Malaysia’s Justice Minister Defends a Gangster

Ahmad Zahid Hamidi tries to get a major gambling kingpin off the hook in a US trial

Malaysia’s Justice Minister has dealt his floundering government coalition a new blow by attempting to convince the US Federal Bureau of Investigation that a notorious high-stakes bookie on trial in Las Vegas for running an illegal gambling ring was not an organized crime figure.

The episode has raised inevitable questions about top members of the government leadership and their connections to international gaming and other interests who can move money offshore without questions being asked.

In his signed Dec. 18  letter to Mark Guiliano, the assistant director of the FBI, Ahmad Zahid Hamidi,  Malaysia's top law enforcement official, wrote that Paul Phua Wei Seng, on trial for illegal transmission of betting information and operating an illegal gambling business, was not a member of the famed 14K Triad, a Chinese organized crime gang with tentacles into most of the Chinese communities across  Asia, and that a 2008 Royal Malaysia Police report on Phua was erroneous.

Intriguingly, Zahid, who has been mentioned as a future prime minister, wrote that Phua had “on numerous occasions, assisted the government of Malaysia on projects affecting our national security.”

Opposition figures have seized on the episode to demand what Zahid knew and when he knew it, and how Phua was assisting doing what, insisting that Zahid answer questions in parliament.

“Mr Zahid writing the letter comes across as very shocking not only because the letter attempts to exonerate Paul Phua, who clearly has a checkered past, but also because Zahid claims that Phua has assisted with ‘projects of national security,’” Fahmi Fadzil, communications director of the opposition People’s Justice Party, told the media Sunday.

Since the letter became public in a South China Morning Post news story last Friday, Zahid and other members of the United Malays National Organization have asked that it be withdrawn from the case and have been fumbling for answers as to why the justice minister was defending, on official Ministry stationery, a man who according to a 2008 report in the Royal Malaysian Police’s own files, was in organized crime up to his ears and saying “as such, we are eager for him to return to Malaysia.”

It is clear that the letter, copied to lawyer Muhammad Shafee Abdulah, UMNO's top fireman and most prominent and ubiquitous lawyer, was never meant to see the light of day. It also raised questions why Shafee was interceding for a gangster of Phua's stature. Speculation in Kuala Lumpur centered on the possibility that Phua was a central figure in laundering money out of Malaysia for top political figures.

Shafee issued a confused explanation on Sunday, saying Zahid was asked by US lawyers for Phua to provide the information or he would be compelled to do it in court. He added that the 2008 report to the FBI identifying Phua as a member of the local 14K was wrong. However, asked to explain the discrepancy between the 2008 report and Zahid’s 2014 letter, the Inspector-General of Police Khalid Abu Bakar declined comment, refusing to back up his boss.

There is voluminous information from the FBI in the US besides the Malaysian police report that Phua was indeed deeply involved in organized crime, raising questions why Zahid felt he needed to personally weigh in to the FBI instead of allowing Khalid Abu Bakar to provide the information and possibly correct its own mistake, if there was one.  Phua’s arrest in Macau last year uncovered what was said to be the biggest gaming racket in the city’s history. In Las Vegas, according to the police report, Phua’s illegal sports betting operation ran into the tens of millions of US dollars.

The episode also raises questions why Phua’s lawyers chose Shafee, UMNO’s top legal figure, to ask Zahuid for help instead of himself going to the police.  Zahid could have simply said the government had no information to connect Phua to the 14K, feigning ignorance of the 2008 report. But instead, in what looks like a bizarre attempt to convince the FBI , he says Phua has been involved in projects affecting Malaysia’s national security – unless Phua was stressing through his lawyers that he had information that he could use against the government if they didn’t make the effort to help.

John Malott, the former US ambassador to Malaysia and a critic of the current government, said in an email to Asia Sentinel that he had become interested in the case and researched it after the SCMP report.

"Zahid's defense of someone who was arrested in both Macau and Las Vegas for allegedly running some of the biggest illegal on-line sporting bets operations in history is simply mind-boggling," Malott said. “Zahid has a lot to answer for. Why is he going out of his way to defend someone like Phua? Why did he say that this man, who is on trial in Macau and the US for criminal activity, is essential to Malaysia's national security?"

Some Las Vegas gambling news websites say Phua’s attorneys are trying to get the case thrown out on civil liberties grounds. The other five people arrested in Vegas all confessed and cooperated with law enforcement. There is no doubt that the crimes took place; they were witnessed by the FBI, they also found evidence on the laptops and cell phones that were seized, and five people confessed, meaning the only way Phua can escape jail is via procedural mistakes.

Phua’s attorneys say the search and later the arrest warrant were not valid because the FBI had entered Phua’s operations without a search warrant. The FBI purposely disabled the internet connection to Phua’s suites where the illegal sports gambling operation was being conducted, then posed as internet repairmen and secretly witnessed and filmed what was going on. They confiscated laptops and cellphones.

Because there was no search warrant, Phua’s lawyers argue, the search and therefore the knowledge that illegal activity was in fact taking place was itself illegal. Under US law, if the search is illegal, all evidence and confessions obtained thereafter are illegal.

The US attorney is expected to argue, however, that there was reasonable suspicion to believe illegal activity was taking place, given the fact that Phua had just been arrested in Macau for illegal sports gambling before he came to Las Vegas and because he had requested an inordinate amount of internet connection equipment for the hotel suites.

According to various Las Vegas news websites, Phua’s attorneys say that the judge issued the arrest warrant for Phua only because the FBI (1) hid the fact that there was no search warrant and (2) because they told the judge that according to the FBI’s information from the Malaysian police, Phua was a known member of the 14K triad. The defense says that  in doing this, the FBI poisoned the judge’s mind and led him to issue the arrest warrant.