Malaysia’s Kleptocrat-in-chief Visits The Donald

Love Fest in the White House??

When Prime Minister Najib Razak of Malaysia meets US President Donald Trump at the White House on Sept. 12, as nearly as it can be determined, it will be the first time America’s chief executive has ever met with a foreign leader being pursued by the US Justice Department for corruption.

Najib is infamously known as Malaysian Official 1, under investigation in what the Justice Department’s Asset Forfeiture Section calls the biggest kleptocracy case ever brought against a foreign leader, with spectacular spending across the US and with ties to glamorous figures such as Leonardo DiCaprio, who has been forced to return Basquiat and Monet paintings given to him as gifts.

Malaysian opposition spokesman Tony Pua once called 1MDB the “mother of the other of the mother of all scandals. Najib is suspected of participating in the theft of as much as US$4.5 billion that is said to have gone missing from 1Malaysia Development Bhd., a state-backed development fund that is said to be more than US$11 billion in the red, due not only to theft but epic mismanagement. At least US$682 million is alleged to have gone into Najib’s own pockets.

A series of questions to the White House asking the rationale for inviting Najib, who is also the subject of a major investigation into kickbacks and bribes in France, elicited only this message:

“Thank you for contacting the White House. We are carefully reviewing your message.  President Donald J. Trump believes the strength of our country lies in the spirit of the American people and their willingness to stay informed and get involved. President Trump appreciates you taking the time to reach out.”

Speculation about the invitation centers around the Trump administration’s concern that several Southeast Asian nations are veering into the orbit of China, whose president, Xi Jinping, has pursued aggressive diplomatic, economic and political initiatives across the region to seek to diminish US sway.  Trump has also invited Philippine President Rodrigo S. Duterte, a psychopath whose misguided war on drugs has taken the lives of an estimated 10,000 poor and disadvantaged Filipinos, and Prayuth Chan-ocha, whose 2014 coup ended a democratically elected government in Thailand, and which remains one of the most repressive societies in Southeast Asia.  Both Thailand and the Philippines have drawn closer to China in the face of criticism by the previous Obama administration.

A call to the media section of the Justice Department in Washington, DC, received no response on the status of the investigation. The Los Angeles unit of the Justice Department, however, is continuing to seek to catalog the head-spinning list of assets thought to have been stolen by Najib and his family and associates. Although a query was met with a refusal to discuss the case, the investigation is reliably said to be going forward.  It is not expected to be completed in 2017.

Documents made available to the press indicate that almost immediately after 1MdB got underway, the looting started on a planet-wide basis, with hundreds of millions of dollars disappearing out of the development company’s accounts into sham accounts in Caribbean financial vehicles and into a series of Swiss banks, which have been charged with wrongdoing in Singapore.

“Maybe Najib Razak can convince Donald Trump that he is not a crook,” former US ambassador to Malaysia John R. Malott said in a Facebook post. “I am sure, however. that the US authorities would have briefed POTUS on the controversies surrounding the beleaguered Malaysian leader and the state of US-Malaysia relations.”

The current documents clearly identify the US$682 million that mysteriously appeared in Najib’s personal accounts in 2013 as having come from 1MDB, not mysterious Saudi benefactors, as Najib has claimed.

Others are Riza Shahriz Abdul Aziz, Rosmah’s son by a previous marriage; Low Taek Jho, or Jho Low, the flamboyant Malaysian Chinese financier who convinced Najib to take over an obscure Terengganu fund and turn it into 1MDB. Jho Low has made himself scarce after an epic romp in New York, photographed guzzling Krystal champagne out of magnums and pouring it into a series of Broadway blondes including Paris Hilton.  He is said to be on his 300-foot motor yacht Equanimity somewhere in waters near Cambodia.

The suspects allegedly “conspired to divert billions of dollars through various means, including by defrauding foreign banks and by sending foreign wire communications in furtherance of the scheme, and thereafter, to launder the proceeds of that criminal conduct, including in and through US financial institutions.“

The funds diverted were “used for the personal benefit of the co-conspirators and their relatives and associates, including to purchase luxury real estate in the United States and overseas, pay gambling expenses at Las Vegas casinos, acquire more than US$200 million worth of artwork, purchase lavish gifts for family members and associates, invest in a major New York real estate development project, and fund the production of major Hollywood films.”

