Malaysia-China Relations: Time to Pay the Chinese Piper?

July 12, 2018

Malaysia-China Relations: Time to Pay the Chinese Piper?

By Toh Han

As Malaysia begins negotiations with China over billions of dollars of Chinese-led public service projects, the outcome will be a litmus test of Beijing’s Belt and Road Initiative (BRI), which is designed to develop infrastructure across 70 countries.

How China treats Malaysia will go a long way toward determining international perceptions of the BRI, which has aroused suspicion and criticism among some quarters of the global community.

There are reasons for concern. As Asia Sentinel reported on July 9, a long list of countries including Cambodia, Laos, Nepal, Pakistan, Sri Lanka and others have found themselves mired in debt to China’s Ex-Im Bank and other financial institutions for projects whose costs have soared out of sight as they have moved toward execution.

They have found that renegotiating debt with China  is difficult. And in some of those countries, their leaders have discovered that financial debt disturbingly translates into political debt as Beijing extends its hegemony across the region.

Malaysia’s new government, which came into power on May 9 after ending more than six decades of rule by the race-based Barisan Nasional,  may learn what Sri Lanka, Pakistan and Montenegro in particular have learned: that the Belt and Road Initiative has beggared their governments.

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Top Malaysian officials are expected to visit China in the coming weeks. At a press conference on July 6, Malaysian Prime Minister Mahathir Mohamad said he intends to visit China in August to discuss Chinese-built projects largely financed by Chinese state-owned banks that have assumed new controversy after the fall of former Prime Minister Najib Razak.

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“There are several issues to be brought up, among which is the unfairness of the terms of the contracts and also of the loans,” Mahathir said. “The interest is also of concern to us because the interest is much higher than when government borrows.”

The previous day, the Ministry of Finance confirmed that the Malaysian government has suspended three Chinese-backed projects worth more than US$22 billion. They comprise the East Coast Rail Link, estimated by the finance ministry to cost US$20 billion, as well as two gas pipelines estimated at US$2.7 billion being built by the China Petroleum Pipeline Bureau.

These two pipelines are overseen by Suria Strategic Energy Resources (SSER), a body under Malaysia’s finance ministry. Also on July 5, Finance Minister Lim Guan Eng, appointed by the new administration to replace Najib, who had headed the ministry in addition to his role as premier, confirmed that a fourth China-related project, a US$813 million gas and petroleum pipeline had been suspended.

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At the July 6 press conference, Mahathir said Daim Zainuddin, who headed the ministry during Mahathir’s previous prime ministership, will precede him to China to negotiate some Chinese-backed contracts. Shortly after winning the Malaysian elections on May 9, Mahathir appointed Daim to head the Council of Eminent Persons, a body which advises the new Malaysian coalition government.

Mahathir announced on June 6 that Lim, with a posse of Malaysian Anti-Corruption Commission (MACC) officers, will travel to China to discuss the SSER pipeline projects.

The fact that three senior Malaysian officials will visit China indicates the importance which the Malaysian government places on China, as well as the difficulty in renegotiating these Chinese projects.

The announced accompaniment of anti-graft officials in Lim’s trip to China suggests the Malaysian government suspects corruption in the SSER pipeline projects. Lim said on June 11 that a report has been filed with the MACC on the SSER projects. On the same day, Lim disclosed the MACC had raided SSER’s office, and the Malaysian finance ministry was forming a committee to investigate these projects.

As Chinese leaders meet Mahathir, Daim and Lim, the Chinese government has to prove its commitment to the rule of law and fighting corruption in Belt and Road projects.

The Forum on the Belt and Road Legal Cooperation, which was held in Beijing on July 2 and 3, declared its stance in fighting corruption. The statement of the co-chairs of the forum, which was attended by over 350 delegates from China and other countries, said, “We call on the parties participating in the BRI to jointly strengthen anti-corruption cooperation, on the basis of the United Nations Convention against Corruption and other international conventions as well as bilateral treaties.”

In September 2017 in Beijing, the World Bank and a Chinese anti-graft agency, the Central Commission for Discipline Inspection, held a seminar on international cooperation to fight corruption in the BRI.

It is interesting that the World Bank was a partner in this anti-corruption seminar, given that the multilateral lender debarred China Communications Construction Company (CCCC) from 12 January 2009 to 11 January 2017 for fraudulent practices. CCCC, a Chinese state-owned enterprise listed in Hong Kong and Shanghai, was the main contractor for the East Coast Rail Link, which will link the east and west coasts of peninsular Malaysia with railway. The World Bank’s debarment of CCCC and all its subsidiaries was related to a CCCC subsidiary China Road and Bridge Corporation’s project in the Philippines.

Although no fraud or corruption has been found in CCCC’s East Coast Rail Link, critics argue the cost of this project is several times higher than similar railway projects. Lim said the East Coast Rail Link cannot continue unless its price tag is lowered.

All companies and individuals are presumed innocent until proven guilty, but if Malaysian investigations reveal corruption among Chinese companies or executives, the Chinese leaders must allow the law to take full effect. After all, in China’s ongoing anti-corruption campaign, Xi has not spared senior Chinese officials from punishment after they were found guilty of corruption.

