Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 27 June 2018
Page: 4250

Senator RHIANNON (New South Wales) (19:25): On 9 May, Malaysians delivered an astounding victory to democracy and voted out the government under the scandal-plagued former Prime Minister Najib Razak. The new government, under the leadership of 92-year-old Prime Minister Mahathir Mohamad, has promised to restore democracy to the country. Unlawful financial activities and abusive democratic practices had become the hallmark of the previous government.

A series of corruption scandals have wracked Malaysia for many years. One scandal involved suspicious asset purchases and fund deposits funnelled through Australia, and they may be linked to large-scale corruption in Malaysia that reaches to the highest level of authority in that country. This scandal involves 1Malaysia Development Berhad, known as 1MDB, a government-owned sovereign wealth fund. In 2009, shortly after Mr Razak became the Prime Minister of Malaysia, he became the chair of the 1MDB advisory board. He was also the country's finance minister. The fund was intended to support projects of national significance to boost Malaysia's economic growth and attract international investment. The fund performed disastrously. From 2009 onwards, many of 1MDB's investments failed, and, by the end of 2014, the fund had more than $12 billion in debt and was struggling to repay its loans.

I've been informed that, in the period from 2009 to at least 2014, multiple individuals, including public officials and their associates, conspired to fraudulently divert billions of dollars from 1MDB through various means. According to the US Department of Justice, which has been investigating, more than US$4.5 billion was diverted from 1MDB and laundered through a web of shell companies and bank accounts located in the United States and other countries, one of them being Australia. Several major financial institutions were caught up in the scandal, with reports of big kickbacks. These institutions include AmBank—24 per cent owned by ANZ—Goldman Sachs, Swiss UBS and BSI SA.

According to the US Department of Justice investigation, the funds diverted from 1MDB were used for the personal benefit of the co-conspirators and their relatives and associates, including to purchase luxury real estate in the United States, pay gambling expenses at Las Vegas casinos, acquire more than US$200 million in artwork, invest in a major New York real estate development project and fund the production of major Hollywood films. Last year the US Department of Justice seized $1.3 billion in assets held by close associates and relatives of the Prime Minister, allegedly siphoned from 1MDB. Singapore has jailed three bankers for money laundering connected to the fund. Australia has yet to begin its own probe on alleged money laundering transactions and other links with the corruption scandal in Malaysia. Najib's government has left a huge debt burden for Malaysia. Its public debt has exceeded A$334 billion. Much of this has been inflated by borrowing to bail out the state investment company 1MDB, which is at the centre of a multibillion-dollar scandal.

Members of the Malaysian community committed to restoring democracy in their country have asked me questions that the Turnbull government must answer. They've asked why the government isn't freezing assets acquired in Australia that have been linked to corrupt activities in Malaysia with the aim of returning them to Malaysia, much like what is being carried out by the US Department of Justice's Kleptocracy Asset Recovery Initiative. They've also asked why the Turnbull government isn't instructing AUSTRAC and the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry to investigate money laundering activities and financial transactions in Australia that are connected to corruption in Malaysia. The comment has certainly been made: if Australia doesn't act, it starts to reflect on Australia and not just on the former Prime Minister and his associates in Malaysia.