Anwar’s feud With 99-Year-old rival looms over Malaysia’s revival

After finally becoming Malaysia's prime minister in November 2022, Anwar Ibrahim faced a choice: Target political opponents who oppressed him for years, or usher in the new era of democratic reforms that he had long promised.

Anwar had reason to want revenge, particularly against former premier Mahathir Mohamad, now 99 years old. In a defining moment of Malaysian history in 1998, Mahathir had sacked Anwar from his posts as finance minister and deputy prime minister, and kicked him out of his party. Then Anwar was arrested, severely beaten and thrown in prison for years. He spent so long in solitary confinement that he read the complete works of Shakespeare four times.

At the same time, Anwar, now 77, had reinvented himself as a global champion of democracy, winning support from the likes of former US Vice President Al Gore and UK billionaire Richard Branson. Anwar had become an advocate of free and fair elections, and campaigned to eliminate graft and crony capitalism. As part of that, he'd called for independent agencies like the Malaysian Anti-Corruption Commission, or MACC, to be free of political interference.

Roughly two years into his term, it's increasingly looking like he's opted for revenge — and, according to Anwar's critics, the MACC is at the center of this retribution.

The MACC, led by Chief Commissioner Azam Baki, has opened investigations into at least three of Anwar's adversaries and their families, including Mahathir, while not yet acting on a complaint by a politician about share purchases by one of the prime minister's allies.The anti-graft agency opened 820 investigations in 2022, according to its most recent annual report.

Four people familiar with the situation, who asked not to be identified discussing confidential matters, said that both MACC officials and political allies of the prime minister are under the impression that the two men have reached an understanding: Azam would have his term extended as MACC chief commissioner in return for taking action against Anwar's opponents.

While it had been customary for new prime ministers to replace the MACC chief since Malaysia passed a law setting up the body in its current form in 2009, Azam — first appointed more than four years ago — has now been in the position for three leaders, including Anwar.

Azam told MACC officials that Anwar himself instructed the agency to investigate Mahathir and his sons, as well as Daim Zainuddin, a former finance minister and longtime Mahathir confidante, according to three people familiar with the matter. The people added that Azam also told agency officials in March not to investigate share purchases by Anwar's former political secretary, Farhash Wafa Salvador, saying the instruction came from the prime minister himself.

In response to written questions, Anwar's office said: "The Prime Minister's Office affirms that the Prime Minister has never issued directives or interfered in investigations conducted by the Malaysian Anti-Corruption Commission. The MACC operates as an independent body, acting on the basis of complaints received."

In March 2023, Anwar explained why he kept Azam in the role, saying he wanted "to avoid the perception that a new prime minister will choose a new MACC chief." Weeks later, after Azam got his first one-year extension under Anwar, the prime minister said he gave the attorney-general and the MACC "complete freedom and authority to carry out their duties."

In a statement responding to questions about Anwar, the MACC's Chief Commissioner Office said that it's normal for the head of the agency to brief the prime minister on "high-profile cases and those with cross-border implications to the country." It added that the MACC "operates independently and has the authority to investigate allegations of corruption without seeking permission from anyone, not even from the Prime Minister."

"This autonomy allows the MACC to act swiftly upon receiving reports or complaints, ensuring a fair and transparent investigative process for all cases, regardless of their prominence," Azam's office said in the statement. The MACC firmly refutes claims "regarding any instructions from the Prime Minister to influence or obstruct specific investigations," it said.

Foreign investors who shunned Malaysia over the past six years — a period that saw a revolving door of five prime ministers and the fallout from a $23 billion corruption scandal over state fund 1MDB — have recently started pouring in money, encouraged by policies to boost investment in the chip industry and artificial intelligence data centers. The ringgit is the biggest gainer across emerging markets while Malaysia's benchmark equity index is the top performer in Southeast Asia with an advance of about 15% so far this year.

Still, Anwar's own political standing is tenuous. While his government commands a two-thirds majority in parliament and an election isn't due until early 2028, coalition partners have a history of jumping ship at opportune moments. And he faces a growing electoral threat from Malaysia's Islamic party, which holds the most seats in parliament, and has seen its fortunes rise among the Malay majority.

There's a growing perception that corruption and cronyism have persisted under Anwar, despite his promises for greater transparency and accountability, according to Ooi Kok Hin, executive director of the Coalition for Clean and Fair Elections, or Bersih, which has led pro-democracy street protests over the past few decades, including back when Anwar was in jail.

"If this is left unaddressed, this could erode investors' confidence and entrench the perception that patronage is 'business as usual' under the new government," Ooi said. "The government's reformist credibility is on the line."

Weeks after Anwar became prime minister, the MACC announced its first probe involving one of his political opponents, former leader Muhyiddin Yassin. Three months later, Muhyiddin was charged with four counts of abuse of power and three counts of money laundering. He has denied wrongdoing and said it was a political vendetta.

While a lower court initially acquitted him of the abuse of power charges last year, the Appeals Court later reinstated them. Legal proceedings are ongoing.

As that criminal case dominated the headlines, the MACC probes against Mahathir, Daim and their families were getting under way. Employees of the anti-graft agency were advised to describe the investigations as being part of ongoing probes into revelations from two giant document leaks, the Pandora and Panama Papers, according to people familiar with the matter.

Some details emerged in public from February 2023, when local media reported that the MACC was investigating Daim, whose shell companies were identified in the Pandora Papers. That December, the agency seized a 58-story Kuala Lumpur skyscraper owned by Daim's family, and said in a statement at the time that it opened an investigation paper on Daim in February 2023 based on information from the Pandora Papers. As part of that, it ordered him to declare his assets.

