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Malaysia's Prime Minister Najib Razak arrives at a presentation for government interns at the Prime Minster's office in Putrajaya, Malaysia, July 8, 2015. Malaysian police raided the office of troubled state investment fund 1MDB on Wednesday, following a report that claimed investigators looking into the firm found nearly $700 million had been transferred to Prime Minister Najib Razak's bank account. Najib has denied taking any money from 1MDB or any other entity for personal gain, and is considering legal action. REUTERS/Olivia Harris TPX IMAGES OF THE DAY - GF10000152317
Reuters/Olivia Harris
Taken into custody.
REVERSAL OF FORTUNE

The mighty are falling in one of Asia’s most audacious corruption scandals

By Tripti Lahiri

Less than a year ago, then Malaysian prime minister Najib Razak seemed secure in his hold on power, even enjoying a welcome at the White House. Today, Najib was arrested (paywall) at his mansion in Kuala Lumpur in connection with an investigation into embezzlement at a state fund, less than two months after his party was unseated from power in an historic election upset. He is expected to be charged tomorrow.

The 1Malaysia Development fund was set up in 2009 under Najib to draw investment to Malaysia. The fund raised more than $6 billion in 2012 and 2013, arranged and underwritten by Goldman Sachs. According to investigations by authorities in several countries, including the US, billions of dollars were later siphoned away from the fund.

Najib has always denied any wrongdoing, as has the fund itself, and investigations by Malaysian authorities while he was in power cleared him of any wrongdoing. A victorious election run by 92-year-old Mahathir Mohamad, a former Malaysian prime minister who united with political foes to take on his one-time protege, rebooted the investigation of the multibillion-dollar scandal.

The arrests show how long it can take to see the impact of investigative journalism, if the political winds aren’t right.

The Sarawak Report blog, run by a former BBC journalist, raised questions in 2014 about the funding for the production company co-founded by Najib’s son, which financed the movie The Wolf of Wall Street. It then moved on to reporting allegations of irregularities relating to the 1MDB fund. In 2015, the Wall Street Journal reported (paywall), citing Malaysian government documents, that hundreds of millions from the fund appeared to have been transferred to Najib’s personal accounts.

Years on from those first reports, Malaysian police last month raided the homes of the former prime minister and his wife, filling some 280 boxes with seized luxury goods, including handbags, watches, and diamonds. The first arrest in the reinvigorated investigation came on June 25, of an aide to the former prime minister. A tally of the worth of the seized goods came to $270 million.