US quietly disbands Kleptocracy Initiative, anti-graft unit behind 1MDB prosecution, says journalist

US quietly disbands Kleptocracy Initiative, anti-graft unit behind 1MDB prosecution, says journalist



Established in 2010 to track down assets linked to international corruption, the Kleptocracy Initiative has pursued Russian oligarchs, Nigerian dictator Sani Abacha, and the families of former South Korean president Chun Doo Hwan. — AFP pic

Friday, 07 Feb 2025 12:08 PM MYT


KUALA LUMPUR, Feb 7 — The US Department of Justice (DOJ) has disbanded its elite anti-corruption unit known for prosecuting the 1Malaysia Development Bhd (1MDB) scandal, according to investigative journalist Bradley Hope.

The Kleptocracy Asset Recovery Initiative, commonly referred to as the Kleptocracy Initiative, was “quietly disbanded last night,” Hope stated in an X post late Thursday (February 6), citing unnamed sources, according to a report published in The Edge today.

Hope, known for his work on financial scandals, co-authored Billion Dollar Whale alongside Tom Wright, chronicling the 1MDB scandal while working as journalists at The Wall Street Journal.

Established in 2010 to track down assets linked to international corruption, the Kleptocracy Initiative has pursued Russian oligarchs, Nigerian dictator Sani Abacha, and the families of former South Korean president Chun Doo Hwan.

Its most notable achievement came in 2016 when it seized over US$1 billion in assets that US prosecutors alleged were purchased with misappropriated 1MDB funds.

The seizure was the largest of its kind by the US, with former US attorney general Jeff Sessions describing the 1MDB case as “kleptocracy at its worst”.

The DOJ’s strength has been in its ability to prosecute financial crimes involving the use of US dollars or the US financial system.

The closure of the initiative raises concerns that it could embolden corrupt foreign leaders and facilitate the movement of illicit funds, which had come under increasing scrutiny by US authorities in recent years.

In a separate blog post, Hope, citing insider sources, reported that newly appointed Attorney General Pam Bondi under US President Donald Trump announced the shutdown of the DOJ’s Kleptocracy Initiative and its related task force via email.

According to the memo, the Criminal Division’s Money Laundering and Asset Recovery Section will now focus on targeting cartel activities and transnational criminal organisations (TCOs).

The Task Force KleptoCapture and the Kleptocracy Team will also be disbanded, with attorneys reassigned to their previous roles and resources shifted entirely toward dismantling cartels and transnational criminal organisations (TCOs).