As we have reported before, the government is seeking forfeiture of the following assets, but it’s always good to report them again:

·        The Equanimity, worth US$250 million.

·        A Bombardier Global 500 private jet, worth US$35 million purchased by Jho Low

·        A US$5 million Vincent Van Goh painting

·        Two Monets, Saint-Georges Majeur (US$35 million) and Nympheas (US$58 million)

·        Two Picassos, “Tete de femme, (US$40 million) and “Nature Morte au Crane de Taureau” (US$3 million), which Jho Low gave to actor Leonardo diCaprio.

·        Framed 3-sheet color lithograph poster created by the German artist Heinz Schulz-Neudamm for the 1927 silent film “Metropolis.”

·        Collage by Jean-Michel Basquiat titled “Redman One”

·        Photograph titled “Boy with the Toy Hand Grenade” by Diane Arbus

·        Condominium at One Madison Park in New York, owned through a nominee company known as Cricklewood One Madison Park LLc

·        Common stocks in FW Sports Investments LLC.

And presumably for Rosmah Mansor, Najib’s wife:

·        72-carat heart-shaped diamond

·        88-carat fancy intense pink diamond pendant surrounded by 11-carat fancy intense pink diamonds.

·        18-carat white gold diamond matching jewelry set, including diamond necklace, diamond earring, diamond bracelet, and diamond ring.

·        Pair of 18K white gold diamond earrings consisting a 5.55-carat diamond 5.49-carat diamond

·        Pair of diamond earrings and matching diamond ring, consisting a 7.53-carat flawless type 2A diamond, a 3.05-carat flawless type 2A diamond and a 3.08-carat flawless type 2A diamond

The government has already sought the assets generated by the blockbuster “Wolf of Wall Street” starring Leonardo DiCaprio, which was produced by Red Granite Pictures, financed by Reza Aziz and Jho Low with 1MDB money. DiCaprio has already handed back the Basquiat, the  Picasso and Marlon Brando’s Oscar for the 1954 movie “On The Waterfront, which were presented to him as gifts by Jho Low.

Other assets already being sought include:

·        The luxury hotel Viceroy L’Ermitage Beverly Hills plus all rents and profits

·        Real Property in Beverly Hills, known as the Hillcrest Property and said to be worth U$100 million

·        A US$33.5 million penthouse atop the Upper West Side’s Park Laurel condominium

·        A US$30.5 million Time Warner penthouse

·        A US$39 million home on Oriole Drive in the Hollywood Hills, owned by Jho Low that is said to have kicked off LA’s torrid ultra-luxury property market

·        A US$13.8 million apartment at 118 Greene Street in New York, purchased by Jho Low in 2014

·        A share of the US$2.2 million in assets in EMIU Music Group purchased in 2012 by Sony in which Low’s Jynwei Capital participated

·        €25.21 million in euros held in an escrpw account at UBS, in Switzerland as proceeds for the Monte painting “Nympheas”

·        A US$98 million penthouse, office building and flat on Stratton Street in London, across from the Ritz Hotel in the fashionable Mayfair District, with a view of Buckingham Palace

·        The rights and profit from the movie “Dumb and Dumber To” produced by Red Granite “as well as the right to collect and receive any profits, royalties, and proceeds of distribution owned by or owed to Red Granite Pictures or its affiliate.

·        The rights and profit to “Daddy’s Home” which was also produced by Red Granite Pictures

·        5 million shares of preferred stock ij Palantir Technologies held by Tarek Obaid, the CEO and co-founder of PetroSaudi, a shell company into which much of the fraud was directed.

·        Electrum Assets, including (i) Global Holdings, L.P. (“Electrum Global”); (ii) TEG Global GP Ltd.; and (iii) TEG Services Holding Inc. (“Electrum Services”) (collectively “Electrum”), owned, held or acquired, directly or indirectly, by JW Aurum (Cayman) Gp Ltd.

Malaysia at 60: The Promise Fades

Long-running scandal characterizes miscarried potential

On Aug. 31, Malaysia will celebrate – if that is the proper word – the 60th anniversary of its founding with its people subdued and with a government widely regarded as a kleptocacy.

It is wracked with a continuing scandal that has robbed the exchequer of an estimated US$11.4 billion lost to fraud and mismanagement of its state-backed 1Malaysia Development Fund, its top government leaders being investigated in six countries including the United States.

