The Role of the Malaysian A-G in Political Scandals


June 20, 2017

 

Image result for Apandi AliThe Malaysian Attorney-General is the Public Prosecutor. He must uphold the Rule of Law. (The Malaysian Constitution–Article 145). His job is to protect the public interest, act with objectivity, take proper account of the position of the suspect and the victim, and pay attention to all relevant circumstances, irrespective of whether they are to the advantage or disadvantage of the suspect.
The Malaysian Constitution–Article 145

 

The Attorney General is the principal legal adviser to the Government. His role and responsibilities are provided for in Article 145 of the Federal Constitution. Article 145 of the Federal Constitution provides:

(1) The Yang di-Pertuan Agong shall, on the advice of the Prime Minister, appoint a person who is qualified to be a judge of the Federal Court to be the Attorney General for the Federation.

(2) It shall be the duty of the Attorney General to advise the Yang di-Pertuan Agong or the Cabinet or any Minister upon such legal matters, and to perform such other duties of a legal character, as may from time to time be referred or assigned to him by the Yang di-Pertuan Agong or the Cabinet, and to discharge the functions conferred on him by or under this Constitution or any other written law.

(3) The Attorney General shall have power, exercisable at his discretion, to institute, conduct or discontinue any proceedings for an offence, other than proceedings before a Syariah court, a native court or a court-martial.

(3A) Federal law may confer on the Attorney General power to determine the courts in which or the venue at which any proceedings which he has power under Clause (3) to institute shall be instituted or to which such proceedings shall be transferred.

(4) In the performance of his duties the Attorney General shall have the right of audience in , and shall take precedence over any other person appearing before, any court or tribunal in the Federation.

(5) Subject to Clause (6), the Attorney General shall hold office during the pleasure of the Yang di-Pertuan Agong and may at any time resign his office and, unless he is a member of the Cabinet, shall receive such remuneration as the Yang di-Pertuan Agong may determine.

(6) The person holding the office of Attorney General immediately prior to the coming into operation of this Article shall continue to hold the office on terms and conditions not less favourable than those applicable to him immediately before such coming into operation and shall not be removed from office except on the like grounds and in the like manner as a judge of the Federal Court.

The Role of the Malaysian A-G in Political Scandals

The A-G’s quick dismissal of the DoJ’s second suit and his vigorous defence of the Prime Minister against any criminal wrongdoing has raised eyebrows.

by  Lim Wei Jiet

http://www.freemalaysiatoday.com

Image result for malaysian official 1

 

A little over 24 hours ago, the US Department of Justice (DoJ) filed a second suit to recover more assets allegedly acquired using 1MDB funds. The 251-page complaint sheds more light on the scandal and seeks to seize assets such as yachts, diamonds, rights to Red Granite Pictures films and paintings by notable artists.

In a matter of hours, the Malaysian Attorney-General (A-G) saw fit to release a press statement. Two observations were made from this press statement:

Number One – the A-G was unmistakably dismissive of the DoJ’s second suit: “This second action comes on the anniversary of the first, and appears to be a repeat of it”.

Number Two – the A-G mounted a vigorous defence of the prime minister: “The attorney-general expressed his strong concerns at the insinuations and allegations that have been made against the Prime Minister of alleged criminal wrongdoing in relation to the civil action”.

With respect, these postures adopted by the A-G are both misconceived and not in line with the role of an attorney-general in law. Make no mistake – this second civil suit is not a repeat of the first filed on July 20, 2016.

First, the DoJ has now quantified the alleged misappropriated funds at US$4.5 billion from the initial US$3 billion. Second, it reveals several new “phases” in which funds were allegedly siphoned from 1MDB. Third and most obvious, it has identified more assets in which these misappropriated funds were spent on.

It is therefore unfathomable how the A-G can reach a conclusion that the second civil suit is a repeat of the first, what more in a matter of hours after its release.

Eyebrows were also raised as to how quickly the AG sought to shield the Prime Minister from allegations of criminal wrongdoing.

These statements appear to be incongruent with established international conventions on the role of prosecutors.

Article 13(b) of the UN Guidelines on the Role of Prosecutors 1990 states that prosecutors shall “(b) protect the public interest, act with objectivity, take proper account of the position of the suspect and the victim, and pay attention to all relevant circumstances, irrespective of whether they are to the advantage or disadvantage of the suspect”.

Meanwhile, Article 3 of the International Association of Prosecutor’s Standards of Professional Responsibility 1999 states that “Prosecutors shall perform their duties without fear, favour or prejudice. In particular they shall…act with objectivity; have regard to all relevant circumstances, irrespective of whether they are to the advantage or disadvantage of the suspect…always search for the truth and assist the court to arrive at the truth and to do justice between the community, the victim and the accused according to law and the dictates of fairness.”