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CCCC Chairman Liu Qitao (pic above) said he was not worried at the Malaysian government’s focus on development, because CCCC projects benefit the countries they are located in. Speaking at the Belt and Road Summit in Hong Kong on June 28, Liu said CCCC helped Malaysia’s development.

“If we don’t benefit the local country and environment, the risks will be very great,” Liu added.

Chinese corporate chieftains like Liu, as well as the Chinese government, must prove their professed commitment to ensuring BRI projects in countries like Malaysia are transparent, free of corruption and benefit the local countries. The Chinese government, banks and companies must prevent BRI projects from becoming a heavy financial burden to the countries they are based in. Otherwise, as Liu said, the risks will be very great, not only for Chinese companies but the global image of China and the BRI. At stake is whether other nations will accept BRI projects from China.

Toh Han Shih is a Singaporean writer based in Hong Kong.

Indonesia: Bribery Issues Mar Polls

June 28, 2018

Indonesia: Bribery Issues Mar  Polls

by Ainur Rohmah

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With Indonesia’s regional elections underway on June 27, 152 million Indonesian voters will choose governors, regents, mayors and representatives simultaneously in 13 provinces, 115 districts and 39 cities across the country in a process that is rife with bribery and influence-peddling.

Data collected by the country’s formidable Corruption Eradication Commission show that 78 regional heads have been tried on various corruption cases over the past 15 years. Since January alone, at least seven regional heads have been arrested on various charges of bribery and abuse of power. One, for instance, was Nyono Suharli, the regent of Jombang, who received bribes related to the licensing of government offices. The bribes were to be used for Nyono to fund his 2018 campaign.

Abdon Nababan, a prominent community activist in North Sumatra, described a typical case – involving his own abortive run for power. The country’s political mafia block independent candidates, he said, to effect make “investments” in people they can control through bribery. The system itself in effect thus blocks genuine independent candidates by making the nomination process nearly insurmountable.

“The conditions set (for independent candidates) by the electoral system in Indonesia are too heavy, and only rich persons and those sustained by (political) investors have the opportunity to run for election,” Nababan said.

Nababan for the past 20 years has championed the rights of indigenous peoples over their ancestral lands through the Alliance of Indigenous Peoples of the Archipelago (AMAN). He was rewarded the prestigious Ramon Magsaysay award in August 2017 for his dedication to protecting the rights of indigenous people.

Encouraged to seek office to combat corruption and the sway of the so-called “land mafia,” Nababan said, he decided to run as an independent for governor in North Sumatra – one of the provinces whose leaders have often been arrested for corruption – in the upcoming local elections. Although not affiliated with a political party, surveys indicated that he would be one of the strongest candidates.

Political Dowries A Bar

Regional candidates usually seek to run as independents because it is considered cheaper than running through a political party, which requires candidates to put up what is described as a “political dowry” in order to be nominated for election. In fact, the requirement to run as an independent is equally difficult, since the candidates must collect the signatures and copies of the ID cards of at least 800,000 voters.

Nababan and his volunteers collected hundreds of thousands of signatures in four months before the General Election Commission (KPU) closed the registration process. His efforts failed because he was only able to collect 560,000, falling 260,000 short.

“The distance between my appointment as a candidate with the closing of the registration was too short so we didn’t have enough time to gather support,” he said.

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Shockingly, Nababan said he had been approached by a group of people he called “bandars” or political investors who offered him the chance to run through their political party, which he didn’t name, promising him up to Rp300 billion (US$21 million) to deliver victory.

“A month after the announcement of my candidacy, around August 2017, someone contacted me to request a meeting to discuss political support,” Nababan said. He subsequently met with three unnamed individuals who offered financial support in return allowing them control of the government after the election .

“They told me that they would prepare Rp300 billion for various expenses in my campaign,” Nababan said. “I do not know who they are but I think they have access to political parties, and they have big (financial) capital,” he said.

He assumed they represented a group of influential people in plantations, mining and property, he said, all of which have long-term economic interests in North Sumatra. In order for their business activities to run smoothly, he alleged, they were looking for elected leaders who would make it easy to provide licenses and commission projects.

Nababan is not alone. Faisal Basri, an economic analyst and political activist who ran as an independent for the governorship of Jakarta in 2012, told the highly-regarded Jakarta-based news magazine Tempo ( that he had been offered financial support of up to Rp200 billion (US$14 million) in return for promising to facilitate the donor’s project in the ​​Sundae Kelapa port area in Jakarta.

But the offer was rejected. “Such a fund could trap us,” Basri told Tempo.

High Political Costs

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Donal Fariz, the coordinator of the corruption division of the Indonesian Corruption Watch (ICW), said bribery occurs throughout the entire nomination process until the election. Fariz divides the system into three levels: pre-candidacy, candidate determination, and post-election.

“All three levels are highly loaded with transactions and bribes,” Donal said. At the pre-candidacy level, the prospective candidate’s “dowry” value reaches hundreds of billions of rupiah, paid to the party in order to be nominated. The electoral system requires that candidates gain support at least 20 percent of the party’s votes in the legislature.