It is the second big scandal wrapped around Prime Minister Najib Razak. Two executives with a subsidiary of the French munitions giant DCN have been indicted in France specifically for bribing him in the purchase of submarines during the previous decade, and his close friend and associate, Abdul Razak Baginda, was recently indicted in the same scandal.

It is a country whose every institution that exists in a normal democracy to protect its people is broken – the parliament, whose leaders exist on bribes from the prime minister to keep him in office. The courts function to repress the opposition and to exculpate the guilty among the leadership. The police investigate only the opposition on political matters. The mainstream press is in the hands of the government-aligned political parties and uses its monopoly to clout the opposition and protect the establishment..

The religious establishment – the leaders of Islam, the major religion in the country — are there to back the leadership when needed, loading onto the people a fundamentalism that most do not espouse.  The opposition has been emasculated by sedition charges, police pressure, intimidation, hammering by a kept press, and gerrymandering.

“Perhaps the biggest travesty or paradox is that many of the troubled elite and urban class are now looking towards the man who actually started the decay as their savior – Mahathir Mohamad,” said an increasingly jaded source.

Indeed, the man many hold responsible is former Prime Minister Mahathir, who in 2001 declared that Malaysia was an Islamic state despite the presence of minorities who made up at that point nearly half the population. It was Mahathir who, in 1988, took away the power of the judiciary, firing the Supreme Court and replacing it with appointees aligned with his United Malays National Organization. It was Mahathir who broke the power of the Sultans as the nation’s highest power in the 1980s.

It was Mahathir who emasculated the Parliament in 1987, jailing 106 people under the colonial-era Internal Security Act in what was called Operation Lalang, including the leaders of the opposition and members of civil societies, and shutting down the press. In 1999, he engineered the trumped-up trial on sodomy charges that put his onetime acolyte, opposition leader Anwar Ibrahim, in jail.

Today it is Mahathir, at age 92, who is a reformer that as much as anybody is the victim of those limitations on democracy and free speech. Now probably fervently wishing the democratic institutions were in place, Mahathir has cobbled together Pakatan Harapan (Pact of Hope) in a long-shot attempt to win back power after 14 years in outraged retirement.  He is the head of Parti Prebumi Bersatu Malaysia, or the Malaysian Indigenous Party, which has taken over the leadership of the opposition coalition formerly headed by Anwar’s wife Wan Azizah Wan Ismail.

There are two radically different views of Mahathir’s tenure. “If everything failed under Mahathir how did Malaysia modernize, itself dubbed the Asian Tiger, host a smooth Commonwealth games with race relations pretty good and Islamists in check?” said a Malay lawyer. “Mahathir turned Malaysia from a backwater country into a modern prosperous nation. This is the very reason why Pakatan Harapan and much of the country today pin their hopes on Tun to solve Malaysia’s crisis. As soon as Mahathir retired voluntarily 13 years ago, Badawi then Najib smashed our prosperity, preferring to focus on enriching themselves and their families. Najib lost the Barisan’s two-thirds majority and the popular vote.”

As a measure of the opposition’s desperation for change, Anwar, whom Mahathir fired as deputy prime minister and jailed – and who is in prison again on trumped up charges – has endorsed his leadership. So has Lim Kit Siang, the leader of the Democratic Action Party, who spent 17 months in prison after Mahathir implemented Operation Lalang,

Whether the coalition can have much of an impact on elections which must be held before Aug. 24, 2018 is questionable. Anwar, the country’s most charismatic figure, will remain in prison to serve out his five-year term while privately the country’s leaders look for reasons to keep him there forever. Parti Islam seMalaysia, the rural-based Islamic party, has been resisting Mahathir’s blandishments to pull together with Harapan and is instead flirting with the idea of contesting at least 100 seats on its own in the 222-seat Dewan Rakyat, or lower house of parliament, a death-knell for the opposition.

How did the country get there? In 2007, Nobel Prize-winning economist Joseph Stiglitzcould write that Malaysia “invested in education and technology, pushed a high savings rate, enacted a strong and effective affirmative action program and adopted sound macroeconomic policies. [It] also recognized that success required an active role for government. It eschewed ideology, following or rejecting outsiders’ advice on a pragmatic basis. Most tellingly, during the financial crisis of 1997, it did not adopt IMF policies – and as a result had the shortest and shallowest downturn of any of the afflicted countries. When it re-emerged, it was not burdened with debt and bankrupt firms like so many of its neighbors.”

