by Tom Wright
For Low, Al Qubaisi’s downfall removed one of his closest conspirators. It was unclear how deeply Abu Dhabi’s rulers would probe—surely they didn’t want to embarrass Sheikh Mansour—but Low recognized the ouster was dangerous for him, and he took immediate action.
Less than a week after the ax had fallen on Al Qubaisi, Low flew by private jet to Abu Dhabi on a damage-control exercise. With Al Qubaisi out of the picture, Low was laying the groundwork to put the blame on his former partner; if the full story about the money stolen via IPIC ever came out, Al Qubaisi, already a fallen man, could take the responsibility. Low had ensured his name wasn’t attached to documents, but the signatures of Al Husseiny and Al Qubaisi were all over the place.
“There’s rumors going round that I’m a buddy of Al Qubaisi, and money has gone missing. But it’s an internal IPIC issue if some of the money 1MDB sent is not showing up in IPIC’s accounts,” Low told Shaher Awartani, Ambassador Otaiba’s business partner, in one meeting.
In another meeting with the new head of IPIC—Suhail Al Mazroui, Abu Dhabi’s energy minister—Low portrayed himself as a savior who could chart a course out of the wreckage left by Al Qubaisi. By now IPIC’s new management had gone through the financial statements and were beginning to see that billions of dollars it should have received as collateral for guaranteeing 1MDB’s bonds were missing. Alarmingly, the Abu Dhabi fund was on the hook for $3.5 billion in bonds that 1MDB had sold and didn’t seem able to repay.
The Malaysian fund was on the brink of default. Deutsche Bank, finally aware of the problems with the Cayman Islands collateral, was demanding early repayment of its total $1 billion in loans. Low offered a solution: IPIC would stump up the $1 billion to avoid a default, and in return Malaysia’s Finance Ministry, which Najib also headed, would agree to ensure IPIC was fully repaid in cash and assets. It was unclear how the fund would raise such money—the IPO was on hold amid all the bad news—but IPIC’s new chief had little option but to accept. Al Qubaisi appeared to have been involved, and he was keen to keep a lid on the scandal. After speaking with Najib, Minister Al Mazroui agreed to the arrangement, and both sides soon after signed a formal deal.
Low had other problems bubbling that he needed to sort out in Abu Dhabi. Ambassador Otaiba was concerned about queries he had received from BSI. As Singapore authorities ramped up their probe, BSI had been forced to make a show of auditing all accounts related to 1MDB and Jho Low. The bank was in chaos. Hanspeter Brunner, the head of BSI in Asia, put Yak Yew Chee, Low’s relationship manager, on unpaid leave in the spring.
In return for his bonus, the bank’s head of compliance in Lugano attempted to wring a signed declaration out of Yak that he had received no “gratification” in dealing with 1MDB and Low. Unwilling to be singled out as a scapegoat, Yak took off to rural China to bide his time, and quickly fell into a depression brought on by stress. The bank’s compliance department had begun to investigate all Low-related business, and that had led them to contact Otaiba and Awartani, whose shell company, Densmore, had an account at BSI.
“You should close your accounts. The bank is too much in the limelight. I’ve moved out most of my major assets and will close the remaining accounts soon,” Low advised Awartani in their meeting.
Then he set about enlisting his help. Low told Awartani he wanted to buy his own bank as a parking spot for his money—and that of friends and family—and had just the candidate: an Amicorp Bank affiliate in Barbados. Low had used Amicorp for many transactions, and its bank was on the auction block for $15 million. But Low needed a front, and he wanted to know if Equalis Capital, a Dubai-based financial firm controlled by Otaiba and Awartani, would be willing to acquire the bank. Already alarmed by the events of the past few months, Awartani was noncommittal.
Instead, Low shifted some of his accounts to Amicorp’s bank. He also looked for other new places to stash his money. For help, he once again turned to Tim Leissner. The German Goldman banker was willing to help, writing a letter of reference in June 2015 to Banque Havilland, a small but illustrious Luxembourg private bank. At this stage, few banks would touch Low, but Leissner’s letter, falsely stating that Goldman had conducted due diligence on Low’s family wealth, opened doors. It was a decision that would seal the banker’s fate.
