Najib’s sixth mistake in one week: the continued RCI hearings into Bank Negara forex losses a quarter of a century ago while no RCI on the elephant in the room - 1MDB scandal which turned Malaysia into a global kleptocracy overnight
Two days ago, I spoke about Datuk Seri Najib Razak as a very disaster-prone Prime Minister who made history by committing five political disasters within a week.
But I had under-estimated Najib, as I am today writing about Najib’s sixth political disaster within a week, while tomorrow, I will deal with Najib’s seventh political disaster within a week – from Sept. 12 to 19.
The six political disasters within a week which started from Sept. 12 are:
- Najib’s visit to the White House and meeting with US President Trump on Sept. 12, without any sense of personal shame or national humiliation at being branded a “kleptocrat” and “MO1” by the US Department of Justice (DOJ) largest kleptocratic litigation to forfeit US$1.7 billion 1MDB-linked assets in US, UK and Switzerland, and his subservient role with a supplicant role to Trump to the extent of offering up as homage three “value propositions” to strengthen the US economy.
- Najib publicly labeled as a “crook” by former World Bank President Paul Wolfowitz and Newsweek magazine on Sept. 13, and Najib dare not sue them for defamation.
- Najib’s speech at the MCA-organised Chinese Community Patriotic Assembly at the UMNO HQ in Kuala Lumpur on Saturday, Sept. 16, where he threatened the Chinese saying that “the Chinese community would be targeted should Malaysia ever descend into chaos…If there is no peace in our country, what will happen? The Chinese will be the first to be targeted if there is no peace in this country.”
- The perfunctory manner in which Najib as Prime Minister celebrated Malaysia Day on Sept. 16, spending less than 24 hours in Sabah to attend the official Malaysia Day events in Kota Kinabalu at night while completely ignoring Sarawak altogether.
- The Prime Minister’s much-hyped pre-media conference announcement on Sept. 17 at 4.45 pm, resulting in the swarming by over 100 reporters from all over the world at the media conference, but which produced a dud in Najib’s latest “swamp politics” – “Mike Tyson” rejoining UMNO after a sojourn in PAS and PKR from April 2013.
- The continued hearing on Sept. 18 of the farcical Royal Commission of Inquiry into Bank Negara foreign exchange losses a quarter of a century ago, while there is no RCI on the elephant in the room – the international multi-billion dollar 1MDB money-laundering scandal which turned Malaysia into a global kleptocracy overnight.
Yesterday, former Prime Minister Tun Dr. Mahathir Mohamad and former Finance Minster, Tun Daim Zainuddin, were sub-poenaed to testify at the RCI.
I was most struck by the following exchange between Daim and the RCI Chairman, Tan Sri Mohd Sidek Hassan as reported by Malaysiakini and The Malaysian Insight, viz:
11am: Daim insists he would have stopped the central bank's forex activities if he had known about the losses incurred.
Sidek, earlier, cites former auditor with the Auditor-General's Office P Kanason who questioned the legality of the central bank's forex activities.
"Kanason took the trouble, he took his responsibility seriously....Kanason who was so small in the scheme of things.
"You, (then a) minister, so good, (but) didn't know. I find that very odd."
Daim, however, argues that he could not agree as he "did not know anything", to which Sidek retorts back with "but everyone knew!"
To this, Daim says he would have stopped the forex activities if he had known.
"If I knew, I would have stopped it, no way I would have allowed this to happen. I would have sacked (those responsible)," he stresses. (Malaysiakini)
And the following report in The Malaysian Insight:
Pressed by Sidek on why he did not know what was going on in the central bank, Daim kept repeating that he simply was not informed.
“If I knew these things, there's no way I would have allowed it to happen. I would have sacked them. But I do not know how to act. There needs to be logic in your thinking,” said Daim, the RCI’s 23rd witness.
Sidek replied: “The illogical part, Tun (Daim), is that everyone seems to know, and you do not know. With respect, Tun, the Official Secrets Act is to protect information on the people who are supposed to know. In this case, you are supposed to know.”
Other panel members said Daim, as the then finance minister, was obliged to have known about BNM’s forex dealings as the law governing the central bank required it.
“If they chose not to inform me, what could I do?” Daim said.
He added that as finance minister, he had to oversee many things, such as the Employees Provident Fund, the economy and the Customs Department.
He said the government at the time had shares in 1,200 companies.
Sidek said while he did not expect the finance minister to know everything, something as significant as forex trading losses, which impacted the nation, should not have escaped Daim’s attention.
He added that he found it odd that other lower-ranking officials, citing former senior auditor P. Kanason Pothinker as an example, had known about the forex losses, and yet, Daim had not.
