Corruption Trial Begins For Malaysia's Former Prime Minister Razak
STEVE INSKEEP, HOST:
This could be a pitch for a Hollywood film. You've got a government official with a reputation for corruption. You've got a con man who steers money to that official and to himself. Then you've got a movie star who unwittingly plays a role in all of these plans, and then a trial when it all goes wrong. This is actually a true story, and that trial is underway today in Malaysia where former Prime Minister Najib Razak faces a range of corruption charges in what's being called the 1MDB scandal, named for the slush fund that is involved. Rachel Martin discussed the case with Tom Wright, who's a Wall Street Journal reporter who broke this story back in 2015 and has followed it since.
TOM WRIGHT: Well, this is probably the largest corruption scandal ever to have occurred. It started in 2009 when the Malaysian prime minister at the time, Najib Razak, wanted a political slush fund to stay in power. And he leaned on a 27-year-old Malaysian financier called Jho Low, who he allowed to run a sovereign wealth fund. Low helped him to funnel money around the world and $1 billion into Najib's account that Najib then used to pay off politicians in his home country. But unbeknownst to Najib, Jho Low then used billions more to fund a billionaire's lifestyle. He partied with Hollywood celebrities. He bought storied U.S. companies, like EMI Music Publishing. He became a billionaire in his own right.
RACHEL MARTIN, BYLINE: This scandal implicates specific celebrities, right?
WRIGHT: He really liked Paris Hilton, so he got her to turn up to a lot of his parties. He also got to know Leonardo DiCaprio. He told Leonardo DiCaprio that he had $400 million to fund films. You know, DiCaprio didn't really know who this guy was, but this sounded good. And so these guys set up a film company called Red Granite Pictures, which went on to make "The Wolf Of Wall Street" and was going to make other films with DiCaprio and Scorsese before the whole thing sort of came tumbling down.
MARTIN: And he was doing that all with proceeds from this Malaysian fund?
WRIGHT: Yes. This wasn't a traditional sovereign wealth fund. This was a fund that went and raised money on global markets, and it did so with the help of Goldman Sachs - this is where Goldman comes into this story. Goldman helped the fund raise $6.5 billion going to global investors, and more than half of that money was pilfered by Jho Low and his associates and used, you know, for all these purposes. And Goldman is now the center of a U.S. investigation into what happened. One former Goldman partner, a gentleman called Tim Leissner, has pleaded guilty in the case to helping Jho Low funnel hundreds of millions of dollars around the world.
MARTIN: Who is he?
WRIGHT: Well, he is a guy who grew up in Penang, an island in Malaysia. He had a good start in life. His parents were fairly wealthy. They were involved in the garment trade. But he went to Harrow, the U.K. boarding school, when he was 16, and that really threw him into the world of the super-rich. He was friends with the sultan of Brunei's son, for example. And then he went to Wharton, the business school in the U.S., where he again continued to make connections with the sons and daughters of Arab business people. And that was really his great skill. He was a master networker. He was able to find out who was really important in a room and get to know them.
You know, he also got to know the son of Najib Razak, Malaysia's prime minister. And so he was able to sort of use all those connections. And that was one way that he bamboozled compliance people at banks because whenever he was sending hundreds of millions of dollars around, he'd always say, oh, this is for a Saudi sheikh or this is for, you know, Malaysia's prime minister. And that's one of the ways that he succeeded for so long.
MARTIN: So this guy, Jho Low, got away with this for years. How were you able to uncover it?
WRIGHT: Well, at first, I should say that Jho Low's still getting away with it. He is believed to be living in China. He's been indicted late last year in the U.S. He's been indicted in Malaysia when Najib lost power last year. So, you know, justice hasn't been served in this case. It's ongoing. We found out, through documents we got a hold of, that $681 million had found its way into Najib Razak's account while he was prime minister of Malaysia, and that's how we first started to get involved in this. But it took us from 2015 until last year, when we published "Billion Dollar Whale," to really uncover the full sweep of this scandal because it's so complicated. It involves everyone, from Goldman Sachs, to Christie's, where Jho Low bought a lot of his art, to the auditors who signed off on all these accounts, like KPMG and Deloitte, and the numerous others. I mean, the fact that he got away with it is a failure of capitalism.
MARTIN: So what happens next?
WRIGHT: There is an Interpol Red Notice out for his arrest. It doesn't seem that China is doing anything. One of the reasons could be that very late in this fraud, after it had all been exposed by us and others, Jho Low went to China, and he helped to do infrastructure deals involving Chinese state-owned companies, and those deals look like they were also corrupt. So he knows something about all of that, and that could be one reason why they're not really that keen to give him up to Malaysia - to the new government there that wants him to come back to face justice. So it's very unclear what's going to happen.
MARTIN: Tom Wright of The Wall Street Journal, thank you so much for sharing your reporting on this. We appreciate it.
WRIGHT: Thank you.
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