After being sworn in as Malaysia's seventh prime minister last Thursday, Mahathir moved swiftly to name new finance, home affairs and defense ministers but has not appointed a full Cabinet amid horse trading among his four-party alliance for posts.
Wednesday's scenes made it clear that Anwar - who said he had received congratulatory calls from around the world including old friend and former United States vice president Al Gore - had lost little of his star power.
Malaysia's prison authority released former Deputy Prime Minister Anwar Ibrahim from prison on Wednesdayon full pardon from the King, clearing the way for the now-ruling coalition's de facto leader to become prime minister within a few years.
The raid indicates that Najib's role in the 1MDB scandal is a key focus of the reopened investigation into the billions of embezzled funds.
Anwar was beaten up while in police custody and convicted for corruption in 1999 and for "sodomy" in 2000.
Mr Mahathir, during a prior stint as premier from 1981 to 2003, fired Mr Anwar as his deputy in 1998 over a dispute on how best to respond to the Asian financial crisis.
Police stand guard outside former Prime Minister Najob Razak resident in Kuala Lumpur, Malaysia, Wednesday, May 16, 2018.
Mahathir has not yet moved into the prime minister's office or residence. At one point, prosecutors produced a mattress that they said was stained with semen, accusing Anwar of having sex with two male aides.
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Anwar has been in jail on charges of sodomy since 2015, but was in a hospital when he was released.
Both times, he and his supporters said the charges were politically motivated.
"In the initial stages, maybe lasting one or two years, I will be the prime minister and I will run the country", Mahathir told a Wall Street Journal conference via a video link.
An image published by the Malaysian news agency Bernama showed Anwar, 70, greeting newly elected Prime Minister Mahathir Mohamad, his ally-turned-foe-turned-ally.
"I have forgiven him, he has proven his mettle. Why should I harbour any malice towards him?"
The release of Anwar came soon after the historic win of Mahathir in recent elections.
If true, it could be an ominous sign for Najib, who has already been barred from leaving the country and is expected to face prosecution.
Najib started the 1MDB fund in 2009, and USA investigators say at least US$4.5 billion was stolen and laundered by Najib's associates, some of which landed in his bank account. "They (the police) also acted professionally", he said. "Just last week nobody would have thought that this posh boarding school boy would be rear ended by his old political headmaster".