Monday 28 March 2016

State of Fear: Murder and Money in Malaysia.

"I think there is an atmosphere of total terror."

It's a story of intrigue, corruption and multiple murders, stretching from the streets of Malaysia's capital Kuala Lumpur, to Switzerland, France and the US as well as Hong Kong and Singapore, all the way to Australia's doorstep.

"He said 'You know I can't talk much, he said, because my phone might be bugged'".

The money involved is astonishing.

"The person who made the gift must be extremely rich to be able to just give away US$681 million."

"The fact that it's going to the personal account of the Prime Minister is unprecedented."

And the escalating scandal is threatening to bring down Malaysia's Prime Minister.

"This charge sheet was the smoking gun."

Four Corners reporter Linton Besser investigates two sets of extraordinary allegations of bribery and corruption: one involving a massive arms deal; the other, the Malaysian sovereign wealth fund. It's a story that's made headlines around the world.

"Hello Mr Prime Minister, ABC Australia. I'm wondering if you can explain the hundreds of millions of dollars in your account?"

Linton Besser's pointed questions landed him and cameraman Louie Eroglu in serious trouble.

"I've been placed under arrest ...we are waiting for some legal advice but at the moment it looks like they intend to charge us."

On Monday night Four Corners will reveal new allegations about the staggering sums of money that have flowed into the bank accounts of Najib Razak.

And as the scandal grows, so does the crackdown on the Malaysian Government's political opponents.

"They're just threatening people now and it's very effective."

State of Fear, reported by Linton Besser and presented by Sarah Ferguson, goes to air on Monday 28th March at 8.30pm EDT. It is replayed on Tuesday 29th March at 10.00am and Wednesday 30th at 11pm. It can also be seen on ABC News 24 on Saturday at 8.00pm, ABC iview and at abc.net.au/4corners.

Transcript

28 March 2016 - State of Fear: Murder and Money in Malaysia

(Footage of Najib Razak walking to mosque, Kuching, Sawawak, 12 March)

LINTON BESSER, REPORTER: Hello, Mr Prime Minister. It's ABC Australia. I'm wondering if you can explain...

MALAYSIAN PRIME MINISTER: No, no, no.

LINTON BESSER: ...the hundreds of millions of dollars in your account?

Mr Prime Minister?

(Police officer approaches Linton Besser)

POLICE OFFICER: No, no, no. Who are you? What you trying to do?

LINTON BESSER: No. I'm- its just a press conference.

POLICE OFFICER: No, no, no, no. No, no, no, no, no. Take, take him away.

(Footage ends)

SARAH FERGUSON, PRESENTER: That was two weeks ago in Malaysia. Our reporter Linton Besser and cameraman Louie Eroglu were arrested for challenging Malaysia's prime minister about the vast sums of money channeled into his private bank accounts.

Their arrest made headlines around the world. For two days our team was barred from leaving the country, facing charges for a crime carrying two years in prison.

Tonight we bring you their story: a multi-billion dollar corruption scandal, murders and intrigue across four continents, including Australia.

Linton Besser's investigation begins on the streets of Kuala Lumpur, with one man's attempt to bring the prime minister to justice.

LINTON BESSER: It's a seemingly ordinary day in downtown Kuala Lumpur: September 4, 2015.

One of the city's most senior public prosecutors leaves home and begins his journey to work.

He's been deeply worried about his current case. It's a corruption investigation that will rock Malaysia.

CHARLES MORAIS, BROTHER OF PROSECUTOR: Kevin was extremely stressed out on an ongoing case he was working on. And, um, he never really did talk about the case 'til the last conversation I had with him. And it's then is when he said he, um, "I am, um... you know, I can't talk much," he said, "because my phone might be bugged."

LINTON BESSER: As the prosecutor is caught in heavy traffic, his car is suddenly rammed from behind. The moment is captured on a CCTV camera.

A group of men snatch him from the driver's seat and drag him into a ute. Then both vehicles drive away.

Twelve days later, prosecutor Kevin Morais is found brutally murdered in a swamp on the outskirts of KL. He'd been forced into an oil drum that was then filled with cement.

CLARE REWCASTLE BROWN, INVESTIGATIVE JOURNALIST, SARAWAK REPORT: To have a prominent public legal figure snatched from the streets and brutally murdered in such a way: um, it's perhaps a demonstration of, of what Malaysia is really like. Um, it's bizarre and terrifying: what happened to Kevin.

CHARLES MORAIS: I am 101 per cent confident that my brother was killed. It was a orchestrated attack to silence him.

LINTON BESSER: What what's your feeling about who was behind your brother's death?

CHARLES MORAIS: It was high-level government authorities: extremely high-level.

LINTON BESSER: The target of Kevin Morais' investigation was the Malaysian prime minister, Najib Razak. The prosecutors' case had the potential to expose the prime minister as a criminal and remove him from office.

CHARLES MORAIS: So I called Kevin and that's when he told me he was working on a high-profile case. And I said, "Really?" He said, ah, and he said, um, "These people are terrible." So...

LINTON BESSER: Who, who was he referring to?

CHARLES MORAIS: Just referring to Najib.

