PETALING JAYA (THE STAR/ASIA NEWS NETWORK) - Umno members should accept the reality of the 1Malaysia Development Berhad (1MDB) scandal, as denials will continue to hurt the party, says Negeri Sembilan MP Khairy Jamaluddin.

In an interview with Umno-owned Utusan Malaysia newspaper, the former Cabinet minister said party members should not defend the 1MDB issue, as there was nothing to defend.

"1MDB is not a perception or slander but it is indeed a case that has been proven in the United States. What is there to hide? Just admit it," he said.

Mr Khairy said it will be difficult for Umno and Barisan Nasional (BN) to rise again as long as the 1MDB issue hangs over their heads.

He was indirectly referring to repeated comments by former prime minister Najib Razak and other Umno leaders that the 1MDB issue was blown up by the party's political enemies and that the issue caused negative "perceptions" that led Umno and BN to lose in the May general election.

There were also claims that the state development fund had done some good including sponsoring Muslims from rural areas to go for the haj, the Islamic pilgrimage to Mecca.

Najib said in Parliament just last week that 1MDB, the fund that he started in 2009, would be able to make profits if the Pakatan Harapan government maximised the value of its assets, such as the Tun Razak Exchange financial centre and Bandar Malaysia township.

The US Department of Justice has said US$4.5 billion (S$6.2 billion) of 1MDB monies were misappropriated by top officials in Malaysia and their associates.

US officials early this month unveiled criminal charges against two former Goldman Sachs bankers and Malaysian financier Low Taek Jho over 1MDB.

Najib has been slapped with 25 charges of graft and money laundering in Malaysia's court relating to transactions amounting to RM2.3 billion (S$750 million) linked to 1MDB.

Mr Khairy in the interview discredited the notion that 1MDB was beneficial through the pilgrimage sponsorship programme, saying that doing charitable work does not cancel the crime.

"We cannot cleanse the sins of our robbery by using a part of our loot to do good," he said.

He said Umno members should not live in denial.

"If we continue to deny the reality, I feel the impact on Umno is worse. Because the rakyat (people) will say, they have lost and have been exposed, but they still do not want to accept."

Mr Khairy, the former youth and sports minister and former Umno Youth chief, said he prefers to be realistic about the situation despite allegations that he is an opportunist.

"When we are faced with this reality and we do not want to embrace the reality, something is wrong.

"Those who still want to support, give excuses and deny the reality, they are in fact the biggest liability to Umno," he added.

On speculation that Umno members are seeking to switch parties, Mr Khairy said he is sticking with the party.

"If the Umno ship is sinking or everyone has jumped off the ship, I will probably be the last sailor on board to go down together with the ship," Mr Khairy said.