Malaysia arrests lawyer critical of PM Najib

KUALA LUMPUR (Reuters) - Malaysian police have arrested and detained the lawyer of a local politician who has been calling for U.S. law-enforcement authorities to probe an international financial scandal involving Prime Minister Najib Razak. In a blog post that appeared under the lawyer's name, Matthias Chang said he had been arrested on Thursday as he was visiting his client, Khairuddin Abu Hassan, a former member of Malaysia's ruling party who was also arrested last month. A police spokeswoman confirmed that Chang was arrested but did not say what charges had been made against him. The scandal surfaced in July when the Wall Street Journal reported that investigators looking into state investor 1Malaysia Development Bhd (1MDB) found that nearly $700 million dollars were transferred into bank accounts of the prime minister. Najib, who chairs 1MDB's advisory board, denied taking money for personal gain. Khairuddin was detained on Sept. 18 at a Malaysian airport, hours before he was to board a flight to the United States, on charges of undertaking activities detrimental to parliamentary democracy. He had planned to persuade U.S. police to investigate the 1MDB scandal, which reportedly also involved U.S. banks. The prime minister has faced anti-government protests and calls to step down over the scandal. The country's anti-graft agency has declared the funds a donation and the government's attorney general has cleared 1MDB officials of any wrongdoing. Khairuddin's lawyer, Chang, has begun a hunger strike in protest at his detention, according to the blog post. "This is crass intimidation against Malaysians who are fighting for justice and truth," the post said. Chang is an associate of former Prime Minister Mahathir Mohamad, who is leading a campaign calling for Najib to step down over the allegations of corruption. In February, Najib's United Malays National Organisation ousted Khairuddin from the party after he was declared bankrupt. Khairuddin then travelled to several countries to campaign against Najib and 1MDB before his detention. He remains in police custody. (Reporting by Praveen Menon and Emily Chow; Editing by Mark Bendeich)