Everything We Learned About 1MDB From Sarawak Report's Clare Rewcastle Brown

Clare Rewcastle Brown, the wolves on Wall Street and the story that had them baying for blood. 
Monday 10 December 2018
An army of one: Clare Rewcastle Brown. Photo: UNRESERVED

“Empires are like Ponzi schemes: financial frauds in which previous investors are paid returns out of new investors’ deposits. The costs of holding imperial territory can only be underwritten by loot and tribute extracted by constant new conquests; empires must continue to expand if they are not to collapse.” Paul Kriwaczek, Babylon: Mesopotamia and the Birth of a Civilisation

It is not just Babylon. Look at any great empire that Man created, and you will see the adage “pride comes before a fall’ at work. From Rome under Caesar, to Russia under the Tsar and France under Louis XVI, each civilisation went through a period of excess in vanity, pride and decadence amongst its rulers. Unheeded by prophecy and warning signs, they continued to live extravagantly whilst civil unrest set in amongst its citizens, oppressed by taxes, religious and state control. All the unrest within made each state vulnerable to an attack from without. This was never more true than with 1MDB.

For decades, Malaysia was a country that had wielded economic strength and power. Rich in resources from oil to oil palm and timber, “Malaysia Boleh” (Malaysia can) was a mantra from the 80s that bred a citizenry who felt that much could be achieved. Like most Asian countries, it was economic wealth that was encouraged, rather than spiritual, physical or intellectual prowess.

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Former Prime Minister Datuk Seri Najib Razak and his wife Datin Seri Rosmah Mansor at the general elections earlier in the year. Photo: Mohd Rasfan/AFP

At the time of his downfall in May 2018, Najib was still clinging to power, refusing to accept the inevitable. Like Nero playing the violin whilst Rome burned around him, bolstered by his own delusion that cash was king and that all votes could be bought, he was followed by a trail of “yes men” supporting him – it seemed that UMNO had become ‘UMYES’. Najib apparently ignored the signs and advice from his own party members, the (mostly social) media acted like a Greek chorus echoing the sentiment of the people, prophesying doom and gloom for his government.

Whilst he imposed more taxes (like the GST), his wife personified decadence itself in pink diamonds with her ever-changing carousel of Hermes bags, oblivious to the rancour that it had caused. The arrogance and the denial, and the resulting unrest within Malaysia made the ruling government vulnerable to attack.

In 2013, that attack began from outside the hitherto impregnable walls of his government, not in the form of rolling tanks and a blitzkrieg of bombs, but an army of one. A journalist who lived the mantra that “the pen is mightier than the sword”. Her ink vividly described Najib’s transgressions and like Carl Bernstein and Bob Woodward working tirelessly in the dark before her, she found herself her own Deep Throat. This brought down the man who, if he thought that cash was king, it was ultimately to be his own undoing.

“It is always the adventurers who do great things, not the sovereigns of great empires.” Charles de Montesquieu

With her shiny long red hair and girlish gait, physically, Clare Rewcastle Brown seems like an unlikely candidate to work tirelessly on a story without a team, an army of lawyers and a book deal to look forward to. She has travelled extensively to Singapore, Thailand, Switzerland and the United States – the latter she visited just to take a look at the house of Riza Aziz (Rosmah’s son) which Rewcastle Brown alleges was built using 1MDB funds. She did this all alone, without the support of corporate battalions that could back a journalist for a major newspaper.

An LSE alumnus, she honed her journalistic skills at ITN and the BBC, before launching her own blog “The Sarawak Report.” Before 2013, 1MDB was not even a glint in her eye. I met with her in London where she was in the middle of a hectic book tour last month. I found her to be open, approachable and simpatico, which I hadn’t expected, because she has come across as quite cross in her blog, and I had assumed that this might be her usual manner of being, but I was mistaken. The anger is reserved solely for the criminal imbroglio that is 1MDB and its protagonists. I asked her what triggered her curiosity in investigating 1MDB.

“Well I had been looking into corruption issues in East Malaysia for about 3 years before the 1MDB issue hovered into view… and I’d unveiled a great deal and we created quite a stir, certainly in East Malaysia, politically, by exposing the corruption of the two chief ministers of those East Malaysian states.

“And yet, I wasn’t getting anywhere because although the MACC (Malaysian Anti Corruption Commission) came in to have a look at both those chief ministers, it was quite clear that Najib as PM was telling his AG to freeze the case… So I was facing a block and I could see the problems that were destroying the lives of the people in East Malaysia and Borneo were being caused by corruption at the very top in Malaysia. Having looked at Najib and how his administration had evolved since 2009, you could see that he was a particularly egregious example of personal corruption.”

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Carrying a Chanel handbag, Rosmah eyes the goods on a trip to Beijing in 2009. Photo: AFP

To understand why Rewcastle Brown’s investigation and calls for action went unheeded, one has to understand the context in Malaysia. The film Crazy Rich Asians probably encapsulates all that is important in these societies – designer labels, luxury cars and ostentatious over-the-top bling which all serve to cement one’s status in society. So for the most part, whilst Malaysians were immune to a few Hermes handbags here and there and mere rumours of big shady deals, there was a decided apathy about these issues. It was almost “normal” even when mysterious wealth was splashed around by civil servants, or in this case, by the Prime Minister and his family.

The apathy in Malaysia seemed less about indifference, rather more of a sentiment of helplessness. As the French say, “Plus ça change, plus c’est la même chose”, the more things change, the more they stay the same. Not only that, gossip across all society was that Najib had a lot more than just cash, but explosive secrets too, designed to keep anyone he was leading from straying from the party line. As Teddy Roosevelt once said, “If you’ve got them by the balls, their hearts and minds will follow”.

If you contrast this with Rewcastle Brown and her background, flaunting wealth and grandeur was simply not done in England. After all, this was a country that saw a minister resign because the press had alleged that he had the temerity to fast-track his maid’s visa (David Blunkett, Home Minister). Rewcastle Brown herself is no stranger to allegations – her husband Andrew, who is the brother of former Prime Minister Gordon Brown, was alleged to have received payments for his cleaner through the Prime Minister’s expenses in the UK Government’s expenses scandal of 2009. Later The Telegraph, which ran the story, acknowledged that there was actually no act of impropriety and the storm in a teacup blew over.

So it is no wonder that when it came to the investigations in Malaysia, Rewcastle Brown was shocked at how civil servants could get away with such blatant displays of wealth whilst denying any form of corruption. It was this behaviour that got her radar going, that there was something larger at work. Her stories on her blog triggered the local press to also question the same.

READ: Most Malaysian Government Officials Are Corrupt, Says Mahathir

As she says, “There had been talk about corruption obviously, in BN and huge sums of money being misappropriated. But these two were lavish and ostentatious spenders. Rosmah in particular was forever showing off ludicrously expensive jewellery, ludicrously expensive couture, handbags, shoes, jetting around the world, commissioning themselves new personal jets for their own disposal. It created a lot of mention in the Malaysian press and a lot of speculation as to how they were funding so much lavish spending.

“So I knew this about Najib, and it contrasted with his very carefully prepared agenda when he came in ostensibly as a reformer, and you could see at the same time that although he acted out the very Westernised public school boy educated persona for his international audiences, back home he was doing two things – he was exploiting religious extremism, trying to court PAS, (the Islamic party) because he wanted to bring that in the fold to shore up his own party, BN. He was also cracking down on civil liberties with laws that he was passing in the name of countering terrorism, ironically. So concerns were beginning to emerge about Najib, really, for being a rank hypocrite.”

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Najib after he was called in for questioning by the Malaysian Anti Corruption Commission (MACC) in May 2018. Photo: Mohd Rasfan/AFP

Like many of the great investigative journalism stories from Watergate to the demise of Lehman Brothers, Rewcastle Brown followed the money trail. Undeterred by being banned in Sarawak (her birthplace) and a relentless counter attack by Najib who was trying to stem a growing tide of hostility through a smear campaign in local media, she doggedly looked for the fissures and the trail of collusive behaviour in the Malaysian government.

Najib’s efforts to mount a calculated distraction against Rewcastle Brown’s exposés became an exercise in futility. She recounts the early days of her investigation with, “1MDB got involved in some of the school projects in Sarawak that were designed to benefit the family of the chief minister, a massive industrialisation programme. So again, we were looking at 1MDB threatening at least to become involved in some of those projects. They never did invest the money, of course, it wasn’t about investing, it was about sucking out money, wasn’t it?

READ: Good News – Malaysia is Getting Some 1MDB Money Back

“So for this reason, I’d been aware of the whole project, become suspicious of it, like everyone else in Malaysia, I was aware that opposition politicians were questioning 1MDB and where the money was going. By 2013, huge amounts of money had been borrowed by 1MDB and no one really knew where that money had gone. I think we were talking about some 11 billion dollars (sic) and that 1MDB was in the red by that stage… So it kind of couldn’t be off my radar.

“Alongside that of course, I, like everyone else in Malaysia had been tickled to follow the antics of this young Jho Taek Low (sic), who had been getting in all the magazines around the world as one of the big spenders in high society. Jho Low had already been wowing Malaysia with his antics in Las Vegas, Hollywood and Saint Tropez, record spending in nightclubs, ludicrous ostentatious expenditures.

“So I was aware of Jho Low and I was aware of his link to 1MDB through that Sarawak venture in particular, and that was the foundation for my putting a lot of pieces of a jigsaw puzzle together. Then, in Christmas of 2013, someone tipped me off that the upcoming movie, Wolf of Wall Street, which was the big Hollywood blockbuster that we were all about to see in January 2014 – someone told me that it was produced by Rosmah’s son Riza Aziz. And that Christmas, I just started googling, just looking into that – strange thing – what on earth was the stepson of the prime minister of Malaysia doing, supposedly being behind one of the biggest productions of Hollywood?”

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Rosmah’s stepson Riza Aziz arrives to give a statement at the MACC headquarters in Putrajaya. Photo: Mohd Rasfan/AFP

She continues, “Riza Aziz began to boast that he had ‘skin in the game’ in this movie, it was a 100 million dollar movie – the big mystery around Hollywood was how it was being financed, nobody knew, except that this stepson of Najib was boasting that he had skin in the game and their anonymous Southeast Asian investors. There was no family money that he should’ve had and his career was remarkably undeveloped at that stage in his life. He’d done a couple of years at HSBC in a junior position, I mean, he came to Hollywood saying that he’d taken on the world of finance and attempting to give the impression that he’d made a bag of money in the city of London. It simply wasn’t the case – he was a junior appointee, a salary boy… It was all ridiculous. They should’ve kept their heads down, but of course, they didn’t. It was their behaviour, their ostentatiousness that was the undoing of them.”

The irony of course, is that a film about dirty money and fraudulent schemes, was allegedly funded by dirty money and fraudulent schemes. Perhaps it was the familiar themes that attracted Riza Aziz and Jho Low to invest. As Rewcastle Brown postulates, “It started off as a funny story – I thought it was an outrageous story – it’s a very good example of the hypocrisy of this family, who on the one hand are pushing this very Islamic agenda within Malaysia, being very anti-liberal in their views and then yet on the other hand, there’s their son, over in Hollywood producing this movie that even shocked Tinseltown because of its outrageousness – the sex, drugs and rock-n-roll of the movie.

“I was told that Rosmah was so proud of her son’s efforts that she was trying to promote this to be watched by schoolchildren in Muslim Malaysia. You could not have had a more haram movie. She was excusing it – she was telling education officials that this should be shown in schools as an example of the life not to lead, whereas I think most parents, particularly Muslim parents, would not want their children to even think about the life that was being led.”

What happened next is of course well documented in the media. Rewcastle Brown came across her whistle-blower, Xavier Justo (whose adventures form Part 2 in this series), and with her searing series of exposés, the Malaysian media began their own onslaught on the former Prime Minister. The opposition party corralled public outrage into public support that saw the UMNO-led Barisan Nasional government fall in humiliating defeat after 60 years of ruling the country. Najib had finally spent all his political leverage.

READ: The ‘Lone Gunman’ Behind the Investigation into 1MDB

Rewcastle Brown, who has had to endure threats on her own life, prompting her to make a police report, recounts those months of living dangerously, “I was getting threatened, I was getting followed, I was getting vilified, I was getting computer hacked. It was really the morning that I realised they were actually publishing my movements for the Malaysian media that something needed to be done. So I went to the police station and it was all a bit out of the normal way of things for the average police officer in London and it was rather an amusing sort of morning trying to explain to the London coppers that I was being followed by Malaysians.

