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The Malaysian dirty money with links to the City of London

NAJIB RAZAK was Malaysia’s prime minister from 2009 until May 2018, when Malaysian voters kicked him out in an election where allegations of his personal corruption were a big issue. 

At the start of this month Razak was arrested and charged with corruption on a huge scale. He is charged with diverting billions of pounds out of Malaysian public funds into his own and his associates’ pockets.

There is a good chance the trial will uncover a huge, corrupt money trail that leads repeatedly to Britain, showing that the City of London is at the centre of the international movement of dirty money. 

It also looks like top British politicians of both parties were repeatedly on the wrong side of this movement of “dirty money.”

It’s hard not to think that the British Establishment is as comfortable with corruption as its friends in the City.

Razak has been handling big money. Malaysian police also raided his house this month, where they found 284 boxes of designer handbags and 72 bags of cash and jewellery.  

They also found 114 ringgit — that’s £23 million — in cash in his house. Razak claimed this was money from his political party, the United Malays National Organisation, which he was looking after. 

It’s also pretty small change for Razak, since $681m — that’s £514m — was put in his personal bank account in 2013. Razak claimed this was a personal gift from the Saudi royal family and not corrupt money.

The biggest source of potential corruption is the 1MDB scandal. US prosecutors say that at least £2.6 billion was looted from the Malaysian public investment fund called 1MDB. 

This public fund was supposed to help Malaysian development, but US officials say it was turned instead into an “international public corruption and a global money-laundering conspiracy” by a “kleptocracy,” as money flowed into the pockets of businessmen linked to Razak.  

The Malaysians might want to talk to Britain’s Coutts Bank, as some of the 1MDB transactions flowed through the bank. Coutts was fined £5m by Swiss regulators for dubious 1MDB-linked transactions last year.  

As the Queen’s own bank and a subsidiary of publicly owned RBS, Coutts could not be more “Establishment.” It is chaired by former Tory minister Lord Waldegrave, who joined the Coutts board in 2012.

The whole 1MDB scandal, which helped lead to Razak’s fall, may not have been revealed without Swiss whistleblower Xavier Justo and investigative website the Sarawak Report, which began exposing the affair in 2014. 

Justo worked for Saudi firm PetroSaudi, which is implicated in the 1MDB scandal. He took a brave stand, leaking emails and files which indicate huge corruption around 1MDB. 

The Sarawak Report, which is a small but very impressive investigative new website run by Clare Rewcastle Brown,  led the world’s reporting of the massive 1MDB scandal.  

However, PetroSaudi tried to fight back and rubbish the exposure of the scandal by Justo and the Sarawak Report. 

It hired a British security and intelligence firm called Protection Group International that tried to discredit both Justo and the Sarawak Report in 2015.  

Protection Group International tried to smear the whistleblower and the Sarawak Report, saying their exposure of 1MDB corruption was the work of “greedy or malicious employee” and likely “plain forgery.”  

It was defending PetroSaudi and also 1MDB against the corruption allegations. 

Justo was actually sent to prison for a time for leaking material, in a nasty, unjust attempt to silence the whistleblower. 

So Protection Group International attacking his reputation was a dirty trick with potentially very serious consequences. It could offer no justification for its smears and the forthcoming court case against Razak is likely to prove the Protection Group very wrong. 

I think the only thing Protection Group International could rely on was its supposed “respectability.” Where did this supposed respectability come from?

Two Labour lords, Baroness Symons and Lord Paul Boateng, respectively a former Foreign Office minister and former Treasury minister under Tony Blair, are both paid members of the “advisory board” of Protection Group International. 

Lord Boyce, Britain’s chief of defence staff until 2003, is also Protection Group International’s senior adviser. 

Yet again, big figures in the British Establishment are on the wrong side of the 1MDB scandal.

Razak’s corruption may go beyond 1MDB. In June Anwar Ibrahim visited Britain. He was the opposition leader imprisoned by Razak, who now helps lead the new government’s coalition.  

Ibrahim said he wanted to check whether the £1.6bn investment by Malaysian state funds this January in the huge Battersea Power Station luxury development was a “dubious” deal.  

Perhaps the Malaysian government made the right decision when it invested in luxury property in London. 

Either way, top figures in the British Establishment are involved in the deal. Tory Lord Strathclyde, a Cabinet Office minister under David Cameron, is an adviser to the Battersea Power Station Development Company. 

I don’t know how aware many of these Establishment figures were aware of the 1MDB scandal and how it touched their companies. 

But I think they should have been aware. I think they should have been the ones saying: “Don’t touch anything to do with 1MDB.”
What we are seeing with the 1MDB scandal is that the City of London loves money and doesn’t really care that much about corruption. 

British banks, City institutions, the “security consultants,” lawyers, accountants that support them and the luxury property industry have all again and again been found at the wrong end of corruption. 

However, the political will to reform the City and its hangers-on is weak, because City institutions offer well-paid careers to politicians.

 

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