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M. Bakri Musa

Seeing Malaysia My Way

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Location: Morgan Hill, California, United States

Malaysian-born Bakri Musa writes frequently on issues affecting his native land. His essays have appeared in the Far Eastern Economic Review, Asiaweek, International Herald Tribune, Education Quarterly, SIngapore's Straits Times, and The New Straits Times. His commentary has aired on National Public Radio's Marketplace. His regular column Seeing It My Way appears in Malaysiakini. Bakri is also a regular contributor to th eSun (Malaysia). He has previously written "The Malay Dilemma Revisited: Race Dynamics in Modern Malaysia" as well as "Malaysia in the Era of Globalization," "An Education System Worthy of Malaysia," "Seeing Malaysia My Way," and "With Love, From Malaysia." Bakri's day job (and frequently night time too!) is as a surgeon in private practice in Silicon Valley, California. He and his wife Karen live on a ranch in Morgan Hill. This website is updated twice a week on Sundays and Wednesdays at 5 PM California time.

Sunday, August 28, 2016

Devolution and the Rise of Sarawak's Adenan Setam




Devolution and the Rise of Sarawak’s Adenan Satem
M. Bakri Musa
www.bakrimusa.com


Do not anticipate any positive change in Malaysia coming from the center, not from the current corrupt and incompetent UMNO leadership. Instead expect it from the periphery, in particular Sarawak’s Chief Minister Adenan Setam.

This rise of the periphery is a worldwide phenomenon. Witness the successes of the Scottish Nationalist Party and the Brexit referendum. Devolution there is a backlash against globalization; with Malaysia, a weak and distracted center.
 
            Adenan’s rise is facilitated both by his political prowess as well as Najib’s precarious position. Najib is inept in dealing with state leaders other than those from UMNO. With those from UMNO, Najib could bribe or bully his way.

            A measure of Najib’s lack of sensitivity to matters Sarawak is that not a single university has a Department of Iban Studies. Petronas, which gets the bulk of its oil from Sarawak, does not even have one Board Director or senior manager who is from the state. Now Adenan has imposed a moratorium on work permits for West Malaysians in Petronas. It is significant that he spared non-Malaysians.
 
           Unlike his predecessor the crude and greedy Taib Mahmud who exploited his leverage to enrich himself, Adenan uses his to extract greater autonomy for Sarawak. He acts as if he already has that, declaring English to be on par with Malay in schools and the state’s administration, in defiance of federal policies. The surprise is the silence of UMNO chauvinists and Malay language nationalists. That can only happen with specific directives from Najib.

            Adenan has banned UMNO from Sarawak; there is no legal basis for that. Again, no challenge from Najib. If UMNO were to defy that, Adenan would quit the ruling coalition and Najib would fall. Note Adenan’s ease in castrating UMNO jantans. Not a peep of protest from them. They bear and grin, as instructed.

            Sarawak (and also Sabah) already enjoys considerable autonomy on immigration. West Malaysians need a passport to enter. Adenan exploited that to maximal effect in the last state election, denying entry to opposition MPs from West Malaysia, a slap to Parliament’s prestige. Again, the surprise was the silence of the Speaker, an UMNO man, to this unprecedented affront to his institution.

            Adenan could act with impunity as his party is critical to Barisan. Through that he controls Najib. To Najib, Sarawak is his “fixed deposit.” That euphemism cannot hide the political reality. Without Adenan’s party, Najib and UMNO would topple. Right now it is to Adenan’s (and Sarawak’s) advantage to stay with the ruling coalition. Najib will do everything to ensure that; his survival depends on it.

            Autonomy is meaningless without changes in federal tax laws, a formidable obstacle. The federal government has near-exclusive taxing authority. Only minor items like land taxes are under state control. The oil royalty-sharing formula heavily favors the central government. Even if Sarawak could re-negotiate that, it is no windfall, what with the declining oil price. Despite its massive rain forest with its valuable hardwood, Sarawak still cannot forgo massive federal transfer payments.

            One way to circumvent the tax hurdle would be to execute a secular zakat maneuver. Zakat is a religious tax based on assets, not income, and is under state jurisdiction, albeit applicable only to Muslims and is voluntary. It could be made mandatory and extended to all, non-Muslims included. Both moves would enthrall the Islamists.

