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This article first appeared in The Edge Malaysia Weekly on January 13, 2020 - January 19, 2020

IT was Jan 5, 2016, barely five months after Datuk Seri Najib Razak sacked his deputy and another Cabinet minister for openly speaking out about the 1Malaysia Development Bhd (1MDB) issue. He had also removed the Attorney General who headed the task force investigating the US$620 million that went into the then prime minister’s bank account and suspended The Edge and The Edge Financial Daily for its reporting on the issue.

A man identified as Tan Sri Dzulkifli Ahmad, then with the Attorney General’s Chambers (AGC), made a late-night call to a woman identified as Datin Seri Rosmah Mansor to inform her that the investigation paper by the Malaysian Anti-Corruption Commission (MACC) that he had just received was bad for her husband.

When Najib, who was apparently watching golf on TV, came on the line, Dzulkifli told him the same thing — that the MACC had made “very bad” recommendations.

“How could this be?” asked Najib. “I was not involved at all.”

“It is very clear here, Datuk Seri. The IP [investigation paper] is with me,” Dzulkifli said.

Najib responded, “How could Abu Kassim [then MACC chief commissioner Tan Sri Abu Kassim Mohamed] say one thing and do another thing? If the matter comes out, it will leave a bad taste.”

This conversation between Najib and Dzulkifli was one of the nine audio recordings of conversations — said to have occurred between Jan 5 and July 29, 2016 between Najib and several people — released by the MACC at a press conference last Wednesday.

That phone call from Dzulkifli in January 2016 marked a bad start to the new year for Najib after what was a harrowing 2015, when the 1MDB scandal broke.

After exposés by The Edge, Sarawak Report and The Wall Street Journal, Najib sacked those he felt were acting against his interests. He also initiated action against MACC officers who were directly involved in the investigations, in particular, the first round of investigations that involved SRC International Sdn Bhd.

Recall that Najib had used the police to raid the MACC headquarters and arrest a few MACC officers. In the end, all were released but later transferred out. Abu Kassim also met with then Inspector-General Tan Sri Khalid Abu Bakar and it was believed then that the two men had reached a compromise to cool down the situation between the two law enforcement agencies.

Going by Najib’s remarks in his conversation with Dzulkifli in the audio recording, it appears that the compromise was for the MACC to clear him of any wrongdoing.

“How could Abu Kassim say something and do something else?” an exasperated Najib asked Dzulkifli.

Dzulkifli replied: “Sorry, Datuk Seri, I think you were really played [out].” He went on to say that he and the new Attorney-General Tan Sri Apandi Ali could handle the matter, but he was worried about details of the MACC’s recommendations, as contained in the investigation paper, leaking out.

“There are more than 20 people [in the know]. How do we cover up?” he said to Najib.

On Jan 26, 21 days after that conversation, Apandi appeared on TV to clear Najib of any wrongdoing in the SRC case as well as the receipt of the US$620 million, which has since been proven to have originated from 1MDB.

And on Aug 1, Najib tied up loose ends by appointing Dzulkifli as MACC chief, taking over from Abu Kassim.

The audio recording released last week has provided clarity and context to what happened at and with the MACC then.


But Abu Kassim did not give up

Although he was unable to get the new AG Apandi to act against Najib and was eventually removed, Abu Kassim had apparently already set in motion a plan to get help from the US authorities.

In an Al Jazeera interview last week, Michael Hershman, president and CEO of risk management firm Fairfax Group, said Abu Kassim was under a lot of pressure and placed under surveillance.

“It was at that point that Abu asked if I could pass on documents to the US prosecution authorities in New York and to arrange a secret meeting [between the two].

“Unfortunately, as a result, he was faced with charges of treason for assisting a foreign prosecution authority in its investigation of the 1MDB scandal,” said Hershman, who claimed to know Abu Kassim through an Interpol commission.

But clearly, Abu Kassim’s attempt to reach out to the US Department of Justice (DoJ) contributed to swift action being taken. The DoJ filed a civil lawsuit in July 2016 to claim over US$1 billion in assets in the US, said to be part of US$4.5 billion misappropriated from 1MDB.

Najib was identified as “Malaysian Official 1 (MO1)” in the US DoJ forfeiture suit.

What really worried him and Rosmah was the fact that their son’s name, Riza Shahriz Abdul Aziz, was clearly spelt out. Riza was accused of receiving funds siphoned from 1MDB through the Hollywood production house he co-founded, Red Granite Pictures.

