2011: The Year of Living Dangerously
When a high profile US executive is charged with corruption in a foreign country, United States government uses everything at its disposal to get the executive off the hook. Example being recent Ex VP Cheney's indictment in Nigeria for being responsible in the largest corruption case in that country. The case was solid, but direct intervention by the US government in addition to a large payoff ($250-$500 million) of the government by Haliburton, where Cheney was its CEO during the bribery, forced the Nigerian government to drop all charges.
The global economy is not yet out of the woods. Despite some encouraging signs in the U.S. job market, there are plenty of remaining pitfalls. Just two years removed from the worst recession since the Great Depression, the U.S. and Europe are reducing government spending in hopes that improved balance sheets will restore economic vigor. At the same time, fears of an economic bubble have led China to raise interest rates. As a consequence, the global economy is now walking a tightrope. There is a way forward, but there is little margin for error and the potential fall is a long way.
The natural forces of recovery, assisted in the U.S. by the year-end tax deal, may continue to gather strength, but they will have to do so without another fiscal policy assist from the U.S. and Europe. With debt levels still rising, austerity is the new order of the day, and a government shutdown in the U.S. could occur if Congress fails to act in time to raise the debt ceiling.
If the economy does falter, the U.S. could institute a third round of quantitative easing. While another monetary injection might make U.S. manufacturers more competitive and give a temporary boost to financial markets, its impact on aggregate demand is a matter of legitimate dispute. Rather than boosting real demand for goods and services, it may do little more than fuel speculative bubbles in real estate, stocks, and commodities. Even worse, another round of monetary stimulus might precipitate a run on the dollar and a global financial panic.
If the European debt crisis erupts anew, particularly if the situation in Spain or Italy takes a turn for the worse, the Euro itself could start to unravel, sending a financial shockwave around the world. Similarly, if China's economy should suddenly falter as a result of an inflationary surge or the bursting of a speculative real estate bubble, the entire global economy could be at risk.
Commodity prices also pose a risk. They came roaring back in 2010, and if they continue to rise in 2011 they could easily abort the global recovery. The U.N.'s Food and Agricultural Organization just reported today that its food commodity price index reached a record high in December 2010. Another spike in grain prices could spell trouble for China's efforts to contain inflation, and it could be massively disruptive for countries, like Egypt, that are heavily dependent upon food imports.
Corruption is cancerous to any democratic dispensation earmarked by the rule of law.
The United States knows all too well through spending a staggering $250 million daily in Afghanistan to prop up the corruption-laden administration of President Hamid Karzai. Afghanistan ranks as the second most corrupt nation in the world according to Transparency International.
The most persuasive influence of the United States abroad in promoting democracy and the rule of law is by example.
The United States Department of Justice should act aggressively to bring powerful foreign political figures to account for violating United States anti-corruption laws. The money laundering conviction of Panama's notorious Manuel Noriega is illustrative. In the aftermath, Panama now ranks 73 on Transparency International's corruption index.
If, as the United States Supreme Court held in Nixon v. United States (1973), the President of the United States is not above the law, the United States should not balk at indicting or prosecuting foreign politicians or family members for illegally employing the United States to launder the fruits of corruption. Strict enforcement is especially urgent in the prosecution of foreigners from countries whose judiciaries are politically compromised.
United States Senator Carl Levin amplified during a February 2010 hearing by the Senate Permanent Subcommittee on Investigations:
Corruption is a cancer that corrodes the rule of law, undermines economic development, and eats away at the fabric of civil society. In extreme cases, corruption can destabilize communities, and lead to failed states, lawlessness, and terrorism. For the United States, which has so much riding on global stability, corruption is a direct threat to our national interests.
A case in point is that of Nigeria, which ranks on a par with Zimbabwe at 134 on Transparency International's hierarchy of corrupt nations. The stupendous thievery there has provoked violent upheaval in the oil-rich Niger Delta region and given encouragement to Al Qaeda in the Maghreb. Nigerian military dictator Sani Abachi stole and laundered approximately $5 billion in his lifetime with impunity, which seemingly emboldened others. Think about Nigeria's former Vice President, Atiku Abubakar and his fourth wife, Jennifer Douglas Abubakar, a United States citizen. Both were implicated in hundreds of pages of a February 2010 Report of the Senate Permanent Subcommittee on Investigations in suspect off-shore wire transfers of more than of $40 million into the United States. According to the Report, Jennifer Douglas' personal expenditures ranged up to $90,000 per month.