            Zakat contributions are federal tax credits, not deductions. That provides a neat way to circumvent federal income tax.

            Sarawakians have minimal fondness for the federal government. They could be persuaded to pay zakat (and its secular equivalent for non-Muslims) instead of income tax as the benefits would accrue to them, as the money stays in Sarawak. Sarawakians would not be paying both, rather diverting income tax to zakat.

          Adenan has adopted an excellent negotiating strategy with Najib by creating momentum with the easily-agreed upon and costless items like increasing the number of Sarawakians in Petronas and having one on its Board of Directors.

With Najib’s current weakness, Sarawak could drive a hard bargain for greater autonomy, including independent taxing power, to the point of being a virtual sovereign state. Once that happens, Sabah would be next in line to demand similar status. Sabah UMNO leaders would not dare defy the demands of their members no matter how much Najib bribes those leaders. From there, others. Johor sultan already stirs noises for Bangsa Johor and threatens secession. Kelantan wants its hudud. Najib supporting that ill-advised initiative could come back to haunt him.

            Once the unravelling begins, it is unstoppable. The prospect of a chief minister being on par with the prime minister is a giddy one to ambitious state politicians. Remember, the federation is of recent vintage. The old Malaya was set up only in 1948; Malaysia, even more recent.

            Consider the impact of autonomy on national policies like education and special privileges. Even with the current restrictions, note the ease with which the opposition DAP terminated special privileges for Malay contractors in Penang. Selangor under Pakatan’s Khalid Ibrahim annihilated a whole class of UMNO rent seekers, and saw his predecessor, that dentist character, jailed for corruption.

           Even if Najib were to balk at Adenan’s demands, what’s to stop Adenan from asking his party members in Parliament to submit a private member’s bill, a la PAS Hadi’s hudud, seeking greater autonomy and taxing authority for Sarawak? If Adenan were to do that, then watch both Najib and the opposition compete to accommodate Adenan in an epic lu tolong gua, gua tolong lu battle. He would be holding Parliament–and Malaysia–to ransom.

            I support the principle that a government closest to the people governs best. There are pitfalls, however.

           Sarawak shares a long unguarded border with Indonesia. Most of Borneo is Indonesia; Sarawak being part of Malaysia is an anomaly. It would not take much for the Indonesians to overwhelm Sarawak. If not for the British, they would have during konfrontasi. Besides, Jokowi is everything that Najib is not: honest, effective and charismatic.

            As for Sabah, Filipino pirates can enter it with impunity, and Philippines is resurrecting her claim. Another complicating mix, traditional kinship ties between Sabah and Southern Philippines.

Adenan envies tiny independent Brunei. The lesson there is not the Brunei of today but earlier. In 1962 one A. M. Azahari toppled the sultan. If not for the British Gurkhas, the sultan would have remained a refugee in Singapore. The son of Azahari may yet arise. This time there will be no Gurkhas.

           As for Johor, it wasn’t too long ago that its sultan treated the state as his private property and gave away a strategic and valuable part of it (Singapore). It would be the supreme irony if his descendant were to repeat the folly.

Those aside, I see great potential for Sarawak under Adenan Satem. He may be the transforming leader Malaysia needs while remaining within the ruling coalition. Today that coalition is Barisan. Tomorrow who knows. If Adenan plays his card well, that would be good for him, Sarawak, and most of all, Malaysia.

Monday, August 22, 2016

The Hyenas, Vultures and Maggots of 1MDB

The Hyenas, Vultures and Maggots of 1MDB
M. Bakri Musa
www.bakrimusa.com


1MDB is not yet a bloated carcass (it is bloated only with debt) and already the hyenas, vultures and maggots are feasting with glee. In the wild, hyenas and vultures wait till their prey is dead, and maggots, rotting. Not these human hyenas, vultures and maggots.

Scavengers are vital in the ecosystem; they cleanse the environment of dead and decomposing bodies. In contrast, these human hyenas, vultures and maggots feasting on 1MDB are part of the rubbish. Perverse as it may seem, they have an exalted opinion of themselves. They view what they are doing–defending “Malaysian Official 1” who is related to one of the hyenas Reza Aziz–as honorable.

