by Tom Wright
Deutsche Bank was not buying Geh’s excuses, and, just before Christmas Day in 2014, Low took a drastic step, ordering senior executives at the fund to destroy all documents at 1MDB’s headquarters in Kuala Lumpur. Low was a phantom presence at 1MDB, rarely in the offices but exerting his power through executives who would carry out his wishes without question. Most of the smart Ivy leaguers had left amid concerns about Low; those who remained were loyalists.
This demand, however, to erase the data of a multi-billion-dollar sovereign wealth fund reeked of desperation. Lower-level employees were told to bring their laptops and cell phones to the IT department, where staff wiped them clear of all data. Even information on the fund’s mainframe computer was obliterated. As an excuse, executives told staff there had been a hacking of 1MDB—that was how Sarawak Report had obtained the emails—and this was the only way to ensure security.
The action was not rational. A company that’s facing a hacking threat can simply take its servers offline. Not long after, the physical servers went missing, too. This was an attempt to erase history, and it was a sign Low was running out of options. For years, he had thrived, leveraging his proximity to Prime Minister Najib to run 1MDB in secret. Over the years, he exhibited an inhuman tolerance for risk. The flipside was that Low rarely looked to the future: He had no contingency plan, no idea of how to get out of this mess, and now he was panicked.
But his hapless maneuvering didn’t work. There were copies of documents in multiple locations—Justo had access to some key ones—making it impossible for Low to smother all traces of the fund’s existence. Deutsche Bank kept pushing for documents, and Geh eventually was forced to doctor 1MDB’s accounts and Brazen Sky’s bank statements at BSI to make it appear the cash was still there.
The 1MDB fund’s chairman, Lodin Wok Kamaruddin, who was in close contact with Najib, informed the board, in a meeting on November 25, 2014, that there was no choice but to sell assets and wind down operations as soon as possible. Interest costs alone were more than $800 million per year and the fund was close to default. The IPO looked ever more like a pipe dream. Before the fund could be wound up, however, Xavier Justo pulled the trigger.
Chapter 42
The Exposé
Singapore, January 2015
Ho Kay Tat strode into the sunlit atrium of the Fullerton Hotel in Singapore, accompanied by his boss, chairman of the Edge Media Group, Tong Kooi Ong. The imposing gray-granite neoclassical building had served as the scrappy colony’s Central Post Office in the 1900s but was now a well-known five-star hotel at the mouth of the Singapore River, towered over by the glass-and-steel skyscrapers of the financial district.
As the pair entered the Fullerton, Clare Rewcastle-Brown came over and informed them her contact was waiting in the lounge area. She had briefed them on a source with information on 1MDB, but they had been expecting a Malaysian, and they got a shock when Rewcastle-Brown led them to Justo, a tall, charming Swiss man sitting in a comfy chair. It was late morning, and over coffees, Justo showed a sampling of the emails from PetroSaudi, repeating his demand for payment of $2 million.
“We need to verify the authenticity of the emails first,” Ho replied.
Although she refused to pay him herself, since meeting Justo Rewcastle-Brown had been searching for someone to supply the money. The Edge’s publisher, Tong, was an obvious choice. Since founding the Edge two decades earlier, Tong had built up a staff of 350 people and a reputation as Malaysia’s only true independent newspaper proprietor. He’d agreed to meet Justo, and brought along two independent IT experts to verify the information.
That afternoon, the group reconvened in one of the Fullerton’s meeting rooms, where the IT experts pored over Justo’s hard disk, taking a few hours to sift through the reams of emails and documents. The experts scoured for evidence of tampering, looking at the hidden metadata within files to ascertain whether anyone had made alterations after the date of creation.
Computer users leave a “digital fingerprint,” and, though they could not be 100 percent sure, the IT experts concluded that, in their opinion, the files had not been tampered with. The group then discussed how to pay Justo. He didn’t want cash, and he was worried a large transfer into his accounts might lead to complications with bank compliance executives. He left agreeing to find a way to receive the money at a later date, but handing over the hard disk.
“I trust you,” Justo said to the group.
Rewcastle-Brown and Ho Kay Tat had their hands on the journalistic scoops of their careers.