“At this stage the political cost becomes the highest,” Fariz said, although he said he couldn’t confirm the size of the bribes to lawmakers. “If we asked to the candidates, they would not answer. If we asked the party, they would not admit it, even they claim to be the party who spend money,” he said.

However, some candidates have complained about the huge sums they have been asked for the dowries. In January, La Nyalla Mattalitti, the chairman of the East Java Chamber of Commerce and Industry (Kadin), claimed he had been asked for Rp40 billion (US$3 million) by Gerindra Party Chairman Prabowo Subianto, the failed 2014 presidential candidate, in return for the party’s support in the East Java gubernatorial election.

Others are Dedi Mulyadi, a candidate for the governorship of West Java, who said he had also been asked for Rp10 billion (US$740,000) by an unnamed individual in Golkar, the country’s oldest party, to smooth his candidacy. Brig. Gen. Siswandi claimed the Prosperous Justice Party (PKS) turned him down as a candidate for the Ceribon seat when he refused to pay a dowry. The Hanura Party reportedly suffered internal conflicts due to the same issue. Prabowo, Gerindra, Golkar, PKS, and Hanura have all denied asking for dowries.

Fariz of the ICW said he believes many other cases are not revealed to the public. In addition to political dowries, there are also “survey fees” by particular institutions to raise candidates’ electability, he said. The second level is candidate determination, which is the major cost required for campaign attributes and props, as well as bribes to voters.

As for the post-election level, bribes are usually awarded to election organizers from the lowest level to the most strategic one, including bribes to law enforcement officials dealing with electoral disputes. The Chief Justice of the Constitutional Court, Akil Mochtar, was thrown into prison by the Corruption Eradication Commission (KPK) for accepting bribes in adjudicating disputes over regional gubernatorial elections in 2014.

Consequences of Corrupt Process

The transactional and corrupt spaces have long-term consequences, such as the many heads of regions who abuse their power for corruption. “So do not be surprised why many elected regional heads are ultimately involved in various corruption scandal,” Fariz said.

“The system has to be improved because this kind of (corrupt) system is very expensive for good and potential people,” Nababan said. It will be almost impossible for Indonesia to elect independent, viable candidates without such reform.

Ainur Rohmah ( is a Jakarta-based correspondent and a regular contributor to Asia Sentinel.

Media and Politics in Southeast Asia

June 23, 2018

Media and Politics in Southeast Asia–A Matter of Trust

by Ross Tapsell, Australian National University

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Southeast Asians have dwindling confidence in traditional journalism. As a result, social media platforms such as Facebook and WhatsApp have become the main source of information for voters. A combination of wider access to the internet and declining trust in longstanding news sources is changing the dynamics of democracy across the region.


In the wake of Donald Trump’s election as President in the US and the result of the UK’s Brexit vote to leave the European Union, the term “post-truth” entered the public lexicon. It is now used to explain elections and other political events in which the outcomes are determined by emotions rather than policy details, and in which those emotions are increasingly shaped by social media discourse.

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Recent elections in Southeast Asia, where the use of social media like Facebook and WhatsApp is prevalent, have been emotionally charged campaigns. These have led to the 2016 election of populist Rodrigo Duterte as President of the Philippines, the election loss and subsequent jailing of an ethnic Chinese Christian governor of Jakarta in 2017 and regime change in Malaysia in 2018.

Despite its widespread use, I do not believe that “post-truth” adequately describes these elections, as it implies that there was a time when the world engaged in “truthful” election campaigning. Rather, we should define the current political climate as the “post-trust” era. We need to consider more deeply how trust in the mainstream media is being replaced by trust in social media, and the impact this has on election outcomes.

Social Media Makes Malaysian History 

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 Since the arrival of the internet in Malaysia in the mid-1990s, a shackled and partisan mainstream media has been challenged by alternative online platforms. The country’s oldest newspaper still in print, the New Straits Times, has seen its daily circulation drop from 140,000 in 2006 to 50,000 in 2016. Indeed, it is a global trend that as internet penetration rises, newspaper circulation drops, although the newspaper’s pro-government nature has assisted in its rapid decline.

In part due to changes in media usage and online discourse, the majority of urban votes, concentrated in areas where internet use is prevalent, have gone to the opposition in recent elections. In 2013, Malaysia’s former ruling coalition, Barisan Nasional, won 133 seats out of 222 in the lower house of parliament to claim victory, but only five of those were urban seats, while 20 were semi-rural seats. The rest were rural seats in areas where internet penetration was lower.

We should define the current political climate as the “post-trust” era.

To unseat the Barisan for the first time in Malaysian history, the opposition needed swing voters in majority ethnic Malay semi-rural and rural areas. The one way it could regularly reach these voters was via the internet. Prior to the 2013 election, only 58 percent of internet users in Malaysia were ethnic Malay. Two years later, that number had grown to 67 percent, and it continues to rise.