This 1MDB mess is humungous; it will burden Malaysians for generations. That is a grim and undeniable fact.

Other facts, also undeniable, include these. One, 1MDB’s debt in excess of RM42 billion, and growing fast, exceeds the current budgetary allocation for education. No other entity, private or public, then or now could come even close. Those loans are ultimately the responsibility of taxpayers as well as those who do not pay tax. Those non-taxpayers, meaning the poor, are impacted because funds meant for them would be diverted to servicing those debts.

Two, 1MDB has gone through as many accounting firms as Britney Spears with boyfriends.  Its latest, Deloitte, has resigned, but not before making a most unusual declaration. That is, the US Department of Justice’s June 20, 2016 asset forfeiture lawsuit contained information that, if known at the time of the 2013 and 2014 audits “would have impacted the financial statements and affected the audit reports.”

Along the same vein, the Auditor-General’s Report on 1MDB which the government had promised to make public is now under the Official Secrets Act. Those reports have always been public. Why keep this one secret?  

Three, 1MDB has gone through as many chief executives in as many years, not the sign of a well-managed company. Four, drive by the site of the proposed Tun Razak Exchange, 1MDB’s signature development. It is empty. Last, 1MDB has yet to generate a sen of profit despite being in existence since 2009.

Meanwhile Switzerland has forced the sale of the bank involved with 1MDB and imposed an unusual and tough stipulation. Its new owner must not employ any of the existing senior managers of the sold bank. Singapore summarily closed the local branch of that bank. Its head now faces criminal charges. He was denied bail while awaiting trial, reflecting the gravity of the alleged crime. Singapore admitted to being lax in monitoring the bank’s activities with respect to 1MDB. Singapore also froze the assets of Jho Low, Najib’s financial confidant and key 1MDB player, an unprecedented as well as severe action.

There are other facts. The Attorney-General and Bank Negara have closed their investigations with no negative findings. Then there are the American DOJ’s asset forfeiture lawsuits and the class-action suit of Husam and Chang.

In America anyone can file a lawsuit. Thus you may dismiss the American lawsuits but not the actions of the Swiss and Singaporean authorities. As for the Attorney-General and Bank Negara Governor exonerating 1MDB, I let readers give that its proper weightage and relevance. Nonetheless that would still not explain 1MDB’s huge debts, changes in management and auditing firms, empty TRX lot, and the Auditor-General Report being kept secret.

For those who believe that Najib is God’s gift to Malaysians, you can’t argue with them. It would also be blasphemous to dispute Allah’s choice. For the rest of us, we need a more rational explanation, one that does not assault credibility or insult intelligence.

Back to the hyenas, they are now uncharacteristically quiet, their former flamboyance gone. Perhaps they are enjoying their morsels while they can, in their penthouses of Manhattan, mansions of Beverly Hills, and luxury yachts cruising the South China Sea. One would expect that having benefited handsomely from 1MDB they would harbor some gratitude to defend their benefactor.

The vast majority of Najib’s supporters are simple, unsophisticated Malay villagers still under the grip of feudalism. To them it is a simplistic “my leader, my race, my country, right or wrong!” Their loyalty to leaders is intense and unquestioning, up to a point. Betray that, and you pay the price. Datuk Onn was a hero for stopping Malayan Union, and Tunku Abdul Rahman for bringing merdeka. When they fell out of step with their followers, their drop from hero to villain was precipitous and merciless.

Najib is nowhere near the caliber of those two giants. We must remind him and his ardent supporters of that.

Those villagers aside, only those vultures and maggots remain Najib’s supporters. The hyenas should be, but for reasons best known to themselves have chosen to remain silent. That leaves the vultures to be his noisiest and ugliest cheerleaders. Unlike the hyenas with their bounties in the millions, those vultures are satisfied with a promotion or two and a federal award (second or third class) thrown in. Satisfied because stripped of their new appointments, they would earn but a mere fraction back at their old law practices or whatever they did before prostituting themselves to Najib.

The maggots are there as long as there is a decaying carcass.  A few ringgit tossed their way to fill the tanks of their used motorbikes, and they are happy parading their red shirts or polluting the social media with their inane comments. Once the carrion is gone, so will they.