Low was taking actions to shut down scrutiny of 1MDB and to hide his own assets. But this piecemeal approach wouldn’t do. It was too reactive. He needed to make a more aggressive move—to fire a warning shot across the bows of anyone thinking of crossing him.
Chapter 44
Strongman Najib
Koh Samui, Thailand, June 2015
On a hazy, hot tropical afternoon in late June, Xavier Justo was relaxing at his villa on the island of Koh Samui. Suddenly, armed Thai police burst in and muscled him to the floor. Once officers had secured the suspect—tying his hands so tightly with plastic cuffs that his wrists bled—they ransacked his office, carting off computers and other documents. He was flown to Bangkok, where a convoy of police SUVs drove him across the city to a holding cell.
Two days later, still wearing his beach outfit—a gray Hugo Boss T-shirt, cream shorts, and flip-flops—Justo was paraded in front of the media in Bangkok. As the Royal Thai Police chief reviewed details of the case, five commandos in dark shades and brandishing machine guns stood ominously over Justo, whose hands were still cuffed. On a table nearby stood the computers taken from his residence. This was the kind of dramatic staging Thai authorities reserved for drug kingpins, not someone charged with attempted blackmail and extortion.
Awaiting trial, Justo was placed in a Bangkok jail with fifty other prisoners. The stench of urine and the lack of floor space, or even a mattress, made it impossible for him to sleep. He was relieved when a former British police detective, Paul Finnigan, who ran his own consultancy, turned up to visit. Finnigan was working with PetroSaudi, but he told Justo he was a police officer investigating the case.
Finnigan offered Justo a deal: Plead guilty to the charges and he would get out of jail before Christmas. Tarek Obaid would help him, Finnigan promised, but only if Justo was cooperative. A few days later, Mahony arrived at the jail cell, and made similar promises, according to a complaint Justo later filed. Stressed from the ordeal, and yet to have been given legal representation, Justo signed a twenty-two-page “confession,” in which he apologized to PetroSaudi for stealing the documents and negotiating to sell them to the Edge.
This was phase one of a plan to discredit Justo, cast doubt on the authenticity of the emails, and blame Malaysia’s political opposition for stirring up trouble for the prime minister. His resolve galvanized by Rosmah, who called the situation a “test from Allah,” Najib was not going to resign so easily.
“We have been the victims of a regrettable crime that has unfortunately been politicized in Malaysia,” PetroSaudi said in a statement.
The day after the arrest, the New Straits Times, an English-language newspaper owned by the ruling UMNO party, published a piece quoting an unnamed spokesman from Protection Group International, a London-based cybersecurity and corporate intelligence firm, as saying it had reviewed the leaked emails and found evidence of tampering.
The firm, owned by a former British Royal Marine, had been hired by PetroSaudi, but it had conducted only a review of a few documents available on the Sarawak Report website. Now, its private review for PetroSaudi was being plastered over UMNO’s party mouthpiece. Only Najib, or other senior UMNO politicians, could dictate to the New Straits Times what to write. After its publication, Low quickly forwarded the story to Khaldoon Al Mubarak of Mubadala, the Abu Dhabi sovereign wealth fund, to mislead his allies in the Gulf into believing that the PetroSaudi emails were somehow fake.
A month later, Justo was still languishing in jail, awaiting his trial, when a Singapore journalist turned up for an interview. The reporter had provided the questions ahead of time, and Finnigan supplied Justo with prearranged answers. Justo told the journalist how the Edge had failed to
stick to its promises to pay him, and now he made a new claim: During the meeting in Singapore with Rewcastle-Brown and the principals at the Edge newspaper, the buyers had talked about how they planned to modify the documents he provided.
Justo repeated the claims in another meeting with Malaysian police officers, his answers scripted by Mahony and Finnigan. Justo had to help Malaysia’s prime minister by blaming Rewcastle-Brown, and at all costs he was to avoid mentioning Jho Low, they told him. Since the publication of the Edge’s stories, Ho Kay Tat and four other staffers had been detained by Malaysia’s police under the Sedition Act and then let go, in what appeared to be a clear act of intimidation. Najib’s administration also recently had brought in a new law, on the surface aimed at curbing terrorism, but permitting suspects to be held indefinitely.