Moving forward, it is humbly recommended that these guidelines be followed by the A-G:

• To appoint a special prosecutor of unimpeachable integrity to investigate and take appropriate action in relation to the 1MDB matter, as the attorney-generals in the US have done in Archibald Cox during the Watergate scandal and Robert Mueller towards Russian interference in the US elections.

• Whenever a foreign jurisdiction takes action on matters relating to the 1MDB matter, take appropriate time to read and liaise with the authorities to comprehensively assess all relevant angles before dismissing the same.

• Whenever any party alleges or accuses a person investigated in the 1MDB matter, take appropriate time to reach out to such parties for more information before dismissing the same.

• Never attack or defend any person currently being investigated in the 1MDB matter to prevent an impression of bias.

If one needs a role model, one can look no further than our US brethren in Sally Yates, the acting US attorney-general who defied US President Donald Trump in defence of the Rule of Law and the dignity of the DoJ.

I end by quoting a paragraph of her poignant speech to the Harvard Law School’s graduating class of 2017:

“There is plenty worth fighting for. For me, it’s criminal justice reform — so that we can have a fair and proportional criminal justice system that applies equally to all regardless of race, wealth or status. It’s also respect for the brave men and women of law enforcement who put their lives on the line to protect us. It’s holding corporate executives who break the law accountable so that cheating and stealing doesn’t become just a way of doing business…It’s the rule of law, and the principle that our law enforcement and intelligence agencies must be free to do their work without political interference or intimidation.”

Lim Wei Jiet is an advocate and solicitor of the High Court of Malaya. He is also the deputy co-chairperson of the Malaysian Bar Constitutional Law Committee.

On Public Office: The Malaysian Judge misjudges


April 30, 2017

On Public Office: The Malaysian Judge misjudges

Image result for Din Merican

Comment: Najib is first of all an ordinary citizen like you and I. Like us, he is subject to the laws and regulations of Malaysia. Citizen Najib can, therefore, be sued and charged in our courts, and if found guilty he can be sentenced and sent to Hotel Sungai Buloh or Hotel Kajang as a guest of our King.  He has the right to appeal to the higher courts against a conviction.  Next, he is professional politician, an elected Member of Parliament for Pekan, Pahang, currently Prime Minister of Malaysia and incumbent UMNO President.

In my personal opinion as a citizen, Najib is to intents and purposes a public official. It does not take a 31-page opinion to prove that Najib Razak is not. As a public official, Najib has a fiduciary duty to act in accordance with the Constitution which defines his duties as Prime Minister. As an ordinary person, he is not above the law. Is the law an ass? I am unable to understand why High Court Judge Abu Bakar Jais thinks otherwise.  Where did he go to do law, I wonder. –Din Merican

Definition of Public Office Is Who Appoints And Who Pays!

Image result for High Court Judge Abu Bakar Jais

High Court judge Abu Bakar Jais (pic above) in his controversial ruling yesterday that Prime Minister Najib Abdul Razak is not a public official or public officer has detailed his grounds for the judgment in his 31-page decision.

Justice Abu Bakar said Najib’s lawyers argued that in initiating the suit, former UMNO leaders Dr Mahathir Mohamad, Khairuddin Abu Hassan and Anina Saadudin must first prove the offices that Najib occupies – as Prime Minister, Finance Minister, BN chairperson and UMNO President – are all public offices.

“The defendant maintained he is not a public officer and therefore cannot be liable for the tort of misfeasance in public office,” the judge said in throwing out the suit. Najib, he noted, also contended there is no fiduciary duty owed by him as PM, Finance Minister, BN chairperson and UMNO President to the plaintiffs.

“There is no mutual trust and confidence placed between the parties for a fiduciary relationship to exist,” Justice Abu Bakar said.

Our comment

by The Sarawak Report

The public appointed Najib and the public pays Najib.In return, Najib on assuming office swore to serve the public faithfully and honestly. He was given a position of immense trust in charge of the nations finances, which the judge acknowledges he may have abused.

Yet this judge has opined that Najib is nevertheless not accountable to the public and that there is no duty of trust nor any obligation not to betray his terms of office, as would pertain to a teacher, parking officer or judge.

This law officer has decided that Najib is above the law and that democracy is about electing which dictator you want to have steal from you next – your money and your liberties included.

2017 — A Thunderous Clash of Politics, Economies and Policies


January 6, 2017

2017 — A Thunderous Clash of Politics, Economies and Policies

Martin Khor is Executive Director of the South Centre, a think tank for developing countries, based in Geneva.

The Paris agreement, which was adopted in December 2015 and which came into force in record time in October 2016 as a demonstration of international concern over climate change, may face a major test and even an existential challenge in 2017, if Trump fulfils his election promise to pull the US out. Credit: Diego Arguedas Ortiz/IPS.

The Paris agreement, which was adopted in December 2015 and which came into force in record time in October 2016 as a demonstration of international concern over climate change, may face a major test and even an existential challenge in 2017, if Trump fulfils his election promise to pull the US out. Credit: Diego Arguedas Ortiz/IPS.

PENANG, Jan 2 2017 (IPS) – Yet another new year has dawned.   But 2017 will be a year like no other.

There will be a thunderous clash of policies, economies and politics worldwide.   We will therefore be on a roller-coaster ride, and we should prepare for it and not only be spectators on the side-lines in danger of being swept away by the waves.

With his extreme views and bulldozing style, Donald Trump is set to create an upheaval if not revolution in the United States and the world.

He is installing an oil company chief as the Secretary of State, investment bankers in key finance positions, climate sceptics and anti-environmentalists in environmental and energy agencies and an extreme rightwing internet media mogul as his chief strategist

US-China relations, the most important for global stability, could change from big-power co-existence with a careful combination of competition and cooperation, to outright crisis.

Trump, through a phone call with Taiwan’s leader and subsequent remarks, signalled he could withdraw the longstanding US adherence to the One China policy and instead use Taiwan as a bargaining card when negotiating economic policies with China.  The Chinese perceive this as an extreme provocation.

He has appointed as head of the new National Trade Council an economist known for his books demonising China, including “Death by China: Confronting the Dragon”.

Trump seems intent on doing an about-turn on US trade and investment policies, starting with ditching the Trans Pacific Partnership Agreement and re-negotiating the North American Free Trade Agreement.

Other measures being considered include a 45% duty on Chinese products, extra duties and taxes on American companies located abroad, and even a 10% tariff on all imports.

Martin Khor

Thus 2017 will see a rise in protectionism in the US, the extent still unknown.  That is bad news for those developing countries whose economies have grown on the back of exports and international investments.

Europe in 2017 will also be preoccupied with its own regional problems.  The Brexit shock of 2016 will continue to reverberate and several European countries facing elections will see challenges to their traditional values and established order from xenophobic and narrow nationalist parties.

As Western societies become less open to the world and more inward looking, developing countries should revise their development strategies and rely more on domestic and regional demand and investments.

As North-South economic relations decline, this should also be the moment for expanding South-South cooperation, spurred as much by necessity as by principles.

2017 may be the year when resource-rich China, with its huge Road and Belt initiative and its immense financing capacity, fills in the economic void created by western trade and investment protectionism.

But this may not be sufficient to prevent a finance shock in many developing countries now beginning to suffer a reversal of capital flowing back to the US, attracted by the prospect of higher interest rates and economic growth.

Several emerging economies which together received many hundreds of billions of dollars of hot money in recent years are now vulnerable to the latest downturn phase of the boom-bust cycle of capital flows.

Some of these countries opened up their capital markets to foreign funds which now own large portions of government bonds denominated in the domestic currency, as well as shares in the equity market.

As the tide turns, foreign investors are expected to sell off and transfer back a significant part of the bonds and shares they bought, and this new vulnerability is in addition to the traditional external debt contracted by the developing countries in foreign currencies.

Some countries will be hit by a terrible combination of capital outflow, reduced export earnings, currency depreciation and an increased debt servicing burden caused by higher US interest rates.

As the local currency depreciates further, the affected countries’ companies will have to pay more for servicing loans contracted in foreign currencies and imported machinery and parts, while consumers suffer from a rapid rise in the prices of imports.

On the positive side, the currency depreciation will make exporters more competitive and make tourism more attractive, but for many countries this will not be enough to offset the negative effects.

Thus 2017 will not be kind to the economy, business and the pockets of the common man and woman.  It might even spark a new global financial crisis.

The old year ended with mixed blessings for Palestinians. On one hand they won a significant victory when the outgoing President Obama allowed the adoption of a UN Security Council resolution condemning Israeli settlements in occupied Palestinian territories by not exercising a veto.

The resolution will spur international actions against the expansion of settlements which have become a big obstacle to peace talks.

On the other hand the Israeli leadership, which responded defiantly with plans for more settlements, will find in Trump a much more sympathetic President.  He is appointing a pro-Israel hawk who has cheered the expansion of settlements as the new US ambassador to Israel.

With Trump also indicating he will tear up the nuclear power deal with Iran, the Middle East will have an even more tumultuous time in 2017.

Some countries will be hit by a terrible combination of capital outflow, reduced export earnings, currency depreciation and an increased debt servicing burden caused by higher US interest rates.

In the area of health care, the battle for affordable access to medicines will continue, as public frustration grows over the high and often astronomical prices of patented medicines including for the treatment of HIV AIDS, hepatitis C, tuberculosis and cancers.

There will be more powerful calls for governments to curb the excesses of drug companies, as well as more extensive use of the flexibilities in the patent laws to counter the high cost of medicines.

Momentum will also increase to deal with antibiotic resistance which in 2016 was recognised by political leaders meeting at the United Nations to be perhaps the gravest threat to global health.

All countries pledged to come up with national action plans to counter antibiotic and anti-microbial resistance by May 2017 and the challenge will then be to review the adequacy of these plans and to finance and implement them.

The new year will also see its fair share of natural disasters and a continued decline in the state of the environment.  Both will continue to be major issues in 2017, just as the worsening of air pollution and the many earthquakes, big storms and heat-waves marked the previous few years.

Unfortunately low priority is given to the environment.  Hundreds of billions of dollars are allocated for highways, railways and urban buildings but only a trickle for conservation and rehabilitation of hills, watersheds, forests, mangroves, coastal areas, biodiversity or for serious climate change actions.

2017 should be the year when priorities change, that when people talk about infrastructure or development, they put actions to protect and promote the environment as the first items for allocation of funds.

This new year will also be make or break for climate change.  The momentum for action painfully built up in recent years will find a roadblock in the US as the new President dismantles Obama-initiated policies and measures.

The Paris agreement, which was adopted in December 2015 and which came into force in record time in October 2016 as a demonstration of international concern over climate change, may face a major test and even an existential challenge in 2017, if Trump fulfils his election promise to pull the US out.

But Trump and his team will face resistance domestically including from state governments and municipalities which have their own climate plans, and from other countries determined to carry on without the US on board.

Indeed if 2017 will bring big changes initiated by the new US administration, it will also generate many counter actions to fill in the void left in the world by a withdrawing US or to counter its new unsettling actions.

Many people around the world, from politicians and policy makers to citizen groups and community organisers are already bracing themselves to come up with responses and actions.

Indeed 2017 will be characterised by the Trump effect but also the consequent counter-effects.

There are opportunities to think through, alternatives to chart and reforms to carry out that are anyway needed on the global and national economies, on the environment, and on geo-politics.

Most of the main levers of power and decision-making are still in the hands of a few countries and a few people, but there has also been the emergence of many new centres of economic, environmental and intellectual capabilities and community-based organising.

2017 will be a year in which ideas, policies, economies and politics will all clash, thunderously, and we should be prepared to meet the challenges ahead and not only be spectators.

Seeking Justice on 1MDB (Malaysia’s Enron and Watergate Combined)


August 16, 2016

Seeking Justice on 1MDB (Malaysia’s Enron and Watergate Combined)

by Dr. M. Bakri Musa, Morgan-Hill, California

Seeking Justice for Malaysians

The One Malaysia Development Berhad (1MDB) corruption is business as usual in Malaysia. That is a great tragedy as well as a gross injustice. To Malaysia, 1MDB is “case closed.” That reflects the nation’s system of justice and quality of its institutions, as well as the caliber of those entrusted to run them.

Like ugliness, injustice is obvious to all and transcends boundaries. The US Department of Justice (DOJ) first shone the light at the hideous pox on 1MDB’s face with the filing of the asset forfeiture lawsuit on July 20, 2016. That was only the beginning. Shortly thereafter, Singapore froze the assets of Jho Low, one of the culprits. Together with Switzerland, it also closed the bank involved.

There is now a racketeering suit filed by Husam Musa and Matthias Chang, as private citizens, on August 11, 2016 in New York. That has yet to be certified as a class action suit. With the huge number of potential plaintiffs, it will have no difficulty meeting the numerosity criterion. 1MDB will be Malaysia’s Watergate and Enron combined.

Henry Kissinger and Richard Nixon–Partners in Power and in the Destruction of Cambodia

The US Senate Watergate Hearings of the 1970s, triggered by the “third-rate burglary” at the Democratic Party Election Headquarters in Washington, DC, saw many jailed. More than a few prominent lawyers were disbarred, including a former Attorney General as well as the Counsel to the President. It forced President Nixon to resign in disgrace.

The Enron debacle also saw many of its principals imprisoned. The main culprit had a fatal heart attack while being investigated. Enron’s principal advisor, the giant accounting firm Arthur Andersen, collapsed. Quite a collateral damage.

The suit by Husam and Chang differs from the earlier DOJ’s in that the defendants are individuals and firms, not assets. They include the usual culprits Jho Low and Riza Aziz, plus his principal accountant Debra Johnson, Goldman Sachs’ bond salesman Timothy Leissner, and film producer Joey McFarland, together with their respective enterprises Metroplex Capital Advisors, Goldman Sachs, and Red Granite Pictures respectively.