Some support Najib out of inertia, buttressed by the havoc of regime change in Iraq and Libya as well as the performance of the opposition. Others reflect the forbearance of Malaysians. Najib, they rationalize, won the last election albeit without the majority of the popular votes. Nonetheless that victory was reaffirmed by the recent state elections in Sarawak as well as the two by-elections in Peninsula Malaysia.

That is a dicey defense. Winning elections is no license to steal or be corrupt. Nixon won a landslide in 1972, yet that did not stop his impeachment and subsequent resignation in disgrace for covering up the Watergate break-in.

A few would argue that Najib’s shenanigans are no different from Mahathir’s many opaque UMNO proxy companies plus London Tin, Bank Bumiputra, and Forex debacles. To them 1MDB is merely a different crocodile, albeit much more menacing, but from the same fetid swamp. Malaysia will never progress with that attitude.

Then there is the reflected glory argument. Reza Aziz, Malaysian Official 1’s stepson, is one of the producers of the Academy Award-winning The Wolf of Wall Street. Most would miss the irony as the film is banned in Malaysia. Nonetheless Malays in particular should celebrate that achievement.

Malaysians would have, and proudly too, had the film not been tainted. Indeed, the Academy publicly demanded that Reza Aziz’s name be officially deleted. It is like winning at the Olympics, and later disqualified for doping. Instead of glory, shame.

Another aspect of Najib’s support is crude anti-American rage triggered by the DOJ’s lawsuit. That was seen as interference as well as double standards. America too is blighted with corruption, they sniff. True. As South Korean Tongsun Park and Indonesian James Riady, as well as former Attorney-General Mitchell and President’s Counsel John Dean found out, the corrupt do get caught, convicted, and jailed. That’s the lesson Malaysians should draw from America.

As for American interference, if Najib and other corrupt Third World leaders do not want that, then next time accept only Zimbabwean dollars and use a bank in Uzbekistan. Buy properties in Bali or Cancun, not Manhattan or Beverly Hills, and bet at casinos in Macau not Las Vegas. There are no shortages of hyenas, vultures and maggots in those countries to clean up your mess.








Sunday, August 14, 2016

1MDB - Malaysia's Enron and Watergate Combined


1MDB – Malaysia’s Enron and Watergate Combined
M. Bakri Musa
www.bakrimusa.com

         
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.

            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 Reza 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.

            Reza 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. Reza 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 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.

Sunday, August 07, 2016

Lowering The Bar on Najib's Already Mediocre Leadership


Lowering The Bar On Najib’s Already Mediocre Leadership 
M. Bakri Musa
www.bakrimusa.com


I am baffled at the continued praise and support for Prime Minister Najib in the face of the mounting 1MDB mess. To be sure, those come only from Malays, specifically those in UMNO, plus a few scattered voices elsewhere. They are lowering the bar for Najib’s already mediocre leadership.

Najib is but a Third World corrupt kleptocrat robbing billions belonging to the people of Malaysia, to quote the US Department of Justice (DOJ). Meanwhile those toadying Malays continue blathering “let justice take its course” or “innocent till proven guilty.” Those may be fine in a courtroom but for leaders we demand and impose a much higher standard, as “without even the hint of impropriety.”

Those praises for Najib come in various contortions. Consider the absurd statement from PAS Hadi Awang who ventured that DOJ must produce four witnesses or that the accusation against Najib could come only from Muslims. Which cave did Hadi emerge from?

The evidence of Najib’s impropriety abounds, not just in the DOJ filings or complicated charts tracing the cross-border flows of illicit money as reported in The Guardian, Wall Street Journal and elsewhere, rather by the simple and obvious fact that 1MDB has saddled Malaysians with billions worth of debt and little to show for it. The proposed Tun Razak Exchange site is still empty while power plants once locally owned are now in foreigners’ hands.

Najib denies that he is the “Malaysian Official 1” referred to in the DOJ documents. I wonder who could that top Malaysian public official related to Reza Aziz be? Najib also denied being linked to the DOJ’s lawsuit. Poor Najib! Despite his expensive British boarding school education, Najib could not comprehend the difference between the legal term “defendant” and the everyday meaning of “linked.”

