1MDB Controversy: Malaysia Government Sticks To Claim $610M Was Legal Donation

Malaysian Prime Minister Najib Razak's deputy stuck to claims Thursday that 2.6 billion ringgit ($610 million) in the leader's accounts were legal political donations as authorities investigate what could be the country's biggest corruption scandal. Critics allege the funds were siphoned off from state-controlled 1 Malaysia Development Berhad, a fund formed to make Malaysia a financial powerhouse. 1MDB is now being investigated by the U.S., Hong Kong and Singapore, according to Reuters.

In October, U.S. authorities said they were looking into Goldman Sachs' dealings with 1MDB, though there is no suggestion of wrongdoing by the bank, or if the dealings would be a key part of their investigation into the fund.

On Thursday, Razak, who is chairman of the 1MDB advisory board, was expected to give a statement to the Malaysian Anti-Corruption Commission. In the afternoon, Deputy Prime Minister Zahid Hamidi went to Parliament to make a statement -- that the funds were donations from a Middle Eastern benefactor.

“In a democracy, the practice of receiving donations is allowed for political parties,” Bloomberg reported Zahid as saying. "It has never been stated that political donations must be declared.”

Zahid made his statement in three minutes and questions were not allowed. Lawmakers expressed frustration at that.

"This must be answered by Najib, not by the deputy prime minister," malaysiakini.com reported lawmaker Gobind Singh as saying. "We should be able to ask him questions."

The controversy broke in July when the Wall Street Journal reported that investigators had discovered the money in Najib's accounts. Opposition leaders and former Prime Minister Mahatir Mohamad have called on Najib to step down. Aside from Mahatir's call, the country's nine sultans have called for a credible investigation and the central bank has clamped down on 1MDB while investigations are in progress.

Malaysia is the third-biggest economy in the Association of Southeast Asian Nations, a group the U.S. is working with to try to counter China's growing influence and assertiveness in the region.