Business tycoon Jho Low was brought into 1MDB to help handle election-related spending, a former Malaysian ruling coalition politician is reported to have revealed.
This is despite Low not holding any formal title within Umno, the politician says in a report published by US financial daily The Wall Street Journal (WSJ) today.
A former employee of 1MDB is also reported as saying that there was intense secrecy surrounding 1MDB, with the senior management refusing to share documents on Google.
The management argued that the opposition might be able to access them, the former employee said.
He also revealed that Low used the code name "UC" when he was dialled into conference calls.
Prime Minister Najib Abdul Razak's former political secretary Oh Ei Sun is quoted as saying that 1MDB was viewed by the Prime Minister's Office as a way to finance projects to boost Umno's popularity.
1MDB set aside money for such projects proposed by staff in the Prime Minister's Office, Oh said.
"If we thought it could help the incumbent government pull in some votes, we could propose that," added Oh, who later quit his post due to his concern over the lack of transparency in the government.
According to WSJ, the state fund's minutes also revealed that the board's chairperson had "noted that it is vital for the company to win the support of Sarawakians, particularly the natives".
Senior strategist for BN Penang in GE13
The government had also sold prime land in Kuala Lumpur to 1MDB in 2010 at below-market rates to develop a financial centre, in a joint venture with the subsidiary of an Abu Dhabi sovereign fund, WSJ reported.
Meanwhile, a leader of the BN, the former ruling coalition in Penang, is reported to have said that Low had returned to Penang, which is his hometown, before the May 2013 election and acted as a senior strategist for the BN.
The leader said that Low told the candidates for the election that if they needed money for their campaigns, they could request from him and he would deliver the funds.
Among the things the candidates requested money for, the leader said, was to paint voters' houses and give out free food and other favours.
Coalition party politicians from the ruling federal coalition said the money did not flow through official Umno channels and the source of the funds, along with its total size, was unclear.
"The money was flowing like hell," another former coalition lawmaker said, adding that he assumed the funds were from corporate donors.
According to WSJ, Low’s school friend Geh Choh Hun organised a group called 1Malaysia Penang Welfare Club , which handed out cheques for hundreds of thousands of dollars to non-governmental groups. WSJ: 1MDB prioritised political spending despite insufficient funds