Former Deputy Prime Minister Anwar Ibrahim was arrested on September 20 under the Internal Security Act, a law that Human Rights Watch believes to be a violation of basic human rights. Since his sacking on September 2, many of his supporters have also been arrested. The background to the case follows.

By September 20, eleven persons associated with former Malaysian Deputy Prime Minister Anwar Ibrahim had been arrested on unspecified charges, some apparently connected to allegations against Anwar of sexual misconduct, corruption and possible breaches of national security. Most were subsequently released, but some key associates of Anwar remain in detention under Malaysia's draconian Internal Security Act or ISA, a law which permits lengthy detention without charge or trial. Student supporters from the Mara Institute of Technology (IT) were also threatened with expulsion and blacklisting from government educational institutions for being involved in Anwar's campaigns for political reform. Civil servants were also warned not to participate in political movements or activities.

Anwar Ibrahim was dismissed on September 2 when he refused to resign from his government positions after being accused of "inappropriate behavior" following the publication of the book entitled 50 Dalil Kenapa Anwar Tidak Boleh Jadi PM (50 Reasons Why Anwar Cannot Become Prime Minister) in May. The book contains graphic sexual allegations as well as accusations of corruption against Anwar, who obtained a court injunction on June 17 to restrain the author, publisher, and their agents from publishing, distributing or reprinting the book. Anwar made a defamation complaint against the author, Khalid Jafri, and in August, police charged Jafri with malicious publishing of false news. In September, the judge who had banned further distribution of a book was transferred, leading to fears among Malaysian lawyers about possible threats to the independence of the judiciary.

The book was circulated during the annual meeting of the UMNO party in June. It was during that meeting that Prime Minister Mahathir apparently began strengthening his control over the party, despite a public attack against cronyism and nepotism by an Anwar ally named Zahid Hamidi. Observers had speculated for months that Anwar's position was in jeopardy as forces close to the deputy prime minister appeared increasingly critical of Mahathir's style of governing and economic policies. In July, a visit by the Indonesian opposition leader Amien Rais led critics to compare events in Malaysia with those in Indonesia, where allegations of cronyism and economic and political dissatisfaction contributed to President Suharto's downfall. Domestic critics accused Mahathir of tolerating cronyism between corporate and government interests, and the international financial press and the International Monetary Fund (IMF) demanded greater transparency in government and UMNO-managed enterprises. The editors of both Utusan Malaysia, a Malay-language newspaper and magazine group, and of Berita Harian, another prominent Malay newspaper -- both Anwar-linked -- were allegedly forced to resign in July because of the prominence their papers had given to the transparency issue.

Soon after his dismissal Anwar publicly accused Prime Minister Mahathir of "paranoia" and resistance to political change. He said that he was fired because of his efforts to warn Mahathir of the public anger over corruption and cronyism in Malaysia and growing popular demands for reform. Disagreements between the two over economic policy had also become increasingly apparent over the past few months, with Anwar's dismissal coming one day after Mahathir announced plans to restrict foreign exchange transactions in order to prevent further currency devaluation.

Anwar's dismissal extended to all his other positions held in his capacity as Deputy Prime Minister and Finance Minister, including Cabinet committee posts and the National Economic Action Council (NEAC) deputy chairmanship. On September 4 he was expelled from UMNO; where he served as the party's deputy president.