CORRUPTION, VANITY & PURE GREED: THE STORY OF NAJIB RAZAK’S 1MDB SPILLS OUT ON THE WORLD STAGE

The story of 1MDB is, by any measure, an extraordinary tale. The Malaysian state investment fund unravelled earlier this year under a flurry of international probes whose repercussions reached from Asia to Hollywood and toppled a government.

Ostensibly founded by Najib Razak — the former Malaysian prime minister who was voted out of office after an election dominated by the scandal and that ended six decades of his party’s rule — 1MDB was masterminded by Jho Low. In the words of the authors of Billion Dollar Whale, the Harrow alumnus and as classically “crazy rich Asian” as they come, conceived “one of the greatest financial heists in history”.

The fund’s money, mainly debt cycled through a web of offshore vehicles, was supposedly to fund domestic infrastructure. Instead it was blown on the likes of champagne, casinos, the production of the film The Wolf of Wall Street and acquiring artworks such as Jean-Michel Basquiat’s “Dustheads”. To be fair, there was also the odd deal.

As in George Orwell’s Burmese Days, another tale of corruption, vanity and greed in a tropical backwater, few come out of this story well. Everyone is on the make; even the movie stars who appeared, for a price, at 1MDB parties.

The richly woven story, as told by Tom Wright and Bradley Hope, who reported on 1MDB for the Wall Street Journal, includes an impressive cast of characters, spanning Saudi royalty and rappers, actors and Goldman Sachs bankers. Ex-Victoria’s Secret model Miranda Kerr and former US president Barack Obama make several appearances. Fortuitously for the authors, so do a clutch of bit-characters who felt insufficiently rewarded by those further up the food chain for their role in the affair. Revenge came in gigabytes — one trawl contained almost 500,000 emails — which supplemented dogged reporting and a rich Instagram trail documenting a world of topless girls cavorting in oversized cocktail glasses.

The result is the detail and vicarious pleasure afforded by reading celebrity magazines. Low’s first office restrooms had automatically adjusting toilet seats, depending on the height of the occupant. Khadem al-Qubaisi, managing director of Abu Dhabi sovereign wealth fund IPIC, has a penchant for lewd T-shirts, monogrammed cigars and pumping iron.

Occasionally the authors get carried away. They describe the last fateful journey of Kevin Morais, an anti-corruption investigator who, getting too close to the truth, was run off the road, bundled into an oil drum and set in cement. As he drove to the office, Morais “tried to focus on his latest case, one involving a Malaysian Army pathologist charged with running a medical procurement scam”. That’s an impressive insight given he’s dead a matter of hours later.

Like all good business stories, Billion Dollar Whale is bigger than the immediate one it tells. It is a story of emerging markets crippled by corruption and cronyism and comes from the era of egregious — and mostly punishment-free — banking. Their profits from a 1MDB deal made it “one of Goldman’s biggest paydays of the year”, the authors write.

Malaysian deals fitted in with Wall Street’s new narrative: facing fines and increasing restrictions at home in the wake of the financial crisis, bankers were seeking new markets in which to practise their wizardry. Yet, as in 2008, few people cried wolf. The combination of a prime minister, blue-blooded bankers and connections proved Teflon for a long time. Domestic media that refused to toe the line, notably The Edge, had their licences removed.

Frustratingly for the authors there are many loose endings. As they note at the beginning, no public charges of wrongdoing have been filed against most of the major characters, Razak excepted, and all have denied committing crimes and maintained the transactions were legal.

Low, who has previously denied any wrongdoing, has since been charged in Malaysia with money laundering. He has disappeared, apparently hunkered down in China. His $250m superyacht too, the Equanimity (this is a tale not short on irony) is now “a wasting asset”, Bloomberg reported last month, that the government is seeking to sell.

And the money continues to make inconvenient appearances: the two authors recently reported links to Chris Christie, saying the US Justice Department is investigating whether Low used laundered funds to pay a legal team that included the former New Jersey governor and a lawyer who represents President Donald Trump. Christie’s spokesman told the reporters the DoJ had not contacted the ex-governor over any such matter.

One thing is clear. If ever Hollywood gets round to telling the story on screen, here is perfect material for the script.

– FT.com