This put immense pressure on Najib, on top of ongoing investigations in Switzerland and Singapore, which were among countries the 1MDB money trail led to.

The audio recording released last week gives a peek into what Najib did behind the scenes immediately after the DoJ announced its civil forfeiture action.

He called the United Arab Emirates (UAE) Crown Prince Mohammed bin Zayed Al Nahyan for help. In the recording, Najib told the crown prince that Riza “genuinely believed” the funding for Red Granite’s production came from Aabar Investments PJS, a unit of International Petroleum Investment Co (IPIC), which is owned by the UAE.

“You see, the problem is relatively small, if there can be an agreement with Sheikh Mansour [IPIC chairman Mansour bin Zayed Al Nahyan] to have a loan agreement signed, and he [Riza] will pay back according to schedule.

“That will show that it is a legitimate financing package. It is not money laundering, you see,” said Najib.

“I don’t want him to be a victim when he was strictly unaware about the source of money. He genuinely believed it was from Aabar, and under the instruction of Sheikh Mansour.

“So I need that agreement to be sorted out quickly, Your Highness. That is my special request. As soon as possible,” Najib added at one point.

The crown prince said he would try his best. He rejected Najib’s request, how­ever, for a face-to-face meeting. He instead opted for Najib to communicate with his adviser Khaldoon Al Mubarak, but Khaldoon also refused to a meeting initially.

The UAE already had its hands full handling the controversies related to the misappropriation of 1MDB funds, said to be channelled to entities under the Emirati nation.

It was investigating its own officials — IPIC managing director Khadem Al Qubaisi and CEO of Aabar, Mohammed Badawy Al Husseiny.

At the time, IPIC had claimed US$6.5 billion from 1MDB in an arbitration, on grounds that 1MDB did not fulfil its obligation on the loans guaranteed by IPIC.

1MDB claimed to have paid US$3.5 billion to companies carrying the name of Aabar, but which were incorporated in the British Virgin Islands and the Seychelles. IPIC denied receiving the funds and claimed that it was not linked to the fake Aabars.

In other recordings, Rosmah was heard pressuring Najib one week after the US DoJ lawsuit on how to move the UAE to drop the arbitration.

“I don’t like this. You are the prime minister, you should take charge. Not anybody else, okay?

“Maybe Khaldoon have to come here and talk to you … settle it. Not just talking over the telephone and all, it doesn’t work,” Rosmah said.

“And in the meantime, we can also sort out Riza’s problem. Riza’s problem is not — it is just that, you know, somewhere along the line, the thing was not completed. Itu je!

“Then talk to the crown prince,” she added. “Tell him [to send] Khaldoon here to talk to us and settle it once and for all. Darling, we’ve wasted one week already.”

It was not until April 2017 that 1MDB and IPIC finally agreed to an out-of-court settlement. But that settlement has been challenged by the Pakatan Harapan government and is now the subject of litigation in a British court.

While the release of the recordings has triggered much debate about whether MACC should have done it, there is no doubt that the conversations have shed more light on the frantic attempts by Najib, Rosmah and their cohorts to try and cover up the wrongdoings that had taken place.

Finally, a brief remark by Najib to Rosmah after she complained that he was moving too slowly to tackle the problem is interesting.

He said: “A lot of things are moving already. They want to see some movement on the other side, the Chinese side ... the Chinese side is moving already.”

Might Najib have been referring to the railway and gas pipeline deals — signed in 2017 — with China that we now know were inflated in value as part of the plan to siphon billions to cover the 1MDB hole?

Perhaps the MACC will release the recordings about the China deals soon.



The loan agreement trick

Datuk Seri Najib Razak’s appeal to the Crown Prince of UAE to help get a loan agreement done to “cleanse” the money Riza Aziz obtained to fund the movie The Wolf of Wall Street was not the first time a loan agreement had been used to cover money stolen from 1MDB and laundered.

In fact, this method had been used from the very start.

Recall that when 1MDB sent out US$1.0 billion in September 2009 as its investment with PetroSaudi International, it was suddenly told that the JV had a US$700 million loan that had to be paid off. This was used to justify paying US$700 million to Good Star International, whose beneficial owner was Jho Low. This was the first of the many thefts of 1MDB money.

Months later, when pressure was put on 1MDB by its auditor EY (which was eventually sacked) to account for the investments in the JV, 1MDB decided that instead of an investment, the US$1.0 billion had been converted into a US$1.0 billion loan to PetroSaudi.

It was nothing more than a fake loan because the money had all been stolen and spent, as we now know.



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