Lawsuits are complex and expensive, both to initiate and defend. As for costs, we are looking at high six figures or even millions. That’s US dollars, not devalued ringgit. I do not know about Chang, but I am certain that Husam does not have the kind of resources to engage the high-powered law firms of Louis F Burke PC of New York and Ajamie, LLP of Houston. I do not know their arrangements.

America has the wonderful concept of contingency fees where plaintiffs’ lawyers would get paid only from the awards. Meaning, they have to prevail in order to get paid. That’s laudable public policy as it would ensure that the poor get access to good legal representation.

It would be in the plaintiff lawyers’ interest to ensure that there is a good or at least winnable case, as well as a pot of gold at the end of the trail, or trial. To put it in the colloquial, their defendants must have deep pockets.

The Two Malaysian rogues, Riza Aziz and Baby-Faced Jho Low with Film Producer Joey McFarland (center)

Riza Aziz’s and Jho Low’s major assets are now tied up in the DOJ’s forfeiture lawsuit, while Low’s are also frozen in Singapore. Riza Aziz may have a super rich stepfather or donor somewhere. As for the other defendants, Goldman Sachs has the deepest pocket, tantalizing enough target by itself.

While the other defendants and their enterprises may not have deep pockets on cursory examination, they may have generous liability and other insurances. It would be a hollow victory, not to mention a very expensive one, if in the end you could not collect your awards.

In their lawsuit Husam and Chang seek awards of actual damages, restitution or disgorgement of wrongful profits obtained by the defendants, triple damages as provided for by the racketeering Act and other statutes cited, punitive damages, as well as costs and expenses. Tallying those will take a battalion of accountants. Insurances usually do not cover punitive damages or racketeering acts. The threat of both is motivation enough to make defendants settle early.

Husam and Chang have already won a victory of sorts in securing the services of these two top law firms. Those lawyers would not risk their reputation and resources to see their case thrown out of court at the first hearing. They must have done their research and found the case not without merit.

What’s in it for Husam and Chang? Certainly not the money. For even if they were to prevail and the awards be in the mega millions, their share after their lawyers’ cut would not be substantial. They must be doing it to ensure that justice prevails. They could not get that in Malaysia, so they come to America.

The irony should not escape us. The pair could not find justice in an Islamic country but instead have to fly ten thousand miles away in the land of the kafir to seek it. The paradox must have struck Husam hard, being a former PAS Vice-President. That should impress upon him the essential difference between label and content.

Lawyers however, have as much to do with justice as doctors to health. Lawsuits in particular have even less; they are but business decisions to law firms. Victory is settlement in their favor without having to go through an expensive and uncertain trial.

For others, justice would be served if Jho Low and Reza Aziz were forced to disgorge their illicit gains, and then be punished. For Malaysians, that would not be enough. For them justice would come only with full exposure, as with a trial so all the ugly truth could be revealed. Then with that information they could make a better choice on whom to elect as their next leaders to ensure that such corruption and injustice would not recur.

As President Johnson once noted, the vote is the most powerful instrument ever devised by man to fight injustice. We must erase this perversity among Malaysians, leaders and followers alike, that corrupt and illicit gains are but rewards and gifts from generous donors or a benevolent Allah. An open trail would be a great effort in that direction.

The highest reach of injustice is to be deemed just when you are not, wrote Greek Philosopher Plato. Likewise, the most depraved act of corruption is to view it as otherwise. 1MDB is the most egregious corruption, and we have to expose it to Malaysians as such.

To Husam Musa and Matthias Chang, thank you for your initiative in taking that brave first step. Yours is the finest form of patriotism. The corrupt, the perverts and the traitors would view your act as treason. That is the ultimate compliment! You do not want them to praise you. Reserve that for Najib.

Riza Aziz Facing Malaysians in Racketeering Lawsuit


August 14, 2016

‘Wolf of Wall Street’ Financier Red Granite Now Facing Malaysians in Racketeering Lawsuit

by Eriq Gardner

http://www.hollywoodreporter.com/thr-esq/wolf-wall-street-financier-red-919160

A putative class action alleges that Riza Aziz and Joey McFarland knew the company's money was derived from illegal activity.

A putative class action alleges that Riza Aziz and Joey McFarland knew the company’s money was derived from illegal activity.

Red Granite Pictures, currently under a cloud thanks to an ongoing federal investigation as well as asset forfeiture actions, will now be in court directly with Malaysian citizens.

On Thursday, a putative class action lawsuit was filed in New York federal court. Matthias Chang, a former political secretary in the country, and Husam Musa, currently a state assembly member, is leading a racketeering lawsuit against Red Granite, its principles Riza Aziz and Joey McFarland, as well as others like Low Jho and Goldman Sachs Group being tied to the alleged misappropriation of assets once held by Malaysia’s sovereign wealth fund, 1Malaysia Development Berdhard (1MDB).

