Najib Shouldn’t Be Smiling Much in New York

PM Najib arrives in NYC

By Guest Blogger: Rusman

As Malaysian Prime Minister Najib Razak arrives in the United States, he can expect that his movements, meetings, and activities will be closely scrutinized, not only by the Malaysian public and media but by U.S. law enforcement.

On September 21, it was reported by the New York Times that the Federal Bureau of Investigation and U.S. Justice Department’s Kleptocracy Asset Recovery Initiative is investigating both the $11 billion of losses of 1MDB but also the transfer of $700 million of funds into Prime Minister Najib’s personal account from an unnamed Middle Eastern source. Earlier the Wall Street Journal reported that the FBI has started investigations into allegations of money laundering related to 1MBD.

This joins the already announced investigations by Singapore, Switzerland, Hong Kong, and United Kingdom. One has to assume there is a certain amount of coordination going on behind the scenes to get to the bottom of what is going on.

Ordinarily, a foreign leader would have little to worry about in his or her dodgy transactions, as long as they weren’t completed in U.S. dollars. But a little focused on but essential fact about this story is that Mr. Najib received his $700 million in U.S. dollars and all dollar-denominated transactions must pass through and be subject to the full law enforcement jurisdiction of the United States. It appears Najib’s love of all things American may get the better of him.

Buried in the details of the news reporting is that the $700 million, allegedly from a Middle East donor, came via an offshore fund through a Swiss private bank via Wells Fargo & Company, an American bank. Most of the funds transferred to Mr. Najib’s account were transferred out after the 2013 elections to unknown recipients as well.

Given the Prime Minister has acknowledged this was his personal bank account – and all of that money came through the United States – unless every source and use of those funds has been legal, depending on how the facts unfold Najib could be subjected to a raft of criminal laws in the United States from criminal conspiracy to wire fraud to violations of the Foreign Corrupt Practices Act or to violations of the Racketeer Influenced and Corrupt Organizations Act.

Prior news reports have suggested that a wave of Malaysian money was spent in New York and beyond in recent years by family and associates of Najib to buy expensive real estate. Every one of those transactions, holding companies, and persons who touched any part of those deals could be subject to Federal subpoena demanding answers to questions about these transactions. And once a few people have been caught up in the net and have struck their own deals for immunity, the pieces could fall into place and point back to the Prime Minister.

If these investigations uncover fraudulent or corrupted transactions that lead back to Prime Minister Najib, he, his family, and his associates could all be indicted for the commission of Federal crimes in the United States and any proceeds of these corrupted transactions could be seized and forfeited. Anyone under indictment could find themselves subject to an international arrest warrant, or Red Notice, issued by INTERPOL, and find themselves facing extradition to the United States on the various charges relating to grand corruption.

Najib, himself, must be viewed as a separate case. Ordinarily, under customary international law, heads-of-state are accorded immunity, which means they are not subject to the jurisdiction of foreign courts at least to authorized official acts taken while the leader was in power. As a matter of diplomacy, it is unlikely that the United States would seek to arrest a sitting head of state. But that doesn’t mean that they could not be indicted for serious crimes. And if these acts were taken outside the official authority of the head or state or violated international law, then upon leaving office, Najib himself could be subject to arrest and prosecution.

Indeed, since 1990, some 75 former Heads of State have been prosecuted for serious human-rights abuses and financial crimes.

While Najib continues to fly high believing that his golfing buddy President Obama values their friendship and will keep him safe, he doesn’t understand the American system. Even if Obama wanted to protect him, at this point, he can’t. Under the U.S. system, the Attorney General operates independently with respect to the investigation and prosecution of Federal crimes.

President Obama couldn’t stop the investigation even if he wanted to – and the moment Najib or anyone in his inner circle were to approach him to ask for assistance, Obama would have to distance himself dramatically from Najib to avoid even the appearance that he had tried to do so.

While ordinarily, the convening of a Federal Grand Jury to examine evidence in such cases is not publicly reported, the mere fact of leaks suggest the Justice Department is confident in its evidence and it has strategically confirmed the investigation to provide strong incentives for anyone with useful information to come forward to strike their own deals to avoid prosecution.

And once the Justice Department has decided there is sufficient evidence to merit deploying their considerable investigative resources, they almost always win. Indeed, the conviction rate for Federal crimes in recent years has approached 95 percent.

But most cases never go to trial – when the weight of the U.S. government comes down on criminal defendants with strong evidence, almost everyone pleads guilty.

While the noose always gets tightest around the target at the very end, in the meantime Najib can’t trust anyone. There is almost no amount of money that people will take to keep quiet but spend the rest of their lives on the run from the United States.