LINTON BESSER: Just prior to his murder, the prosecutor had helped to prepare charge sheets against prime minister Najib Razak.

The documents alleged the prime minister corruptly obtained a bribe totalling RM27 million, the equivalent of $11 million Australian, in return for organising a loan for a government-linked company - a penalty that could result in up to 20 years in prison.

(To Clare Rewcastle Brown) When you were following the money trail, how important was that document?

CLARE REWCASTLE BROWN: Well, this charge sheet was the smoking gun.

LINTON BESSER: The charge sheets were sent anonymously to Clare Rewcastle Brown in London. She's an investigative journalist and the sister-in-law of former British prime minister Gordon Brown.

CLARE REWCASTLE BROWN: The Najib administration went wild when I published that document, because they knew how dangerous it was. They were trying to shut this down: cover it up.

LINTON BESSER: The Malaysian government has charged seven men over Kevin Morais' murder, including a military doctor he was prosecuting for corruption.

But Charles Morais and others are convinced the charges are a cover-up.

CHARLES MORAIS: I believe they were involved in the killing, those people. But I'm confident the order to kill came from way... high up.

LINTON BESSER: Why was your brother Kevin Morais killed?

CHARLES MORAIS: He was, he was killed because he was investigating and he drew up the charge sheet. And, um, that why he was killed.

LINTON BESSER: Four Corners has come to Malaysia to investigate this murder and a political scandal engulfing the prime minister, Najib Razak.

Four Corners has been told that Kevin Morais' boss, the Malaysian attorney-general, planned to lay a criminal charge against prime minister Najib Razak at a cabinet meeting in July last year.

The prime minister was going to be accused of the misappropriation of public funds.

The attorney-general briefed senior officials, including the deputy prime minister, who would have had to step into the top job.

But the plan was leaked and both the attorney-general and the deputy prime minister were removed from office.

ZAID IBRAHIM, LEGAL AFFAIRS MINISTER 2008: You sack your deputy prime minister, who just wanted to know what happened. You sack the attorney-general who I believe was preparing a charge against you.

Well, this is unprecedented. I don't think we will ever have, we will ever witness this kind of massive dismantling of the institutions of government to cover up crime.

LINTON BESSER: The $9.5 million payment to the Malaysian prime minister that was being pursued by Kevin Morais is just one of many unexplained payments he has received.

His official salary is about $130,000, yet his personal bank accounts have overflowed with hundreds of millions of dollars in unexplained wealth.

MAHATHIR MOHAMAD, DR., MALAYSIAN PRIME MINISTER 1981-2003: The amount of money involved is huge. We- It is unthinkable that a prime minister should have such huge sums of money in his own private bank, ah, banking account.

LINTON BESSER: Dr Mahathir Mohamad, Malaysia's former prime minister and one-time mentor to Najib Razak, has become one of his biggest critics.

MAHATIR MOHAMAD: This is wrong. This is totally wrong. A prime minister of Malaysia should never have that amount of money in his private account. If he has, he must have been... it must have come through, ah, some, ah, undesirable activity.

(Footage of launch of Kuala Lumpur International Financial District, 2009)

NAJIB RAZAK (2009): I now officially launch the Tun Razak Exchange.

(Audience applauds. Footage ends)

LINTON BESSER: The saga that has embroiled prime minister Najib began seven years ago, with the establishment of Malaysia's national wealth fund, 1MDB.

Rather than build prosperity, it's racked up debt.

TONY PUA, OPPOSITION MP: The fund has performed disastrously. I think "terribly" doesn't quite describe how the fund has performed.

Every single investment that 1MDB took has failed. It has resulted in billions of dollars of debt, which it is unable to repay. And today the Malaysian government is forced to bail out, ah, this particular, ah, entity.

LINTON BESSER: The 1MDB advisory board is chaired by prime minister Najib Razak.

In 2009 1MDB set up a joint venture with a company called PetroSaudi. The deal was brokered by a high-flying Malaysian playboy businessman called Jho Low, a friend of Paris Hilton and prime minister Najib.

Photographed together on a luxury yacht in the Mediterranean were Jho Low and the prime minister. Joining them were two key PetroSaudi executives.

CLARE REWCASTLE BROWN: Well, that photograph was taken in August 2009: mid-August, off Monaco. Um, and what it does is: it shows the key players at the time that they met and agreed to do this deal.

So you see who's involved: you've got Jho Low; you've got, ah, Tarek Obaid of, of PetroSaudi; you've got his, his partner at PetroSaudi, Prince Turki; you've got Najib there.

And, um, what emerges from, from that a few days later is an email between Tarek and Jho Low saying, "Following our meeting and our discussions, um, I'm going to introduce you to my company and my fellow directors. And we're going to go ahead with this deal."

LINTON BESSER (to Tony Pua): It was a scam, wasn't it?

TONY PUA: The deal was in essence a transaction to enable 1MDB to siphon out at least, ah, if not more: US$1 billion of cash to parties outside of the deal, ah, for expenses that we are unaware of.

LINTON BESSER: Exactly where that money went is unclear. It's now the subject of at least four investigations across the world, probing the billions of dollars that have flowed out of 1MDB.

