Dr Mahathir Mohamad has claimed Umno was told that the money purportedly deposited into a private bank account was used in the last general election.
"There is no denial the money was deposited in the private account. The explanation to Umno is that it was for the elections. Umno seems satisfied.
"Don't they know that government money cannot be used to help a political party win elections?" Mahathir asked in his blog today.
"But the money was from donation. Who donated the RM2 billion? No answer," he added.
Although Mahathir did not specify whose account he was referring to, it is believed that his remarks were aimed at Prime Minister Najib Abdul Razak.
Previously, there was speculation that since ruling coalition candidates had received a portion of the funds for their respective campaigns, Umno cannot afford to rebel against Najib.
Following this, Culture and Tourism Minister Nazri Abdul Aziz said The Wall Street Journal, which claimed Najib used 1MDB funds for BN's election campaign, if proven true, would confirm the firm’s money was not missing, as argued by detractors.
The WSJ reported that the 1MDB funds had flowed through the Genting Group in 2012, which donated RM31 million to the Najib-controlled Yayasan Rakyat 1Malaysia.
The journal later reported that RM2.6 billion had been banked into Najib's private accounts.
The prime minister has denied using public funds for personal gain and has sent a legal letter to the WSJ.
Najib also accused Mahathir of masterminding these allegations in an attempt to topple him from power.
Mahathir rubbished Najib's letter to the WSJ as a polite question, asking why they had published articles critical of him.
"Is there a need to ask that silly question? Isn’t it obvious that as a newspaper, the information obtained by The Wall Street Journal was sensational?
"Any newspaper, convinced of the authenticity of the information, would have printed it. Of course, the local mainstream papers will not, for obvious reasons," he added.
The former prime minister ( photo ) then lashed out at the mainstream media, which he claimed misled the public just to curry favour with Najib.
"To ingratiate themselves with the prime minister, they would rather mislead the people. The sub-editors are good at writing misleading headlines.
"For example, when a statement is made to let the task force of four do their work, this is headlined as support for the prime minister," Mahathir said, referring to the special task force currently investigating the allegations against Najib.