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In a country where close to 90 percent of smartphone users access Facebook, the social media platform was the place to see photos of Mahathir Mohamad, now the Prime Minister, at rallies and watch his speeches live. Facebook also provided Malaysians with a glut of information about the role of former Prime Minister Najib Razak in 1MDB, a state investment fund from which more than US$4.5 billion was allegedly diverted. Thus, I believe that without Facebook, there would have been no significant perception of alleged government corruption, and thus no regime change, in Malaysia.

In Malaysia and Indonesia, the rise of the messaging platform WhatsApp, owned by Facebook, has been vital. WhatsApp is more than just a messaging service: it’s work email, family discussions, citizen journalism, and internet chat room all rolled into one, forming communal information societies. Given its popularity, WhatsApp has become a crucial component of political campaigning in these countries. One newspaper even described the 2018 Malaysian election as “the WhatsApp election.”

Battle of Trust

Facebook and WhatsApp triumphantly loosened the grip of government-controlled mainstream media on semi-authoritarian Malaysia. But at the same time, they may be contributing to declining trust in professional journalism in democratic countries like the Philippines and Indonesia.

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Malaysia’s Beauty Queen–Social Media made her infamous because her greed and devilish ways. She was one of the factors that led to Najib’s defeat in the May 9 GE-14. Rosmah Mansor became a butt of jokes on Facebook and WhatsApp, and an embarrassment to UMNO Malays for making Najib Razak to be perceived as a hen-pecked and weak leader.

In a 2017 survey on levels of trust in major institutions in Indonesia, the lowest ranked were political parties (45 percent), parliament (55 percent), courts (65 percent), and the media (67 percent). Even the notoriously corrupt Indonesian police (70 percent) ranked higher than the press. Much like in Malaysia, flagrantly partisan political coverage in the mainstream media eroded the public’s trust in it.

As mainstream media loses credibility, Facebook content and WhatsApp propaganda are becoming more successful in shaping political discourse. A 2017 survey found that Filipinos who had internet access trusted social media more than the mainstream media, with 87 percent of respondents saying that they trusted information on social media. Facebook influencers played such a big role in the Philippines election that in October 2017, the Philippine Senate Committee on Public Information and Mass Media held a hearing to probe the challenges posed by misinformation, especially on social media.

While social media is harming democracy in Southeast Asia in some respects, it is paradoxically facilitating the growth of democracy in others. Recent elections in the region have seen high voter turnouts, such as 78 percent for the 2017 Jakarta gubernatorial election compared with 66.7 percent for the 2012 election; and 81 percent for the 2016 Philippine presidential election, compared with 74 percent for the 2010 election. In providing more chances for citizens to engage with election issues and political personalities, social media fosters political participation.

This, however, does not change the fact that the common thread linking election victories in the region is WhatsApp- and Facebook-based “black campaigns” of negativity and smear tactics. Politicians are involved in these black campaigns as both victims and perpetrators. Every politician must strive to reduce the impact of negative online campaigning, as well as mount such campaigns themselves against their opponents.

This is not unique to Southeast Asia: scholars and observers have identified the use of disinformation and fake news in elections as a global trend. But the ubiquity of social media in Southeast Asia makes it an epicenter of the crosscurrents of internet communications and politics.

In the face of a new public sphere driven by social media communities, politicians need to consider the implications of the impending death of newspapers and the potential end of television and radio news, as well as the decline of professional journalism. Newspapers were once central to a broader imagined community of shared national and international experience. In contrast, today’s social media communities are smaller—our experience of the collective is more insular, haphazard, and schematic. The digital era is changing the avenues of trust from which we receive information. We should look to countries in Southeast Asia to examine how post-trust societies may take shape.

Ross Tapsell is a senior lecturer, Department of Gender, Media and Culture. Director, ANU Malaysia Institute. He wrote this for AsiaGlobal Online, a digital journal published by the Asia Global Institute (AGI) at The University of Hong Kong with which Asia Sentinel has a publishing agreement.

US Mounts Major Global Anti-Money-Laundering Campaign

June 19, 2018

US Mounts Major Global Anti-Money-Laundering Campaign

by John

The US Treasury Department has initiated a wide-ranging campaign against money laundering across the globe and is leaning on governments particularly in Cyprus, Beirut, Singapore and the Gulf states including Dubai in an attempt to stop the flow of billions of dollars that wash through the financial system every day from Russia, Iran and China.

Although planning for the campaign, headed by the department’s Marshall Billingslea, Assistant Secretary for Terrorist Financing and Financial Crime, began during the administration of former US President Barack Obama, the Trump administration is seeking aggressively to stop the flow of illegally gained money from the three countries into UK and French real estate, small German banks and the Gulf states.

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Paul Manafort is charged for money laundering.

It is uncertain how much of the new assertiveness can be traced to the US initiative. A spokesman for the Treasury Department said only that the department is “undertaking initiatives against money laundering in several different countries as part of an ongoing process.”

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However, banks from Cyprus to Singapore to the long-standing boltholes for hot cash in the Caribbean are being told to clean up their act or lose access to the Belgium-originated Society for Worldwide Interbank Financial Telecommunication – the SWIFT system, as it is known, through which almost all of the world’s financial transactions travel. Hundreds of billions of dollars a day move through the system, which enables the world’s financial institutions to send and receive secure information about financial transactions.  The SWIFT system has come to dominate the world’s movement of money.