“I think they thought that I was crazy too, actually [laughs]. And being a woman, they always imagine you’re mad, you have to be, you’re a woman and you’re coming in saying that you’re being followed by Malaysians. But anyway, in the end, I said I’m not leaving the police station until you have written down what I’m complaining about, because if I do end up dead next week, I want you to go and follow the right people – I don’t want this just to disappear with me going into the Thames. So I was sufficiently concerned and damned annoyed.”

She got off easily, she concedes, compared to her whistleblower Justo who ended up in a Thai Jail. “I was there on my own wondering what I could do to somehow help Xavier who’d been exposed, arrested in Thailand… It was a set-up job from the beginning and looking at the pictures, I could tell that. And then they brought in these charges and then of course he was shoved into jail in terrible conditions.”

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Her story of her adventures in Borneo and the 1MDB saga is well documented in her book The Sarawak Report. Its publication came just after Tom Wright’s Billion Dollar Whale which as has been reported, was a contentious issue. I ask her about the disagreement, and she comments, “Well since I gave him the story in 2015, I spoke to him the day before we both published and I’ve never spoken to him since, he didn’t get back to me again. He got back to my intermediary, who he said he wouldn’t contact again, and has not troubled to contact me again directly.

“So the disagreement is purely along the lines of what I think the significance of this story is. And the significance of this story is – not the crazy rich fun story about a naughty guy who stole a lot of money and bamboozled a whole lot of people, and ‘Wow! what fun, and poor banks got taken in, poor prime minister got taken in’ – that’s where I take an issue.

“This is a serious story about serious issues. I’ve given six years of my life to working on it because I think it’s serious, because I think millions of people’s lives are affected by the failure to take on these problems, and to regulate this sort of activity properly, for political reasons as much as anything else. And I don’t think it should be trivialised in order to make a fun movie and to let the banks off the hook.”

Speaking of banks, at the time of writing, Goldman Sachs, the financial architect of the deal, has seen their stock tumble no thanks to their association with 1MDB. At the time of writing, the Bank insists that rogue employees misled its legal and compliance teams about the deals. Two former Goldman Sachs Bankers Roger Ng and Tim Leissner, who managed the 1MDB relationship, have been charged for their involvement in the conspiracy. Roger Ng was arrested in Malaysia and faces extradition to the United States within the next 60 days.

READ: How One of the World’s Biggest Banks Got Tied Up in 1MDB

Other Goldman Sachs executives have been scrutinised, namely the firm’s former CEO Lloyd Blankfein who was the unidentified high-ranking executive who apparently met with Najib in 2009. Another high-ranking Goldman Sachs executive is Andrea Vella, who was immediately placed on leave following the allegations. He has yet to be charged, but it is speculated that he may well be the alleged co-conspirator in the matter as described in unsealed charges from the Department of Justice. Jho Low also faces three counts in his indictment in the US, but still protests his innocence.

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Former CEO of Goldman Sachs, Lloyd Blankfein. Photo: AFP

However, charges against Malaysian Official Number 1 and his wife, as revealed by Abdul Rahman Dahlan, former minister in the prime minister’s department, to be Najib and Rosmah, are yet to be made. This has prompted speculation that to date, the DOJ still has not gathered enough evidence to indict them. As far as Rewcastle Brown is concerned, while Najib and Rosmah may be facing indictments in Malaysia, the story is far from over. Deeper investigations into the banking and financial world will be her next big adventure.

“I think we shouldn’t attempt to just assume that the banks are innocent in all of this. I think that’s the bigger story. I think 1MDB’s going to get bigger and that’s my intention. I think it’s a much bigger story than one kleptocrat and one con man. It’s about a system that’s allowing this to happen everywhere, the criminal engagement and the knowing engagement of numerous western institutions with people they know are criminal.

“It’s ridiculous to suggest that the bank was not complicit from the top guy down, and like Falcon, it should be charged as a criminal entity. I think the continuing unravelling of the 1MDB case study will shine further light on this problem.” Given her frightening tenacity and commitment, this writer has no doubts that she will be at the centre of yet more intrigue.

Related: The Most Telling Parts of Tim Leissner’s Transcript