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    Southeast Asia
     Aug 28, 2007
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Malaysia's axis mysteriously shifting
By Ioannis Gatsiounis

KUALA LUMPUR - When Abdullah Badawi became Malaysia's prime minister in 2003, many thought the mild-mannered leader would take a more moderate approach to international relations than his prickly predecessor Mahathir Mohamad, who often locked diplomatic horns with the United States and other Western countries.

But a string of scandals and crimes with international dimensions, some even linked to Abdullah's family members, have put his

government's relations with Washington on an uncomfortable footing.

US authorities last month arrested and charged Pakistani national Jilani Humayun for his alleged role in shipping contraband military goods to Malaysia, from where they were re-exported to Iran. He was also charged with conspiracy to commit money-laundering and mail fraud. The sensitive dual-use hardware, which was funneled through an as yet unnamed Malaysian company, included parts for F-5 and F-14 fighter jets and Chinook helicopters.

In April the US imposed sanctions on 14 companies, individuals and government agencies it accused of dealing in advanced weapon technology with Iran or Syria. Two of the companies listed were Malaysian, the Challenger Corp and Target Airfreight.

Moreover, a federal jury in New York last year convicted Singaporean businessman Ernest Koh Chong Tek of smuggling dual-use US military parts to Malaysia for transshipment to Iran's military - a violation of the 1995 embargo the US placed on all exports and re-exports of commodities to Iran without approval by the US Office of Foreign Asset Control. He was also charged with laundering millions of dollars through his Singapore bank accounts in the smuggling scheme.

The US and Iran are currently at diplomatic loggerheads over Tehran's nuclear program, and Washington has frequently accused Iran's military of arming radical Muslim militias in the Middle East, including the Lebanon-based Hezbollah as well as Iraqi insurgents who have targeted US troops. However, at least on the surface, bilateral relations with Malaysia remain cordial.

US officials who spoke with Asia Times Online would not comment on the investigations involving Malaysia on the grounds that they involve sensitive intelligence information. And so far there is no evidence to link recent violations of the US embargo directly to Abdullah. Yet security analysts say the recent incidents have put the crucial bilateral relationship on edge.

"I am absolutely sure that the US is watching these developments closely and pressing hard on Malaysia behind the scenes," said Tim Huxley of the Singapore-based International Institute of Strategic Studies.

The US is Malaysia's largest foreign investor, and the two sides are negotiating a wide-ranging free-trade agreement. Kuala Lumpur relies heavily on the United States' military presence to maintain the region's balance of power, particularly vis-a-vis its heavily armed neighbor Singapore. At the same time, Malaysia has been a key ally to the US administration's "global war on terror" in the region.

"Malaysia needs the US and doesn't want to do anything that will tilt the US toward Singapore, Thailand and Indonesia," said Richard Bitzinger, a security specialist at the S Rajaratnam School of International Studies in Singapore. "Both sides will be willing to accept some [security] deficiencies, if they remain at low levels."

Family matters
Yet the recent security lapses have been traced to the highest echelons of Malaysia's business and political elite, raising questions about Abdullah's underlying foreign-policy objectives. There are still huge question marks surrounding the 2004 proliferation case involving Scomi, a company owned by Abdullah's son Kamaluddin, which was allegedly involved in supplying dual-use technology to Libya's clandestine nuclear-weapons program.

Buhary Syed Abu Tahir, a Sri Lankan national with Malaysian permanent residency, sat with Kamaluddin on the board of Scomi-linked company Kaspadu. Buhary negotiated the controversial contract, which had Scomi Precision Engineering build components for centrifuges that were destined for use in Libya's nuclear program. Scomi Group had since acknowledged that its subsidiary Scomi Precision filled a contract negotiated by Buhary to supply machine parts to Libya.

Documents obtained by the Associated Press reveal that Buhary was the chief financial officer of Pakistani nuclear scientist Abdul Qadeer Khan's underground nuclear-proliferation network. How he was able to forge such high-powered alliances with Malaysia's political elite is a question that remains unanswered. When the scandal broke, Abdullah said Tahir would remain free because there was no evidence of wrongdoing.

Months later, in May 2004, Buhary was arrested under Malaysia's Internal Security Act (ISA), which allows indefinite detention without trial. Opposition leaders at the time accused Abdullah of detaining Tahir under the ISA rather than pursuing standard criminal procedures lest Kamaluddin be implicated. Now, Buhary's whereabouts are unclear.

Amir Izyanias, assistant secretary of the government-sanctioned Human Rights Commission, says his staff made contact with Buhary on July 23 at Malaysia's Kemunting Prison, where many ISA detainees are held. However, an official with the Department of Islamic Development said Buhary is not on his list of detainees.
This all comes on top of the 2005 independent inquiry into the United Nations oil-for-food scandal in Iraq, which cleared Abdullah of involvement but implicated two of his relatives. Abdullah's sister-in-law Noor Asia Mahmood and her ex-husband Faek Amad Sareef were found to have paid US$10 million through their Mastek company, one of the largest payments among the the more than 2,200 companies implicated in the scandal.

The Iraq Survey Group, which the US set up to investigate weapons in Iraq, listed "Abdullah Badawi" on its names of recipients of the oil-for-food scam though did not clarify whether this was Malaysia's prime minister. Abdullah has admitted to helping Malaysian business people to take part in the UN oil-for-food program, but said at the time the accusations surfaced that he was not personally involved. He has said he merely wrote letters supporting their bid in the program, but thereafter didn't follow up what happened to their bids.

Diversified diplomacy
None of these scandals, of course, were necessarily state-sanctioned. Yet they have notably come at a time when 

Continued 1 2 

Malaysia's mid-life crisis (Jul 28, '07)

1. New 'surge' report paints grim picture

2. 'Cracks' in credit

3. Bush: In the footsteps of Napoleon

4. The new 'NATO of the East' takes shape

5. 'Confluence of the two seas'  

6. Central bank impotence and market liquidity

7. As US sinks, Asia unable to swim

8. Musharraf down, but far from out

9. France knocks heads over its Iran diplomacy

( Aug 24 - 26, 2007)

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