Sources speculate that the US aggressiveness played a role in the demand last week by the UK government, also triggered by the poisoning of the former Russian spy Sergei Skripal and his daughter Yulia, that Russian oligarch Roman Abramovich, the owner of the Chelsea Football Club, explain the source of his vast wealth before he is granted a new UK visa. The UK government has launched a further crackdown on wealthy investors into the UK.  Offshore destinations of illicit funds in the Cayman Islands, Guernsey, Jersey, Gibraltar and Nassau are also under the microscope.

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The amount of money spirited out of developing countries is astonishing. The Washington, DC-based NGO Global Financial Integrity, in a 2017 report, estimated that illicit currency flows in and out of the developing world amounted to at least 13.8 percent of total trade, or US$2 trillion, in 2014, the last year for which reliable data were available. An astonishing US$3.97 trillion in illicit funds left China between 2000 and 2011 alone, according to Global Financial Integrity.

Laundered money has been pouring out of Russia for the better part of two decades as oligarchs made rich by the Putin regime have looted a long string of government-linked companies, particularly in oil and gas. The money has gone into expensive homes along the Cote d’Azur in France as well as London, and New York and Beverly Hills in the US. At one point, realtors in New York said roughly 30 percent of condominium sales were going to buyers who listed international addresses including – notably – the family of the now-disgraced former Prime Minister of Malaysia, Najib Razak, as well as Viktor Khrapunov, the former mayor of Almaty, Kazakhstan’s capital city, who has been accused of stealing hundreds of millions of dollars from the country.

With the Trump administration on a rampage against Iran, US authorities are seeking to shut down Iranian funds flowing into Dubai, Bahrain, Kuwait and Qatar as well as banks in Asia including Woori Bank and Industrial Bank of South Korea, according to Bloomberg News Service, which cited documents and testimony on how Iran siphoned US$1 billion from escrow account funds to evade US-imposed sanctions. Other banks that have been hit with compliance lapses included the Agricultural Bank of China, one of the country’s Big Four banks as well as

Songhua Bank of South Korea and Mega International Commercial Bank of Taiwan, according to Bloomberg.

The campaign to lean on Middle Eastern banks could well cause a liquidity crisis in the region including Dubai and Qatar, two of the region’s biggest banking centers, as well as in Lebanon, equally with Cyprus a repository of laundered funds that have flown into financing of terrorist activities by Hezbollah and other groups.  One source speculated that uncertainty over a liquidity crisis was spurring unsettled emerging markets over the past couple of months, with Argentina again facing crisis.

The problems for Cyprus are enormous.  Stelios Orphanides, writing in the Cyprus Business Mail on May 29, said that there is “increasing concern in the ranks of professionals and entrepreneurs in Cyprus over the impact of stricter anti-money laundering and terrorist financing practices being applied, amid fears that recent US pressure on the islandʼs financial and business service providers to take US sanctions more seriously into account, may have a transformative effect on the economy.”

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The disgraced former Prime Minister Najib Razak and his wife Rosmah Mansor are now under investigation

The problems are exemplified by the notorious FBME Bank, headquartered in Tanzania although at least 90 percent of its business was conducted in Nicosia before it was shut down by the US Treasury Department’s Financial Crimes Enforcement Network, or FinCEN last October after a three-year campaign. The bank, owned by Fadi and Ayoub-Farid Saab, was the repository of funds from such notorious characters as Dmitry Klyuev and Andrei Pavolov, key suspects in the looting of Hermitage Capital, once controlled by William Browder before he was driven out of Russia. Dozens of outlaw organizations allegedly banked at FBME, although the Saabs continue to deny any wrongdoing.

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The Hermitage looting and its aftermath resulted in the so-called Magnitsky Act, passed in the US Congress after Sergei Magnitsky, an associate of Browder’s, was beaten to death in a Russian jail while he was attempting to investigate the theft. As a result, a list of top Russian officials were barred from transacting financial business through the SWIFT system.  Natalia V. Veselnitskaya, the Kremlin-backed lawyer who met with Donald Trump Jr. and others in Trump Tower in June of 2016, was attempting to get the Magnitsky Act reversed. That meeting is now a subject of the investigation by Robert Mueller into Russian attempts to subvert the 2016 election that brought Trump to power.

FBME was the subject of a 2016 series of stories by Asia Sentinel that described the alleged laundering of millions of US dollars out of the Indonesia-based Bank Mutiara, formerly known as Bank Century, which was looted by its owner, Robert Tantular, and others during the global financial crisis of 2009.  Bank Mutiara was taken over by the Tokyo-based J Trust financial conglomerate, heavily backed by Nobuyoshi Fujisawa.  J Trust and the Saabs have threatened multiple lawsuits against Asia Sentinel over the stories. Asia Sentinel stands by its reporting.

Another of the primary targets of the campaign is Singapore, which by one report has the equivalent of US$368 billion from Indonesia in its banks – 40 percent of the island republic’s total bank deposits. In one astounding heist, more than  US$13.5 billion was looted from the Indonesian central bank’s recapitalization lifeline to 48 ailing banks during the 1997-1998 Asian financial crisis. As the government poured money into the banks in the attempt to save them, the bankers were stealing it and moving the money to Singapore.

