Malaysia’s Prime Minister, Najib Razak, appeared to get a lifeline when Donald Trump became President of the United States. In 2016, Razak was on the ropes. He had successfully squashed a Malaysian investigation into his billion-dollar heist from one of the nation’s sovereign wealth funds, but the US government remained a problem. Money laundering connected to his crimes extended into the United States. Under Obama, the Justice Department was ramping up enforcement of white collar crime making it difficult for Razak to tamp down news of his theft inside Malaysia.
Obama had shunned his old Malaysian ally after news of his thefts emerged. Warrants and asset seizures led by US investigators kept his case roiling even after his local critics had been harassed into silence or arrested. Trump’s victory was a get out of jail free card for kleptocrats all over the globe.
Less than a year after the election, Trump invited the Malaysian Prime Minister to the White House. Justice Department scrutiny faded. Gary Cohn, the Goldman Sachs partner who had aided Razak’s scam was now the president’s senior economic advisor. Though the FBI continued enforcement efforts already in progress, initiative faded. Razak’s friend, Jho Low, who architected the fraud and may have pocketed more than $3bn himself, was able to breathe a little easier, at least for a while, leaving his Chinese bolthole to tour Southeast Asia again.
An American political disaster should have left Razak free and clear, but something remarkable brought him down – the rise of democracy in the developing world. When the United States abdicated its role as the world’s leading voice for freedom, voters in Malaysia took matters into their own hands. For the first time in the country’s history, the ruling party in 2018 was defeated in a free election. The result was a stunning surprise and Razak was unprepared.
Three days after the election Razak attempted to flee to Indonesia with his family. Mobs blocked access to the airport after immigration officials leaked the family’s flight plans. Razak was trapped like a rat. The next day police raided their properties, seizing more than 10,000 pieces of jewelry, hundreds of designer handbags, $28m in cash, a total haul worth roughly $200m. Cut off from access to his stolen funds and trapped inside the country, Razak had few political levers left to pull. A formal investigation into his crimes resulted in his arrest in July. He is free on bail pending a trial set to begin next spring.
A new book, The Billion Dollar Whale, outlines the fraud surrounding Malaysia’s 1MDB fund and the flamboyant character, Jho Low, who engineered the heist for Razak. Low remains in hiding, probably in China, most of his assets seized. It’s a darkly amusing story of the global reach of financial fraud, with troubling implications for our own democracy.
Though a brief wave of US enforcement efforts contributed to Razak’s ouster, it was our financial system that enabled the heist in the first place. The book is careful to mention Mark Rich, the 90’s financial huckster in the mold of Jho Low who bought a pardon from Bill Clinton. The global money laundering empire that enabled the 2016 Russian campaign to destroy our democracy was born in our own financial deregulation. Eight years of the Obama Administration was not enough to undo twenty five years of organized global graft.
Jho Low executed his fraud in broad daylight, with the assistance of US based accounting firms like Deloitte, and washed his transactions with US real estate and business assets. He built a film business that ironically produced The Wolf of Wall Street. He bought a stake in EMI. His lavish Las Vegas parties featured stars like Leonardo DiCaprio and Jamie Foxx. Then a man who used the same methods to get rich was elected president. We have a problem that will not yield to gentle remedies.
If you remember the old post on the Trump Endgame, you’ll see its outline in the fall of Razak. The book should also make clear why I think Trump will flee before the end comes. It’s the only way for a kleptocrat to preserve his wealth and some semblance of power. The story is also a warning about the storm ahead, especially after Trump’s fall.
A machine of global graft initiated and enabled by the Clinton and Bush administrations gave us President Trump. Dismantling that machine, even after Trump’s departure, will be no simple task. When Malaysian Prime Minister Mahathir Mohamad described the path ahead for his country, he was also delivering a warning for us:
“Certain people were aiding and abetting a prime minister who the world condemns as a kleptocrat. Certain heads must fall.”
