Malaysia’s anti-corruption net tightens around Anwar’s rivals after decades of bad blood: ‘it’s a smart move’

While the 72-year-old prime minister’s timing may be right, he has taken on formidable – if aged – rivals with the money and motive to come back at him.

Why are rivals of Malaysia’s PM Anwar ensnared in a corruption investigation?

The MACC has also hauled in two of Mahathir’s sons, ordering them to reveal their wealth or also face legal action. Speculation is now mounting that their 98-year-old father could be next.

“It’s a smart move to go after Mahathir and Daim,” analyst James Chin told This Week in Asia. “Put yourself in Anwar’s shoes: the people that give you the most trouble are obviously Mahathir and Daim, people with money, so you go after them.”

Anwar came to power at the head of a unity government after an election in November 2022 that revealed more about Malaysia’s political fault lines than the public’s appetite for him to fulfil his lifelong ambition of becoming prime minister.

Anwar denies interfering in Ahmad Zahid’s case, as well as the MACC’s investigations into Daim and Mahathir.

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After his sons’ brush with the authorities, Mahathir is on the defensive and could himself be caught in the dragnet, analyst Azmi Hassan argued, if authorities caught a whiff of any wrongdoing on his end.

“It would be bad for the government if it did not implicate Mahathir if there is proof that he also accumulated wealth illegally,” Azmi said.

While such proof – if it exists – has yet to be unearthed, Anwar went on the offensive as early as last year accusing his two-time predecessor of spending “22 years and 22 months” in office to enrich his family and children, leading Mahathir to sue him.

The political landscape, meanwhile, is tilting in Anwar’s favour.

Late last month, a sixth MP from opposition party Bersatu declared support for Anwar, adding to the 153-seat super majority he claims in the 222-seat parliament. The six lawmakers have said their move was motivated by a desire to ensure political stability – and secure government funding for their constituencies while remaining Bersatu members.

The endorsements have dented the opposition’s attempts – driven by Mahathir and the Malay nationalist Perikatan Nasional bloc, of which Bersatu is a member – to topple Anwar’s government through defections.

At the same time, the courts are going after the money of Daim and Mahathir, Anwar’s former cabinet colleagues.

“The idea is to hit both of them hard,” said a politician who served inside Mahathir’s last government, requesting anonymity.

“It works well with the people too,” he added. “The minute the names of Daim and Mahathir are mentioned, Malaysians feel that their long-standing grouses against these figures and their suspicion of their supposed ill-gained wealth are vindicated.”

Decades of bad blood

Daim, who the MACC says has assets spanning luxury cars and a vast portfolio of properties and hotels, has decried the investigation into his family’s wealth as a hatchet job driven by Anwar.

He has accused the prime minister of abandoning earlier promises to break with Malaysia’s bitter past of political recriminations and favour-trading.

Anwar’s pursuit of past vendettas has blinded him to a worsening economy and weak ringgit as “the sufferings of ordinary Malaysians are ignored”, Daim said.

Worse still, he has alleged that Anwar’s scramble into office by way of a unity pact following an inconclusive election has stripped his claims to clean leadership of all credibility.

“For the sake of becoming the prime minister, Anwar made a person facing corruption charges as the deputy prime minister,” Daim said, referring to Ahmad Zahid.

“Soon after, like magic, the DPM’s 47 corruption charges were dropped. Is this the new Malaysia that was promised?”

The support of Umno, which Ahmad Zahid helms, was a deciding factor in Anwar’s appointment as prime minister as it gifted him a clear majority in parliament.

The ill will that exists between Anwar and Mahathir-Daim has bled across decades of Malaysian political history.

In his first 22 years as prime minister from 1981 to 2003, Mahathir won plaudits for steering aggressive economic expansion, with Daim as his finance minister.

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But as the Asian financial crisis of the late 1990s sent Malaysia’s economy into meltdown, critics blamed crony capitalism for stuffing the pockets of a rapacious business elite as it left ordinary Malaysians to pick up the tab.

Before his time in government, Daim was a renowned businessman with interests ranging from property development to snack-food production, manufacturing and banking. Yet throughout his two terms as finance minister – the last from 1999 to 2001 – he managed to divert interest away from his fortune.

When Anwar took charge of the finance ministry for the first time in 1991, it was Daim who showed him the ropes, according to veterans of the long-ruling Umno party to which all three men belonged at the time.

But when then-prime minister Mahathir decided in 1998 to sack Anwar as deputy leader, Daim famously sided with the older man. Anwar was later jailed on Mahathir’s watch for corruption and sodomy, charges he and his supporters maintain were trumped up.

The 2021 Pandora Papers’ data dump of financial information on the global rich, in particular, gave the Malaysian public a glimpse of the sort of money that Daim and his family have accrued – alleging that he, his wife Naimah and two of their sons were beneficiaries of a trust holding assets worth US$52.5 million spanning properties in Britain and the US.

The MACC said in a statement late last month that it launched investigations into all entities implicated in the Pandora Papers leak in August 2022 – three months before Anwar had managed to claw his way back into high office.

Anwar has denied allegations that he is getting even with long-standing rivals, despite hinting at as much when he told reporters months before the elections in 2022 that Daim would have “sleepless nights” should he become prime minister.

Now he is in the top job, political watchers warn that vengeance may yet prove to be a double-edged sword.

“The short term is personal – settling scores of the past and present – and to shore up support, particularly from a generation of Malaysians who deeply resent Mahathir for his impact on governance,” political analyst and long-time Malaysia watcher Bridget Welsh told This Week in Asia.

“The longer term effects are the perpetuation of a cycle of using power against opponents – like Mahathir – and exposing those who have assets in the political economy.”

All about timing

Mahathir has said the crackdown now “threatened him”, calling it a clear case of selective persecution in which those not aligned with the prime minister are investigated for corruption while his allies are cleared of all charges.

“Back when he was in the opposition, he [Anwar] talked about Reformasi, freedom of speech,” Mahathir said with typical bombast, referring to Anwar’s reform movement launched after his 1998 sacking.

“I would like to tell the whole world to not come to Malaysia. If they [the government] want to investigate, it is done without any explanation. This is the new regime.”

But experts say the Malaysian public no longer puts much stock in Mahathir’s words, with his increasingly cantankerous media appearances appearing to fall flat.

Now is also a shrewd time for the current prime minister to defang the threat posed by Daim, according to one political insider.

“Anwar is essentially cutting the head off the snake by capturing the weaker links in Bersatu to his side, cutting funding by going after Daim, and curbing potential threats through the full use of government machinery,” the insider said, requesting anonymity. “All this seems to be working well for him.”

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“So this is the best time for Anwar to go after these people,” said analyst Chin, a professor of Asian studies at the University of Tasmania.

Rumblings of missing money and fantastic wealth play well among the electorate and could finally help Anwar’s unity government live up to its billing, Chin said.

“I don’t know of anything else that would bring people together like that aside from sports,” he added.