Last year journalist Clare Rewcastle Brown revealed US$680 million had been paid into prime minister Najib Razak's personal accounts.

CLARE REWCASTLE BROWN: Well, for the first time, um, there was evidence: there was proof. I mean, you talk to anyone in Malaysia and they'll all say, "Oh, the corruption. It's unbelievable. Money, politics, billions being stolen," you know.

But there was never any proof. Um, and once we had obtained that, um, i- it was electrifying. The effect was huge.

(Footage of mass demonstration in Kuala Lumpur, August 2015)

LINTON BESSER: The revelations prompted protests across the Malaysian capital. Tens of thousands of people took to the streets.

Despite public outrage, Malaysian investigations were shut down after the new attorney-general said the US$680 million found in the prime minister's accounts was a donation from the Saudi royal family.

MAHATIR MOHAMAD: Well, he needs to explain where he gets the money. When you move huge sums of money, there must be some record, some documentary proof of the existence of the money, the source of the money, the banks that are used and how the money is transferred by the bank to his account.

Apart from saying that, ah, it was a gift from somebody, there is nothing else to prove, ah, that, ah, it was a gift, because we need to know. Ah, the person who made the gift must be extremely rich, ah, to be able to just give away US$681 million.

(Linton Besser stands outside AmBank headquarters, Kuala Lumpur)

LINTON BESSER: The Malaysian government says Najib Razak has returned more than US$600 million dollars he received in 2013 and closed two of his accounts.

But Four Corners has established that three new accounts were opened in the prime minister's name and the money just kept on pouring in.

In June 2014, for example, the bank was notified of another 50 million British pounds that was to be wired into the prime minister's name. There were also a series of cash deposits that raised money laundering alerts here inside the bank.

A high-level source has shown Four Corners the Malaysian prime minister's bank accounts. The banking documents reveal an extraordinary and steady flow of money between 2011 and 2014.

By June 26, 2012, the bank records show deposits worth US$75 million from a Saudi prince, US$80 million from the Saudi Arabian Ministry of Finance and another US$120 million from a shell company in the British Virgin Islands.

On the 21st of March, 2013, the prime minister received US$620 million from a different company registered there. Four days later, the same donor deposited another US$61 million.

By the 10th of April, 2013, the prime minister had received more than US$1 billion.

CLARE REWCASTLE BROWN: This has to be one of the biggest kleptocracy cases ever. Um, he's a- billions of US dollars have been- gone missing and, um, the network of, um, money transfers is global. It's, it's dragged in so many, um, major financial institutions. Um, and this is why the impact of this particular case could- could be very, very far-reaching.

TERENCE GOMEZ, POLITICAL SCIENTIST, UNIVERSITY OF MALAYA: The money is going to the personal account of the prime minister. It's hard for us to trace where this money is coming from. The fact that it's going to the personal account of the prime minister is unprecedented, too.

LINTON BESSER: Here at AmBank, the prime minister's bank accounts were held under the codename "Mr X."

The bank's founder was Hussain Najadi. His son, Pascal Najadi, lives in Switzerland, where I spoke to him via Skype.

(To Pascal Najadi) Mr Najadi, I understand that in 2013 your father told you he'd discovered large-scale corruption in Malaysia?

PASCAL NAJADI, SON OF AMBANK FOUNDER HUSSAIN NAJADI: Yes, my father has been lamenting, ah, at the lunch in Kuala Lumpur about this. And he was throwing his hands up and saying, "My God, this prime minister, ah, Najib is, is lining his pockets. They are robbing the country."

LINTON BESSER: Just five days after their conversation, Hussain Najadi was gunned down in the car park of a Chinese temple in downtown Kuala Lumpur.

PASCAL NAJADI: For us, it was clear this was not a random shooting or random murder. This was- must have been that there were, ah, high powers at hand that have been able to execute such a, such a, er, public-place execution: midday, Kuala Lumpur downtown.

LINTON BESSER: Your your father left AmBank in the 1980s. Why are you so convinced that he had become aware of the prime minister's accounts?

PASCAL NAJADI: My father was one of the old boys of that country. He has helped to build Malaysia. He helped to modernise Malaysia.

Um, and he was, ah, still in touch with, ah, personalities: talking about the old times, talking about old days. Nothing business in particular: just staying in touch with the, with, w- with the folks.

Um, when we, where we got much more clarity, um, Linton, was when we took an audio, er, er, er, witness on audio recording who confessed, or who, who was revealed to us that my father, according to this witness, went with him to, er, the central bank governor's office to complain about certain observations.

I was not aware...

LINTON BESSER: There's no evidence Hussain Najadi's death can be linked to the scandal engulfing the Malaysian prime minister. Pascal Najadi plans to appeal to the United Nations to conduct an inquiry into the murder.

Malaysia's banking regulator was told at least three times about the enormous deposits into prime minister Najib Razak's personal accounts.

Four Corners has learned that senior AmBank figures came here to the Malaysian central bank governor to warn her about Najib Razak's personal accounts, way back in September 2012.

Their report was marked "highly sensitive" and it revealed that almost $300 million had already flowed to Najib Razak from several mysterious donors overseas.

Yet th central bank governor, Zeti Aziz, merely thanked them for their report and handed it back.

