U.S. investigators are looking into Malaysian Prime Minister Najib Razak’s assets as part of a series of global probes linked to a troubled state investment fund, according to people familiar with the matter.
The U.S. Justice Department’s Kleptocracy Asset Recovery Initiative has been investigating the case, which involves people and entities connected to the state-run fund 1Malaysia Development Bhd., the people said. The Federal Bureau of Investigation also is involved with the inquiries, The Wall Street Journal reported Saturday.
The investigation focuses in part on allegations that nearly $700 million in payments went to Mr. Najib’s alleged personal accounts ahead of a close election in 2013. The transfers were discovered by a Malaysian government investigation.
The source of the money is unclear, and the government investigation hasn’t detailed what happened to the funds that allegedly went into Mr. Najib’s accounts. Malaysia’s anti-corruption body in August said the funds were a donation from the Middle East. The donor wasn’t specified.
The transfers were sent from an offshore fund through a Swiss private bank via Wells Fargo & Co., according to documents reviewed by the Journal. Wells Fargo declined to comment.
Mr. Najib set up 1MDB in 2009 to invest in strategic industries for the country. However, it has been struggling with $11 billion of debt and allegations of corruption, which it has denied.
Neither 1MDB nor the office of the prime minister responded to requests for comment about the U.S. investigation.
Mr. Najib is scheduled to visit New York later this week for the opening of the United Nations General Assembly.
Confirmation of a U.S. investigation comes as officials in Malaysia ramp up their rhetoric around the allegations related to 1MDB. The issue has become a focal point for opposition politicians and has sparked protests in Kuala Lumpur.
“The public wants answers to these questions, and they deserve to get the answers,” Bank Negara Malaysia Governor Zeti Akhtar Aziz said Monday at an open panel debate about the Malaysian economy. “In this day and age, it must be known that there is no place in this planet that anyone can actually hide because the world has come together.’’
On Tuesday, 1MDB issued a statement that didn't address Ms. Zeti’s criticisms about the fund, but focused on other comments she made saying the fund’s scandal had contributed to the weakness of the Malaysian ringgit. The fund said it was disappointed in her statement and that it was confident the ringgit would recover.
A High Court lifted the Home Ministry’s three-month suspension of two publications owned by Edge Media Group, a privately held company focusing on business and economic news, over reporting about 1MDB. The court said the Home Ministry didn’t give the company fair opportunity to respond, a lawyer for the company said.
The decision “vindicates our position that the suspension was unfair and without justification,” Edge Media said in a news release. Alice Loke Yee Ching, senior federal counsel for the attorney general’s office, said in an email that the government would appeal the decision.
Authorities in Singapore, Hong Kong and Switzerland are also conducting investigations into allegations surrounding 1MDB. A sovereign-wealth fund in the United Arab Emirates that had close ties with 1MDB is also conducting inquiries into as much as $2.4 billion of money 1MDB said it transferred to International Petroleum Investment Co. but wasn’t received, the Journal reported last week.
1MDB said in statements that it made the payments and stood by its accounting practices but couldn’t speak on behalf of the Abu Dhabi fund. A spokesman for the IPIC didn’t respond to a request for comment.
The news that the Justice Department’s Kleptocracy Asset Recovery Initiative is investigating the case was reported earlier by the New York Times.
By Christopher Matthews and Bradley Hope
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