From: mIChaeL fONg
Subject: [BUNGARAYA] Witness says Mahathir ordered halt to anti-corruption probe

KUALA LUMPUR, June 12 (AFP) - Malaysian Prime Minister Mahathir Mohamad personally ordered the country's anti-corruption agency to drop an inquiry into an official who later became central bank governor, a trial witness said Monday. Shafee Yahaya, the agency's head at the time, was giving evidence for the defence in the s###my trial of former deputy premier and finance minister Anwar Ibrahim.

Shafee said the incident happened in June 1998 -- three months before Mahathir sacked Anwar -- after the Anti-Corruption Agency raided the office of the director general of the Economic Planning Unit (EPU) and found a large sum of money.

In June 1998 the EPU director general, who was not named in court, was Ali Abul Ha#san Sulaiman. The economic agency reported directly to Mahathir.

Ali Abul, who has now retired, was appointed central bank governor in September 1998 after the previous governor and his deputy -- seen as close to Anwar -- resigned on August 28.

On September 1, 1998, Mahathir imposed controversial capital controls and the next day sacked Anwar from both his posts.

Anwar was detained on September 20 after leading anti-government protests. In April 1999 he was jailed for six years for abuse of power and could face another 20 years if convicted of s###my.

Anwar says he was framed because he threatened to expose corruption and was seen as a political threat to Mahathir. The government denies any plot.

Shafee, questioned by Anwar's lead counsel Christopher Fernando, said Mahathir called him up after the raid "and I was told off."

"His words were 'How dare you raid my senior officer's office?'

"I was taken aback. I replied: 'This was based on an official complaint by an aggrieved party and I did as officially required'."

Shafee said Mahathir then accused him of "trying to fix" the official. "I replied that he is wrong and also as a Muslim it is a big sin to fix anybody.

"The prime minister then asked me 'Did Anwar ask you to raid the office?'

"I said: "No, it was based on an official complaint'."

Shafee said he told Mahathir he informed Anwar about the complaint against the official and the fact that a raid was planned.

He added he told Mahathir that Anwar asked him whether he had cleared the action with the prime minister.

"I told Anwar that I did mention it to the PM but the PM then had kept quiet."

After Mahathir scolded him, Shafee said he closed the case against the head of the Economic Planning Unit.

"I was highly disillusioned and I told my wife that I wanted to resign but she advised me to finish my contract."

Questioned further, Shafee said he was disillusioned with Mahathir "for interfering with my duties."

Fernando's questioning was frequently interrupted by Judge Arifin Jaka, who questioned its relevance to the s###my charge.

In angry courtroom exchanges, Fernando accused the judge of "stifling" him and Arifin ticked off the lawyer for rudeness.

The judge barred Shafee from answering a question about whether the Economic Planning Unit chief had been able to explain "a big sum of money" found in his drawer.

Shafee said Anwar had neither ordered the raid nor ordered that the case be dropped. He said Mahathir called him (Shafee) to order the case dropped.

Asked again about relevance, Fernando replied: "I'm trying to show another instance of bad blood (between Anwar and Mahathir)."

Arifin said the defence had to show that Mahathir was involved in fabricating evidence against his then-deputy, as Anwar claims.

"As politicians there will be a lot of bad blood and disagreements. You have to show that Anwar is fixed up," the judge added.

The case continues.