This 1MDB mess is now being investigated in no fewer than six jurisdictions. Singapore has already frozen the assets of Jho Low, Najib’s financial confidant. Switzerland terminated the license of its bank involved in the transactions. It would take great effort on Najib’s part not to know that. Perhaps his staple of reading does not extend beyond UMNO newsletters New Straits Times and Utusan Melayu.

The behaviors of Najib’s courtiers and political whores, like his ministers and party chieftains, do not surprise me. They are paid to pleasure the man. The Rahman Dahlans and Khairy Jamaluddins remind me of Saddam Hussein’s cartoonish Information Chief “Bagdad Bob” just before the fall of that city. The American tanks could be heard and seen rolling in the background but he kept insisting otherwise in a televised press conference. Those UMNO boys fancy themselves heroes defending their leader, but the world sees them as cretins.

As for Najib’s nonchalance, I am certain that Saddam Hussein felt the same way right to the very moment before he had to flee to that rat hole in the desert; his Bagdad Bob had earlier assured him that everything was fine. Muammar Gaddafi probably felt likewise moments before he was caught and butchered by his fellow Libyans.

Najib’s personal fate does not concern me; Malaysia’s does. If Najib were not to get off the stage on his own volition and soon, the price for him as well as Malaysia would be high. Malaysia must be spared such a fate. Leaders in the mold of Najib, like Saddam and Gaddafi, have an unwarranted sense of invincibility, surrounded as they are with their flatterers.
 
It annoys me only a tad to read the toadying comments of the Khairys, Rahmans, and Nazris. What upsets me is that these characters are seen by non-Malays as the best of what our community could produce.

What pains me most are comments by the likes of Tunku Aziz, former Chairman of Transparency International and member of the Anti Corruption Advisory Committee. Does he think keeping the Auditor-General’s Report secret increases transparency? Then there is Bernama Chairman Azman Ujang who quoted an obscure Malaysian-born Australian lawyer’s opinion that the DOJ’s filing was flawed! Azman must have undertaken quite a search to find that character!

The shocking silence of our ulamas and intellectuals too disturbs me. Surely there must be a competent economist in the Majlis Professor Negara (Professors’ Council) who could enlighten us on the implications of 1MDB’s massive debts and the associated opportunity costs.

There were notable exceptions of course but few and far between. Dr. Asri (MAZA), the Perlis mufti, chastised his fellow ulamas for their silence. Mustapha Kamil, group managing editor of the New Straits Times finally reached his limit and quit. Former Law Minister Zaid Ibrahim continues to warn Malaysians of the danger Najib’s leadership imposes upon Malaysians. Law Professor Azmi Sharom is another brave soul. For that he is often charged with sedition. So far they have not been able to nail him. Rest assured that Azmi will not be nominated any time soon to the Professors’ Council.

Those mute carma (contraction for cari makan; lit. looking for food) professors and ulamas, as well as the Tunku Azizs and Azman Ujangs must remember that although Najib may have appointed them, their salaries are being paid for by taxpayers. Their duty and loyalty should thus be to the public. They should also remain true to their calling.

I could sympathize with their support of Najib if those characters were showered with gravy on the same scale as that Malaysian Official 1’s relative Reza Aziz, or Jho Low and that Goldman Sachs’ bond salesman. Instead those Malays were getting only the crumbs, and for that they were willing to soil their reputation. Meanwhile those who had received the juiciest morsels were too busy enjoying their loot to comment.

There is only one certainty; Najib’s tenure will end and Malaysians will be saddled by his legacy. The questions our children and grandchildren would be asking then would be:  Were you part of the solution? If you were not, then you were the problem.







Sunday, July 31, 2016

1MDB Not An Overnight Monster; Likewise Malaysian Official 1

1MDB Not An Overnight Monster; Likewise “Malaysian Official 1”

M. Bakri Musa


The colossal corruption scandal that is 1MDB is not an overnight monster; likewise its principal rogue, “Malaysian Official 1” (MO1).
           
            The loss from 1MDB, though in the billions, is at least quantifiable. Not so the besmirching of Malaysia’s good name by its leader MO1 being labelled the world’s most corrupt kleptocrat by the US Department of Justice.

            So hideous and unprecedented was MO1’s conduct that I believe he (or maybe she) was born corrupt. Or to use Mahathir’s words in his The Malay Dilemma, it is in his (MO1’s) genes to be corrupt.