The complaint (read here) echoes many of the allegations brought by the U.S. government in its attempt to seize more than $1 billion in allegedly diverted assets including rights and profits to the Red Granite-financed, Oscar-nominated film, The Wolf of Wall Street, directed by Martin Scorsese.

At the time of the Justice Department’s July 20 move, Red Granite stated, “To Red Granite’s knowledge, none of the funding it received four years ago was in any way illegitimate and there is nothing in today’s civil lawsuit claiming that Red Granite knew otherwise.”

The latest lawsuit claims that the defendants did indeed have knowledge that the money was tied to Malaysia. The complaint states directly that Red Granite and its principals — plus Debra Whelan Johnson, a former managing director at the powerhouse accounting firm Nigro Karlin — had “knowledge that the property involved represented the proceeds of illegal activity.”

Joey McFarland (center) with the two infamous Malaysian duo

The 1MDB fund was created in 2009 by Malaysia Prime Minister Najib Razak, the stepfather of Red Granite CEO Aziz. The misappropriation of the money allegedly happened via shell companies around the globe and a Goldman bond underwriting. Low is said to be a central figure in the diversion of 1MDB capital and the complaint again raises the way everything flowed into the United States to fund luxury items like yachts, artwork, jewelry and a blockbuster film.

After attempting to trace the complicated transactions, the Malysian plaintiffs go a bit further than the U.S. government does in talking what Aziz and Low did with the money. For example, the complaint states that “in an effort to divert attention from his business deals and lavish spending, Jho Low also publicized his charitable donations.”

The lawsuit also appears to go beyond Wolf of Wall Street with allegations that ill-gotten money went to — plural — “productions,” plus “sumptuous parties featuring celebrities.”

The complaint picks up on news reports how Red Granite’s office includes a 1927 Metropolis movie poster worth more than $1 million and that the company threw a birthday party for Leonardo DiCaprio, spending more than a million dollars on alcohol, plus a gift to him of Marlon Brando’s 1955 Academy Award statuette.

“Neither the party nor the gift to DiCaprio benefitted 1MDB in any way,” states the complaint. “Rather, Defendants gave the gift to curry favor with DiCaprio and burnish their celebrity credentials.”

DiCaprio is not a defendant, but the lawsuit also cites a Wall Street Journal story to say that he, Aziz and Low “used funds misappropriated from 1MDB to attend the World Cup in Brazil.”

The U.S. government for now is focused on specific assets, but this lawsuit with claims of fraud, conversion and racketeering, demands disgorgement of profits, trebled damages, punitive damages and costs.

Red Granite declined comment about the new lawsuit. The company has retained Boies Schiller partner Matthew Schwartz, who formerly worked in the Justice Department and prosecuted Bernie Madoff.

In a statement, Goldman Sachs responds it “received no proceeds of the offerings. We intend to vigorously contest plaintiffs’ misguided decision to include the firm as a defendant.”

 

Malaysian Authorities must undertake an Immediate Inquiry


August 13, 2016

Malaysian Authorities must undertake an Immediate Inquiry

by Steven Thiru

The Malaysian Bar is deeply disturbed by the grim disclosures contained in the complaint filed by the United States Department of Justice (“DOJ”)[1] “to forfeit assets involved in and traceable to an international conspiracy to launder money misappropriated from 1Malaysia Development Berhad (“1MDB”)…”[2]  The DOJ has made serious allegations of siphoning or diversion of funds, fraud, and the misuse of the banking system for illegal activities, by the individuals and entities named in the complaint.

Various persons have in the past weeks sought to interpret the DOJ’s 136-page complaint.  It is appalling that some have deliberately set out to distort the proceedings, and have attempted to create confusion, ostensibly to protect­ wrongdoers.  In the interest of upholding the rule of law and the cause of justice, the thrust, purpose and ramifications of the DOJ proceedings must be appreciated.

The legal proceeding commenced by the DOJ seeking the forfeiture of assets — including rights to profits, moveable assets and real property — constitute a civil action.  These assets, located primarily, but not exclusively, in the United States, are alleged to be proceeds from criminal conduct.  The DOJ maintains that this is the largest single asset seizure action ever brought under its Kleptocracy Asset Recovery Initiative.[3]

The DOJ’s court document states that the assets to be forfeited represent “a portion of the proceeds of over [US]$3.5 billion misappropriated from 1MDB.”[4]  It has been reported that the United States authorities intend “to recover more than [US]$1 billion that was laundered through the United States and traceable to the conspiracy.”[5]  In this regard, it would appear from the court document that the United States authorities possess comprehensive knowledge of the movement of the alleged misappropriated funds, have sighted relevant documentary evidence, and even reviewed telephone conversations.  The substance, depth and reach of the allegations are compelling, and should not be ignored.  The affected parties will have the opportunity to challenge the DOJ’s action in court, hence the process is transparent and adheres to the principles of natural justice.

