Trump to meet scandal-hit Malaysian leader in September

The U.S. Justice Department is conducting a criminal probe into 1Malaysia Development Berhad (1MDB), a state fund founded by Najib that has lost billions of dollars.

The Justice Department has also launched civil lawsuits to seize some $1.7 billion in assets it says were bought with misappropriated 1MDB funds, making it the largest action by the department under its kleptocracy asset recovery initiative.

Najib, who is expected to seek re-election in a poll due by 2018, has consistently denied any wrongdoing related to 1MDB since the scandal first erupted in 2015.

Filings in the civil cases identified several individuals close to "Malaysian Official 1", a term Malaysian and U.S. government officials have previously confirmed refers to Najib.

Aside from the United States, 1MDB is the focus of money-laundering investigations in at least five other countries, including Switzerland and Singapore.

The White House said in a statement that Trump looks forward to "discussing ways to strengthen and broaden our bilateral relationship and expand regional cooperation with one of America’s closest partners in Southeast Asia."

Relations between Malaysia and the United Stated soured in the last months of the Obama administration after the Justice Department filed the lawsuits.

The Malaysian leader has tried rebuilding ties with the Trump administration, and he was among the first world leaders to congratulate Trump on his election victory.

A U.S. Justice Department filing in May showed that Najib had hired a former campaign aide to Trump to lobby with the U.S. government, but Najib has denied this.

Najib has talked to the local media about playing golf with Trump in the past, and claimed he has a picture of the two, with Trump signing off on it saying “To my favorite Prime Minister”.

A meeting with Trump could help Najib bolster support within his party ahead of an upcoming election, and refute claims that he would be arrested if he travels to the United States.

Najib's critics fear he could use the meeting to try to derail further investigations into 1MDB.

KEY PARTNER

Najib had sought to strengthen ties with China as relations with the United States became strained last year, and Malaysian media has reported that Chinese President Xi Jinping is expected to visit the Southeast Asian country in the coming months, though this has not been officially confirmed.

The United States sees Malaysia as an important regional partner in standing up to Beijing's territorial claims in the South China Sea.

The United States has long valued Malaysia's support in its fight against the spread of Islamist militancy, and Washington has also sought Kuala Lumpur's backing for its policy toward North Korea.

"The two leaders are expected to discuss areas of mutually beneficial cooperation, including national security, the global fight against terrorism and extremism, and trade and investment that will benefit our nations and our peoples," Malaysia's foreign ministry said in a statement.

Malaysia had backed the Trans-Pacific Partnership (TPP), the trade agreement that Trump withdrew from earlier this year, dismaying the United States' Asian partners.

(Reporting By Mark Hosenball, Steve Holland, David Brunnstrom and Praveen Menon; Editing by Dan Grebler & Simon Cameron-Moore)