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.

Jazz at The Riverside, Phnom Penh


August 7, 2016

Jazz at The Riverside, Phnom Penh

The weekend is almost over. But there is still time to relax with Tenor Saxophonist Stan Getz and Guitarist, Charlie Byrd. It is, in fact, not strictly over. At the Riverside, in the area near The Foreign Correspondents Club by the Tonle Sap, nocturnal activity is about to begin. May you all enjoy Brazillian Jazz samba by the two outstanding exponents  of the Bossa Nova.

Let us note that in another place in some distant city, Rio de Jenario, Brazil, in another time zone, the 2016 Olympic Games is being held. Our Brazilian friends are to be congratulated by defying the odds to stage the Games amid difficult economic and trying political times in their country. From all counts, despite controversies over the doping scandal involving the Russian Olympic contingent  the Games  promises to be a great success.

Image result for Brazilian samba

Dr. Kamisah and Din Merican wish to pay tribute to Brazil  and the Brazilians for their strength of character, resolve, and resilience in ensuring that the spectacle of 2016 is happening in Rio de Jenario this summer. You did not disappoint the world. In stead you showed the world that  you as a people have the capacity and the political will to honour your commitments to the Olympic movement by staging the Games.--Dr. Kamsiah and Din Merican

No political leadership in failing ASEAN


August 4, 2016

 No political leadership in failing ASEAN

by Dr. Munir Majid

http://www.thestar.com.my

The Transformation of Munir Majid: From  an ASEAN Activist to an ASEAN Skeptic

ASEAN is failing. It is not working in the way grand declarations and pronouncement of community just last year proclaim it would. Yet, in a pattern of self-deception which has become a regional characteristic, ASEAN – and its intellectual apologists – continue to deny what is plain for all to see.

If not before it is piece of fiction now to speak of ASEAN centrality. This was again proclaimed when the ASEAN Political and Security Community was pronounced last November. ASEAN Foreign Ministers even agreed in September on a “work plan” to strengthen this.

But, however ASEAN muddles through with a definition on what this centrality means, it is gone.Surely, the first and foremost thing about ASEAN centrality must be that it is central to its member states. Is it? Certainly not in respect of how to project and defend an ASEAN position on the South China Sea.

Some have described ASEAN as toothless in this regard. This is unfair. You cannot expect ASEAN to bite or even bark at mighty China. However you would expect ASEAN to stand up for its principles and sovereign rights of states, big or small. Therefore ASEAN should more appropriately be described as spineless.

This did not use to be the case. When ASEAN declared ZOPFAN (Zone of Peace, Freedom and Neutrality) in 1971, through the leadership of Malaysia’s Tun Razak among others, it was in no position to defend it in a very hot phase – the Vietnam War was raging – of the Cold War. Nevertheless it drew a line in a joint commitment to establish a cordon sanitaire.

When ASEAN so creatively promulgated the Treaty of Amity and Cooperation (TAC) in 1976 – with leaders such as Indonesia’s Suharto and Singapore’s Lee Kuan Yew at the fore – it was in actuality the origin of ASEAN centrality: when states from outside the region want to come and treat with ASEAN, they had to accede to the TAC, one of whose main tenets was the legal undertaking to resolve disputes peacefully.

Thus it was that China acceded to the TAC in 2003 and the US in 2009. It is interesting to note that in the joint communique in Vientiane last weekend, where ASEAN Foreign Ministers struggled to forge a weak consensus, there was allusion to the TAC – as if, whistling in the dark, ASEAN wanted to remind its outside partners, especially in relation to the South China Sea, of their commitment to the peaceful conduct of states.

If there was some agreement in Vientiane not to make big the arbitration award on the law of the sea which so infuriates China, to lower the temperature in a situation that was spinning out of control, to engage in bilateral negotiations with China among the claimant states, but also to return to the Declaration of Conduct of Parties (2002) framework which will be fulfilled by a legally binding Code of Conduct, it is actually a good thing.

But where is the leadership in ASEAN to pursue the matter with the commitment that is needed? Leaders and ministers meet and then they go back to domestic concerns. Who follows through?

Certainly not the weak secretariat. Who provides the leadership in ASEAN today of the type which saw its establishment of Asean 50 years ago, of the panache and imagination of Tun Razak, Lee Kuan Yew and Suharto, to name just a few of the luminaries of ASEAN days gone by?

