FORMER Malaysian Prime Minister Dr Mahathir Mohamad on Wednesday shot down the US Central Intelligence Agency’s (CIA) report alleging his administration’s involvement in a massive offshore banking scandal during his 22-year-rule, saying it was an attempt to demonise him.
This was his response to the Asian Correspondent‘s report on Tuesday, citing a CIA document suggesting his government’s complicity in the Bumiputera Malaysia Finance Limited (BMF) scandal, in which billions of dollars were lost in the largest financial debacle the country saw during the 1980s.
The CIA’s claim was revealed last week after it declassified a trove of more than 13 million documents, making them accessible online for public viewing – from which the Asian Correspondent unearthed the document entitled “The Bank Bumiputra Scandal: More Trouble Ahead for Malaysia’s Mahathir?”.
Following the revelation, Dr Mahathir had questioned the timing of the release of the declassified CIA report, adding it could be politically motivated.
“These things happened way back, between 1981 and 1984, why are they bringing it up now?
“Why are you bringing it up now? Can you correct what I’ve done before? The purpose is political. Maybe some people might benefit from it,” he said, according to several local news reports.
Dr Mahathir said the CIA had deliberately attacked him as he was a staunch critic of the clandestine agency.
“They are demonising me,” he said.
According to The Star, Dr Mahathir said there were other reports “beyond CIA” that said he was not involved in the scandal. However, he did not indicate which reports said so.
“Even when I do no wrong, they demonise me and accuse me of doing things I didn’t do,” he said.
During the first few years of Dr Mahathir’s tenure, Malaysia was ensnared in a massive graft debacle involving the government-owned Bank Bumiputera (Bank Bumi), whose reputation was tarnished by the “questionable” operations of BMF, its wholly-owned Hong Kong subsidiary.
Widely known as the BMF scandal, the Malaysian bank and its offshore subsidiary dished out billions in bad loans to numerous Hong Kong property speculators, including Carrian Investment Limited (Carrian Group) between 1979 and 1983. The scandal also saw the brutal murder of a young Malaysian Bank Bumi auditor.
The BMF scandal has been described as an embarrassing episode in Dr Mahathir’s premiership, which dogged his leadership and saw hundreds of millions of dollars disappear into thin air following the defunct Carrian group and its former chief executive George Tan’s move to declare bankruptcy.
As BMF was heavily involved in providing loans to property speculators during Hong Kong’s property boom in the late 70s, the CIA said BMF – unlike other banks in the the British colony – continued to extend credit to real estate speculators despite concerns of a weakening market.
As a result, the Malaysian bank, which was initially set up to uplift impoverished Malaysians from the ethnic Malay community, had lost US$1 billion and prompted a delayed and wide-scale probe into the scandal.
The CIA said although Dr Mahathir had admitted BMF’s “imprudent” practices, the government’s response to the losses incurred was “surprisingly restrained”.
The CIA said although there had been no direct links established between Dr Mahathir and the scandal, the political standing of his administration, which took the clean government mandate in 1981, was tainted by the “hint of association”.
The 91-year-old influential statesman, who is currently a staunch critic of the present-day government embroiled in the on-going 1Malaysia Development Berhad (1MDB) scandal, has repeatedly denied any involvement with the BMF fiasco.
Responding to the Asian Correspondent report, a federal Minister under Prime Minister Najib Razak’s administration said the release of the CIA documents would allow everyone to make their own conclusions.
“We’ll wait and see. We’ll look at these documents and if there are questions to be asked, then they have to be directed at Mahathir,” he said, as quoted by Free Malaysia Today.