockets, rather than politics, front of mind – a position the country’s new king Sultan Ibrahim has endorsed, urging an end to the revolving door of politicians in Malaysia that saw three leaders hired and fired between 2020 and 2022.

“So this is the best time for Anwar to go after these people,” said analyst Chin, a professor of Asian studies at the University of Tasmania.

Rumblings of missing money and fantastic wealth play well among the electorate and could finally help Anwar’s unity government live up to its billing, Chin said.

“I don’t know of anything else that would bring people together like that aside from sports,” he added.

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