The causes for the 1MDB Scandal and/or Phenomenon remain unknown, there are no remedial measures for preventing 1MDB 2.0, 1MDB 3.0, and more!
Commentary And Analysis . . . If there’s Royal Commission of Inquiry (RCI) and/or Truth and Reconciliation Commission (TRC) on the 1MDB Scandal and/or Phenomenon, it can only take the cue on remedial measures from international merchant bank Goldman Sachs. It’s said that all roads end in Rome.
The court of law, public perceptions aside, isn’t about ethics, moral values, theology, sin, God, righteousness, justice or truth.
The court of law, unlike the RCI or TRC, was only about law.
We can’t rule out scapegoats, at the end of the day, being left holding the baby and/or being given the short end of the stick in court under the rule of law, the basis of the Constitution. Here, we are reminded that English novelist Charles Dickens famously wise-cracked that “the law is an ass”. Dickens began life as court reporter.
Even so, under the rule of law, the manner in which the accused was convicted comes first. If there has been compliance on procedures and due process, and the rule of law, conviction can follow. There must be perfection in conviction for perfection in law.
The rule of law briefly, for those unfamiliar, holds by its very nature that no one was above the law, all are equal, and there must be no discrimination, save as provided by law, albiet not in criminal law.
In criminology, the scientific study of crime, including its nature, causes, consequences and methods of prevention, authorities look at criminal behaviour from various levels.
RCI On 1MDB
The 1MDB Scandal being out in the public domain, in too many places, may have had dubious beginnings in the business line set up by Goldman’s then-President Gary Cohn. He labelled the approach “monetising the state”, a euphemism.
We have not included any external link on “monetising the state” lest the 1MDB Scandal be misunderstood given surfeit of information which may be irrelevant and immaterial in the court of law, or otherwise. Everyone must find his or her own salvation on the 1MDB Scandal. The state can only initiate RCI and/or TRC.
We must resist another Trial by Media like that carried out against former Prime Minister Datuk Seri Najib Tun Razak. The focus was on the hunt for scapegoats and/or fall guys for political reasons and expediency.
There was selective prosecution for selective persecution in Najib’s case/s. That facilitated acting with impunity for conviction by hook or by crook. It was all about falling back on the letter of the law, by itself, as law. It was not law at all. The court in the unrelated SRC case did not even pay lip service on the rule of law.
There’s greater emphasis on the spirit of the law in the rule of law — the basis of the Constitution — albeit read with the letter of the law.
Remedial Measures
If Goldman Sachs eventually collapses and implodes, for want of public, investor and market confidence, so be it. Goldman Sachs, enriching itself at the expense of not so rich country Malaysia, was much more than bad news. It was global disaster unmitigated.
Malaysia cannot afford the US government position that Goldman Sachs may be too big and therefore should not fail even if it fails.
Goldman Sachs and the US government may be sitting on another planet and building castles in the air on the causes for the 1MDB Scandal. Those who are part of the problem cannot be part of the solution viz. remedial measures for preventing 1MDB 2.0, 1MDB 3.0, and more.
The causes would look at political interference, corporate governance going haywire and public and regulatory governance affecting the corporate governance.
The role of the US Department of Justice’s (DoJ) Kleptocracy Asset Recovery Initiative must be noted. It was tasked with identifying and seizing foreign assets held by corrupt foreign leaders in the US. The DoJ does not look at remedial measures.
Civil Forfeiture
The DoJ has filed civil forfeiture complaint against assets that it alleged had been bought with money stolen from 1MDB.
The DoJ claimed that more than US$3.5 billion was misappropriated from the fund. It filed the 144-page complaint in federal court in Los Angeles targeting about US$1 billion in assets located in the US, the UK and Switzerland.
The assets include mansions and penthouses, a US$35 million executive jet and artwork.
The DoJ claimed the assets were “traceable to an international conspiracy to launder money misappropriated from 1MDB”.