No evidence emerged supporting the claims of tampering; Justo was under huge pressure from Mahony and others to back their version of events. Ho responded with a note on the Edge’s front page, denying the newspaper had paid anyone or tampered with the documents. The publication, he wrote, had a “public duty to find and report the truth.”
So far, Prime Minister Najib had stayed out of the fray, but that was about to change. The Malaysian government task force, led by Bank Negara and the Malaysian Anti-Corruption Commission, had pored through thousands of financial transactions in the prime minister’s accounts. The biggest incoming payments—$681 million from Tanore—were still a mystery, and the investigators were no closer to knowing who controlled the company or why it had paid money to Najib. Even governments could not easily see behind the veil of offshore secrecy, and Trident Trust, which had set up Tanore in the British Virgin Islands, only knew that Eric Tan was the ultimate beneficial owner, not Jho Low.
But investigators had been able to trace a much smaller amount of $14 million from 1MDB to one of the prime minister’s accounts. The Malaysian Anti-Corruption Commission, whose job was to build major cases for the attorney general to prosecute, believed this smaller payment was sufficient grounds for criminal charges. But there was a hurdle: Some members of the task force, especially the National Police, were objecting to moving ahead to frame charges against a sitting prime minister. The only option was to leak the documents detailing Najib’s financial transactions.
Just as the task force was looking for a candidate, we published a front-page story in the Wall Street Journal, the most detailed piece yet on how Najib had used 1MDB as a slush fund. The story caught the eye of an intermediary for the task force. A few days later, a Malaysian source met in London with Simon Clark, a Journal reporter, to confirm the veracity of the documents, which the intermediary handed over hours later. Sarawak Report also received them. The files, copies of wire transfer documents into Najib’s accounts, as well as money-flow diagrams produced by the task force, were explosive.
Under the headline INVESTIGATORS BELIEVE MONEY FLOWED TO MALAYSIAN LEADER NAJIB’S ACCOUNTS AMID 1MDB PROBE, the Journal reported on July 2 how the task force had traced the money into Najib’s accounts via 1MDB-linked entities.
After months of conjecture about the prime minister’s involvement, and his fervent denials of wrongdoing, the story was a tipping point, splaying the issue across the pages of one of the world’s most well-known newspapers. The Journal story was among the most-read online items of the year, garnering more than a quarter-million unique visitors online. Now the 1MDB story had a global audience. A few days later, we reported how Singapore was investigating payments made to Jho Low.
The Edge could have its publication license revoked, but now Najib was faced with the Journal, an organization that didn’t rely on his goodwill to remain in operation. With few other options, the prime minister came out swinging, realizing this was a fight for political survival. Within a week, the Journal received a letter from Najib’s lawyers asking for the newspaper to clarify its position on the story or possibly face a lawsuit. The Journal’s lawyers responded that the paper was standing behind its piece. Najib also took to Facebook to paint the allegations as the work of Mahathir Mohamad, the former leader, who had intensified his calls for the prime minister to step down over 1MDB.
“Let me be very clear: I have never taken funds for personal gain as alleged by my political opponents,” he said in a Facebook post. “It is now clear that false allegations such as these are part of a concerted campaign of political sabotage to topple a democratically elected Prime Minister.”
The Journal story galvanized the Malaysian task force into action. Members of the group shared further password-protected documents on their investigation with the Journal. The password for many of the files: “SaveMalaysia.”
On July 24, Attorney General Abdul Gani Patail informed Malaysia’s police chief that he was drawing up criminal charges against the prime minister. He was preparing to take the document—known in Malaysia as a “charge sheet”—to a judge, the first step in seeking the prime minister’s arrest. The document, laying out charges against Najib, noted how the payments were illegal under section 17 (a) of the Malaysian Anti-Corruption Commission Act of 2009, a provision proscribing the giving or receiving of bribes and that carried a maximum jail term of twenty years.
Najib’s room to maneuver was narrowing fast. Even Deputy Prime Minister Muhyiddin Yassin began to make speeches quoting from the Wall Street Journal and demanding a transparent investigation on 1MDB. But the police chief, supposedly part of the task force, decided to switch sides at the last moment, and informed Najib of his impending arrest.