When Trump is gone we’ll hear a loud chorus crying for reconciliation. Shout them down. Block efforts to protect these criminals by any means necessary. Instead, we must leverage the outrage from this administration toward comprehensive reform, and that kind of reform will not be possible without serious consequences for collaborators. No authentic reconciliation is possible without disclosure and justice. If we want to avoid a path from Trump I to Trump II, heads must fall.
When/If the dems re-take the house they will not be able to get much if any legislation done with the Senate and President blocking them
IMHO they should instead concentrate on investigation – investigate every GOP crime they can find
Do a running tally of the costs verses the indictments – with the Hillary investigations on the other side
As well as GOP offences they should do what they can to investigate all “white collar” crime
The GOP congress has been the “do nothing” congress
The Dems should do as much as they can
Leave POTUS alone – go for his friends and family – go for the enablers
Remember “Friend to boys” Hastert ?
How many others have similar skeletons?
A few comments on the ugly situation concerning the murder of Jamal Khashoggi. Trump isn’t the first US President to gloss over this ugly, tainted relationship between the US and Saudi Arabia. This isn’t even the worst atrocity that ever been swept under the rug. But this is majorly brazen, even for a brazen asshole like Trump. Yemen is the far worse issue (no disrespect to Mr. Khashoggi and his family and colleagues), and ought to be the straw breaking the camel’s back. This is also another compelling reason to open Trump’s financial records and see exactly what business dealings he has with the royal family. Trump makes it pretty obvious that all he cares about is the $, and I realize the main difference between him and some past Administrations is that he’s being totally open in his greedy, callous dickishness, but damn is this shameful and disgusting.
Damon Linker has some valid takes on this:
No recent President has clean hands here, even Obama with his frosty relations with the Saudis was willing to lend some US military support for the proxy war in Yemen. But breaking through the moralistic BS will be more in spite of Trump than because of him, because I suspect he has financial interests he’s putting ahead of America’s interests.
Some asshole stole the Beto sign from my yard yesterday.
This has been happening a lot in The Woodlands where the Beto grassroots organization is robust. Some are using exterior cameras to monitor their signage. When your candidate is as pitiful as Cruz, you have to resort to petty theft. Put another Beto sign up.
On the west corner of I-45 and 1488 (immediately north of The Woodlands, there is a huge electronic billboard with BETO on both sides. The Montgomery County Tx Patriotic tea party can’t steal this sign!
I just got through talking to the police. I didn’t pay for the sign, as it was given to me for volunteering, but whoever took it had to come onto my property without permission, therefore they trespassed. I reported it so that there’s a data point for the police in case anyone else has a problem. The 2 other Beto signs on my street are untouched. Mine was the most visible, so therefore the easiest to snatch. The jerk left the wire behind, so it’s quite obvious what happened. My Sri sign wasn’t touched.
I’ll get a new Beto sign today. I’ve told my friends with the Brazoria Co. Dems what happened.
On a semi-related note, I finally, finally saw Beto do an issue ad on TV, this one about education and supporting teachers (I did hear a healthcare ad in the radio a while back ). I hope he didn’t wait too long to start making such ads.
Howdy Ms. Mary, my wife and I saw the sign this morning on our way to Magnolia for breakfast. We are early voting by mail, just one of the few perks we have as we get older. Both of us are taking great pleasure in voting straight Dem…..take that Cruz and Brady.
Hi Clint! We gotta build our signs tall, big and strong evidently to keep them up! The Woodlands Democratic grassroots are working incredibly hard. Turns out there are lots of closet democrats living in Montgomery County! Who knew?
Even from up here in Seattle, I am rooting for Beto. I’ve made some small contributions and done some phone banking. Your work in TX is highly appreciated by Progressives everywhere and you have my support.
KEEP REPLACING THOSE SIGNS! Back when Kerry was running, I had signs stolen. Seattle was Democratic then, but since then the Rethugs have almost become extinct.