(Footage of Zeti Aziz addressing Wharton Global Forum Kuala Lumpur, 11-12 March)

ZETI AZIZ, CENTRAL BANK GOVERNOR: This integration process, however, has...

LINTON BESSER: Zeti Aziz is still the head of Malaysia's central bank. We wanted to know what action she took about Najib's accounts.

(Footage of Zeti Aziz leaving forum)

LINTON BESSER: Hello. Hello, Dr Zeti.

ZETI AZIZ: Yes?

LINTON BESSER: I'm from ABC Australia.

ZETI AZIZ: Yes?

LINTON BESSER: Just like to ask you a couple of questions...

ZETI AZIZ: Yes.

LINTON BESSER: ...about your role, regarding the prime minister's bank accounts. We're trying to understand why you didn't do more when you were alerted about the hundreds of millions of dollars flowing into them?

ZETI AZIZ: Well, first of all I cannot discuss any individual account, including even your own account, because no central bank or regulator can look at individual accounts. But if the financial institution informed us of what they call "suspicious transactions," then we will... investigate into it.

LINTON BESSER: You were a member of the taskforce investigating, er, all, all of these issues. What, what's been the outcome o- of all of that? Is it true what the new attorney-general has said: that Najib Razak has no case to answer? Is that true?

ZETI AZIZ: I have no comment on this at this point in time. As I said: that no authority will discuss any investigation that has not been concluded.

LINTON BESSER: So who is behind the money flowing into the prime minister's bank accounts?

ZETI AZIZ: As I said, I cannot comment on this. It is an ongoing investigation.

(Footage ends)

LINTON BESSER: Accusations against prime minister Najib date back almost a decade.

The first scandal was in 2002, when Najib Razak was defence minister overseeing a $1 billion submarine deal between Malaysia and France. It embroiled some of Najib's closest confidants in allegations of kickbacks, cover-ups and another murder.

French authorities have indicted the former head of French arms firm Thales. They acted after an investigation by Malaysian anti-corruption campaigner Cynthia Gabriel into a US$108 million commission paid to a Malaysian company.

CYNTHIA GABRIEL, ANTI-CORRUPTION CAMPAIGNER: It wasn't just this payment that was of question: ah, it was a couple of other payments as well that were made that seemed murky and seemed very shady; that did not have very clear, um, ah, reasons for why, ah, the payments were made.

LINTON BESSER: The middleman in the submarines deal was a senior adviser and friend to the prime minister. His name is Razak Baginda.

CYNTHIA GABRIEL: We don't know who he is, apart from him being a close associate and friend of, ah, Najib.

Ah, so I think today we are not certain if he was actually on a formal contract with the Defence Ministry, or whether he was just negotiating a very large multi-million dollar contract, only because he was the friend of Najib Razak.

TERENCE GOMEZ: The allegation is that kickbacks were given to the middle-men who negotiated the deal in France. That is the allegation. That allegation now has to be investigated properly.

LINTON BESSER: What thrust the corruption scandal into the global spotlight was another murder. This time, the victim was a 28-year-old model from Mongolia named Altantuya Shaariibuu. She worked as a translator.

It's also been alleged she was having an affair with Najib, something he's always denied.

But his adviser, Razak Baginda, was sleeping with her.

CYNTHIA GABRIEL: He did admit that they were having a romantic relationship for a while. And then the events that led to her death suggested that he was trying to get rid of her.

LINTON BESSER: The model, Altantuya, wanted a cut of the money from the submarine deal.

CYNTHIA GABRIEL: Interestingly, ah, her father had said that Altantuya had left a note to say that she was coming to Malaysia to pick up her share of the commission, which amounted to s- to about US$100,000.

LINTON BESSER: On October the 19th, 2006, Altantuya Sharibuu went to Baginda's house to demand money.

She was kidnapped by two Special Forces policemen. She was driven into the jungle and shot twice in the head.

Then they attached military-grade explosives to her body and detonated them.

CYNTHIA GABRIEL: Altantuya was brutally murdered in 2006. Her body was blown up by C-4 explosives. And it was really, er, shocking because these explosives are normally used to bring down buildings - it's that powerful - not to, ah, blow up a body.

(Footage of press conference, 2006)

ABDUL RAZAK BAGINDA, FORMER ADVISOR TO NAJIB RAZAK: I... I would like to say here...

LINTON BESSER (voiceover): Najib's adviser, Razak Baginda, was initially charged with ordering the murder. But he was later acquitted.

ABDUL RAZAK BAGINDA: ...and what I have said today to all of you... is what I told the police: er, that Dato Najib had never met the deceased.

REPORTER: How do I know?

ABDUL RAZAK BAGINDA: How do I know? (Laughs) It's like asking me, you know... you know (inaudible)... I know. OK? I know.

(Footage ends)

LINTON BESSER: Najib himself has always denied any involvement with the murder.

(Excerpt from Foreign Correspondent, ABC TV, 4 November 2008)

NAJIB RAZAK (2008): Really, um, there's no shred of evidence at all been presented: Nothing in court. Nothing, nothing has been said. And in fact our, our honorary, the, the Mongolian Honorary Council has come out openly to say, look, he examined all the documents and there was nothing to connect me with, with, with the Mongolian girl whatsoever.