            I go further. Even if you are inherently (that is, genetically predisposed to be) corrupt, you would not necessarily be so if you were to be brought up along the straight path. So the only conclusion is that MO1 in addition to being born corrupt was also nurtured by a corrupt family.
           
            That is a near-blasphemous statement to make in Malaysia. The memory of the father of MO1 is still held in high regards by most Malaysians. Most but not all. For those not lucky enough to be born of the right heritage to benefit from the father’s new enlightened policy, the image is less pristine. 

            In trying to defend his (and his spouse’s) current wealth and profligate ways, MO1 once claimed that he was blessed with a bountiful inheritance. Offended by that statement, one of his siblings took the unusual step of publicly contradicting him, claiming that their father died while not quite in poverty was definitely not wealthy. At least that family has one honest member.

            This MO1 has a long history, both personal as well as official. As for the personal, let’s just say that he is a Malaysian Bill Clinton, minus the brilliance. There is little need to pursue that prurient path.

            As for the official, as Minister of Education back in the 1990s he approved over 500 permits for private colleges during a two-year period. That was more than one application a day! You would need a lot of grease to make the normally sluggish Malaysian bureaucracy go that fast and smooth. He must have received plenty of grease to slide by all those applications.

            A measure of the ministry’s “thoroughness” was that many of those colleges closed shop after their students had paid the exorbitant fees, stranding the students and disappointing their parents.

            As Defense Minister he gave his buddy millions as “commission” to buy a billion-ringgit used submarine that could not submerge. We may yet know more about that scandal as the French is reopening that corruption case. As for his buddy, he too shared MO1’s personal morality. All that is now cleansed, in the eyes of the Malaysian brand of Islam, with their trip to Mecca.

            Now with MO1 as Finance Minister, should Malaysians and the world be surprised then that 1MDB is the consequence?

            One person however vile, corrupt, or greedy could not possibly execute a heist on the scale of 1MDB. MO1 must have had many enablers. Not only that, the nation’s institutions must also have been sufficiently weakened and their personnel emasculated not to have noticed the massive looting. The rotting of Malaysian institutions and the breeding of those enablers too did not happen overnight.

            The heads of Bank Negara, Anti-Corruption Commission and the police, as well as the Auditor-General and Attorney-General during the looting of 1MDB were individuals appointed by other than MO1. The exception is the current Attorney General, that failed former UMNO operative.

            There may be some poetic justice if not perverse irony in that a few of those enablers now face the threat of being charged for treason, for not protecting MO1 vigorously or enough.

            I draw a difference between those enablers versus the UMNO ministers, divisional chiefs, and UMNO Youth “red-shirts” who mindlessly defend and sing praises of MO1. These latter characters are whores; they are paid to pleasure MO1. Destroy 1MDB and MO1, and with their lifeline cut off, watch them convert to be MO1’s and UMNO’s severest critic.

            Now with the National Security Act of 2016 operative, criticisms of MO1 would be that much more difficult and treacherous. Again, that NSA did not appear overnight. It took decades in preparation, going back to the constitutional amendment of 1994 which made possible for laws passed by Parliament to dispense with royal assent.   

            That constitutional amendment, as well as the rotting institutions, is water underneath the bridge. No point wallowing in it. Yet many are still obsessed with the blame game and relish indulging their status as Mahathir’s victims. They are more interested in settling old scores or getting even on earlier slights instead of helping solve the current problem. Some let their hatred and contempt for Mahathir get in their way of rational thinking. What’s the point? All Malaysians are now victims of MO1’s greed, except for the equally corrupt few recipients of his “cash is king” mode.

            Yes, Mahathir let possible for all those things to happen during his watch. However, he has been off the stage now for well over a decade. Surely Malaysians could rise above and rectify his mistakes. Why blame the man? He is over 90 now. No glory in beating up an old man. Besides he is trying very hard to undo his errors. Help him succeed, and once that is achieved you could then engage in a post-mortem and assign blame.

            It takes more than a little bit of humility to admit to one’s error. It takes an even greater courage to rectify it.  Mahathir admitted that appointing that dud Abdullah Badawi was a mistake. Being instrumental in Najib’s ascend was also Mahathir’s mistake. Mahathir was successful in correcting his first. Malaysians should now help him correct his second–get rid of Najib.