I have 3 replacements Beto signs now. An interesting life hack was suggested by one of the gentlemen who gave them to me- grease the edges up with Vaseline. It’s supposed to make it harder to pull it out and they get grease all over their fingers.
Well, I was going to offer my final Beto sign, currently residing in the trunk of my art car.
But Fly doesn’t need that single sign. She’s got 3.
I appreciate that. Hopefully that was just one-off assholery. But if there’s a repeat offense I’ve got some less aceesable but still visible place to post replacement signs.
The main problem in the US right now is not the standard direct corruption but an indirect cycle which won’t be stopped by the exposure that brought down Razak. Basically plutocrats control or strongly influence the media, the media supports the Republicans, and the Republicans provide a conservative-tilted judiciary, tax cuts, and kill regulations that would reduce the plutocrat’s wealth. There are quid pro quos going on, and it will be good to expose them, but the basic cycle doesn’t need quid pro quos to work or even to bring American democracy to the verge of destruction, where we are now. Trump is running the standard kinds of corruption with his hotels and frontrunning stocks affected by his policies, but that is him exploiting the situation and not what got us here.
It’s not really a surprise that this indirect corruption cycle is so dangerous as similar systems have permitted very extended control of semi-sham or sham democracies all over the world, like Mexico, Japan, and Singapore. The model now seems to be spreading rapidly, in Russia, Hungary, Turkey, Poland, and some flirtation in Italy. The key element IMO is that propagandistic media has shifted from blatant heavy-handed propaganda that failed in the old Communist regimes to a more subtle distraction of attention by endless focus on trivial scandal by open society proponent (but her emails!) while ignoring major scandals by the plutocrat party in favor of missing hot blonde coverage and the like.
I don’t have any clever solutions – my own son is terribly gullible in spite of all my attempts to teach intelligent skepticism. He’s not a conservative, because California, but I can see how people like him could be sucked into the rightwing media vortex.
The global financial markets, which still means mostly the U.S. financial markets, are ripe for another 2008. All it takes is one crisis, and it is going to happen all over again. And with this kleptocrat in charge, it will be so much worse. The rich will be just fine, They always do just fine. The poor and middle-class will be wiped out. They control all the financial, political, and ultimately, law enforcement levers.
George Carlin had it right oh so many years ago.
Oh, BTW, the article states the “mob” was a hundred or so at the one airport. Also, the article states that the police deployed to control the mob backed down, and actually left. What are the odds that 100 people at the White House could actually stop a helo from taking off to Andrews, or a private air strip? Or that the D.C. police, secret service, and ultimately the military would back off and leave?
Americans should have marched in the streets by the millions until heads were on a platter in early 2009. How do you think the Chinese would have dealt with the crime lords running the big banks, and the politicians that enabled them?
But no, Americans sat back and watched the crime lords handed bonuses in the hundreds of millions. They will do it again, as the typical American worships the successful, no matter how that success was achieved, or taken.
“How do you think the Chinese would have dealt with the crime lords running the big banks, and the politicians that enabled them?”
You do understand that the Chinese criminal syndicates, bankers, and politicians are the same two dozen people collectively known as “The Communist Party”, right? Occasionally they throw some outer regional director under the bus (via imprisonment or outright execution) if they managed to look bad internationally or in a way that riles up the locals, but otherwise how they deal with financial crimes and corruption outside their control is simply reorganize it so that it’s back into their control.
It is far more that a couple dozen. And yes, to get rich and powerful you have to be part of the Chinese establishment, meaning the Communist Party. But woe betide you do something wrong like mess with baby formulae or wipe out massive wealth.
The Chinese economy has been built on a lot of debt, smoke and mirrors in many ways (entire ghost cities built), but they do not brook corruption / incompetence on the level we saw in 2008.
So Chris, what is your take on Senator Warren’s proposed anti-corruption legislation?