The complaint made by the DOJ does not preclude criminal action, as the forfeiture is but a first step to prevent dissipation of the specified assets.  The act of money laundering, and involvement in a conspiracy to do so, are criminal offences.  Thus, upon forfeiture of the assets, it is likely that there would be criminal proceedings to prosecute those responsible for the alleged misappropriation of 1MDB funds and the laundering of those funds in the United States and elsewhere.

Such proceedings in the United States should not surprise our law enforcement agencies or officers.  There are similar provisions in our law for the freezing or forfeiture of assets in Malaysia that are connected with money laundering activities or are the proceeds of crime, whether or not any individuals are prosecuted.[6]  These have often subsequently led to the prosecution of individuals.  The laws in Malaysia also allow for criminal proceedings against individuals for alleged money laundering activities, even if those activities occur outside Malaysia.[7]

It is noteworthy that the Malaysian Anti-Corruption Commission has issued a statement confirming that it cooperated with the United States Federal Bureau of Investigation in the latter’s investigations.[8]  In international efforts to stop money laundering and curb corruption, many countries — including Malaysia — have passed laws that allow for “universal jurisdiction” in respect of money laundering activities or corrupt practices.  Such legal actions cannot in any way be categorised as attempts to interfere in the domestic affairs of a sovereign state.

The principal aim of international crime prevention and anti-corruption treaties such as the United Nations Convention against Corruption, which Malaysia ratified in 2008, is to specifically provide for the prosecution of those involved in international or transnational criminal activities.  No country that is a signatory to such treaties or conventions should attempt to hide or shield such persons, or permit such persons to evade or avoid prosecution, or to block access to evidence or information.

It is untenable to hold that the DOJ document does not show that money has been misappropriated from 1MDB.[9]  The allegations of financial improprieties concerning 1MDB funds — described as having been “stolen, laundered through American financial institutions and used to enrich a few officials and their associates”[10] — are referred to in no fewer than 193 paragraphs in the document.

Further, it has been reported that 1MDB is being investigated for alleged financial irregularities and possible money laundering in at least nine countries: Australia, Hong Kong, Luxembourg, Singapore, Switzerland, Thailand, United Arab Emirates, United Kingdom and United States of America.[11]  It is significant that immediately after the DOJ announced its action, Singaporean authorities declared that they have seized bank accounts and properties amounting to S$240 million in total, as a result of their own investigations into the flows of 1MDB-related funds through Singapore, which began in March 2015 and are still in progress.[12]

There are parties who have stated that 1MDB has not suffered any losses but only “has debts”.[13]  This is a perverse and unsustainable position, given that the PAC report reportedly named members of 1MDB’s senior management that it said should face a criminal investigation,[14]  and that five of the twelve members of the PAC have reportedly stated that the PAC’s report shows that a total of US$7 billion have flowed out from 1MDB and were unaccounted for.[15]

Several individuals have been specifically named in the DOJ’s court document, but not the Prime Minister.  However, this is not to say that he cannot be identified from the descriptive statements contained in the court document.[16]  The conclusion — based on any clear reading of those descriptive statements — that the person named as “MALAYSIAN OFFICIAL 1” in the court document is the Prime Minister appears irresistible.

The court document contains many other troubling disclosures.  It is alleged that in March 2013, USD681 million was transferred to a bank account belonging to “MALAYSIAN OFFICIAL 1”,[17] and that this sum emanated from a 1MDB bond sale.  This allegation contradicts statements by our authorities that the funds were a “personal donation” to the Prime Minister from the Saudi royal family, given to him without any consideration.[18]

In addition, the court document also alleges that USD20 million and a further USD30 million traceable to 1MDB funds, were transferred to the same personal bank account owned by “MALAYSIAN OFFICIAL 1” in 2011 and 2012, respectively.[19]  It would appear that the transfer of these funds had not been previously uncovered or disclosed by any of our enforcement agencies.  These allegations therefore expose deficiencies and flaws in the investigations that have been conducted so far in Malaysia, and a lack of transparency regarding the findings that such investigations have yielded.

While the DOJ’s proceedings and any other possible related proceedings in the United States of America must be allowed to take their course and not be prejudged, a fresh and comprehensive investigation of all persons directly or indirectly implicated in the allegations made by the DOJ must be pursued.  These allegations must not be ignored or permitted to be swept under the carpet, as that would only fuel the already existing perception of a cover-up.  In this regard, the recent statement by the PAC, in the wake of the DOJ proceedings, that any further investigation into 1MDB is unnecessary, is deeply disconcerting.

