Daniel Halliday
May 15 · Last update 18 days ago.

What happened in the Malaysian 1MDB corruption case?

The 1Malaysia Development Berhad development company was a government run fund to drive strategic initiatives to act as a long-term boost to the Malaysian economy, by driving direct foreign investment. However suspicion surrounding the company’s transactions finally led to numerous investigations internationally, with former President Najib Razak and many individuals linked to him largely implicated in money laundering, criminal breach of trust and abuse of power. What are the implications and significance of this scandal and what can be done regarding the fallout from it?
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Bank facilitated corruption
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Jho Low and the wider environment of corruption
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Saudi involvement
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Fault of the government
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One of the biggest corruption scandals in history
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Bank facilitated corruption

With the recent deal struck between Jho Taek Low and the United States Department of Justice the Malaysian government and the 1MBD case look severely weakened, as the Low family and the Trump administration seem to be the only parties standing to gain from the outcome of this scandal. The loose ends and responsibility are not a finished story however as the Department of Justice’s case is based on allegations of money laundering, with Jho Low cleared of wrongdoing the only party left who are criminally implicated in the case are the Goldman Sachs investment bank. The implication and lesson to take away from the 1MBD scandal then is that international money laundering schemes are predicated on a corrupt international banking system that allows and facilitates this sort of actions to go on. A system that even takes the blame when law enforcement become involved, securing an environment of impunity around the international elite criminal class.

business.financialpost.com/investing/global-investor/canadian-banks-help-chinese-flout-their-laws-to-get-piece-of-smurfing-billions intpolicydigest.org/2019/11/02/jho-low-is-absolved-by-the-department-of-justice-where-can-mahathir-go-from-here

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Daniel Halliday
Nov 3
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Jho Low and the wider environment of corruption

While the case of the 1Malaysia Development Berhad scandal has largely centred on the culpability of ex-Prime Minister Najib Razak, the story of mastermind fugitive fraudster Low Taek Jho seems much more telling and suspicious. In October 2019 Jho Low reached a settlement with the US Department of Justice, relinquishing $900 million of contested assets in return for a comprehensive pardon, but judging by his fugitive reaction to the 1MDB investigation and ties to other international scandals. Furthermore Lows political actions in Malaysia and the United States have earned him further criticism, with Malaysian government opposition describing his fund raising for Razaks government as electioneering, and a US Justice Department employee being found guilty of lobbying against the US investigation. While Najib Razak's reputation may have suffered during this scandal there appears to be a wider environment of corruption underlying the 1MDB case which now seems to include impunity surrounding the scandals mastermind.

straitstimes.com/asia/se-asia/jho-low-doj-settlement-high-powered-legal-team-led-by-ex-new-jersey-governor-chris abc.net.au/news/2019-05-29/malaysian-corruption-fugitive-implicated-in-kpop-sex-scandal/11159466 theedgemarkets.com/article/jho-lows-role-1mdb-kept-hidden-protect-najib-%E2%80%94-shahrol nst.com.my/world/2018/12/436259/us-justice-official-pleads-guilty-1mdb-lobbying-case#cxrecs_s

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Daniel Halliday
Nov 3
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Saudi involvement

In mid 2015 it became clear that the Saudi Royal Family had donated 2.6 billion Malaysian ringgit to Najib Razak’s personal bank account. While the Saudi foreign minister has claimed that this was a “genuine donation with nothing expected in return” it has become clear during the Malaysian 1MDB scandal that the Saudi Royal Family are guilty of directly or indirectly interfering in Malaysian politics and/or possibly laundering money. It is still not clear if this “donation” is linked directly to money from the 1MDB state fund, but either way it is some form of interference in Malaysian politics, something Malaysians should be very concerned about.

bbc.com/news/world-asia-36051474

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Daniel Halliday
Nov 2
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Fault of the government

Regardless of the actions of Najib Razak such scandals can only occur due to the failure of the usual checks and balances in a country with a long-term history of corruption. Although vital institutions were rendered defenceless as the country was robbed the scandal has caused a crisis of confidence in the Malaysian government and voters are recoiling against such practices which could rejuvenate the democratic process in the country. Currently PricewaterhouseCoopers (PwC) are auditing 1MDB, but further government oversight is obviously needed in Malaysia and better stricter auditing rules for funds and companies seems an obvious first step and a necessary step in the right direction for a less corrupt Malaysia.

aljazeera.com/news/2015/10/royal-rulers-deplore-malaysia-crisis-confidence-151007064312312.html

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Daniel Halliday
Jul 11
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One of the biggest corruption scandals in history

Najib Razak was arrested in 2018 by the Malaysian Anti-Corruption Commission over a suspicious transaction of over $10 million in his personal bank account from 1MDB sovereign fund. Thanks to whistle-blower Xavier Justo a fuller picture of this scandal came to public attention. Justo, a former employee of PetroSaudi released documents that showed the company was part of a money laundering web of companies that helped associates of Najib in siphoning off over $700 million from the 1MDB fund, the fund itself with a debt of $11.73 billion by this time. Such large sums of money are unprecedented even for a country with a history of corruption like Malaysia, causing many journalists to refer to this as the biggest heist in history.

theguardian.com/world/2016/jul/28/1mdb-inside-story-worlds-biggest-financial-scandal-malaysia

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Daniel Halliday
May 15
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