According to a 2007 Asia Sentinel story, some 18,000 Indonesians described as “rich” live in Singapore. They were said to be worth a combined total of US$87 billion, more than Indonesia’s entire annual government budget at the time.

Indonesia’s Corruption Eradication Commission is said to be investigating the movement of as much as US$1.5 billion from Bank J Trust, the former Bank Mutiara, which was sold to the Japanese financial services corporation J Trust Group. J Trust is heavily backed by Taiyo Pacific Partners, the Washington State-based investment fund whose chief investment officer was Wilbur Ross, now President Donald Trump’s commerce secretary. The Indonesian bank is believed to be connected to some of the country’s most powerful politicians. KPK targets are said to ionclude Boediono, the former central bank governor and vice-presidential running mate of former President Susilo Bambang Yudhoyono.

Others are said to be Rafat Ali Rizvi, a British citizen who at one point faced the possibility of a death penalty for helping to loot Bank Century, the carcass from which Bank Mutiara was fashioned, and Hesham Al Warraq, a Saudi national who was also a major shareholder in the bank. Only Robert Tantular, the president of Bank Century, has been jailed.

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Other countries’ leaders have used Singapore as a piggy bank as well, including Myanmar, whose generals moved millions of stolen funds out of their country into Singapore banks. The Singaporeans were so grateful that in 2009, they named an orchid planted in their spectacular Singapore Botanic Garden for Thein Sein when he paid a visit.  More recently, Singapore cracked down on Swiss banks BSI Bank and Falcon Private Bank and withdrawing their licenses in 2016 for acting as conduits for billions of dollars funneled from the scandal-ridden 1Malaysia Development Bhd. Two other banks – the Singapore-based DBS and the major Swiss bank UBS were hit with heavy fines.

Stealing Money from the National Treasury is an Act of Treason

June 17, 2018

Stealing Money from the National Treasury is an Act of Treason–so, Najib Razak is a Traitor

by Mariam

Image result for Najib is a CrookIt takes time, but Justice will come eventually to Najib Razak and Rosmah Mansor



93-year-old Dr. Mahathir Mohamad, who heads Malaysia’s reform coalition Pakatan Harapan, has lost no time in knuckling down to work. A week after he assumed office in the wake of the political earthquake of the country’s May 9 general election, he terminated the contracts of 17,000 political appointees as a drain on public expenditure.

The move was hailed by a public taken aback  by the numbers of people involved, although some are concerned that the shock and awe of Mahathir’s move would generate the same kind of guerilla underground that cropped up when Paul Bremer, the American proconsul in Iraq, disbanded the army and civil service in 2003. That played a major role in the eventual creation of the Islamic State which has terrorized Syria and Iraq for the past several years.

Nonetheless, the sackings are looked upon by Malaysia’s 31 million people as just the start of the cleanup of decades of appalling corruption. Police seized 72 bags alone of loot from deposed Prime Minister Najib Razak’s residence in the days after the May 9 election, of which 35 contained RM114 million (US$28.6 million) in cash in 26 different currencies. Another 35 bags contained jewelry and watches, and 284 boxes were filled with designer handbags including Ellen Birkin bags by Hermes that can cost upwards of US$200,000. The former Premier is not likely to go hungry. He is believed to have hundreds of millions more stashed overseas. Famously, in 2013 US$681 million appeared in his personal account at Ambank in Kuala Lumpur and almost immediately was moved overseas.

The biggest mess, of course, is the state-backed development fund 1Malaysia Development Bhd., from which US$4.5 billion is said by the US Justice Department to have disappeared in corruption and mismanagement. Mahathir has said the scale of corruption is even greater and has demanded a full explanation. The Finance Ministry, now under Lim Guan Eng of the Democratic Action Party, says Malaysia’s total government debt and liabilities exceed RM1 trillion (US$250.7 billion).

The number of no-bid contracts awarded to crony companies and government-linked companies – now termed by many to be government-linked crookedry – is overwhelming.

Mahathir for instance cancelled a high-speed rail contract from Kuala Lumpur to Singapore that cost RM70 billion which, with other government commitments including operating expenses over 20 years ran the total to RM110  billion. “Estimates are that in a proper open tender, the project could have been done for a maximum of RM25 billion,” said a well-placed business source in Kuala Lumpur.

Equally questionable is a contract for Malaysia’s Eastern Corridor Rail Line, awarded to a Chinese company at RM67 billion. The payment was time-based, not on a completion basis. As such, 40 percent of the total payment has been made while only 7 percent of the work has been completed. The project cost is widely believed to have been a subterfuge for Chinese help in paying off 1MDB’s massive debt.

Next is the Sarawak and Sabah gas pipeline, again awarded on time-based payments with 87 percent of RM9 billion paid and only 13 percent of the work completed.