There is a palpable need for greater fervour, transparency and accountability in the investigation by our enforcement authorities, and for appropriate and concrete action to be taken against all wrongdoers, without delay.  The truth must be revealed and justice must be done.                                                                                 
Footnotes:

[1] Civil suit document filed by the United States Department of Justice dated 20 July 2016 (“DOJ civil suit”).

[2] DOJ civil suit, para 5.

[3] Press statement by the United States Department of Justice entitled “United States Seeks to Recover More Than $1 Billion Obtained from Corruption Involving Malaysian Sovereign Wealth Fund” dated 20 July 2016 (“DOJ press statement”).

[4] DOJ civil suit, para 33.

[6] Section 41 of the Malaysian Anti-Corruption Commission Act 2009, and Sections 44, 45, 50, 51 and 52 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.

[7] Sections 44, 45, 50, 51 and 52 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.  Sections 44 and 53 also deal with the freezing and seizure of assets located outside Malaysia.

[8] Press statement issued by the Malaysia Anti-Corruption Commission entitled “SPRM Bekerjasama Dengan FBI” dated 22 July 2016.

[9] Press statement by the Attorney General of Malaysia Tan Sri Dato’ Sri Haji Mohamed Apandi Bin Haji Ali entitled “US DEPARTMENT OF JUSTICE FILING OF CIVIL ACTION” dated 21 July 2016.

[12] Joint statement by the Attorney-General’s Chambers of Singapore, Commercial Affairs Department of the Singapore Police Force and the Monetary Authority of Singapore entitled “Investigations into 1MDB-Related Fund Flows through Singapore” dated 21 July 2016.

[13] “Don’t be blindsided by 1MDB: Najib”, New Straits Times Online, 9 August 2015.

[14] “Malaysia’s Probe Into 1MDB Fund Was Flawed”, Wall Street Journal, 26 May 2016.

[15] “PAC members: We never said no wrongdoing, cash went missing”, MalaysiaKini, 12 April 2016.

[16] (a) DOJ civil suit, para 28: “MALAYSIAN OFFICIAL 1 is a high-ranking official in the Malaysian government who also held a position of authority with 1MDB. During all times relevant to the Complaint, MALAYSIAN OFFICIAL 1 was a “public official” as that term is used in 18 U.S.C. § 1956(c)(7)(B)(iv) and a “public servant” as that term is used in Section 21 of the Malaysian Penal Code.”
(b) DOJ civil suit, para 129: “[RIZA SHAHRIZ BIN ABDUL] AZIZ is a relative of MALAYSIAN OFFICIAL 1 and a friend of LOW [TAEK JHO].”
(c) DOJ civil suit, para 39: “Upon its formation, MALAYSIAN OFFICIAL 1 assumed a position of authority with 1MDB. MALAYSIAN OFFICIAL 1 had the authority to approve all appointments to, and removals from, 1MDB’s Board of Directors and 1MDB’s Senior Management Team. In addition, any financial commitments by 1MDB, including investments, that were likely to affect a guarantee given by the government of Malaysia for the benefit of 1MDB or any policy of the Malaysian government, required, the approval of MALAYSIAN OFFICIAL 1.”
(d) DOJ civil suit, para 238: “The Government of Malaysia provided a “Letter of Support,” dated March 14, 2013, in connection with the Project Catalyze transaction… the letter is signed by MALAYSIAN OFFICIAL 1.”, read together with “A 1MDB default would test limits of Najib’s support: Gadfly”, StockHut, 19 April 2016.
(e) DOJ civil suit, para 263: “… a press release issued on January 26, 2016, the Malaysian Attorney General confirmed that, “the sum of USD681 million (RM2.08 billion) [was] transferred into the personal account of [MALAYSIAN OFFICIAL 1] between 22.03.2013 and 10.04.2013,” and that, “ In August 2013, a sum of USD620 million (RM2.03 billion) was returned by [MALAYSIAN OFFICIAL 1]. . . .” The Malaysian Attorney General ultimately characterized the payment of $681 million as a “personal donation to [MALAYSIAN OFFICIAL 1] from the Saudi royal family which was given to him without any consideration.”

[17] DOJ civil suit, para 229:  “…between approximately March 21, 2013, and March 25, 2013, $681,000,000 was transferred from the Tanore Account to an account belonging to MALAYSIAN OFFICIAL 1.”

[18] Press statement by the Attorney General Tan Sri Dato’ Sri Haji Mohamed Apandi bin Haji Ali entitled “IN RELATION TO THE INVESTIGATION PAPERS RETURNED BY MACC ON SRC INTERNATIONAL AND “RM2.6 BILLION” dated 26 March 2016.

[19] DOJ civil suit, para 261.