Before they had time to sift through the hundreds of thousands of documents provided by Justo, the New York Times published a front-page story on Low on February 8, 2015. The Times piece, part of a series about dodgy foreign money in the Time Warner building, detailed his accumulation of U.S. properties and painted him as a bagman for the prime minister’s family, buying apartments and mansions and passing them on to Riza Aziz. It noted how Low’s story had changed, from being a “concierge” for rich friends to being a billionaire claiming that he was investing family money. The Times also pointed out how Red Granite’s principals had once put forward Low as an investor, but of late had started mentioning Al Husseiny. And the newspaper noted Rosmah’s penchant for expensive jewelry.
“Neither any money spent on travel, nor any jewelry purchases, nor the alleged contents of any safes are unusual for a person of the prime minister’s position, responsibility and legacy family assets,” Najib’s office said in a statement to the Times.
The Times piece rippled through Malaysia, picked up by those news outlets that Najib couldn’t control. The statement from the prime minister’s office was the last straw for Najib’s four brothers, who for years had complained inside the family about Rosmah’s spending. The first lady was increasingly out of touch, a Marie Antoinette–like figure who recently had complained to a public gathering about the $400 it cost to dye her hair, a monthly wage for some Malaysians. The brothers decided to put out a rare statement to counter the inference that their father, Prime Minister Abdul Razak, had taken money while in office.
“We take issue with anyone who taints his memory, whatever the motive,” the brothers wrote. It was a thinly veiled dig at Najib and Rosmah.
But it was too late to salvage the family name.
By late February, Rewcastle-Brown was ready to publish. After years of suspicions about 1MDB and Low, her story, posted on February 28, was headlined “Heist of the Century,” and it drew back the curtain on the early days of the fund’s operations. The piece showed with documentary proof how Low had siphoned money from 1MDB via Good Star, the first time anyone had detailed how Low took money from the fund in 2009. She embedded documents into her story to give it added heft: One email showed Shahrol Halmi, the chief executive, pushing Deutsche Bank to send money to Good Star; another document named Seet Li Lin as the investment officer for Good Star, the shady Seychelles company, linking it to Low; and there were agreements for Good Star to pay tens of millions of dollars to Tarek Obaid. Rewcastle-Brown had hit the mother lode, and days later the Edge would follow up with its own investigative scoop.
The news of Low’s apparent theft caused a civil war within UMNO. A faction led by Mahathir called openly for Najib to resign. Some senior politicians even arranged to tap the prime minister’s phone and heard him discussing with Jho Low a plan to put the blame for any corruption on 1MDB’s Middle Eastern partners. Until the dust settled, Najib ordered Low to leave the country and keep a low profile. In public, the prime minister denied any wrongdoing at 1MDB but nevertheless ordered an official government investigation of the fund, led by the National Audit Department, a body tasked with checking state finances. The Public Accounts Committee of Parliament, headed by an UMNO politician, began to clamor for answers. The committee ordered Low to appear before it, but no one knew his location.
For years, Low must have been expecting this day to come. How could he believe it possible to take so much money, revealing parts
of the scheme to a prime minister, a Saudi prince, Malaysian bankers, and the head of an Abu Dhabi sovereign wealth fund, while keeping the full contours of its audacity to himself?
In the days after the Sarawak Report scoop, Low acted as if he’d steeled himself for this situation all along. Many people, caught in the act of something much less felonious, would crumble and admit all. Najib was even talking to family members about stepping down. But Low was ready to fight. It was a survival instinct, for sure, but perhaps after years of fabrication, he found it hard to perceive the hard line that divided truth from falsehood. Maybe he really did believe he was benefiting Malaysia, building ties with foreign governments and raising the nation’s profile.
As the news broke, the Malaysian was traveling the world on his jet, and he sent off a barrage of messages to his associates. He told Khaldoon Al Mubarak, the chief executive of Mubadala, that Malaysia’s government had found no evidence of wrongdoing. The reports were based on “fabricated” emails from PetroSaudi. “We expected these few months to be filled with noise, innuendo and misinformation from certain political quarters,” Low wrote Al Mubarak. He blind-copied Ambassador Otaiba, showing his ally how he was trying to keep the situation under control.
