This article first appeared in The Edge Malaysia Weekly on June 13, 2022 - June 19, 2022

FORMER chief secretary to the government Tan Sri Mohd Sidek Hassan testified last week that when he was nominated in 2010 to sit on the Board of Advisers (BoA) of 1 Malaysia Development Bhd (1MDB) at the behest of the then prime minister Datuk Seri Najib Razak, he was given to understand two things.

The first was that the state investment arm was established to be used as a political fund for the then Barisan Nasional government. The second was that it was done out of the kindness of Najib’s heart as he felt that Sidek’s salary of RM29,125 a month did not commensurate with his position.

Testifying at the 1MDB-Tanore trial as a prosecution witness, Sidek also revealed that he did not ask to be on the BoA, did not know the reason he was appointed, and had never attended any meetings of the board as no meetings were ever called, even when the company came under heavy media and public scrutiny for the billions of dollars in debt raised for dubious ventures which had brought it to its knees.

Shockingly, Sidek, who retired from the civil service on June 23, 2012, also told the court that he had never asked nor sought to know more about the company’s transactions or its problems — perhaps because he was under the impression that 1MDB was to be used for BN’s political funding.

Even so, his admission was all the more shocking given that he was paid RM30,000 a month as a board member — a fee that he was paid from from July 1, 2010, to end-2012. Thereafter, the fee was reduced to RM10,000 a month until June 2015.

It should be noted that Najib was the chairman of the BoA and that the board never held any meetings throughout 1MDB’s history.

In court, the country’s former top civil servant said that he felt that the monthly salary of RM29,000 plus was not adequate compensation for his duties.

He said that Najib had previously asked him about his salary while he was chief secretary, and remarked that Sidek’s income was low.

“I thought the reason why the PM offered me that was because of my salary ... [My thinking was that] the PM thought that [for] the responsibility that I had [the salary was low].

“So, out of the goodness of his heart [I thought] this was just a vehicle [for compensation],” he said upon cross-examination by Najib’s lawyer Tan Sri Muhammad Shafee Abdullah.

Despite the hefty allowance, Sidek said he was never involved in any meetings or discussions relating to 1MDB’s issues or investments, nor did he receive any report from its management on the company’s operations.

On his impression that 1MDB was set up by Najib as a political fund for the then Barisan Nasional (BN) government, he pointed to a cabinet meeting where Najib had informed the ministers of “donations” from Middle East royalty to Yayasan 1MDB (the company’s charitable arm) to carry out CSR projects to help the rakyat.

Najib had asked the ministers to suggest projects or proposals for their constituencies.

Sidek said Najib also conveyed in the meeting that the government had to be more creative in seeking government resources and allocations outside of existing avenues as it would give more flexibility to the government to help the people.

During re-examination by lead prosecutor Datuk Seri Gopal Sri Ram, Sidek said that he assumed that 1MDB was to fund BN programmes because the ministers in the cabinet at the time were from the ruling BN party.

Sri Ram: Those projects were meant for whom?

Sidek: For ministers [and] their constituencies.

Sri Ram: So how did that lead you to assume it was for BN?

Sidek: The ministers were from BN.

When Sri Ram pointed out that it was not the job of the cabinet to discuss party politics, Sidek replied that one could not separate party politics and government policies.

“I was a civil servant through and through. The government policy is the policy of the party in power, [whether] it is BN or [others]. You can’t really differentiate the two,” he stated.

Sidek was chief secretary to the government from September 2006 to June 2012. He was appointed by Najib, who was at that time both the prime minister and finance minister.

Upon leaving his post after 38 years in the civil service, Sidek then served as chairman of Petroliam Nasional Bhd from 2012 until end-June 2018. Again his appointment was courtesy of Najib.

This is not the first time someone inside 1MDB had got the impression that it was set up for BN political funding.

Previously, former CEO Mohd Hazem Abdul Rahman had also testified that he was under the impression that 1MDB was formed for BN’s political funding — an impression he said was conveyed by Najib’s then private secretary, the late Datuk Azlin Alias, and fugitive financier Low Taek Jho during an informal job interview for the position.

“During the interview, Azlin introduced me to Jho Low, whom he described as an unofficial adviser to Najib. It was at the meeting that Jho Low informed me that 1MDB was formed to help Umno through businesses in which it would invest.

“Jho Low informed me that 1MDB is a company controlled by Najib and the company is to act on the then PM’s whims. Any decision must receive his [Najib’s] approval and final say from him,” Mohd Hazem told the court.

Throughout his testimony, Mohd Hazem testified that 1MDB was specifically formed to assist Umno and fund the political party through the injection of funds from foreign financial institutions into various 1MDB projects.

Apart from Sidek, 1MDB’s BoA, led by Najib as chairman, also included former minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop, former chief secretary to the government Tan Sri Dr Ali Hamsa and former treasury secretary-general Tan Sri Dr Mohd Irwan Serigar, who took over from Tan Sri Wan Abdul Aziz, the former secretary-general of the treasury.

Qatar’s ex-prime minister Sheikh Hamad Jassim Jaber Al-Thani was also present on the BoA as special adviser as well as Bernard Arnault, chair and CEO of LVMH (Moët Hennessy Louis Vuitton) and one of the richest men in the world.

CEO of Abu Dhabi state investor Mubadala Khaldoon Khalifa al-Mubarak is also said to have sat on the board. However, it is not known how long the individuals served on the board as the board never met or served its purpose.

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