"Based on the legal principle of `presumption of innocence,' anyone being investigated for any offences is innocent until proven guilty, and he has every opportunity to clear his name if the case is brought to the court of law," the MACC said in the December 2023 statement.

In January this year, Daim and his wife, Nai'mah Abdul Khalid, were charged with failing to declare assets. They pleaded not guilty. The cases against Daim and Nai'mah are ongoing.

"I say this to you, Anwar Ibrahim, that power is brief and there is always a reckoning for those who abuse it," Nai'mah, one of the skyscraper's owners, told reporters after she was charged in court. "As the Bard whom you often quote says, 'Man, proud man, Drest in a little brief authority.' The rest you know."

Anwar is pursuing "vendettas of the past," the now 86-year-old Daim, who appeared in court in a wheelchair, said in a statement on Jan. 29. Both Daim and Nai'mah declined to comment further.

Also in January, the MACC separately ordered Mahathir's two eldest sons, Mirzan and Mokhzani, to declare their assets dating back to 1981, the year Mahathir became prime minister, without saying publicly that the orders were part of an investigation into their father. The agency was worried about the optics of pursuing such an elderly man, according to people familiar with the matter.

"My father is the primary suspect," Mokhzani, 63, said an interview with Bloomberg in March, revealing for the first time that the probe is targeting his father. "We are witnesses to whatever it is that they're investigating."

A month later, Azam confirmed to local media that Mahathir was among those being probed for asset declaration issues. "Let the MACC continue the investigation first until I think of a suitable time for us to announce the findings," he was cited as saying by Bernama, Malaysia's state news agency.

The two sons have declared their assets and the MACC is now seeking more information from them, Azam said at a press briefing on Sept. 18. The investigations are ongoing and no charges have been filed. Both sons declined to comment further.

In an interview in May, Mahathir also denied wrongdoing and denounced the investigations. Malaysia's longest-serving prime minister was recently hospitalized for a cough but is now making public appearances again. He hasn't been charged.

"This is abuse of the rule of law," Mahathir said.

Meanwhile, the MACC hasn't announced any action on allegations of wrongdoing by Farhash, who ran the prime minister's own campaign for a seat in the 2022 election. Within six weeks of Anwar taking power, the 42-year-old former aide was appointed to positions at listed firms.

Farhash's dealings became a national political scandal in March, when he disclosed a roughly 16% stake in a software company called HeiTech Padu Bhd. — a requirement for holders of 5% or more of a listed company's shares. The Edge Malaysia, a local business newspaper, said in March that the firm had been shortlisted for a lucrative immigration systems contract. Shares in HeiTech Padu surged as much as 14% the day after Farhash revealed the position.

Asked by local media, Anwar said in March that he would check with the Finance Ministry on the allegations against Farhash. The prime minister didn't respond specifically to Bloomberg's questions about Farhash and the MACC, or a request for an update on whether the ministry was still looking at the case.

In an interview, Farhash said he was unaware of any MACC investigations and denied any wrongdoing. He called criticism of his HeiTech purchase "unfair" and said he could've made more money if he sold the stake earlier. He also said he wasn't in touch with Anwar much anymore and was appointed to various corporate positions due to longstanding business relationships.

"I'm not a government contractor — I don't do anything with government," Farhash said. "People like to underestimate me," he added. "I'm highly educated and I've been in the business space for a long time."

In May, Anwar extended anti-graft chief Azam's one-year term for a second time. Anwar made several considerations before doing so, Communications Minister Fahmi Fadzil said at the time, without detailing them.

To critics, the extension of Azam's term was the latest example of Anwar's actions as prime minister differing from his promises before he took the job.

In 2019, Anwar vowed to repeal a colonial-era sedition law that gives the state sweeping powers to prosecute dissenting voices. Yet he stopped short of that when he became prime minister, saying in July 2023 that his government would avoid using the act except in cases against royalty.

Investigations under the Sedition Act more than doubled in 2023 from a year earlier, according to Suaram, a prominent Malaysian human rights group. The trend continued this year with 18 sedition cases in the first six months, more than during the same period in 2023, it said.

Amnesty International, which once declared Anwar a "prisoner of conscience," said in an April report that his government is using the act to silence activists and critics with arrests and investigations. In April, Communications Minister Fahmi said the government accepts Amnesty's views but "there is a difference between freedom of expression and freedom to spread slander," according to the New Straits Times.

In the run-up to the 2022 election, the Anwar-led coalition's campaign manifesto called for the MACC to be accountable to parliament, but he now says the proposal needs more scrutiny because some lawmakers may be the targets of investigations.

Malaysia fell 34 places to 107th in a 2024 press freedom ranking by Reporters Without Borders. Anwar was unapologetic at an event in May, telling local reporters democracies need a free media but it was right to take tough action against comments that inflame religious, racial or royal tensions.

Anwar critics were also upset about a year ago when the attorney general, who serves as both prosecutor and the government's legal adviser, dropped 47 charges against Deputy Prime Minister Ahmad Zahid Hamidi, a key coalition ally.

Bridget Welsh, a prominent researcher of Malaysian politics with the University of Nottingham Asia Research Institute Malaysia, said the investigations into Mahathir's camp appear selective and "the burden is on Anwar to show that it isn't revenge."

"He has a growing credibility problem," she said of Anwar. "The disappointment is even greater because the expectations were higher."