Letter from Kuala Lumpur from Our Own Correspondent
BILLIONS of dollars are stolen. Everyone knows what happened, but it turns out almost no one is guilty of anything. This, it seems, is how dodgy local politicians want it – as well as well-paid international armies of lawyers, lobbyists, auditors and regulators.
The IMDB scandal burst through Malaysia’s veneer as a booming if somewhat particular democracy five years ago. Harrow-educated businessman Low Taek Jho, current whereabouts unknown, denies industrial theft in partnership with leading politicians, second-division Gulf royalty and some of the best names money in the west can buy.
His lawyers, including Kobre & Kim and former New Jersey governor Chris Christie, last year pocketed $15m in fees as part of a deal with the US Justice Department under which Jho Low, as he is more commonly known, admitted no liability for wrongdoing but surrendered a billion dollars. Last month prosecutors in Malaysia agreed to drop charges against Goldman Sachs in connection with the web of empty boxes and opaque accounts that was IMDB, in return for a settlement that may fall well short of the reported $3.9bn-again with no taint of impropriety.
Goldman Sachs is not the only institution to emerge with everything save its reputation unscathed. Those caught apparently unwittingly in the web of 1MDB’s distress reads like a who’s who of international finance, including RBS Coutts, Standard Chartered, UBS, BSI, Falcon, Edmond de Rothschild Bank, ANZ, Julius Baer, ICBC, JP Morgan, Deutsche Bank, Credit Suisse, United Overseas Bank, DBS and AmBank. KPMG and Deloitte face allegations of either negligence or complicity, while those law firms and lobbyists enlisted to ensure the accused receive a fair hearing include Kobre & Kim, Schillings, Loeb & Loeb, Mishcon de Reya, White & Case, Shearman & Sterling, DLA Piper and Clyde & Co LLP.
It’s no surprise, then, that Najib Razak, the prime minister who presided over the IMDB affair, also says he has done nothing wrong, save for helping orphans and farmers. A new government smuggled into power in March – we call it “money politics” – has already dropped all charges against Riza Aziz, Najib’s stepson, relating to allegations that he used some of the IMDB loot to produce the movie The Wolf of Wall Street and finance a playboy Beverly Hills lifestyle.
New prime minister Muhyiddin Yassin, commonly known as Moo, used to be Najib’s deputy and has been on a familiar charm offensive. We now have a record number of ministers, to match lucrative new appointments to government-linked companies. For those not on board, the outlook is more gloomy: a reformist former finance minister faces resurrected charges of corruption (already dismissed for lack of evidence), while Anwar Ibrahim, jailed and pardoned for trumped-up sodomy charges, is also back in the frame. The result? The very interests thrown out at the last election are now back, ruling a very comfortable roost (in between court appearances).
So, it seemed something of a surprise when Najib was found guilty in Kuala Lumpur on 28 July of the first seven of 42 charges relating to the scandal and sentenced to 12 years, especially as Moo’s awkward coalition hangs by a single vote- that of the former PM himself. Najib may have been convicted of a massive theft of public money, but is able to remain an active MP pending appeals.
Moo (and those who promoted him) know Najib’s conviction leaves him essentially a free man – but obliged to the new/old order during an appeals process that could extend beyond the next election. There’s a lot riding on the outcome for Najib and all those so keen to move on from the unvictimless crime that was IMDB.