This lack of leadership is the reason why ASEAN is failing today. Asean has been happily organising meetings, with rotating chairs, among its members, with its partners (the so-called Asean Plus countries), at the Asean Regional Forum (established in 1994, now with 27 members) and the East Asia Summit (set up in 2005, now with 18 members), where they all come and attest to Asean centrality. Which Asean believes while they do their own thing.

After the hoopla and the linking of arms, there is poor follow up and follow through, except for the organising of more meetings. All too often you hear the assertion: ASEAN will do this and that, will take on the challenge of one thing or the other. Who? Which ASEAN? Doing what exactly?

There is no doubt there are big problems in the region. The biggest is the new regional geopolitics in South-East Asia informed by strategic contest for influence in the region between China and the US.

Weighty academic conclusions have been reached such as South-East Asia has become “the decisive territory, on the future of which hangs the outcome of a great contest for influence in Asia.”

ASEAN – here we go again, ASEAN as one when there is not any – is not able to contend with this new geopolitical reality. There is now an environment in the region out of the control of ASEAN’s institutional capabilities, such as they are. Another comment by a regional expert: “ASEAN suffers from inherent institutional paralysis.”

However, the situation was not any easier at the height of the Cold War at the time ASEAN was established, when the Vietnam war was raging, later when the genocidal Pol Pot regime reigned in Cambodia, which was then invaded, the war between China and Vietnam in 1979 – one thing after another – but ASEAN held together and fashioned a regional order even if it did not exclusively determine its remit.

There was leadership in ASEAN to make it possible to talk about an ASEAN position. Nowadays even the simplest of things take forever to happen.

The leaders talk grandly about a “People-Centric”. Yet they cannot even make sure there are ASEAN lanes at all ASEAN airports and points of entry.

 

Quintin Rozario– Paid Spinner or Top Lawyer in….. Brisbane?


August 1, 2016

Quintin Rozario– Paid Spinner or  Top Lawyer in….. Brisbane?

http://www.sarawakreport.org/talkback/top-lawyer-in-brisbane/

A Malaysian-born lawyer in Australia has said US action against assets linked to 1Malaysia Development Berhad (1MDB) is legally flawed.

Quintin Rozario, a prominent litigation lawyer in Brisbane, said the US Attorney-General, Loretta Lynch, had committed “excesses and breaches of natural justice” by making public statements on Malaysian individuals that allegedly laundered illicit funds into the United States.

Last week, the US Justice Department filed a complaint to enable the seizure of assets said to have been acquired with funds embezzled from 1MDB.

Rozario told Bernama from Brisbane that Lynch overstepped the mark and her authority by concluding that an offence or offences had been committed by Malaysia or its agents.

He cited a US Supreme Court decision that held that offences committed by anyone resident in the US could not be attributed to their government, or in this case, to 1MDB.

Rozario accused Lynch and the United States of using strong-arm tactics against smaller states by appropriating to itself powers that usurped Malaysia’s sovereignty and the powers of US and Malaysian courts.

Our comment–Sarawak Report

July 31, 2016

Was this the best that Bernama’s UMNO bosses could dredge up? Obviously yes. A Malaysian “prominent litigation lawyer”, who has made it to the heady heights of Brisbane!

Presumably, no one in the US or indeed anywhere else, has yet been found prepared to make such silly comments, unless engaged on a formal basis (Najib says he has decided against legal action – no surprise there) … after all top lawyers have their reputations to think about in the cut throat real world.

We can expect a lot more silly stuff from the few non-entities willing to stick up for Najib in the face of overwhelming evidence from the DOJ over the next days. The sort of people who have nothing to lose in terms of credibility, because they are of little note to begin with.

Meanwhile, set these claims alongside the acknowledgement by Australian Foreign Minister, Julie Bishop, someone who is definitely worth listening to:
The allegations involving 1MDB are serious and subject to ongoing investigations in more than one jurisdiction”,

Indeed. What does Quentin have to say about the Swiss, Singaporean, Luxembourg and other statements on the case?  Have these national prosecutors botched up their jobs as well?  Funny no one has yet bothered to hire him to get things right in any of these countries…. maybe a career outside Brisbane may one day beckon.

The Dark Knight


July 22, 2016

by David Brooks

Welcome to a world without rules. (I want you to read this paragraph in your super-scary movie trailer voice.) Welcome to a world in which families are mowed down by illegal immigrants, in which cops die in the streets, in which Muslims rampage the innocents and threaten our very way of life, in which the fear of violent death lurks in every human heart.