The country’s success, Stiglitz wrote, “should be studied both by those looking for economic prosperity and those seeking to understand how our world can live together, not just with toleration, but also with respect, sharing their common humanity and working together to achieve common goals.”

But, said a Malaysian political analyst, “In the past decade or so, Malaysia has undergone political turmoil and changes to the political backdrop that have had far-reaching effects on its future. In fact, in a multi-ethnic, multi-religious society like Malaysia where the nightmarish memories of the racial riots of 1969 still linger, the events of the last decade have brought it down a slippery slope that many Malaysians fear may take it a long time to recover, if at all.”

Many of the changes to the socio-political fabric have been exacerbated during the past eight years of rule under Najib. In January 2010, shortly after he became prime minister, a series of arsons and desecrations took place against 10 churches and two mosques. It continued with the emergence of belligerent right-wing groups, like Perkasa, an extreme Malays-first NGO of which Mahathir was patron, and continued incidences of intolerance and bullying of minorities, and the kind of race-baiting, chauvinism and racism not seen since 1969.

“In any other country, the 60^th anniversary would be a landmark celebration. But in the streets of Kuala Lumpur, there are hardly any banners, billboards or signs that this is an occasion to be celebrated,” the political analyst said: “The misguided policies, corruption, a deteriorating education system, rise in crime, a tarnished judiciary and legislature and incessant political bickering and infighting have taken their toll. A cynical population has tired of promises and as Malaysia goes to 2018, when general elections must be called by June, there is more uncertainty than there ever was in the last 60 years.”

Will Malaysia succeed? The brain drain, the outflow of capital, the increased applications for permanent residence by minorities bailing out for countries such as Singapore and Australia, all dictate that a solution is urgently required.

“The politics of old will only ensure that the future is bleak,” the source said. “Najib’s administration has failed to implement and execute reforms and workable economic programs. It has failed to silence the racists and bigots and in effect has abetted them. It has failed to curb corruption and nepotism. In fact it is a very bleak report card where red ink dominates almost every box that needs to be ticked. Malaysia is teetering on the brink of failure.”

By John Berthelsen

French Justice Catching up With Malaysians in Sub Scandal?

Key chum of PM Najib is indicted in Paris court but extradition seems unlikely

Although Abdul Razak Baginda, the central figure in what was previously Malaysia’s most notorious scandal, has been charged with “active and passive complicity in corruption” by French prosecutors, according to Agence France Press on Aug. 1, it is unlikely that they are going to catch up with him anytime soon.

Razak remains in Malaysia, a close friend of Prime Minister Najib Razak, with extradiction doubtful since the premier himself also figures in a case involving a €114 million bribe to the United Malays National Organization for the purchase of French submarines. It is a case that involves political corruption, murder, sex and allegations that reach high up into both the Malaysian and French governments.  Neither Najib nor Razak Baginda is likely to go touring in France anytime soon.

In addition to Razak Baginda, four former Thales International Asia officials have been indicted, including one in December 2015 by a French court for allegedly bribing Najib himself, according to a January 2016 AFP story quoting French judicial sources. The matter seemed to have been stalled after that report although the case has been under investigation for seven years. 

Case in 1MDB’s shadow

The affair has since paled in Malaysia in the shadow of the massive 1Malaysia Development Bhd. scandal, in which US$5.4 billion disappeared from a state-backed investment fund through looting and mismanagement that has spurred investigations in half a dozen countries across the world. US prosecutors have alleged that anywhere from US$681 million to US$1 billion disappeared out of 1MDB into Najib’s pockets, part of it to be used to buy a vast store of real estate, paintings and other assets in the United States, which alerted the US Justice Department’s kleptocracy unit to name him a “Public Official 1” and to seize millions of dollars’ worth of assets.

The two cases have given Malaysia an international black eye but have done nothing yet to bring Najib down as prime minister. He remains insulated from defenestration through the payment of fulsome contributions to the top UMNO cadres who might be tempted to oust him. Although the opposition has unified in recent months under the unlikely leadership of former Prime Minister Mahathir Mohamad, the betting is that, insulated by gerrymandering, religious xenophobia, political repression and a kept press, he won’t be ousted in the next election, which must be called before mid-2018.

