World’s Largest Payoff

World’s largest payoff? Not really.

In Malaysia, hundreds of millions of dollars turned up in the personal bank accounts of prime minister Najib Razak. The facts appeared to suggest that the money had been siphoned off from 1Malaysia Development Berhad (1MDB), a state investment fund. Not coincidentally, the prime minister was also finance minister and the chief advisor to 1MDB. The affair has rocked Malaysian politics.

As one news account of the scandal stated:

The Attorney-General said documents showed that US$681 million (S$973 million) was transferred to Mr Najib’s personal accounts between March 22 and April 10, 2013 from the Saudi royal family, and the PM returned US$620 million in August the same year as the funds had not been put to use.

The Financial Times tells us more:

The attorney-general said three investigations by the anti-corruption commission, which were completed last month, had uncovered no evidence of crimes committed by Mr Najib. The attorney-general gave no further details about the source of the $680m, nor any explanation about the purpose of the transfer. He said the prime minister had returned $620m in August 2013.

“I am satisfied with the findings that the funds were not a form of graft or bribery,” he said. “There was no reason given as to why the donation was made to PM Najib, that is between him and the Saudi family.” No independent evidence has been produced to show the funds came from Saudi Arabia. It would be surprising if any donation would be as much as $680m, observers in the kingdom said.

Indeed, the Saudi Foreign Ministry has denied the story.

The Attorney General’s story is preposterous, and Malaysia’s anti-graft body will appeal his ruling. That is not to say that in the real world money never changes hands, including between rich Gulf monarchies and political leaders. When I was involved with UN affairs in the Reagan and George W. Bush administrations, we heard often about vote buying in the General Assembly and Security Council. For some years there were frequent rumors that when prime ministers and foreign ministers visited the Gulf, they rarely came away empty-handed. Palms were greased, or to be more exact suitcases were handed over.

But palms were greased with a million here or five million there. Even when oil prices were high, a gift of $681 million is a laugh, not a defense. And if it was a gift, why did the PM return $620 million of it? Better question: what has he done with the $61 million to which he seems to have grown attached?

Malaysians may find out the truth one of these days. But sadly or not, they will not go into the Guinness Book of World Records under "the world’s largest payoff."