US corruption investigation targets Malaysian leader, NY Times reports

A U.S. federal grand jury is examining allegations of corruption involving Malaysian Prime Minister Najib Razak and individuals close to him, The New York Times reported. The development that could add to the domestic political pressure on the troubled administration, and three Malaysian opposition parties announced Tuesday that they’re forming a new alliance. 

The U.S. inquiry, run by a Justice Department unit that investigates international corruption, is centered on U.S. properties bought in recent years by Najib's stepson and properties linked to "a close family friend,” the Times reported Monday.

The unit is also examining a separate allegation that $681 million was deposited by an unknown entity in 2013 into Najib's personal bank account, the newspaper added. Allegations involving the deposit had surfaced in July in a Wall Street Journal report, which said it had been uncovered by Malaysian investigators probing allegations of graft and mismanagement at sovereign wealth fund 1Malaysia Development (1MDB).

Najib has denied taking any money for personal gain, and 1MDB has denied transferring funds to him. An interim government report said there was no indication of anything suspicious, and Malaysia's anti-corruption commission said the $681 million deposit was a donation from the Middle East.

The U.S. investigation is still at an early stage and could take years to determine if any federal laws were broken, the Times said.

The 1MDB fund, whose advisory board is chaired by Najib, is seeking to cut its $11 billion debt by selling power and property assets.

Underscoring Najib’s possibly tenuous political situation at home, three Malaysian opposition parties announced an alliance on Tuesday. While the political storm has raged around Najib for months over the alleged corruption and mismanagement at 1MDB, opposition parties have been largely unable to overcome their own differences to mount a serious challenge to his rule.

But with Tuesday's development, they appear to have successfully used the brewing scandal as an opportunity to come together. 

The People's Justice Party, led by jailed opposition leader Anwar Ibrahim, along with the largely ethnic Chinese Democratic Action Party (DAP), have joined hands with the small, newly formed Parti Amanah Negara.

Led by Anwar, the previous alliance inflicted political damage on Najib's ruling coalition in the 2013 election, in which the coalition won the poll but with less than half of the total vote — its worst-ever electoral performance.

In February, Anwar was sentenced to a five-year jail term after a sodomy conviction that he and many independent observers have said was politically motivated. Anwar has denied the sodomy charges.

Najib's United Malays National Organization (UMNO) party has led Malaysia since independence from British colonial rule in 1957, standing at the head of a multi-ethnic ruling coalition called Barisan Nasional.

Last month, tens of thousands of protesters gathered in a two-day rally last month calling for Najib to step down.

Al Jazeera and Reuters