            Malaysia would be the ultimate beneficiary, not Mahathir. He doesn’t need the trophy. If 1MD and MO1 are not destroyed, both will destroy Malaysia. Then all Malaysians will be the victim.




Monday, July 25, 2016

The Malay Shame and Tragedy That Is 1MDB



The Malay Shame and Tragedy That Is 1MDB
M. Bakri Musa
www.bakrimusa.com


Imagine had Prime Minister Najib Razak responded differently to the US Department of Justice Asset Forfeiture lawsuit and said instead, “I have instructed my Foreign Minister to seek clarification to determine who this “Malaysian Official 1” so we could investigate him. I have also directed the Attorney General to review the evidence in the DOJ complaint.”

            As for 1MDB, imagine if its spokesman had responded, “We view with deep concern allegations that assets meant for our company, a public trust, had been corruptly diverted. We seek clarification on who 1MDB Officials 1 and 2 are to make sure that they are no longer in our employ. We will review our policies to ensure that such pilferages as alleged by DOJ if they did occur will not recur. Additionally, we are engaging legal counsel to protect our interests in the American trial.”

            Instead, what Malaysians and the world heard last Wednesday were irrelevant and meaningless statements to the effect that neither Najib nor 1MDB are the defendants in the suit. True and obvious, needing no response or clarification. The defendants are the owners of those seized assets which are alleged to have been acquired with funds corruptly siphoned from 1MDB, a GLC of which Najib is the Chairman.

            The responses from Najib, his ministers, and 1MDB only brought shame to themselves, to Malays, and to Malaysia.

            As for the defendants, their options are either not to contest the suit and thus forfeit those assets, or fight it. Negotiated settlement is unlikely. This is the biggest asset forfeiture in US history; Attorney-General Lynch is out to make a point to corrupt kleptocrats everywhere in these days of complex cross-border money laundering.

            Before this, the biggest forfeiture involved the giant telecom company, Amsterdam-based Vimpel.com, and individuals close to the president of Uzbekistan. The Uzbeks ignored the suit while the company pleaded guilty to the criminal charges. Rest assured that those defendant Uzbeks won’t be visiting Disneyland or Las Vegas any time soon!

            This 1MDB corruption may be a legal case but politics is never far off the radar in Putrajaya and Washington, DC, as well as in the potentially more volatile international arena.

No-Contest Option
Not contesting would save substantial legal fees and other costs, as well as the not insignificant personal hassle factor. Those aside, the biggest advantage would be not further exposing the defendants and others, legally as well as in many other ways, during the pretrial discovery and trial. Spared a trial the identity of “Malaysian Official 1” will never be known, at least not officially, a crucial consideration in Putrajaya.    

            The loss of those assets, even though in the hundreds of millions (in US dollars, not worthless ringgit), is at least quantifiable. However, even the Sultan of Brunei could not shrug off a loss of that magnitude.

            Choose this option and Reza Aziz, one of the defendants who according to court documents is also related to Malaysian Official 1, would be well advised to pack up and find a country that does not have extradition or tax treaty with the US. He also had better get used to a much less luxurious lifestyle.

            Were Reza to pursue this course, at least in his old age he could regale his grandchildren with stories that he once owned a glittering condo in Manhattan and shared drinks with Hollywood stars in Las Vegas.

            That would also be a very Malay story. At Kampung Baru today there are many elders who look with nostalgic gaze at the skyscrapers in the Golden Triangle and lament, “Ah, itu cerita dulu!” (Those are old stories!)

            The US Government would recoup its considerable costs from those assets. Rest assured there would be itemized bills for every paper clip and DOJ lawyers would be charging senior partners’ rates. Even after factoring that there will still be substantial loot left. By statute, that belongs to the people of Malaysia.

            If Najib is still Prime Minister, do you think those Americans would be dumb enough to return those millions to the same scoundrels? America could not disburse them to Malaysian NGOs either as most are not sympathetic to UMNO. That would present a delicate diplomatic problem. On the hand it could prove to be the most sophisticated and effective exercise of “soft power,” more powerful than “boots on the ground” in effecting regime change.