HELEN VATSIKOPOULOS, REPORTER (2008): So you didn't know her? She...

NAJIB RAZAK (2008): No, absolutely not.

HELEN VATSIKOPOULOS (2008): ...she did some translation work for your company...?

NAJIB RAZAK (2008): Nothing. Absolutely nothing. I have not met her at all. I do not know her at all. And how can I be linked with her?

LINTON BESSER: The allegations have dogged prime minister Najib since a private investigator, Balasubramaniam, swore a statutory declaration implicating the PM's adviser Baginda in the model's murder.

(Footage of Perumal Balasubramaniam, TV PAS, Malaysia)

PERUMAL BALASUBRAMANIAM, PRIVATE INVESTIGATOR: She said she was... she knows Ra- Najib and Razak Baginda: met, met them in Paris. She was the mediator.

(Footage ends)

CLARE REWCASTLE BROWN: Bala was a key witness, because he had been a part of the whole drama of those last few days of Altantuya's life.

B- Bala was there on that final night, during that final drama when a car drove up with two thugs and pulled, ah, Altantuya off the street and drove away with her: the last time she was seen alive. Um, and so his, his testimony was crucial.

(Footage of Perumal Balasubramianam being interviewed, archive)

PERUMAL BALASUBRAMANIAM (archive): Yeah. I know. He's Najib's br- brother...

LINTON BESSER (voiceover): But the P.I. recanted his statement and claimed in court documents he was forced by people close to the prime minister to leave the country.

PERUMAL BALASUBRAMANIAM (archive): He offered me RM5 million for me to retract the SD. Then (inaudible) asked me whether: "You are married?" I said, "Yes." "Do you love your family?" I said, "Yes."

(Footage ends)

AMERICK SIDHU, BALASUBRAMANIAM'S LAWYER: Now, to emphasise, um, their desire of getting Bala out of the country: they actually took him to a shopping centre on the outskirts of KL as well. And they met somebody that Bala recognised - and it was the prime minister's younger brother, Nazim.

And Nazim Razak said to Bala, "Now, look: if you love your family and if you're concerned about their safety, then I suggest that you follow exactly what (censored) tells you to do."

And so a combination of inducement - financial inducement - and threats to the safety of his family made him think that it was probably a good idea to leave.

LINTON BESSER: This scandal has reached all the way to Australia.

One of the model's killers has been locked up here at Villawood detention centre in Sydney's west.

Sirul Azhar Umar was convicted over Altantuya's murder and sentenced to death. But during an appeal over the case, he fled Malaysia and sought a protection visa to stay in Australia.

Sirul told his friends and family he was just a pawn in a political conspiracy.

TERENCE GOMEZ: There seems to be no reason why he should have killed that lady. The allegation is that he must have got instruction from someone senior.

He knows a lot as to why this girl was murdered. He has not told us why the girl was murdered and who he was acting for.

(Smart phone footage of Sirul Azhar Umar, published January 2016)

LINTON BESSER: Out of the blue, after months in custody, Sirul released a series of bizarre videos that announced prime minister Najib Razak had nothing to do with the model's murder.

SIRUL AZHAR UMAR, FORMER BODYGUARD TO MALAYSIAN PRIME MINISTER (translation): The most honourable prime minister of Malaysia, Datuk Seri Najib Abdul Razak, was not involved at all and was not connected to the case.

(Footage ends)

CLARE REWCASTLE BROWN: The sole purpose of the videos appears to be to use Sirul to exonerate the prime minister. I mean, he doesn't seem to be sitting there doing a video to exonerate himself or to forward his own case: he's doing it to, um, help the prime minister.

LINTON BESSER: When Four Corners arrived in Malaysia three weeks ago, we found a country transformed by fear of its prime minister.

CLARE REWCASTLE BROWN: I think there is an atmosphere of total terror. It's an incredibly difficult situation for every individual trying to carry out their jobs.

ZAID IBRAHIM: You see, the problem with this country is that everybody's so scared of the prime minister.

LINTON BESSER: In Malaysia today dissidents are silenced, political opponents are jailed and news organisations are shut down.

But people are still finding ways to protest.

Street artist Fahmi Reza's image of prime minister Najib Razak as a clown has gone viral.

(Fahmi Reza installs poster on wall in public street)

FAHMI REZA, ARTIST: I designed the poster and posted it on my social media sites: you know, on Facebook, Twitter and Instagram. And I received a warning from the Malaysian Twitter police, warning me for posting the poster.

LINTON BESSER: Why? What's wrong...

FAHMI REZA: And now, and now, and now this warning: I've also been investigated, um, for, for making the poster. I mean, I'm being investigated under two- there's two charges: one is under the Malays- the Communications Act; another one under the Penal Code - for this poster alone.

LINTON BESSER: Why are they cracking down on it?

FAHMI REZA (shrugs): Um, someone wasn't happy with the image and made a police report against me.

LINTON BESSER: Authorities are on the look-out for anti-government critics everywhere. Within hours, Fahmi Reza's new poster had been torn down after a visit by police.

