(1) The US is a strong and powerful country, but this does not make them automatically right, or clever. The US Government has the largest military, diplomatic, intelligence and analytic resources that any government has ever had, and they still took a war and thousands of their sons’ lives into Iraq to destroy weapons of mass destruction that did not exist, and had never existed. They can be misled and they can be unintentionally misleading.
(2) The actions of the US Attorney General this week are far less risky. There is no criminal indictment of anyone. The Attorney General spent much of her presentation making it clear that the intention of this action is to send a message to the world, that improper use of its banking system would not be tolerated. Unlike most Governments, the US Department of Justice can apply to a court to seize assets for which THEY DON’T NEED TO PROVE ANY WRONGDOING. Crazy, but true.
(3) Under US law, the Government have the right to seize assets, and challenge the owners to respond. Those owners will not be tried for any crime, but would have to persuade a court to recover the assets, against the might of the US Department of Justice… which in this case is channelling a tidal wave of political disinformation about Malaysia, originating in part from Tun Mahathir Mohamad’s Anti Najib Coalition.
(4) The US Government has said that the assets they want to seize belonged to 1MDB. Well, not according to the accountants and auditors and bankers. Whatever criticisms of the way 1MDB management conducted itself, whatever the weaknesses in its processes and business operations, these authorities do not report a loss that in any way matches what the US Department of Justice thinks that it has found. Admittedly, not for the first time the US Government is being outstripped by Tun Mahathir who claims to have found a 42 billion hole in 1MDB accounts. They cannot both be right. They are both wrong.
(5) The reason for this is very simple. These huge sums and movements refer to operations in the Middle East outside 1MDB that have never been under the control of 1MDB or Malaysia. Where 1MDB has refused to repay a debt to a UAE company, it has not been because it couldn’t, but in order to bring to court disputes all of which arise from confusing and reportedly improper dealings in the UAE, not Malaysia.
(6) When money has been lent to Malaysia, or borrowed from Malaysia, it has been paid back. In 2009, 1MDB invested with PetroSaudi International in foreign oil assets. The asset contributed by the Saudi partner failed, but they paid back the Malaysian contribution, with interest. They borrowed further from Malaysia, in an Islamic financial bond, and discharged the debt in full.
(7) It is easy to confuse the investment relationship with PetroSaudi, then part-owned by a Saudi prince, with the extraordinary close relationship of the Prime Minister with the late King Abdullah. Both involved major flows of finance through complex banking arrangements organised by the Saudi counterparts. Those wishing to destabilise Malaysia have deliberately combined the two and this has given rise to gross misrepresentation. But these were separate issues, and accounted separately to Bank Negara.
(8) As to the disputed funds originating from UAE, which the US wishes to seize: It is clear that the disputed funds relate to money flows OUTSIDE Malaysia, and OUTSIDE 1MDB’s businesses. The US Government should remember that individuals and companies are innocent unless proven guilty.
(9) The Malaysian situation is clear. The two priorities of this Government must be to ensure that Malaysia’s wealth is safe, and economy growing; and to ensure that all live in harmony and security. Malaysian foreign policy is driven by strong leadership, and by close relationships with countries that understand the extraordinary job that this Government has done for so long in managing racial and social cohesion and the economy.
(10) The US Attorney General’s speech echoed all the familiar attacks on Malaysia by our critics. When the US Government gains access to the information that the Saudi and Malaysian authorities have had for some time, maybe they will realise the disinformation they’ve been fed by Tun Mahathir’s ANC members in Malaysia.