            At any rate don’t expect those Monet paintings to hang on the walls of kampung huts any time soon.

Contesting the Forfeiture
Contesting would be no walk in the park. It would be expensive, protracted, and risk uncovering details that could trigger criminal charges. American lawyers are not cheap and potential defense attorneys would want their substantial fees paid upfront and from “clean” sources. With those assets tied, Reza better have other fat bank accounts. Even if he were to receive help from his “Malaysian Official 1” relative, Reza’s defense attorneys would insist, and need unchallenged documentation, that the money is legitimate and not siphoned public funds. 

            The earliest a trial could begin would be a year or two hence, in time for the UMNO Leadership Convention or worse, the next Malaysian election. A trial would also risk exposing the identity of “Malaysian Official 1, a consideration for Putrajaya.

            Being a civil case the burden of proof for the prosecution is lower, merely the preponderance of evidence, not the much higher “beyond a reasonable doubt” of a criminal trial. The burden also shifts to the defendants to prove that those assets were acquired with untainted funds.

            In court documents Reza Aziz claimed that the millions he received from some unknown Arab was a gift. An incredulous assertion that even his accountant did not believe him; hence the attestation from his “donor.” If this be a trial by jury, it would be tricky to convince an American juror, as with Reza’s accountant, that receiving millions from a stranger is a “gift.” Besides, the image of an Arab in America these days is far from pristine.

            With a trial the testimonies of those professionals who had advised the defendants would be scrutinized. The Watergate Hearings of the 1970s exposed the unsavory activities of the various advisors. Many prominent lawyers ended being disbarred, including the President’s Counsel as well as a former Attorney-General.

            A trial would highlight an ugly truth that could prove explosive in race-sensitive Malaysia. That is, Reza Aziz excepted, those corrupt Malays got only the crumbs while the gravy flowed to that Wharton-trained Chinaman. That won’t sit well with UMNO Youth’s “Red Shirts” or PERKASA boys.

            A trial would also showcase the professionalism and meticulousness of American prosecutors and investigators. That would not make the former failed UMNO operative and now Malaysia’s Attorney-General look good. The Malay image is already battered by the amateurs at 1MDB.

            From the perspective of international politics, it may be shrewd not to identify “Malaysian Official 1.” This forfeiture however, is not the only game. After all, Obama did not tee off with Najib that Christmas in Hawaii because he (Najib) was a Tiger Woods. It was part of Obama’s “Pivot to Asia” show, with Najib the prop.

            There are other actors in this new shadow play. China is asserting itself, most visibly through military exercises in the South China Sea but more effectively elsewhere. Note the abrupt change of face at the recent ASEAN conference that had initially condemned China, and ASEAN’s collective silence on the International Court’s decision on the South China Sea dispute.  

            China too could play the Obama game, not on the green of Hawaii’s golf course but FELDA’s oil palm oil plantation. China could buy palm oil from Africa, and not offer inflated prices for those rusty 1MDB assets.

            Najib now has to balance the interests of his stepson and former Beverly Hills real estate tycoon Reza Aziz versus that of FELDA settlers and their wooden huts. Not an easy choice!

            The kampung boy in me longs to see a good fight by our modern-day Hang Tuah. Thus I challenge Reza to be jantan (man) enough to fight this US forfeiture.

            Back to reality, the winners in this 1MDB shadow play are many and obvious. Reza is one, though not as big as he was before the forfeiture; so too Malaysian Official 1 as well as IMDB Officials 1 and 2. As for that Wharton MBA character, he could still savor his shark’s fin soup in Taiwan. The US DOJ too is a winner, and a very big one.

            As for the losers, 1MDB is the obvious. Its current management should sue the previous board and management for incompetence as well as breach of fiduciary duties to recover some of the losses. Current management owes the company and Malaysians that much.

            The other victims are less obvious. They include FELDA settlers now deprived of better schools, smart young Malays who excelled on their IB tests but now cannot go abroad, and those dedicated GLC Malay executives whose reputations are now tainted because of the shenanigans of those monkeys at 1MDB.

            Those Malaysian officials who responded last Wednesday to the DOJ’s lawsuit and those Malays who still strenuously defend Malaysian Official 1 have yet to recognize these victims. That’s the terrible shame and great Malay tragedy.