“Please note the ‘Sarawak Report’ exposé is sensationalized, filled with innuendo and baseless accusations,” he messaged Joanna Yu at AmBank. Yu did not respond; she was too busy closing Najib’s accounts. Finally, under pressure from AmBank’s board and amid a constant shortage of funds, the prime minister had to acquiesce. For Yu, the scope of what she was involved in was revealing itself. Of course, she knew it was illegal to keep an account secret, even one controlled by the prime minister, and to hoodwink the central bank and the board. But the scale of Low’s scheme was probably far from her imagination.
A few days after Low’s last messages to Yu, Malaysian police raided AmBank. They moved through the bank’s headquarters, a skyscraper close to the Petronas Towers in Kuala Lumpur, asking to be directed to Yu’s desk, where they demanded she hand over her computer and phones. She complied immediately. There were no other senior executives left at the bank for the police to question. Her former boss, Cheah Tek Kuang, had gone into retirement months earlier. Ashok Ramamurthy had resigned as AmBank’s chief executive in a hurry in early March, to return to a job with ANZ in Australia, and soon after he would leave the bank entirely.
In the wake of the Sarawak Report story, Malaysian law-enforcement agencies felt emboldened to take action, setting up a task force to investigate the 1MDB affair. The group included Bank Negara, the National Police, the Malaysian Anti-Corruption Commission, and the attorney general, the country’s top public prosecutor.
The evidence taken by police about Najib’s accounts, including Yu’s phone messages with Low, painted an extraordinary picture. In the ensuing weeks, officials at Bank Negara Malaysia, under Governor Zeti Akhtar Aziz, combed through the documents from the raid, revealing a stunning fact: The prime minister had received more than $1 billion into his personal accounts between 2011 and 2014. The biggest payments, totaling $681 million, were from an unknown company called Tanore, which had an account at Falcon Bank in Singapore. Given the explosive nature of its discovery, the task force decided not to reveal the information to the public for now.
The Sarawak Report story made no mention of Najib’s accounts. And, as yet, the central bank had no evidence the prime minister had received money from the 1MDB fund, but it began to cast its investigatory net in a wider arc. Bank Negara reached out to Singapore’s police for information on Jho Low’s accounts. The Suspicious Transaction Reporting Office wrote back on March 13 that a company account at BSI in Singapore owned by Low had received $500 million between 2011 and 2013 from Good Star. This was the company Sarawak Report had mentioned, and it appeared to reveal another step in the money flows, but it didn’t connect 1MDB to the prime minister.
Still, the probe had momentum, and Singapore, normally keen not to upset the equipoise of its lucrative private banking world, began to dig in.
“If proceeds of crime have been transferred to Singapore, we would like to consider whether an offense has been committed,” Chua Jia Leng, head of the suspicious reporting office, wrote Bank Negara.
Authorities in Malaysia and overseas were closing in. As Low and Najib were trying to contain the fallout, another major figure was in peril: Khadem Al Qubaisi of IPIC.
Chapter 43
Buttocks in a G-String
Tel Aviv, Israel, April 2015
Behind an office building in Tel Aviv, the flames of an impromptu bonfire melted the plastic of several USB sticks. Two men stood watching over the fire. One, Mohamed Al Husseiny, the chief executive of the Abu Dhabi fund Aabar, was there to ensure its contents were incinerated. Al Husseiny, who had helped Low take money from the 1MDB bonds arranged by Goldman, watched as singed bits of paper from a stack of burning documents floated into the sky. They included secret files and photos that risked bringing the career of his boss, Khadem Al Qubaisi, crashing down. The documents had been removed from Al Qubaisi’s home and office in France by Racem Haoues, a French-Algerian man. Over years of corrupt deals, Al Qubaisi had made a raft of enemies, and Haoues was among them.