Mr. Abubakar attributed his substantial wealth to "fortunate investments," such as an ownership interest in "Intels," an oil service company that has grown into one of Nigeria's largest. In Nigeria, however, oil and corruption are synonyms. At present, Mr. Abubakar is seeking the presidential nomination in a primary scheduled by Nigeria's People's Democracy Party in mid-January 2011.
Senator Levin summarized the Report's findings as follows:
...Jennifer Douglas, [was] a U.S. citizen and a wife of Atiku Abubakar, former Vice President and former presidential candidate in Nigeria. From 2000 to 2008, she helped her husband bring more than $40 million in suspect money into the United States through wire transfers from offshore corporations. Ms. Douglas is alleged in a 2008 civil complaint filed by the Securities and Exchange Commission to have received $2.8 million in bribe payments from a German conglomerate, Siemens AG. Siemens has pleaded guilty to criminal charges and settled civil charges related to the Foreign Corrupt Practices Act, and told the Subcommittee that it sent payments to her account at Citibank. The Subcommittee located three wire transfers substantiating $1.7 million in payments from Siemens to Ms. Douglas in 2001 and 2002.
Of the $40 million, the Subcommittee traced nearly $25 million in offshore wire transfers into U.S. accounts controlled by Ms. Douglas, provided primarily by three offshore corporations called LetsGo, Sima Holdings, and Guernsey Trust Company. The five banks holding her accounts were generally unaware of Ms. Douglas' PEP status, and did not subject her accounts to enhanced monitoring, despite multiple, incoming wire transfers from Switzerland and Nigeria. One bank took seven years to find out she was a PEP [Politically Exposed Person]; after it did, it reviewed her account activity and closed her accounts.
The United States enacted the Foreign Corrupt Practices Act in 1977 (FCPA) to address corruption of foreign officials. It generally prohibits any person, foreign or domestic, from using the instrumentalities of interstate commerce to bribe foreign officials in their performance of official duties. In addition, companies whose securities are listed in the United States must keep books and records that accurately reflect transactions, and maintain internal accounting controls.
But the FCPA has serious shortcomings. It does not punish or otherwise sanction foreign officials who demand or receive bribes. Moreover, it does not address the practice of foreign officials laundering their ill-gotten wealth into the United States while escaping detection because of the difficulties regularly encountered in tracking down the source of their funds within foreign sovereignties. Corrupt governments are poor candidates for welcoming the F.B.I. to investigate incumbents or their political allies for money laundering or otherwise, as the case of the Abubakars demonstrates. Several banks ultimately closed the accounts of Jennifer because the source of huge sums purportedly wired by her husband Atiku could not be verified. It seems puzzling, nevertheless, that the U.S. Department of Justice has apparently neglected to investigate either Atiku or Jennifer for money laundering in violation of 18 U.S. C. 1956. She is a United States citizen; one of her accounts was the proven recipient of bribe money wired by Siemens that occasioned its guilty plea; Atiku was then Vice President; and, his wealth derived substantially from an oil industry investment.
It might be penny wise, but it is certainly pound foolish, for the United States to wink at prima facie cases of money laundering by prominent foreign political figures to advance transient diplomatic or economic objectives. If the United States permits international politics to hijack the rule of law at home, then democracy and rule of law abroad will falter, especially in places like Nigeria where anti-corruption laws are honored more in the breach than in the observance.
Shouldn't the Senate Permanent Subcommittee on Investigations be asking the Executive Branch whether foreign diplomacy shipwrecked a Justice Department money laundering investigation of Atiku and Jennifer Abubakar?
I consider yesterday,January 5, 2011, as a day of shame and deceit because in just one day we, Malaysians, witnessed 3 big cover ups or whitewashes:
* When the MACC Corruption Prevention Panel Chairman, Tan Sri Ramon Navaratnam, declared that AG Gani Patail has been cleared of his relationship with former MAS Chairman, Tajuddin Ramli’s proxy, Shahidan Shafie. There was no investigation and yet AG Gani was cleared. This was a bad cover-up.