“And you, as a minister who was so good, didn’t know. I find that so odd. Don’t you agree?” said Sidek.
Daim replied: “How can I agree or disagree when I wasn’t informed?” (The Malaysian Insight).
I have no doubt that every Malaysian reading these reports would immediately think of the 1MDB scandal.
Could there be a RCI on 1MDB in 2018, and there would be one such RCI if Pakatan Harapan wins in the 14GE as this is a Pakatan Harapan commitment in its first 100 days of forming the Federal Government in Putrajaya.
Or do Malaysians have to wait may be until 2050 for a RCI into 1MDB if Najib continues as Prime Minister after the 14 GE?
But whether there is a RCI on 1MDB next year or in 2050, a relevant question would be why the Prime Minister, the entire Cabinet, Members of Parliament and the key officials of the period (and Sidek was one of them as he was chief secretary of government from 3rd September 2006 till 24th June 2012) did nothing to stop the 1MDB scandal when it was known, not only in Malaysia, but in the whole wide world that Malaysia had ascended to the heights of a global kleptocracy because of the 1MDB scandal?
I am reminded of a recent article by Malaysian business journalist, P. Gunasegaran entitled “The difference between forex and 1MDB losses”, who said it was wrong to say that 1MDB’s losses are paper losses and will be recovered.
He pointed to the differences between the two and wrote:
The forex losses arose out of a desire to make money for the country even if it were by highly irresponsible and irregular speculative activities bordering on gambling by a central bank. Never before or since has a central bank engaged in such activities and made such losses.
However, no individual or corporation associated to Mahathir or the government of the day made money from the losses that the central bank made. That is the important distinction when compared to 1MDB.
We now know from press reports that US$7 billion is unaccounted for in 1MDB and that the DOJ maintains that RM4.5 billion has been stolen from 1MDB and the money moved through various accounts controlled by Jho Low, a person who is well-known to Najib’s stepson Riza Aziz and even to Najib himself and his wife, Rosmah Mansor. Indeed, the DOJ says that US$680 million came directly into Najib’s bank account while US$238 million went to Riza’s account.
Jho Low could not have moved such amounts of money into his account without the connivance and collaboration of 1MDB officials but there has been no investigation to determine wrongdoing with Najib, the government, the attorney-general, and all senior Umno officials still maintaining that no wrong has been done despite overwhelming evidence to the contrary.
The forex losses have been made and occurred 23 to 26 years ago. They represent a huge error of judgement and improper conduct by a central bank. But the 1MDB money stolen is still in the world banking system and the money is still being moved around into various assets as the DOJ investigations show.
1MDB does not require an RCI now but immediate attempts to recover all stolen money and bring to account everyone responsible for this horrendous crime, representing kleptocracy by the state which has allowed fingers to dip in and take out nearly all of the bond borrowings of 1MDB. The scale of this and the necessary connivance is unprecedented too.
1MDB represents a new chapter in the annals of corruption and mismanagement by the government led by Umno. The RCI will eventually get to the bottom and make official what many people in Malaysia knew all the time – forex trading was a harebrained gamble to make money for the country gone horribly wrong.
But if 1MDB is to be righted now instead of having the truth revealed a quarter of a century down the line through another RCI, it needs a change of government, for the government controls all the supposedly independent bodies that should be investigating 1MDB now. We all know who was responsible for that.
What have the Prime Minister, the Cabinet, Sidek and the RCI commissioners on the Bank Negara forex losses, have to say on this commentary by Gunasegaran?
Mahathir said the RCI was meant to paint him, Anwar Ibrahim and Pakatan Harapan in a bad light.
This is clearly the sole purpose for Najib in setting up the RCI on Bank Negara’s forex losses.
Unfortunately, Najib’s plans went awry when the key RCI witness, former Bank Negara advisor Nor Mahamed Yakcop and the key operator of the Bank Negara forex dealings at the time, Tan Sri Nor Mohamad Yakcop testified on Sept. 6 at the RCI that he accepted his fair share of accountability for Bank Negara’s forex losses in the late 1980s and early 1990s, and that he never discussed the forex transactions in the years between 1986 and 1993 with both the then Finance Minister Datuk Seri Anwar Ibrahim and the then Prime Minister, Tun Mahathir.
The question Najib should answer is why continue with the charade of the RCI on Bank Negara forex losses more than a quarter of a century ago, when he is not prepared to immediately form a RCI into the 1MDB scandal and even more imperative, urgent and relevant, to immediately attempt to recover all stolen money in the 1MDB scandal and bring to book and justice all the criminals in the 1MDB scandal.