Overseas, the prime minister was considered charming and a democrat. Only months earlier, he had given a speech at Malvern, his old boarding school in England, in which he thanked his teachers for instilling in him “decency, discipline and perseverance.” A politician needs at least two of these, he quipped to laughter. No one perceived Najib as either decisive or ruthless. But now, fearing he could end up in jail, a steelier edge to his character came into focus. At this crisis point, raw power was all that mattered.
On July 27, 2015, three days after Najib got wind of the charges against him, he breezed into the ballroom of Kuala Lumpur’s Hilton Hotel for a dinner to celebrate Eid-al-Fitr, Islam’s holiest festival. Thousands of people, the great and good of Malaysian society, had assembled for the event, and the conversation revolved around the country’s mounting political crisis. Most of the guests expected that Najib would soon be political history. Dressed in a Malay-style purple silk shirt, the prime minister took his place at a table reserved for VIPs, shaking hands with many of the UMNO politicians who wanted him gone. Only the prime minister knew the fury he was about to unleash on those disloyal to him.
The morning after the dinner at the Hilton, Attorney General Abdul Gani Patail arrived at his office to find the way barred by staff and security from the prime minister’s office. Abdul Gani no longer had a job and could not even enter the office to collect documents, they informed him. An hour later, Najib replaced the head of the Police Special Branch, who had been instrumental in the probe into the prime minister’s accounts. Later in the day, a fire broke out in police headquarters, destroying scores of documents.
Najib fired Deputy Prime Minister Muhyiddin and four other cabinet members, and he suspended the Public Accounts Committee’s probe into 1MDB. The prime minister sought to cow other critics, including the media. The Home Ministry suspended the Edge’s publication licenses for three months, claiming its reporting on 1MDB could lead to public disorder. In one brutal house clearing, Najib had solidified his control on power.
Days later, British Prime Minister David Cameron flew into Malaysia for an official visit. He’d just given a speech in Singapore about how Britain needed to stop corrupt cash from flowing into London’s property market, where Malaysians were among the biggest buyers. In private, he pressed Najib on the corruption claims, and Malaysia’s human rights record. Najib was furious at the lecture by Cameron. His love affair with Western democracies was over.
As Najib battled to stay i
n power, Jho Low was forced to cancel his participation in a National Geographic expedition, which would include Leonardo DiCaprio, who was filming Before the Flood, his documentary about global warming. The Journal published its stories about Najib’s accounts and Singapore’s investigation of Low just as he was about to set off.
As he dealt with the fallout, Low sent his parents in his stead. DiCaprio, a Victoria’s Secret model who accompanied the actor, Low’s parents, and a group of National Geographic scientists spent three days flying helicopters over the receding ice sheet in Greenland and filming polar bears. Afterward, DiCaprio announced his foundation was donating $15 million to environmental organizations, including National Geographic, which Low also had funded.
By August, with the prime minister’s crackdown in full swing, Low felt reassured enough to fly by private jet and helicopter to join the Equanimity in the seas off Greenland. For over a week, he went completely dark, visiting the National Geographic scientific camp, and stunning people who were seeking regular updates on developments.
“He literally traveled to the end of the earth and went completely offline,” said a Middle Eastern contact.
Perhaps Low was feeling confident the worst was over. Maybe he wanted to make a show of business as usual, clinging to his image as a philanthropist. On his return, he nonchalantly wrote another contact: “I apologize for my late response as I have been on a conservation expedition in the Arctic with limited coverage.”
Or maybe the trip was like a gambling session, a short break from people calling and demanding answers. He exhibited few other signs of confidence, and he seemed increasingly agitated that Najib would burn him. Over the summer, he told a 1MDB board member: “If they sacrifice me, I’ll go nuclear. I was acting on the instructions of the boss.” The prime minister had warned Low to stay out of the country as the crisis deepened, and he began to lay low in Bangkok, the capital of Thailand, and Shanghai, China’s financial capital, where he stayed in the residences of the Peninsula Hotel. Unbeknownst to all but his closest contacts, he had also obtained a new passport from the tiny island nation of St. Kitts and Nevis.