Highly Compartmentalised
The 1MDB Scandal, like the Deep State and intelligence services, was probably highly compartmentalised phenomenon — i.e. on need to know basis — created by international merchant bank Goldman Sachs and/or rogue elements linked with the former as insider job.
Then Prime Minister Najib may have only been at the bottom of the compartmentalisation, albeit inadvertently, i.e. if at all.
The young alleged co-conspirators with Najib were probably too inexperienced and could not have master-minded 1MDB. They, not knowing what was going on, did the next best thing and fled the country.
Elephant In The Room
The elephant in the room on the 1MDB Scandal: Goldman Sachs shamelessly reserved for itself 200 times the typical fee i.e. an exorbitant US$600m for placing US$6.5b in three no-bid bond offerings over ten months in 2012-2013. Half the US$6.5b allegedly disappeared.
There were several other billions borrowed and various other criminal activities allegedly took place.
Goldman Sachs 3rd bond offering, US$3b, was arranged two months before GE14 on 9 May 2018.
The amount of money which Goldman Sachs made from relatively plain bond deals was the initial warning sign of illegalities taking place.
Five internal Goldman Sachs committees, reads literature for case study, vetted the bond offerings under the noses of “more than 30 Goldman Sachs executives,” including the then-CEO, the then-COO and later President, the then co-head of investment banking and now current CEO, the then-Vice Chairman and many others.
A compilation of known facts in the media shows that the Terengganu Investment Authority (TIA) was set up in 2007 for monetisation of the state’s future income, revenue and resources.
International fund manager Jho Low, actively working with Goldman, helped turn TIA into 1MDB in June 2009.
In July 2009, 1MDB’s new Mandate included donation for CSR (corporate social responsibility) activities.
CEO Sharol Azral managed 1MDB under the purview of Finance Minister Najib Tun Razak who was also Chairman of the Board. He, remaining above the fray, could not have been privy to day to day operations.
Goldman Sachs, between May and October 2012, raised then unverified billions in 1MDB bond monies. DoJ discovered that US$4.5b had been diverted for probably nefarious purposes.
Rival politicians manipulated media coverage on 1MDB, between 2014 and 2022 and beyond, and settled on Najib as the scapegoat.
In 2015/2016, although 1MDB had more assets than liabilities, an IPO (initial public offering) exercise failed in the wake of Trial by Media and bad press.
Najib was jailed unrepresented on 23 August last year after being convicted on the unrelated RM42m SRC International case. The conviction, given unrepresentation alone, wasn’t perfected in law for perfection in law. Najib awaits UN Review on arbitrary detention.
Federal Court Review Panel Head Judge Datuk Abdul Rahman Sebli ruled DNA (discharge and acquittal) for Najib on March 31 on the grounds that there were many transgressions against him.
Therein the matter lies.
Johor Sultan
Also in March this year, the Johor Sultan publicly expressed opinion that Najib should be freed if more people don’t join him.
In October, former Court of Appeal (CoA) Judge Datuk Hamid Sultan Abu Backer expressed dismay in op-ed on the SRC conviction. He advised Najib’s family that they could file habeas corpus Application and/or file Petition for Pardon with the Conference of Rulers (CoR).
Again, Najib awaits the UN Review by Christmas on arbitrary detention. The UN Review can only find the SRC case incomplete and call for 2nd Review which may or may not happen.
Generally, based on precedents, Malaysia adopts UN Advisory Opinion and that from Commonwealth jurisdiction, given lacuna (gap) in local law. It’s high time that Najib returns and Malaysia restores the rule of law. That will bring multiple benefits as the RM would no longer head south, the sentiment in the stock market would improve and strong and sustained FDI inflow would resume. — NMH
Longtime Borneo watcher Joe Fernandez has been writing for many years on both sides of the Southeast Asia Sea. He should not be mistaken for a namesake formerly with the Daily Express in Kota Kinabalu. JF keeps a Blog under FernzTheGreat on the nature of human relationships.
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