(Linton Besser and Fahmi Reza meet again and shake hands. The poster has been removed)

LINTON BESSER: What's happened?

FAHMI REZA: Yeah, eight hours later: something like that, you know. Don't know exactly when. But when I talked to the car attendant here at the parking lot, they said the police came here at around 8pm last night, asking him so many questions about the poster: who did it, you know.

You know, this is just one more way for them to silence dissidents in this country.

(Car park attendant approaches Fahmi Reza)

ATTENDANT: You leave this, please.

FAHMI REZA: OK.

ATTENDANT: Because why:...

LINTON BESSER: Why, why, why should we leave? What's...

ATTENDANT: Because he put a stick- a poster.

LINTON BESSER: Yeah. Yes.

ATTENDANT: It's, it's against the law.

LINTON BESSER: It's against the law to put up a poster?

ATTENDANT: Yeah, yeah. My prime minister: this country's prime minister's photo: that is very bad.

FAHMI REZA: Why... why can't we as citizens express ourselves?

ATTENDANT: OK, OK. Can you hold on? I call the police now, you can talk to them

FAHMI REZA: Why do you want to call the police?

ATTENDANT: Because you did something wrong.

This is our Malaysian law.

LINTON BESSER: Right.

ATTENDANT: Yeah. We cannot say bad things about our prime minister.

FAHMI REZA: There's no law that says we cannot say bad things about the prime minister.

ATTENDANT: OK, OK, OK. I'll, I'll go and call the police.

FAHMI REZA: So you want to call the police on me?

ATTENDANT: Yeah.

(Footage ends)

LINTON BESSER: For others, the consequences of dissent are far more serious.

Khairuddin Hassan is a former senior politician from prime minister Najib's own party.

Last year he went to the UK, Switzerland, Singapore and Hong Kong to lodge police complaints about the huge sums of money pouring into the PM's accounts.

KHAIRUDDIN HASSAN, FORMER NAJIB GOVERNMENT OFFICIAL: You see, my aim: actually, my intention was to get the foreign legal enforcement authority to investigate on this 1MDB scandal.

I didn't make any new wild accusations or whatsoever. I flew abroad because I want to put it to the rules of law.

LINTON BESSER: Khairuddin Hassan was jailed for two months on terrorism charges. He was accused of sabotaging the Malaysian economy.

KHAIRUDDIN HASSAN: Well, they accused that I was trying to sabotage the economy of Malaysia. Why I am arrested, detained and charged under Terrorism Act? That is ridiculous.

I was arrested and charged under that Terrorism Act and my lawyer for the first time in history: he is arrested alongside me. A lawyer who is providing legal services to his client.

LINTON BESSER: It didn't take long for our questions to start upsetting people.

We went to a press conference starring a woman named A. Santamil Selvi.

(Footage of press conference)

RAMESH RAO, POLITICAL FIXER: This is a non-government...

A. SANTAMIL SELVI, WIDOW OF BALASUBRAMANIAM: NGO.

RAMESH RAO: ...organisation.

LINTON BESSER (voiceover): Her husband was the private investigator Bala, who witnessed the kidnapping of the murdered model.

Bala died of a heart attack.

His wife Selvi has been pursuing a lawsuit, accusing the prime minister and his relatives of forcing her family out of the country for several years.

In a dramatic backflip, she has decided to apologise to the prime minister.

A. SANTAMIL SELVI (translation): My purpose here today is that I wish to apologise openly, specifically to the Malaysian prime minister, Datuk Seri Najib, and his family.

LINTON BESSER: Ah, so let me ask you this.

(A. Santamil Selvi speaks to staffer in Malay)

LINTON BESSER: Mrs Selvi, it's just so strange. Suddenly you apologise. It's- you can see why it's confusing. Sorry, I'm asking Mrs Selvi.

(Voiceover) The press conference was exposed as a sham when, within minutes, Selvi withdrew her apology and revealed she had been paid.

(To A. Santamil Selvi) Ah. So you're not apologising to Najib?

A. SANTAMIL SELVI: No. And Bala's SD is (inaudible), right. It's true. OK.

LINTON BESSER: Why, Mrs Selvi, suddenly you're changing your position so radically?

Someone has come to the table with funds to help you in your difficult financial position and you've you've taken a difficult decision and one that perhaps is understandable to change your story because the political pressure was just too great. Is that right?

RAMESH RAO: No, she never changed any story here.

LINTON BESSER: Well, she's changed her story twice today already this morning?

RAMESH RAO: You see, the story… No, what, what story she change?

LINTON BESSER: Well, first: well, the the statement says she apologises to Najib. But she just said clearly: no, she's not apologising to Najib. Which is it?

A. SANTAMIL SELVI (translation): I don't want to talk about anything else. (In English) OK? Sorry.

(A. Santamil Selvi stands to leave press conference)

LINTON BESSER: You, you won't answer any more questions, Mrs Selvi?

A. SANTAMIL SELVI: No. Sorry, no, no more questions.

LINTON BESSER: What was the total financial offer?

A. SANTAMIL SELVI: I come here for my children's education. That's all.

RAMESH RAO: Twenty thousand.

LINTON BESSER: Thirty thousand ringgit?