Contracts such as these are aplenty. The gadfly website Sarawak Report reported on June 10 that a car rental company headed by an official with a Barisan-aligned party in Sarawak received a RM1.25 billion no-bid contract to install solar energy facilities for 369 Sarawak schools. The three-year contract, allegedly steered by Najib himself, has been underway for 18 months. Not a single solar power unit has ever been installed.

But beyond that, dozens of government-linked companies have been found to be paying exorbitant salaries to their executives. Malaysia has the fifth highest number of GLCs in the world, for which Mahathir himself must share the blame, since many came into existence during the 22 years he headed the government from 1981 to 2003.

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Many are household names – the national car project Proton, now peddled to China’s car company Geely; the national energy company Petronas, the electrical utility Tenaga Nasional, the electric utility Telekom Malaysia, the Tabung Haji Pilgrimage Fund, the Federal Land Development Authority, Malaysian Airlines, The Majlis Amanah Rakyat (Malay People’s Trust Council), the Sime Darby plantation and property conglomerate.

Publicly traded GLCs currently comprise 36 percent the market capitalization of Bursa Malaysia and 54 percent of the benchmark Kuala Lumpur Composite Index according to a study by the think tank Institute for Democracy and Economic Affairs. They employ 5 percent of the national workforce.  According to the study, government bailouts of GLCs have “resulted in a huge drain on the public purse.” They include RM1.5 billion for Proton in 2016 and RM 6 billion for Malaysia Airlines in 2014.

”One estimate suggests that around RM85.51 billion has been used to bail out GLCs over the past 36 years,” according to the report putting pressure on commercial interest rates as a result of recurring budget deficits that “may have been a separate factor operating to crowd out private investment, at the margin.”

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As an example of exorbitant salaries, the Transport Minister, Anthony Loke, told reporters that the executive chairman of the Aviation Commission (MAVCOM), retired Gen. Abdullah Ahmad, drew a monthly salary of RM85,000 (US$21,325). The figure is over four times the basic recorded salary of the Malaysian Prime Minister and is similar to the salary of millionaire CEOs of successful private enterprises.

Veteran journalist, R Nadeswaran, formerly of The Sun Daily, reported that his investigations into MAVCOM, an independent body established in 2015 to regulate economic and commercial matters relating to civil aviation, revealed that RM570,000 had been paid in directors’ fees, and a further RM770,000 on directors’ travel and accommodation.

More revelations have followed. One “former minister turned adviser” in Najib’s Prime Minister’s Office received a monthly wage of RM200,000 (US$50,177), which is about 10 times Najib’s official salary. Other “advisers” were paid from RM70,000 upwards per month in a country where per capita income on a PPP basis is RM26,900 annually.

Other ministries, together with the newly-revitalized Malaysian Anti-Corruption Commission (MACC), have been directed to investigate the various GLCs and political appointees  Apart from the allegations of huge bonuses and exorbitant salaries, it has also been alleged that officials of various GLCs collaborated with contractors to submit false claims for maintenance work. The MACC is investigating.

The almost daily revelations of cronyism and large-scale corruption have been described by one Malaysian as akin to “Chinese water torture,” when water is slowly dripped onto a person’s forehead and drives the restrained victim insane.

Loke’s disclosure also prompted the veteran MP, Lim Kit Siang, Mahathir’s onetime adversary turned ally, to demand transparency and public accountability in the wages of the heads of the GLCs. He proposed the implementation of a public website showing the perks, salaries and remuneration of all GLC heads and members.

Lim wanted to know how many of the heads of the GLCs are political appointees and how many of the UMNO/Barisan Nasional appointees have resigned since Najib lost power.

Malaysians responded swiftly to Loke’s report. One person multiplied Loke’s figure by the number of existing GLCs and was astounded by the money which taxpayers had to fork out for GLC directors’ fees. Who approved the salaries of the board members in this public regulatory body?

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A Foreign Friend In Cambodia asked me, “Din, is your recently pardoned felon running a parallel government?”  And I answered, “For Malaysia’s sake, I hope not.–Din Merican

Surprisingly, the revelations over the GLCs are in contrast to those by newly released and pardoned former Opposition leader, Anwar Ibrahim, the PM-in-waiting, who told a crowd in Perak that chief ministers should not rush to take action against GLCs, and to refrain from being vengeful.

“I have no problem with GLCs, if their performance is good and the Menteri Besar (Chief Minister) thinks it’s appropriate to continue, we accept (the continuance),” unless, he added, “that it was proven at the federal level,  there was wasteful overlapping and excessive payment of allowances to political figures.”

Malaysians demanding intense scrutiny of GLCs wonder what to make of the PM-designate’s remarks and actions.

Mariam Mokhtar is a Malaysia-based reporter and regular contributor to Asia Sentinel.

The Model who knew too much to live

May 25, 2018

The Model who knew too much to live

by John

Altantuya Shaariibuu, the Mongolian jet-setting beauty who was murdered in a patch of forest near Kuala Lumpur on October 18, 2006, was killed because she was causing trouble and she knew too much.  It appears likely that the mystery of her death, 12 years later, may now be finally be unraveling.

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The Model who knew to much

Asia Sentinel carried 73 stories on the events surrounding her death between 2006 and 2015, with several more in the intervening three years. We may now be about to learn what happened.

