By: Clare Rewcastle Brown<\/p>\n
The background to Malaysia\u2019s East Coast Rail Link (ECRL) project, due\nto begin operations in January, is widely known among Asia watchers. The\nproposal had been worked on for decades as an important development\ndriver designed to connect the mainly agricultural areas on Malaysia\u2019s\neast coast with the more urbanised west coast region, and also Port\nKlang at the exit of the Malacca Strait facing the Indian Ocean and\npotential export markets beyond.<\/p>\n
In mid-2016, the project was due to go out to tender after the cost\nwas estimated by the East Coast Economic Region Development Council to\nbe in the region of RM30 billion (just over $10 billion dollars at\ncurrent rates). However, then Prime Minister Najib Razak had other\npriorities at that time, as it marked the height of the 1MDB sovereign\nwealth fund scandal, by then fully in the public eye following a year of\nexposures and reporting kicked off by my online site, The Sarawak\nReport. Asia Sentinel was one of the key regional media that kept\nrunning with a story that was eventually picked up globally.<\/p>\n
Extraordinary theft<\/p>\n
Najib, now sentenced to 15 years in prison, had only himself to blame\nfor the situation, given he had authorised the wholescale looting of the\nfund, which he had set up under his sole control in his simultaneous\nrole as Minister of Finance. One Malaysia Development Berhad, to give\nits full name, was allegedly designed to borrow money to drive\ndevelopment, however its real purpose was to fund political patronage.\nMoreover, Najib\u2019s co-conspirators, including his informal fixer, the\nyoung Chinese Malaysian, Jho Low, siphoned off hundreds of millions for\nthemselves and were indulging in headline-catching ostentation. By this\npoint, the fund\u2019s debts stood at RM11 billion, of which over RM5 billion\nhad been outright stolen by Najib and his collaborators.<\/p>\n
On July 20, 2016, a year of denials from the Malaysian government\nthat 1MDB\u2019s mounting debt was due to poor governance, let alone grand\nlarceny, came to a humiliating juncture. On that date, the US Department\nof Justice took the groundbreaking step of initiating its first major\nasset seizure by its new Kleptocracy Asset Recovery Unit, freezing over\n$1.7 billion of property deemed to represent the laundering of stolen\nmoney from 1MDB in the United States. This included the rights to the\nLeonardo DiCaprio movie, The Wolf of Wall Street, a bombardier jet, two\nBeverley Hills Mansions and New York apartments belonging to Najib\u2019s\nstepson and to Jho Low, the key proxy and fixer behind the fund.<\/p>\n
Malaysia was dumbfounded. Najib, clearly identified as \u201cMalaysian\nOfficial One\u201d in the DOJ filing, continued to deny all, however he was\non a major hook over the debts that needed repaying. The original\nscenario, mapped out by his advisors from Goldman Sachs, had been to\nfloat the fund and encourage the public and pension funds subject to\ninfluence by his own Ministry of Finance along with government-linked\ncompanies to inject much-needed cash to plug the holes in 1MDB\u2019s\naccounts. The floatation could no longer survive such publicity. Tim\nLeissner, the Goldman Sachs Southeast Asia boss, is now also imprisoned\nin the United States for the role he played in raising $6.5 billion\ndollars in Goldman Sachs bonds for 1MDB, of which around half went into\nthe pockets of Najib, Jho Low, himself and a dozen other fund managers\nand officials from the Gulf.<\/p>\n
In a corner, Najib had sent Jho Low to China to explore a bailout\nfrom Beijing. This was to prove rapidly successful. However, the relief\ncame with major strings attached, including the delivery of the East\nCoast Rail Link into the orbit of China\u2019s Belt & Road initiative,\nbypassing the original tender, at a 100 percent mark-up.<\/p>\n
China and Najib<\/p>\n
The full story behind China\u2019s extraordinary collaboration with Najib\nand Jho Low in their attempted cover-up of the 1MDB theft \u2013 by stealing\nfurther billions of dollars from the Malaysian people and then\nlaundering it back into the fund \u2013 has only been possible to fully piece\ntogether over time. It forms the substance of my new book The China\nContract, which has ironically coincided with a closed-door settlement\nof key outstanding issues between the two countries relating to that\nmutual participation in a shameful episode. In my book, I reveal that\nsummit negotiations between the two countries last year resulted in\nChina waiving an outstanding debt owed by Malaysia of some $3 billion in\nreturn for a pledge to not include Chinese state companies and banks in\nthe ongoing quest for reparations from firms caught up in facilitating\nthe world\u2019s largest recorded kleptocracy.<\/p>\n
I received my first inkling of what was going on almost immediately.\nJust one week after the DOJ press conference, I was leaked a copy of an\nextraordinary document that mapped out the deal. The document outlined\nin precise detail the terms agreed by Jho Low following meetings with\nthe state-owned Assets Supervision and Administration Commission (SASAC)\nin Beijing days before.<\/p>\n
The ECRL would be removed from public tender and converted into a\nChinese Belt & Road project funded through loans from China and\nconstructed by Chinese companies. In return, China would facilitate a\nproject inflation theft by Najib whereby the cost would be doubled to\nRM60 billion, half of which would then be laundered back to 1MDB to pay\nits debts. The document spelled out 1MDB\u2019s debt repayment schedule over\nthe next five years and specified the method by which Chinese banks and\nChinese companies would channel the money out of the project.<\/p>\n
My publication of this scoop rightly resulted in more scandal for\nNajib and more denials. Nonetheless, in November of that year, the prime\nminister flew to Beijing to sign off on the project along the very same\nterms. Moreover, he tied Malaysia into a wider Belt & Road Treaty\nthat involved important realignments in defense and further major\ninfrastructure, including two oil pipeline projects that conveniently\nallowed for 8<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/imdbs-china-connection-1790041847", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }