PETALING JAYA (Aug 28): The 1Malaysia Development Bhd (1MDB) scandal played a bigger role in bringing down the Barisan Nasional government in the May 9 14th General Election than the unpopular goods and services tax (GST), said veteran financial journalist P Gunasegaram.

“This is because [1MDB] was an outright robbery, not in the hundreds of millions but tens of billions, a scale that the world has not seen before,” said Gunasegaram.

“I think the people were not prepared to vote to power a government which had clearly been robbing from them,” he added at the launch of his book entitled “1MDB, the Scandal That Brought Down a Government”.

The 300-page book, priced at RM60, would be available in book stores next week.

Gunasegaram noted that the General Election came just in time because the main players in the scandal, former Prime Minister Datuk Seri Najib Razak and fugitive financier Low Taek Jho (Jho Low), were already doing other deals to cover up the big hole in 1MDB and they could have got away with it.

The deals included the East Coast Rail Link project and pipeline projects which were overpriced by RM20 billion and RM10 billion respectively, he said, adding that these projects had been paid for way ahead of their completion.

“One thing that struck me is the audacity of these guys. There’s no way that you could’ve gotten away with a crime like this. There’s no way they could’ve hidden the RM30 billion,” said Gunasegaram.

“It is the largest theft in the world and is a shameless and audacious transfer of bond proceeds out of 1MDB and into the hands of criminal conspirators, on top of other misdeeds earlier such as bond mispricing, overpayment for assets and overpayment of fees,” he added.

Describing the act as downright foolish, Gunasegaram believes that the perpetrators could have possibly been encouraged by the success of their earlier ventures, and thought they could steal the money and get away with it.

It could also gave been that they intended to borrow the money and return it, but could not, or did not want to, in the end.

He opined that they may have gotten away with it if the BN government was returned to power.

“I think, essentially, this [scandal] shows how much greed and power can corrupt people. You need a check and balance against these things and you should never give one single person too much power, even if it’s the Prime Minister,” he said.

On the appointment of  PricewaterhouseCoopers (PWC) as the new auditor for 1MDB, Gunasegaram expressed hope that the report is made public so that the people know the scale of the crime.

He pointed out that the audit report on the Bumiputra Malaysia Finance (BMF) scandal in the 1980s had been made public.

He also noted that the crimes at 1MDB could not have taken place without the global financial system, where international banks allowed the movement of stolen funds, hence facilitating money-laundering exercises.