* When Datuk Mat Zain Ibrahim, former KL CID Chief, has again accused AG Gani Patail and former IGP Musa Hassan of fabrication of DNA evidence against Anwar Ibrahim in Sodomy I. Mat Zain appealed to the Solicitor-General Datuk Idrus Harun to end this old cover-up;
* When the Teoh Beng Hock Coroner’s Inquiry returned an open verdict which means the coroner cannot ascertain how Teoh died. If it was not suicide, then it must be homicide. Yet there was no courage to say that openly. This was a lame cover up.
It is shameful that all these cover ups involved the AG’s office and the two principal law enforcement agencies of the country, the PDRM and the MACC. The public perceive that there are many more cover ups. The public perceive there is no more check and balance. The public perceive there is only collusion by the people and agencies entrusted to preserve law and order. This is shameful.
Robert Phang: The Lone Voice in MACC (?)
That is why Tan Sri Robert Phang took umbrage at Tan Sri Ramon Navaratnam’s announcement and resented that the MACC Advisory Panels were being manipulated to be mere rubber stamps to protect and preserve AG Gani Patail’s position. Is Robert Phang the lone voice amongst the 30 Board and Panel members of the MACC who attended an MACC confidential meeting? More of them should make their stand. After all, they were selected based on their eminence in society.
Phang is critical of AG Gani Patail. To Phang, a senior public officer like the A-G, who is the country’s Top Lawyer, must be free from any form of suspicion of improper conduct. To Phang, AG Gani Patail’s conduct is far from satisfactory and Phang would not have the MACC being manipulated to be a fait accompli to AG Gani Patail’s wrongdoings.
Eusoff Chin and V.K.Lingam holidaying in New Zealand. It was not just Lingam putting his hand over Eusoff’s shoulder, but also Eusuff putting his hand over Lingam’s shoulder.
There is a saying that when a fish rots, it always starts at the head. That was the cause of the public furore over the holiday photographs of Chief Justice Mohd Eusoff Chin with lawyer Datuk V.K. Lingam which resulted in a Royal Commission of Inquiry. Unfortunately, despite some damning findings, NOTHING has happened after that. Another cover-ups !
PKFZ and Sime Darby Scandals
It was public pressure that saw some big names being charged in the PKFZ Scandal. The same scene is now unfolding in the Sime Darby Scandal where several senior and top executives are being sued and charged for abuse of powers and corruption.
MAS Scandal
But the public did not see that happening in the MAS Scandal. Why is that so? Why the big cover-up in MAS? Instead, the public saw a most frightening scene where the key persons investigating the MAS Scandal were brought down in a most brutal fashion.
The Director of Commercial Crimes, Dato’ Ramli Yusuff, was stripped of his Commissioner of Police rank, and then tried in the media on false accusations of being “The RM27 Million Cop”. In the end, the charge against Dato’ Ramli was nowhere near the much publicized RM 27 million but for some small change and for using an aircraft while on official duty in full uniform.
The public saw another frightening scene when a senior lawyer of a premier firm, Rosli Dahlan, was brutalized, publicly paraded in handcuffs and charged for defending Dato’ Ramli. Both the trials of Dato’ Ramli and Laywer Rosli have disclosed some very disturbing and repulsive conducts of the officers of the AG’s Chambers and the MACC in fixing up a bad case.
Both were acquitted without their defence being called and with some damning statements being made by the Judges against the MACC witnesses. Despite the court findings that there were no crimes committed, AG Gani Patail immediately appealed? Why? Was that to serve some ulterior evil motives?
As a matter of priority, wouldn’t tax payer’s money be better spent to detect and apprehend the real crooks in the MAS Scandal? Why did the MACC and AG Gani Patail spend valuable time, resources and funding to so vociferously go after a Police Director and a lawyer who were unraveling the wrongdoings in MAS? Was that because Dato’ Ramli Yusuff and the CCID under him had recommended that Tajuddin should be charged for various offences? This is one big screw up where the good guys got canned and crooks go scot free.
All in the Family
In the report lodged with the MACC by Shahari Sulaiman, the Managing Director of MASKargo, Shahari stated that the main front-man for Tajuddin is Shahidan Shafie who is the first cousin cum adopted brother of Rizana Daud. Tajuddin had appointed Rizana as the Company-Secretary of MAS in order to cover up all his tracks.
Tajuddin trusted Rizana because she is married to his brother, Bistamam Ramli. She is Tajuddin’s sister-in-law and by extension, that makes Shahidan as Tajuddin’s in-law (the Malay word is ipar-duai). Tajuddin’s web of deceit in camouflaging his interest in the companies that fleeced MAS have already been unraveled in the chart provided by Shahari to the MACC which surfaced sometime ago. The links and connection are so clear as follows:
The links and connection are so clear !
That Shahidan is Tajuddin’s proxy is also clear because Shahidan has been named in various court documents filed by Tajuddin’s lawyers where Tajuddin is trying to do another deal with the Government. Tajuddin is blackmailing the Government to settle or he will open a bigger can of worms. Tajuddin’s lawyers specifically mentioned Shahidan’s name as the new shareholder of Naluri Berhad which Tajuddin’s former corporate vehicle.
This is just another cover up disguised as a court sanctioned “ Global Settlement”. The following is page 2 of Tajuddin’s lawyer’s letter which had already surfaced earlier. And yet the MACC did nothing.
This is just another cover up disguised as a court sanctioned “ Global Settlement”. The following is page 2 of Tajuddin’s lawyer’s letter which had already surfaced earlier. And yet the MACC did nothing.
That A-G Gani is compromised in the decision not to institute prosecution against Tajuddin and company in the MAS Scandal is not mere suspicion. The above link can’t be any clearer even if it is in Braille to be read by a blind man. Or is MACC feigning ignorance because it is curtailed by A-G Gani Patail?
Then, on November 24, 2010, Raja Petra Kamaruddin (RPK)’s blog, Malaysia-Today, disclosed that A-G Gani Patail and Shahidan Shafie, who is Tajuddin Ramli’s proxy, were doing the Haj pilgrimage together in Mecca.
RPK produced Tabung Haji’s documents which showed that A-G Gani Patail and his family and Shahidan have the same booking reference, the same Haj package, the same travel itinerary, the same listing. AG Gani’s son who is also a government lawyer even twin-shared a room with Shahidan like part of the same family! Is that a mere coincidence?
Is this a mere coincidence?
Just look at the Tabung Haji document(above). Now how did A-G Gani Patail explain this to the satisfaction of the MACC Board and Panels?
Despite all this information, there has been total inaction on the part of the MACC. Had it been anyone else, the MACC would have swooped in to seize documents from Tabung Haji and recorded statements from all connected people.
Selective Prosecution
Had it been anyone else that senior, the MACC would have leaked that news to the press and there would have been a public lynching as what had happened to Dato’ Ramli Yusuff, Dato’ Mirza Thaiyab (former DG Tourism), Dato’ Wahid Don (former DG Immigration) and many others. In this case, there was total silence and total inaction. Was it because it involved A-G Gani Patail?
Then on January 5, Tan Sri Ramon Navaratnam declared that the MACC Board members and Panel Advisers had cleared AG Gani Patail without an investigation. This violates section 7 (b) of the MACC Act, which requires the MACC to detect and investigate:
i) any suspected offence under this Act.
ii) any suspected attempt to commit any offence under this Act.
iii) any suspected conspiracy to commit any offence under this Act.
Something is amiss here. Why the haste?
Something is really rotten here. Why the haste to clear A-G Gani Patail? That confidential meeting was clearly an orchestrated event. Ramon Navaratnam then immediately leaked to the mainstream media and even appeared on TV in the comforts of his office to clear AG Gani Patail. The public would not have known what had actually transpired until an infuriated Tan Sri Robert Phang issued a press statement refuting Ramon Navaratnam’s version of that confidential meeting.
It seems that Robert Phang is the only voice of conscience left in the MACC. In light of all these hanky panky, Abu Kassim must not be seen as failing to live up to his promise to investigate the big fishes. Otherwise, he should just resign as he had pledged at the 15th Malaysian Law Conference in 2010.
A-G Gani Patail is very powerful [Article 145(3) of the Malaysian Constitution]
All this is happening because there are no checks and balances. Everyone is afraid of A-G Gani Patail because he has become very powerful. He thinks no one can touch him because as the Attorney General of Malaysia, he is vested with absolute discretion under Art. 145(3) of the Federal Constitution over all matters relating to?
the prosecution of an offence. So he alone decides. So he will not allow himself to be investigated what more to be charged. That is what power does to a person. As said by Lord Acton- “Power corrupts, absolute power corrupts absolutely“.
After the three big cover ups all disclosed in one day, MACC suffers from a serious credibility issue. How can MACC insist it has any integrity left if it continues with this shameful whitewashing of A-G Gani Patail’s shenanigans?
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