For years, Haoues acted as a glorified butler for Al Qubaisi, arranging cars, jets, and reservations while also occasionally passing messages between his boss and people making discreet payments. Haoues was handsomely remunerated, but he must have become increasingly envious as he saw Al Qubaisi and subordinates like Al Husseiny line their pockets with hundreds of millions of dollars in kickbacks. In a magnanimous moment, Al Qubaisi said he would throw him a morsel—a stake in a big real estate play in Spain—but he later reneged on the deal. Soon after, in early 2015, Al Qubaisi fired him. But Haoues already had an insurance policy: Over time he had amassed a raft of compromising information on his former boss.
The documents included Al Qubaisi’s bank statements, details of his multiple French properties and payments on Sheikh Mansour’s yacht, Topaz. Haoues leaked a selection of the documents to Clare Rewcastle-Brown, who published a story in late March 2015, just weeks after her exposé on Jho Low. The piece outlined how a Luxembourg company owned by Al Qubaisi had received $20 million from Good Star, Low’s shell firm, in February 2013. It was accompanied by photos, also supplied by Haoues, of the IPIC managing director partying around the world. In one shot, he was dancing in a club while a topless model cavorted in an oversized cocktail glass. In another, he was making out with a woman on a sofa, behind some shisha pipes. Yet more photos showed him in clubs, wearing T-shirts with lewd images, including one that featured a close-up of female buttocks wearing a G-string. It was common for wealthy Gulf residents to shed modest Arab dress in the West, but these bawdy party photos were beyond the pale—especially after they were publicly disclosed.
Haoues had only given a drip of his total information to Rewcastle-Brown. According to a later complaint, filed and then withdrawn, Haoues, through an intermediary, set about trying to extract money from Al Qubaisi, warning that—if he did not pay—more material would come out. The material touching on Sheikh Mansour’s business was extremely sensitive. Acting for his boss, Al Husseiny helped arrange a transfer of 30 million euros to Haoues in return for the destruction of the documents. After the payment was made, Al Husseiny traveled to Tel Aviv, where he and an intermediary for Haoues built their bonfire.
Al Qubaisi hoped further trouble had been averted. With the continued backing of Sheikh Mansour, he might have believed himself to be untouchable and more dominant than ever. Within the past year, Al Qubaisi had put his half a billion in 1MDB money to work, purchasing a penthouse in New York’s Walker Tower for $51 million, and two mansions in Los Angeles for a combined $46 million. As chairman of Hakkasan Group, a nightclub empire owned by Sheikh Mansour, he had become one of Las Vegas’s most powerful businessmen.
Around the time of Haoues’s blackmail threat, Al Qubaisi launched the Omnia nightclub in Caesa
rs Palace. Its name meaning “the sum of all things” in Latin, Omnia was the most expensive nightclub ever built, at over $100 million, and could host more than 3,500 revelers. Al Qubaisi’s domain featured a 22,000-pound light-emitting, kinetic chandelier, hovering like a UFO over the main dance floor, along with state-of-the-art liquid-crystal displays, “opera boxes” that looked down on the main club, and an outdoor terrace with views of the Strip. The opening night in March 2015 featured superstar DJ Calvin Harris (who was paid hundreds of thousands of dollars a night to perform), and Justin Bieber celebrated his twenty-first birthday at the club over the star-studded weekend of festivities.
But Al Qubaisi’s optimism was misplaced. Crown Prince Sheikh Mohammed Bin Zayed Al Nahyan, the ruler of Abu Dhabi, had decided to take action. The dealings of his brother Sheikh Mansour, overseen by Al Qubaisi, had gone too far. The crown prince ordered a discreet investigation into Al Qubaisi. With his brother completely in the dark, investigators piled up evidence of financial wrongdoing, painting a picture of Al Qubaisi as a man who had grown too powerful, failing to respect the royals for whom he worked.
On April 22, 2015, a presidential decree ousted Al Qubaisi from IPIC, without explanation. A few months later, his subordinate, Al Husseiny, was kicked out of Aabar, the IPIC subsidiary. Al Qubaisi was in Spain at the time for business, and initially brushed off the change as a temporary issue and attended a football game between Real Madrid and Atlético Madrid in the evening. He didn’t realize the seriousness of his predicament: Sheikh Mohammed was cleaning house. In the Gulf, the ruling families were protected; but Al Qubaisi was in danger.