RAMESH RAO: Twenty.

A. SANTAMIL SELVI (shouting): Only RM20,000. I need only 20,000. But (inaudible) cannot give me the 20,000, so I come to this office. For my children's education: that's all.

Take my bag.

UNIDENTIFIED WOMAN: Can you please stop asking questions?

A. SANTAMIL SELVI (shouting): No more questions, please. I come here for my children education that's all.

LINTON BESSER: The man organising the press conference, Ramesh Rao, is a political fixer who has staged similar events before.

(To Ramesh Rao) Mrs Selvi has stuck...

RAMESH RAO: What is wrong with you, eh, white man? Can you see the paper statement? I am helping these (inaudible) and all that. And you keep repeating (inaudible). I'm off.

OK? I will make sure the children get a good education. I will help them. She apologise or not: that is not my problem. But my concern: I will make sure the children get a good education. Done.

(In car park, Linton Besser approaches people seated in a car)

LINTON BESSER (voiceover): The event seemed to have been prompted by the realisation that Four Corners was asking questions. And there were Special Branch agents scattered around the building.

(To people in car) Are you Malaysian Special Branch? Why is Malaysian Intelligence here at this press conference? Can you answer some questions, sir?

(They ignore him)

CLARE REWCASTLE BROWN: It's the sort of, um... farce that people have got used to in Malaysia: these extraordinary staged events. People retracting their evidence and clearly being paid and intimidated to do it.

LINTON BESSER: A few hours later, we heard that prime minister Najib Razak had put out a press call and we jumped on a plane.

The PM had invited the media to a rare public appearance on the island of Sarawak, where he was giving an evening campaign speech.

It was the first and only chance we had to have prime minister Najib answer our questions.

(Footage of Najib Razak walking to mosque, Kuching, Sawawak, 12 March)

LINTON BESSER, REPORTER: Hello, Mr Prime Minister. It's ABC Australia. I'm wondering if you can explain...

MALAYSIAN PRIME MINISTER: No, no, no.

LINTON BESSER: ...the hundreds of millions of dollars in your account?

Hello, Mr Prime Minister. Can you explain all the hundreds of millions of dollars in your account? Mr Prime Minister?

(Police officer approaches Linton Besser)

POLICE OFFICER: No, no, no. Who are you? What you trying to do?

LINTON BESSER: No. I'm- its just a press conference.

POLICE OFFICER: No, no, no, no. No, no, no, no, no. Take, take him away. (Speaks to officers in Malay)

(To Linton Besser) What are you? Why are you? What are you trying to do?

(Linton Besser is surrounded by police officers)

LINTON BESSER: J-j- just, just ABC press conference.

POLICE OFFICER: No, where, where is your identity? We do not know about you.

LINTON BESSER: I-I- I'm just a pre- it's, I'm just a journalist for a press conference.

(Footage of Linton Besser in mini van, driving away from mosque)

LINTON BESSER: It's very sensitive here. We've just been questioned by the police and Malaysian Intelligence. They've have taken our passports and asked us where we were staying; ah, made it very plain we were not welcome questioning the Malaysian prime minister about the huge volumes of money pouring into his account.

LOUIE EROGLU, CAMERAMAN (off-screen): OK.

LINTON BESSER (voiceover): Soon after, our van was pulled over. Cameraman Louie Eroglu and I were arrested and taken to the local police station.

(Covert smart phone footage of Linton Besser in police station, speaking on phone)

LINTON BESSER (on phone): Yeah, we are. And our lawyer's just arrived: Albert Tang.

I'm here. I've been, ah, placed under arrest at, um, a police station in Sarawak. Ah, we're waiting for some legal advice but at the moment it sounds like they're intending to charge us with, ah, obstructing a civil servant in the exercise of their duty, just for throwing a question to, ah, the Malaysian prime minister, Najib Razak.

(Voiceover) Our passports were taken again and we were detained for six hours.

JUANITA PHILLIPS, PRESENTER (ABC TV News, 13 March): An ABC Four Corners crew was detained by Malaysian authorities overnight.

KARL STEFANOVIC, PRESENTER (Today program, Channel 9, 14 March): Things have- seem to be going from bad to worse in Malaysia?

JULIE BISHOP, FOREIGN MINISTER (Today program, Channel 9, 14 March): Well, these are matters that we are raising with the Malaysian authorities.

(Footage of Julie Bishop at press conference in Suva, Fiji)

REPORTER (14 March): A Four Corners team has been arrested, um, in Malaysia...?

JULIE BISHOP (14 March): We are deeply concerned about this. We are providing consular support to the ABC crew and we're certainly raising the issue at, ah, the appropriate level within the Malaysian government.

LINTON BESSER: Louie and I were banned from leaving Malaysia and warned we could face two years in jail.

Late on the Monday night, we got bad news.

ALBERT TANG, LAWYER (14 March): If your clients do not plead guilty, then the matter will go to trial and in which case the senior federal council may ask the court for the passports of Linton and Louie to be retained by the court.

LINTON BESSER: We were to face court the next day to hear criminal charges read against us.

But six hours later, there was a bang on my door. The authorities had suddenly changed their minds. The charges were to be dropped.