It’s actually excellent. Perhaps more importantly, it’s the perfect platform for the ’20 election. Would make for great debate material.
Now if she can just get it passed….
Democrats, or indeed anyone with a reforming stance, needs to talk about corruption a lot more. It’s odious, it puts government in service in something other than the public good, it’s contagious, and it does not fix itself.
Daniel- I shared this interview of Beto O’Rourke with Chris, but didn’t post it due to its length. It is so precisely on topic and so revealing of the way both parties work that I will drop it in here.
Beto is asked about how newly elected members of Congress are managed when they arrive in D. C. fresh off the campaign trail, flush with idealism and a commitment to serve their constituents. As many years as I’ve watched and participated in politics, this was shocking and disheartening to learn. Beto tried to be a “good” freshman Congressman but quickly realized he was serving the wrong people. He stopped and to this day, has not taken any PAC money.
I highly recommend you watch the entire video. There is so much that must change in Washington and beyond. For America to rid itself from corruption.
Chris- Do you really expect anything of substance to be debated by Trump. ;+)
Mary – That’s a good video. I have never gotten into the transactional guts of how either party finances its fronts in various regions, via pricing each house committee seat. I am not surprised the system has wound up the way it is, because the first to disarm would be destroyed. The strategy must be semi-optimal at this point to gain and defend seats. But, as Beto notes, only one party platform seems to protest this arrangement and see it in need for reform, for now.
I keep thinking of the line from “Trading Places”, where Billy Ray Valentine tells Louis Winthrop “The best way to hurt rich people is to turn them into poor people.” Plenty of corrupt rich people out there who deserve exactly that, in addition to prison.
I’m not interested in hurting rich people, I’m interested in preventing them from hurting me. If that means taking their money away, and it almost certainly does, then fine.
I only hope you are right about the fall of Trump and his crime syndicate. We the people really do have the power. But only if we take an interest in truth, band together and take the risk necessary for change. One thing I am sure of is the radically right and their enablers do not have the strength and courage to fix this. Never did and never did. It will be up to snow flakes all over the political spectrum to deal with this. God give us the strength.
Just order the book on my Kindle. Hope it is a good read.
“A machine of global graft initiated and enabled by the Clinton and Bush administrations … ”
Yes, Clinton’s pardon of Mark Rich was a travesty, but unless I’m significantly mistaken, almost all the push for deregulation of finance in that period came out of the Republican legislature (e.g. Phil Gramm).
I would encourage everyone to read up on the history of the Democratic Leadership Council, the project that produced Bill Clinton and the modern posture of the Democratic Party.
Less we forget, the big banks and power brokers who interfaced with them were bailed out. I recall the justification being, they were “too big to fail.”
This dynamic seems to repeat itself throughout or capitalist society. From large pharmaceutical companies to environmental polluters, the “big” guys always seem to get off , or pay a pittance fine while pocketing the big bucks.
Glass-Steagal May have had its shortcomings, but since it was denuded, America’s financial guardrails are gone.
The free market can be a good thing when the people who lead it are “responsible “. Given what is happening in America today with the loss of a moral code of business (generally), we little people are the fingers in the proverbial dyke. How delightful that other countries are leading the way back. I am not very proud to be an American right now.
I totally concur with your last paragraph. When finally Trump leaves there must be comprehensive reform. America has a tendency to move on and forget the past. While that in general is a good policy, sometimes it precludes dealing with underlying issues. For that reason problems caused by the same old issues, keep recurring. A good example is the disasters caused by financial shenanigans. The financial crises that caused the Great Depression and the numerous financial panics throughout the 19th Century and the early part of the 20th, were largely controlled during the immediate post WWII years, but then the financial markets were deregulated and those crises are now reoccurring. America has now once again largely became an oligarchy.
TL:DR; too many people have been getting away without consequences for too long. Heads need to roll or it won’t stop.