DOJ Action against 1MDB continues


October 4, 2017

DOJ Action against 1MDB continues, despite Najib’s embrace of President Donald Trump–Justice will be done

http://www.sarawakreport.org

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When the US Dept Of Justice gained its court order to suspend various court actions over the assets it has now seized and frozen relating to 1MDB last month, it made clear that this was because it was in the middle of intensifying its criminal investigations.

In doing so federal agents for the first time described their chief targets in the investigation as criminal suspects, including the PM’s advisor Jho Low and the PM’s step-son Riza Aziz along with the ex-Chairman of Aabar, Khadem Al Qubaisi. However, they also made clear that this was by no means conclusive list:

“The FACs [First Amended Complaints] allege that the individuals who were involved in the Criminal Phases include, but are not limited to, Low; Riza Aziz (“Aziz”), a Malaysian national and the step-son of the senior Malaysian official who oversaw 1MDB; and Khadem al-Qubaisi (“Qubaisi”) . Moreover, the FACs allege that Low and several others, including Aziz and Qubaisi, were involved in or facilitated several multi-million dollar transfers that were made as part of the Criminal Phases. Many of these transfers and Low and others’ involvement in them are described in the FACs, underscoring the direct relationship between the 1MBD Actions and the ongoing criminal investigation.” [Declaration of FBI Special Agent Robert Heuchling – filed 9th May 2017]

In other words Jho Low and Riza can expect to face formal criminal charges sooner rather than later.

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Given that this submission by the DOJ was accepted by Judge Dale Fischer and the court order granted on September 13th, the day after Najib met with Donald Trump, it lays to rest all the recent spin about the case being dropped, thanks to supposed intervention from the President.

The wording of the joint FBI/DOJ submission also intensifies the heat on Najib himself by pointing the finger ever more directly at him.  Just in case anyone in Malaysia still believes that the prime mover and beneficiary of the heist, MO1, refers to someone other than Najib Razak, the statement spells it out even more clearly, because criminal suspect Riza Aziz is described as “the step-son of the senior Malaysian official who oversaw 1MDB” – i.e. Najib and Malaysian Official One (MO1) are without any mistaking one and the same.

Here is an abridgement of the points made in the FBI declaration by Agent Heuchling:

I am a Special Agent with the Federal Bureau of Investigation (“FBI”)....Specifically, the FACs allege that, over the course of four phases (collectively the “Criminal Phases”), billions of dollars were stolen from the Malaysian government’s 1Malaysia Development Berhad (“1MBD”), a strategic investment company...The 1MDB Actions and the ongoing criminal investigation are related because they involve the same or substantially the same parties, witnesses, facts and circumstances.  Specifically, the United States is investigating the individuals, entities, financial and monetary transactions, and investment vehicles involved in the Criminal Phases.  As alleged in the FACs, one of the Criminal Phases involved the fraudulent diversion of more than $1 billion in proceeds from 1MDB to a Swiss bank account held in the name of Good Star Ltd...The FACs allege that Taek Jho Low (“Low”), a Malaysian national, controlled the Good Star Account, and used the criminal proceeds diverted from 1MBD and deposited into the Good Star Account to purchase tens of millions of dollars of assets in the United States.  During two of the other Criminal Phases, the FACs allege that Low and his associates conspired to divert and misappropriate approximately more than $2.5 billion in proceeds that 1MDB raised through multiple bond offerings in 2012 and 2013.  Many of these funds were then used to acquire assets that are the subject of the 1MDB Actions.  Similarly, during another Criminal Phase, the FACs allege that 1MDB officials and their associates conspired to misappropriate approximately $850 million in 1MDB funds that were borrowed from a syndicate of banks led by Deutsche Bank.  Some of these funds were also used to acquire assets relating to the 1MDB Actions. The FACs allege that the individuals who were involved in the Criminal Phases include, but are not limited to, Low; Riza Aziz (“Aziz”), a Malaysian national and the step-son of the senior Malaysian official who oversaw 1MDB; and Khadem al-Qubaisi (“Qubaisi”) .  Moreover, the FACs allege that Low and several others, including Aziz and Qubaisi, were involved in or facilitated several multi-million dollar transfers that were made as part of the Criminal Phases.  Many of these transfers and Low and others’ involvement in them are described in the FACs, underscoring the direct relationship between the 1MBD Actions and the ongoing criminal investigation. I believe that allowing discovery or other proceedings to occur in the 1MBD Actions will have an adverse impact on the United States’ ongoing criminal investigation..... the claimant in that case propounded 358 separate document requests seeking broad discovery intothe United States’ investigation.  These requests seek “all” documents obtained by the United States during its investigation “[c]oncerning,” among other things, individuals and persons referenced in the forfeiture complaint..transactions cited in the complaint...assets acquired by persons referenced in the complaint
.. the criminal acts alleged in the complaint,including the unlawful diversion and misappropriation of 1MBD and other funds; thematerial misrepresentations and omissions discussed in the complaint; the knowledge and intent of those involved in the criminalacts; specific money laundering transactions; the involvement ofany one of more than thirty banks in the monetary transactions described in the complaint; and communications that the United States has had with various individuals, persons and their counselThe claimant’s counsel also requests that the United States produce “[a]ll Documents and Communications concerning” twenty different legal entities...“including but not limited to . . . ‘information supplied [] by other law enforcement officers, experts,and other witnesses’” (Request No. 2); between any of the over forty individuals discussed or referenced in the forfeiture complaint along with “[d]ocuments sufficient to identify the name, home address, business(es), e-mail address(es), telephone number(s) and facsimile numbers” of these individuals (Request Nos. 3 and 4);  and concerning “all subpoenas, Mutual Legal Assistance Treaty (‘MLAT’) requests” or documents and communications obtained by the United States pursuant to any MLAT requests (Request No. 9)....Finally, the requests ..seek, among other things, “all” documents and communications[c]oncerning” the extent to which the United States relied upon “anyother country or principality” as a source of evidence and information; “all” agreements, including cooperation or settlement agreements, the Government entered into with individuals and persons; “all” “witness statements,transcripts, memoranda of interviews,reports, notes or video or audio recordings” “[c]oncerning” the subject matter of the forfeiture complaint; “all [d]ocuments and[c]communications” between the United States and “any other country or principality . . . including Malaysia, Seychelles, Switzerland, Singapore, Luxembourg, Hong Kong, France, the United Kingdom, Australia, the Cayman Islands, New Zealand, the British Virgin Islands, and the United Arab Emirates” or any of these countries’ agents or representatives..All or almost all of these documents are evidence of the conduct underlying the Criminal Phases of the 1MBD Actions.Providing these documents to any of the claimants in the 1MDB Actions could result in their disclosure to other third parties.  The disclosure of such information to subjects or targets of the criminal investigation could give these individuals and entities a preview of the United States’ criminal investigation as well as the opportunity to track the status of the criminal investigation.  Disclosure of such materials also will potentially identify witnesses who have provided information to the government, including their identity and location ...By obtaining discovery directly from the government or third parties about the government’s investigation, individuals and entities involved in the Criminal Phases could potentially conceal, alter, or destroy evidence, as well as intimidate and/or retaliate against potential witnesses Producing any identifying witness information could result in witness intimidation or jeopardize the safety and security of witnesses – a legitimate concern in this case, given that press reports have publicized potentially retaliatory or threatening acts linked possibly to the 1MDB investigation.
For example:On or about September 1, 2015, the media reported that Khairuddin Abu Hassan, an official in the United Malays National Organization, was arrested by Malaysian authorities after he announced that he intended to travel to New York to provide information about 1MDB to the FBI. Similarly, on or about August 1, 2015, the media reported that three Malaysian law enforcement officials, including a deputy public prosecutor, an official of the Malaysian Anti-Corruption Commission and an official from the Attorney General’s Chambers of Malaysia, all of whom were working on a special task force in Malaysia investigating 1MDB, were arrested by Malaysia’s Special Branch, Malaysia’s intelligence service, because of news reports relating to 1MDB published in the United Kingdom. On or about April 8, 2016, Malaysian media reported that Rafizi Ramli, a member of Malaysia’s Parliament, was arrested because he was suspected of disclosing information relating to 1MDB. Just a few days ago, Malaysian local media reported that the driver of former Malaysian attorney-general, Abdul Gani Patail, who opened the initial investigation into 1MDB in that country, was shot in public by two unidentified men. (See “Driver’s Shooting a Warning to Gani Patail from ‘MO1’ Not to Assist in DOJ’s 1MDB Criminal Probe? [Abridgement of Agent Heurchling statement, which was accepted by the Court]

 The above cites that the targets of the civil case are the same as in the criminal investigation and they are now trying to get disclosure of information involving 30 banks, 20 jurisdictions and 40 individual people who have assisted in the 1MDB investigation so far.

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The FBI and DOJ have made plain that they do not wish to provide such information to tip of their criminal suspects and enable them to intimidate witnesses, so they have frozen the assets relating to the money laundering until they have brought their formal charges. The US Court has accepted their position.

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

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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

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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!

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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.”