(Footage of Linton and staff in hotel room, packing equipment)

LINTON BESSER: We were free to go, but for those who live in Malaysia the crackdown continues.

CLARE REWCASTLE BROWN: They've resorted to sheer intimidation and threats. Um, they're no longer able to rely on y- law enforcement to protect their position.

Um, so they're just letting people know: if they do cross them, ah, they'll just be met with sheer intimidation. I mean, they're pulling charges out of the air to throw at people, um, and shoving people in jail because of course under current rules you can be thrown into jail and kept there for months without, ah, a court appearance. So they're just threatening people now and int- It's very, it's very effective. It's amazing how effective it is.

LINTON BESSER: Millions of ordinary Malaysians are watching the unfolding drama with wary resignation. How long prime minister Najib Razak can hold on to power is anyone guess.

MAHATHIR MOHAMAD: He has to go, because his policies are doing a great deal of harm to the country. He has undermined all the institutions of government created to make sure that the country is well run.

So all the institutions that, um, guard public interest are not functioning anymore, so that gives him almost absolute power.

LINTON BESSER (to Clare Rewcastle Brown): In any other country, a prime minister linked to so many allegations of corruption would have been impeached by now. What is it going to take in Malaysia?

CLARE REWCASTLE BROWN: I think that Malaysia is waiting for foreign action. I think they feel, um, disempowered; um, helpless.

Um, I think after years and years of increasing dictatorial control, ah, they no longer feel they have a democracy. There is an atmosphere of total fear amongst the people who should be taking action to see law and order enforced against Najib.

END

Background Information

NEWS COVERAGE

Najib Razak 1MDB scandal: Malaysian Prime Minister's accounts triggered internal money-laundering alarm, by Four Corners | ABC News | 28 Mar 2016 - https://www.abc.net.au/news/2016-03-29/najib-razak-bank-accounts-triggered-money-laundering-alert/7280244

Najib Razak 1MDB scandal: Former Malaysian attorney-general planned to lay charges against PM | ABC News | 28 Mar 2016 - https://www.abc.net.au/news/2016-03-28/former-malaysian-attorney-general-planned-to-confront-pm/7278226

INFOGRAPHIC The 1MDB monster | The Business Times | 24 Mar 2016 - http://www.businesstimes.com.sg/infographics/the-1mdb-monster

Former Malaysian leader Mahathir Mohamad sues PM Najib Razak | ABC News | 24 Mar 2016 - https://www.abc.net.au/news/2016-03-23/former-malaysian-prime-minister-mahathir-sues-pm-najib-razak/7271778

Former Malaysian leader Mahathir Mohamad sues PM Najib Razak | ABC News | 23 Mar 2016 - https://www.abc.net.au/news/2016-03-23/former-malaysian-prime-minister-mahathir-sues-pm-najib-razak/7271778

'This is Najib's party': Former Malaysian PM Mahathir Mohamad quits party over $1.4b 1MDB scandal | ABC News | 1 Mar 2016 - https://www.abc.net.au/news/2016-03-01/former-long-serving-malaysian-pm-mahathir-mohamad-quits-umno/7211532

Malaysian Police Threaten Internet Users for Sharing Clown Memes of Prime Minister | Global Voices | 13 Feb 2016 - https://advox.globalvoices.org/2016/02/13/malaysian-police-threaten-internet-users-for-sharing-clown-memes-of-prime-minister/

Najib Razak: Malaysian PM cleared over $980 million Saudi 'donation' | ABC News | 26 Jan 2016 - https://www.abc.net.au/news/2016-01-26/corruption-probe-clears-malaysian-prime-minister-najib-razak/7115712

Gani says in the dark over sudden termination | Malay Online | 28 Jul 2015 - http://www.themalaymailonline.com/malaysia/article/gani-says-in-the-dark-over-sudden-termination

Malaysia's attorney-general says he has seen documents alleging corruption by PM Najib Razak | ABC News | 8 Jul 2015 - https://www.abc.net.au/news/2015-07-04/malaysian-ag-says-seen-documents-alleging-najib-corruption/6595584

Malaysia PM Najib Razak slams corruption allegations in news report as 'political sabotage' | ABC News | 4 Jul 2015 - https://www.abc.net.au/news/2015-07-03/malaysia-pm-slams-corruption-report-as-political-sabotage/6594088

Leading human rights activist among dozens arrested in Malaysia after May Day protest | ABC News | 2 May 2015 - https://www.abc.net.au/news/2015-05-02/rights-activists-opposition-politicians-arrested-in-malaysia/6440154

British journalist Clare Rewcastle Brown given police protection after being followed and photographed in Hyde Park | The Independent UK | 6 Aug 2015 - http://www.independent.co.uk/news/uk/crime/british-journalist-clare-rewcastle-brown-given-police-protection-after-being-followed-and-10441274.html

Sirul Azhar Umar: Who ordered the brutal murder of Atlantuyaa Shaariibuu? | SMH | 9 May 2015 - http://www.smh.com.au/national/sirul-azhar-umar-who-ordered-the-brutal-murder-of-atlantuyaa-shaariibuu-20150411-1mj5ce.html