A Malaysian rights group called the sentence a "dangerous chill on free speech" that could lead to a more repressive and unaccountable government.
Rafizi Ramli, vice president of the People's Justice Party, was found guilty by the court of violating the Official Secrets Act by possessing and disclosing content of a government audit report on the indebted 1MDB fund, founded by Prime Minister Najib Razak.
Rafizi, who often makes allegations on alleged government wrongdoing, said he would appeal. He risks being disqualified from running in the next general election, due in 2018.
The Malaysian rights group Lawyers for Liberty called the sentence harsh and excessive. It questioned why the Auditor General's report on 1MDB was suddenly classified as an official secret when it is normally presented to Parliament annually and made available to the public.
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Authorities were quick to punish whistleblowers like Rafizi, but have taken little or no action against alleged corruption involving the fund, it said.
"The conviction and sentence will create a dangerous chill on free speech and result in a more repressive, opaque and unaccountable government," Lawyers for Liberty said in a statement.
The US Justice Department says at least USD 3.5 billion has been stolen from 1MDB by people close to Najib and initiated action in July to seize USD 1.3 billion it says was taken from the fund to buy assets in the US.
The government complaints also say that more than USD 700 million has landed in the accounts of "Malaysian Official 1." They did not name the official, but appear to be referring to Najib. The prime minister has denied any wrongdoing since the allegations of massive fraud in the fund erupted last year.
New York-based Human Rights Watch said Rafizi's conviction under the Official Secrets Act was unprecedented and targeted to "intimidate whistleblowers into silence over the 1MDB corruption scandal.