Bids to exonerate 1MDB don’t fool anyone

Both Umno and PAS are living in denial if they think larceny, corruption and malfeasance are simply a case of bad management.

Rais Hussin, Free Malaysia Today

When all else fails, political economists and scientists the world over follow the money. In other words, when a certain phenomenon cannot be explained, a critical look at the money trail will shed light on the issue.

Take 1MDB for instance. Tan Sri Khalid Ibrahim, in an article in Free Malaysia Today, argued that the business model of 1MDB was based on the “over gearing” of debt.

What does “over gearing” mean? Simple. Lots and lots of debt, borrowed up front on the basis of guarantees by the Ministry of Finance that all derelict payments will be absorbed by the Malaysian government or, simply put, the people of Malaysia. Remember that the Ministry of Finance is run by Prime Minister Najib Razak.

Khalid, a former CEO of Guthrie and former Selangor menteri besar, argued that this business model, while troubling, was not entirely unheard of.

Everyone borrows to start a business. But then, what happened to that money, be it in the form of debt or unit funds? For lack of a better way of putting it, Khalid didn’t follow the money.

While large sums of the money have apparently disappeared, Khalid still refers to them as debts. These debts, amounting to US$11 billion (RM47.24 billion) at least, have to be paid by Malaysians, not the individuals who have squandered or sequestered the money.

Khalid also white-washed the claim that 1MDB did not default on its last few payments to IPIC.

Now if there was no default in payment, then we can make a simple request: show Malaysians the transactions.

Khalid argued that the payments were made to Aabar IPIC and it was the latter that was slow to transfer the sum to the account of IPIC proper. Pakatan Harapan is willing to give him the benefit of the doubt. After all, as a former businessman he should know what he is talking about.

But where are the records of the transactions? Khalid could not show any. Instead he took to parroting the narratives of Arul Kanda.

Now the issue is this: if the payments were not late, why isn’t Arul Kanda showing the printed transactions?

Khalid alleged that the 1MDB issue had been “politicised”. Well, if systematic truth telling is indeed politicising the issue, then Pakatan is guilty as charged. We just tell the truth. Full stop.

But Pakatan is also telling the truth based on evidence and corroboration from some six civil and/or criminal investigations and across party divides as well.

If PPBM and other coalition members in Pakatan cannot agree on the truth about 1MDB, would they have unified into a cohesive group? They would not as their parties would be accused by their members of betraying their ideals.

Lastly, Khalid argued that investigations by the US Department of Justice on 1MDB was not “a free lunch”. By that token, the DOJ must be launching a legal, though slow motion, coup against President Donald Trump. But Trump is clearly in office, and Special Prosecutor Robert Mueller has been placed on watch to investigate Trump’s alleged Russian links.

If the DOJ can exercise such broad investigative powers, with Attorney-General Jeff Sessions recusing himself from the investigation, then the DOJ does operate well.

Why should one ascribe nefarious motives to the DOJ on the issue of 1MDB? The comment of “no free lunch” is a cop out and a wild and apologetic attempt by Khalid to cozy up to PAS and Umno.

Both parties are living in denial if they think larceny, corruption and malfeasance are simply a case of bad management. If bad management is the root of all the abuses at 1MDB, shouldn’t Najib be resigning, at least from the Ministry of Finance, if not as Prime Minister?

No amount of public relations messages can overlook one simple fact. If Bandar Malaysia is the jewel of the 1MDB crown, why does it have to be parcelled off to the Finance Ministry?

The answer is simple. 1MDB is incorporated as a company with limited liability. If it defaults time and again, which it has, all its strategic assets would have to go under the hammer to pay back and pare down its debts.

1MDB wants to put up a brave front, with Arul Kanda as the brand’s champion, saying that the company is doing well and the likes of PAS and Tan Sri Khalid Ibrahim delivering exclusive presentations on why it can still pay off its debts.

And they release press statements and publish op-eds in a coordinated manner to excuse the criminal liabilities of all and sundry.

Rais Hussin is a Supreme Council member and head of the Policy and Strategy Bureau of PPBM.