The 28-year-old translator was shot in the head by elite bodyguards for Prime Minister Najib Razak as she begged for her life and that of what she said was her unborn child after a whirlwind romance with Abdul Razak Baginda, then Najib’s best friend and, according to French prosecutors, a participant with him in a giant scandal. Razak Baginda had jilted her and she was demanding US$500,000 in front of Razak Baginda’s house when she was scooped up and thrown into a jeep by Chief Inspector Azilah Hadri and Corporal Sirul Azhar Umar, never to be seen alive again. Her body was wrapped in C4 explosives and blown to bits, possibly to destroy the DNA of the fetus she was carrying. All that was left, when she was found, were bones that filled two urns.

A month after Altantuya was killed, on November 9, 2006 Sirul sat down with recording officer Nom Phot, was read his rights, agreed that he was not speaking under duress, and confessed to the murder, saying Azilah had told him the two would be paid between RM50,000 and RM100,000 to kill the woman.

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Dr. Setev Shaariibuu–The brutally murdered model’s father

That confession, despite the fact that everything appeared to be in order, was never introduced in a court of law. It was printed verbatim in Asia Sentinel on March 20, 2009.  Three years after the murder, a Kuala Lumpur court convicted the two of murder without ever seeking to learn who would pay them the money.

That question has never been answered, but now it may be. Sirul has been in an Australian detention center since 2015, having fled Malaysia while he was temporarily freed on appeal. The conviction was later reinstated in Malaysia and Australian authorities detained him.

According to the Malaysian news portal Malaysiakini, Sirul now wants to return home and tell the full story of how Altantuya was killed in exchange for a pardon. Since he was detained, Sirul, a convicted murderer, has had the advice and assistance of two lawyers from the United Malays National Organization (UMNO), the leading party in the Barisan Nasional, the party headed by Najib Razak, which decisively lost the May 9 general election.  With UMNO now having been ousted from power, Sirul’s lawyers apparently have disappeared.

Mohamad Fuzi Harun, Malaysia’s new top Police Officer, said he would discuss reopening the investigation into the murder.

So what did Altantuya know that made her so troublesome?  She accompanied Razak Baginda, and almost certainly Najib as well on a jaunt to Paris to meet with officials of DCNS, the French munitions giant, in the final stages of the purchase of two Scorpene submarines from a DCN subsidiary, Thales. Altantuya was identified as a “translator” on the trip, according to documents obtained by Asia Sentinel in 2012.  Najib has sworn on the Quran that he never met her although there are credible reports that he had.

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 Dr. Abdul Razak Baginda

Among other things, according the documents, a DCNS agent, Jean-Marie Boivin, paid for a jaunt to Macau for Razak Baginda and Altantuya. Altantuya was identified as the translator on the transaction. Other news sources say the two lovers toured Europe in Razak Baginda’s Ferrari before he ultimately jilted her.

According to a series of stories that won Asia Sentinel the 2013 award for excellence in investigative journalism from the Society of Publishers in Asia – Asia’s version of the Pulitzer Prize – UMNO was paid kickbacks in the equivalent of US$141.3 million at then-prevailing exchange rates for the purchase of the submarines. Ironically, the submarines can’t operate in Peninsular Malaysian waters. They were stationed in East Malaysia, where they were virtually useless.

However, as Asia Sentinel reported, the kickbacks were paid with the knowledge of French government officials all the way up to then-Foreign Minister Alain Juppe and with the knowledge of then Prime Minister Mahathir Mohamad and other Malaysian officials.

Given her intimacy with Razak Baganda – and possibly with Najib himself, according to a now-dead Malaysian private detective Perumal Balasubramaniam – it is likely that she knew considerable about how the US$141 million ended up with UMNO. According to a sworn declaration by Balasubramaniam, she had spent time with both Razak Baginda and Najib as her lover as well, and she had been promised the US$500,000 as a “commission” for assisting in the submarine transaction.

Today, French authorities have issued a warrant for Abdul Razak Baginda on bribery charges in the purchase of the submarines.  Two Thales officials have also been charged specifically with bribing Najib Razak.

From the start, it has been inconceivable that two elite policemen who had never known of Altantuya’s existence until the day she was murdered would decide out of the blue to kill her.

The stakes – a woman scorned and pregnant, standing on the street demanding that Razak Baginda show himself  or willing to tell what she knew – were high. By her own admission, in a letter found in the hotel room where she was staying, she said she was blackmailing Razak Baginda.

Razak Baginda, after her death, seemed to express horror that she had actually been murdered.  In public statements, he said he had only asked that someone “do something” about her to keep her from harassing him. In a highly unusual move, a high court judge turned him loose without ever having to put on a defense, whereupon he fled for the UK for several years.

It was Najib’s aide de camp, Musa Safri, who ordered Sirul and Azilah to pick up the woman, according to additional reports. Musa was never questioned, nor did he testify in the trial.  The question is who told Musa to order the two police commandos into action. If Inspector General of Police Fuzi decides to reopen the case, if Sirul makes his way back to Malaysia, We may now find out.