Malaysian Prime Minister Finance Scandal: Where did the Dollars come from and Where did They go?

Malaysian Prime Minister Finance ScandalBottom of Form

M: Where did the Dollars Come From and Where did They go?

                        The questions keep coming but the answers don’t

If, as Asia Sentinel reported on Aug. 6, more than RM1 billion from Malaysian Prime Minister Najib Razak’s personal accounts disappeared somewhere overseas, the Sarawak Report has apparently solved where the money went. It was more than RM1 billion and it appears to have gone back from where it came from, deepening the mystery.

Since July 2, when the Sarawak Report and the Wall Street Journal reported that nearly US$700 million had been deposited in Najib’s personal account at AmBank in Kuala Lumpur in March of 2013, there has  been a continuing mystery over who gave Najib the money and what it was used for.  Statements by Najib’s allies that the funds were “donated” by Middle Eastern interests to defend the Barisan Nasional in the 2013 general election made no sense.

There is a growing sense that the United Malays National Organization rank and file are starting to question what Najib was up to. An UMNO Youth division in Melaka over the weekend passed an emergency measure saying that Najib must resign over  issues including the massive scandal surrounding the deeply indebted 1Malaysia Development Bhd. and  the donation into Najib’s account have affected the prime minister and by extension, the party’s credibility. The resolution asked him to resign. There have been a growing number of other speeches in other UMNO units in the kampungs critical of the huge transfusion of money into his account and the 1MDB affair.

Former Prime Minister Mahathir Mohamad, who has been trying to unseat Najib for more than a year, said it best in his blog, Che Det, on Aug. 10: “Arabs are generous, but not that generous. I could not raise even a single dollar from them for the Malaysian International Islamic University or for the Oxford Islamic Centre. This claim that Arabs donated billions is what people describe as hogwash or bullshit.” 

The idea that RM2 million was spent in the 2013 general election, Mahathir said, “is absurd.” Mahathir needed less than RM10 million, he said, for each of the five elections he presided over as the Barisan’s leader.

Now, in Sarawak Report’s Aug. 14 edition, editor Clare Rewcastle Brown has reported that US$650 million (RM2 billion) was transferred from the Prime Minister’s AmPrivate Bank account in Kuala Lumpur back to Singapore after the 2013 general election and deposited in the name of Tanore Finance Corporation, domiciled in the British Virgin Islands, at Falcon Bank in Singapore.

Tanore is a mystery, its true ownership shrouded in the BVI’s impervious banking laws. Tanore originally transferred US$681 million into Najib’s AmPrivate Bank account earlier in March. To earlier explanations that the money was “donated’ to Najib personally on behalf of the United Malays National Organization purportedly for the election, there are further questions. 

When the money was transferred from Tanore to Najib’s account, the purpose of the transfer, according to a transcript of the transaction obtained by Sarawak Report, the purpose was not listed as a donation.  It was listed as a “partial payment.” Tanore was apparently wound up in April of 2014, raising questions where the US$650 million went next.

 

A partial payment for what?  None of Najib’s allies have been able to explain how or why the prime minister received and sent back such an enormous amount of money, then closed his personal bank account.

As Sarawak Report noted, the Tanore Finance Corporation account used in the transaction was at Falcon Private Bank in Singapore, a Swiss-based bank owned by the Abu Dhabi company Aabar, which had signed a RM18 billion  “strategic partnership” with 1MDB just days before.    

The mystery has spurred investigations by Swiss and Singaporean authorities into money laundering and raises the possibility of a US one as well, given that Jho Taek Low, a friend of the prime minister’s family who was instrumental in the creation of the crippled 1Malaysia Development Bhd state investment fund has become an American citizen and is thus subject to US money laundering laws.

Voluminous records that implicate Jho Low, as he is known, were given to Rewcastle Brown by a Swiss national, Xavier Andre Justo. The documents, including emails and WhatsAp chats, were stolen by Justo, a former official with PetroSaudi International, a Middle Eastern oil exploration company that received a US$1 billion loan from 1MDB.

Singaporean and Malaysian authorities have frozen numerous accounts over the 1MDB investigations. Two of those accounts are believed to be at Falcon.

Najib has gone to extraordinary lengths to shortstop all domestic investigations into the matter, including ousting Deputy Prime Minister Muhyiddin Yassin for questioning the 1MDB accounts. He has fired Attorney General Abdul Gani Patail, who according to sources in Kuala Lumpur was in the process of preparing indictment documents against Najib when he was sacked. He promoted two members of the Parliament’s Public Accounts Committee, which was investigating the 1MDB affair, to the cabinet, paralyzing that investigation.  The Malaysian Anti-Corruption Commission’s top two officers have been placed on leave and a half-dozen investigators have been interrogated, in effect stopping the commssion’s investigation as well.

Zeti Akhtar Aziz, the respected central bank governor, is under intense attack along with four top members of the Bank Negara hierarchy on suspicion she was behind the leaks to Rewcastle Brown and the Wall Street Journal.

The government has blocked critical reporting, suspending for three months the country’s most influential financial publications owned by The Edge Group. It has attempted to block The Sarawak Report in Malaysia, but the attempt has easily been circumvented. 

The country has gone all-out to search for foreign interests pursuing “activities detrimental to parliamentary democracy under sections 124B and 1241 of the Penal Code,” statutes that basically replicate the Internal Security Act which was ostensibly repealed at Najib’s urging by the Parliament in 2012.

Sarawak Report also adds detail to Asia Sentinel reports that that money was handed out personally by the Prime Minister to UMNO party heads, not only before the election but after, including numerous payments to MPs. The money was distributed in the form of checks, handed to key party coordinators by the Prime Minister, drawn on the Najib’s AmPrivate Banking account. It is these cadres who have stood Najib’s strongest defenders even as the public outcry grows and UMNO finds itself in more and more trouble.

Despite the crackdown and despite the bribes to the lawmakers, however, the questions keep coming. The answers don’t.