“Apparently after (the opposition Pakatan Harapan) sorted out leadership issues in their coalition, they have been gaining a lot of traction,” said a well-wired political observer in Kuala Lumpur. “The tragedy for Malaysia is that their comeback kid is 92 years old and his “successor” (imprisoned opposition leader Anwar Ibrahim) is in jail.”

Prize-winning series

As Asia Sentinel reported in a prize-winning series in 2012, a two-decade campaign by DCN and its subsidiaries to sell submarines to Malaysia and other countries resulted in a tangle of blackmail, influence peddling and misuse of corporate assets that took place with the knowledge of top French officials including then-foreign Minister Alain Juppe and with the consent of Mahathir Mohamad as prime minister. The case has had far wider implications, stretching from South America to Pakistan to India to Taiwan and other countries and featuring a series of unexplained deaths as DCN sought to peddle its weapons. 

At the center of the Malaysia case were Razak Baginda and Najib, then on a vast weapons acquisition spree as minister of defense, buying fighter jets, patrol boats and armored weapons.  The ministry spent US$2 billion for Scorpene submarines manufactured by Thales.  A store of documents from French prosecutors made available to Asia Sentinel presented a damning indictment that showed Najib’s goal was to steer the kickbacks to UMNO through a private company called Perimekar Sdn Bhd. whose principal shareholder was Razak Baginda’s wife Masjaliza.

Another €36 million was directed to Terasasi Hong Kong Ltd., whose principal officers were listed as Razak Baginda and his father. The company only existed as a name on a wall in a Hong Kong accounting office. At the time Razak Baginda was then the highly respected head of a Malaysian think tank called Malaysian Strategic Research, which was connected with UMNO.

DCN paid for lovers’ Macau tryst

Among the documents was one that showed a DCN confederate sent Razak Baginda on a jaunt to Macau with his then-girlfriend, Altantuya Shaariibuu, a 28-year-old Mongolian national and international party girl who was later murdered by two of Najib’s bodyguards. Altantuya was said to have also been a lover of Najib before he passed her to his best chum although Najib said he would deny knowing her by swearing on the Quran.

During negotiations at the end of the submarine contract, Altantuya was employed as a translator, according to the documents, although it is questionable how effective her language skills really were. In any case, after a whirlwind tour of Europe in his Ferrari, Razak Baginda apparently tired of Altantuya and jilted her, impelling her to fly to Kuala Lumpur to demand US$500,000 in what she described as blackmail in a letter found in her hotel room after her murder.

Altantuya was grabbed on Oct. 19, 2006 from in front of Razak Baginda’s home by Azilah Hadri and Sirul Azhar Umar, members of an elite police unit responsible as bodyguards for Najib, and was dragged into a car and driven to a forested spot outside the Kuala Lumpur suburb of Sha Alam, where she was knocked unconscious and shot twice in the head.  The two then wrapped her body in C4 plastic explosive and blew her up, supposedly to destroy the fetus she was carrying.  

Detailed confession not allowed in court

Sirul gave a detailed confession to a fellow police officer in which he described in chilling fashion how the two had killed the woman, who begged for the life of her unborn child. Although Sirul had been read his rights, inexplicably the confession was never introduced in the lengthy trial that followed. At the conclusion of the trial, as he was being sentenced, Sirul broke into tears, telling the judge that he was the “black sheep who has been sacrificed to protect unnamed people.” 

Although Razak Baginda was quoted in his own statement to police following the discovery of the murder as saying he had asked one of Najib’s aides to “do something” about the woman, who was harassing him, he was excused without the need to present evidence, The aide was never called to testify, nor were a long string of other Malaysian officials with connections to the case.

Ultimately, Azilah and Sirul were sentenced to death. However, the two have never been executed, Sirul, released temporarily on appeal, made tracks for Australia, where he was later detained. He remains there today after having implicated Najib in the murder and then retracted the allegation. Mahathir has repeatedly called vainly for the case to be reopened.  Nonetheless, it remains one of Malaysia’s biggest scandals, and is likely to remain so unless a new election sweeps out UMNO and its lieutenants.

By John Berthelsen