Sometimes in that blood-drenched world a dark knight arises. You don’t have to admire or like this knight. But you need this knight. He is your muscle and your voice in a dark, corrupt and malevolent world.

Mike Pence and Donald J.Trump–The Republican Team for 2016

Such has been the argument of nearly every demagogue since the dawn of time. Aaron Burr claimed Spain threatened the U.S in 1806. A. Mitchell Palmer exaggerated the Red Scare in 1919 and Joe McCarthy did it in 1950.

And such was Donald Trump’s law-and-order argument in Cleveland on Thursday night. This was a compelling text that turned into more than an hour of humorless shouting. It was a dystopian message that found an audience and then pummeled them to exhaustion.

Will it work?Well, this fear builds on the sense of loss that was the prevailing theme of this convention. We heard from a number of mothers who lost sons and siblings who lost brothers.

The argument takes the pervasive collection of anxieties that plague America and it concentrates them on the most visceral one: fear of violence and crime. Historically, this sort of elemental fear has proved to be contagious and it does move populations.

Finally, a law-and-order campaign calls upon the authoritarian personality traits that Donald Trump undoubtedly possesses. The G.O.P. used to be a party that aspired to a biblical ethic of private charity, graciousness, humility and faithfulness. Mitt Romney’s convention was lifted by stories of his kindness and personal mentorship.

Trump has replaced biblical commitments with a gladiator ethos. Everything is oriented around conquest, success, supremacy and domination. This was the Lock Her Up convention. A law-and-order campaign doesn’t ask voters to like Trump and the Republicans any more than they liked Richard Nixon in 1968.

On the other hand, there are good reasons to think that this law-and-order focus is a significant mistake, that it over-reads the current moment of Baton Rouge, Dallas and Nice and will not be the right focus for the fall.

In the first place, it’s based on a falsehood. Crime rates have been falling almost without fail for 25 years. Murder rates have been rising just recently among gangs in certain cities, but America is much safer than it was a decade ago. In the first half of 2015, for example, the number of shootings in New York and Washington hit historic lows.

Trump dwells on illegal aliens killing our children. Between 2010 and 2014, only 121 people released from immigration custody later committed murder; that’s about 25 a year. Every death is a horror, but the number of police officers killed each year as a result of a crime is about 55, in a nation of over 320 million people. The number of police deaths decreased by 24 percent between 2005 and 2015.

The main anxieties in this country are economic and social, not about crime. Trump surged to the nomination on the back of his supposed business acumen, not because he’s a sheriff. By focusing so much on law and order, he leaves a hole a mile wide for Hillary Clinton. She’ll undoubtedly fixate at the Democratic convention in Philadelphia on economic pain. Trump could end up seeming strangely detached.

But if Trump is detached from the country, and uninterested in anything but himself, he’s also detached from his party. Trump is not really changing his party as much as dissolving it.

A normal party has an apparatus of professionals, who have been around for a while and who can get things done. But those people might as well not exist. This was the most shambolically mis-run convention in memory.

A normal party is united by a consistent belief system. For decades, the Republican Party has stood for a forward-looking American-led international order abroad and small-government democratic capitalism at home.

Trump is decimating that, too, along with the things Republicans stood for: NATO, entitlement reform, compassionate conservatism and the relatively open movement of ideas, people and trade.

There’s no actual agenda being put in its place, just nostalgic spasms that, as David Frum has put it, are part George Wallace and part Henry Wallace. Trump’s policy agenda, such as it is, is mostly a series of vague and defensive recoils: build a wall, ban Muslims, withdraw from the world.

This is less a party than a personality cult. Law and order is a strange theme for a candidate who radiates conflict and disorder. Some rich children are careless that way; they break things and other people have to clean up the mess.

Public Policy in the 21st Century


July 17, 2016

Public Policy in the 21st Century

Our Public Administrators must abandon old mental maps and deal with the realities of our globalised, technology and internet driven and fast paced world. Even Najib’s Blue Ocean strategy is out of date. We must learn to deal with open systems. Times are unpredictable and uncertainty is the norm. Innovate or become out of date. We need to do things better, faster and cheaper with new capacity to detect and anticipate emergent issues. Listen to this lecture and start thinking differently by creating inventive solutions with an innovative mind set.

Build national resilience through partnership with society and non-government organisations. It is our shared responsibility to make our country better. Our administrators must recognise that there are many ways of producing solutions to our problems. The best way is to be humble by recognising Government cannot deal with these complex challenges without the cooperation of all stakeholders.–Din Merican