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The Global City

Unnoticed in the blizzard of "Russian collusion" news coverage are the dramatic events in Malaysia where the ruling party lost its 60 year old grip on power over voter anger at what has been dubbed the largest financial scandal in history.  It was "a stunning, sudden fall for Najib Razak, Malaysia's 'Man of Steal'", wrote the New York Times. The fall was from the great height of nearly $5 billion abstracted from the 1Malaysia Development Berhad, the country’s state investment fund, known as 1MDB. “1MDB was a key factor in the election result,” said one NYT source. “The long-running scandal became indelibly associated with the endemic high-level corruption in the country.”  It is also a case study in global money laundering.

Much of the stolen money wound up in the US. The American part of the Malaysian story deserves examination.  According to Wikipedia:

In June 2017, the U.S. Department of Justice began moves to recover more than US$1 billion from people close to Najib and 1MDB.  Assets include high-end properties in Beverly Hills, Los Angeles, Manhattan, New York City and London.  Also included in the assets seizure was fine artwork, a private jet, a luxury yacht and royalties from the film Wolf of Wall Street and its production company Red Granite Pictures.  On 28 February 2018 Indonesian authorities seized the luxury yacht linked to the 1MDB investigations in waters off Bali on behalf of the FBI. And on 7th March 2018 in Californian courts, the producers of the 'Wolf of Wall Street' agreed to pay $60m to settle Justice Department claims it financed the movie with money siphoned from 1MDB.

One of Razak's alleged henchmen was Malaysian businessman Jho Low, an aspiring player on the globalized business scene.  He was the very model of the global man.  A graduate of Harrow and Wharton business school,  Low had connections with China,  Singapore and the Middle East.  He was reputedly close to Riza Aziz, the stepson of now deposed Najib Razak.  Aziz himself was cut from the same cloth. "Riza holds a BS degree in Government & Economics and an MS in Politics from the London School of Economics. ... In 2010, with producing partner Joey McFarland, Aziz co-founded Red Granite Pictures, an American film finance, development, production and distribution company."

Both these worthies were eventually named in a massive DOJ forfeiture action seeking the recover of assets purchased by money stolen from 1MDB .  The methods used to loot the Malaysian sovereign fund are instructive. Some money was moved under cover of a private Saudi oil extraction company into a Swiss bank account named Good Star Limited. Others funds were obtained by diverting 1MDB proceeds raised "through two separate bond offerings arranged and underwritten by Goldman Sachs" and guaranteed by an investment fund wholly owned by the Government of the UAE. Yet a third bunch of money was abstracted through a third bond offering arranged by Goldman in March 2013 -- this time to Singapore.  In 2014 another $850 m was siphoned away under the guise of buying back options from a shell company they themselves created. No masks or firearms were involved.  During all this time the alleged malefactors were not hiding in some safe house but were out in the open hobnobbing with the rich and famous. Picture this scene: