‘Tim Leissner’s 1MDB revelations reveal endemic corruption, breakdown in financial system, governance’

It has been dubbed the world’s biggest financial heist – filled with lies, deceit, conspiracy, blackmail, and corrupt practices.

Yet, many Malaysians don’t seem to understand the magnitude and gravity of the 1Malaysia Development Bhd (1MDB) saga.

One political analyst even believes that Barisan Nasional (BN) and Umno would be unaffected by this scandal and win majority support in the upcoming Johor elections.

“Many don’t seem to understand the magnitude and gravity of the 1MDB scandal. This is the biggest financial heist in history but it’s beyond most people,” said Associate Professor Dr Azeem Fazwan Ahmad Farouk.

“It’s a complex saga, on how money was moved. We are talking about billions of ringgit … That itself, is beyond the comprehension of most people.

“This whole episode needs to be broken down in simple terms, so that the man on the street understands this mess,” added Azeem, who is Universiti Sains Malaysia’s Centre for Policy Research and International Studies director.

In Tuesday’s hearing in a United States Federal Court, former chief of Goldman Sachs’ Southeast Asia operations, Tim Leissner, admitted to using money he received from 1MDB to buy a US$10 million (RM41.8 million) house in London for his then-lover, Datuk Rohana Rozhan. Rohana was at the time, Astro Malaysia Holdings Bhd’s chief executive officer.

Leissner told US prosecutor Drew Rolle that Rozana had threatened to expose his involvement in 1MDB.

Leissner added that he had informed his then-boss, Richard Gnodde, head of Goldman Sachs’ Asia business, about his relationship with Rozana, and that Gnodde had allegedly told Leissner to “be careful about relationships with clients”, reported Bloomberg. Astro was one of the businesses Goldman Sachs was working with in Malaysia.

Azeem added that Leissner’s revelations also centred on corporate corruption – a topic that is often largely ignored.

“We tend to focus on the public sector, but at the same time, corruption is also happening in the corporate world,” Azeem said.

“Leissner is an example of a Wall Street investor who would do whatever it takes to ensure the bottom line is in the black, and not red. Some of the big corporations don’t practise what they preach.”

Leissner also revealed that Bank Negara Malaysia (BNM) approved an “overnight” foreign exchange transfer of US$1 billion from 1MDB to PetroSaudi International.

To that, Azeem said: “What happened to governance? We are supposed to have oversight (agencies). In this case, it is BNM. BNM, at one time, was a highly respected institution, as it had some degree of independence.”

“We need to get down to what really happened, how they (BNM) gave the green light as per Leissner’s revelations.”

Azeem added that the 1MDB saga, which happened when BN was in power, is Malaysia’s Achilles heel, and that the nation was falling behind other countries in the region.

“I think the web of deceit is beyond our comprehension. Corruption is endemic. Our reputation among the international community is being tested.”

Azeem added that Malaysia was in a state of crisis.

“People should ask themselves what they want for the country. We need to be aware that the middle-class is shrinking. The gap between the rich and the poor is widening. This is hurting the nation, and the people’s wellbeing.”

He said the 1MDB saga was now out in the open but did not discount the possibility of other scandals that “we don’t know about”.

“Some individuals are trying to reset the country. But it’s seen as a very urban movement that doesn’t resonate with the majority of Malaysians. The people need to understand the full extent of the problems we are facing,” said Azeem.

Despite 1MDB continuing to make headlines across the globe, Azeem believed the saga would have little impact on BN and Umno’s chances in the upcoming Johor polls.

“There seems to be a disconnect with what is happening vis-a-vis 1MDB, and what is happening on the ground. On the ground, there seems to be a momentum moving towards BN, more specifically, Umno.”

He highlighted the Melaka elections last November, which saw BN winning 21 out of the 28 seats contested. A big win by BN in Johor will pave the way for the 15th General Election.

Former prime minister Datuk Seri Najib Razak, despite leading BN to a historic defeat in the last general election, remains a key player in the local political scene.

Najib, a central figure in the 1MDB scandal, was last year branded by the Court of Appeal as a “national embarrassment” following his conduct in the misappropriation of funds from SRC International Sdn Bhd, a former subsidiary of 1MDB. The appeals court ruled that his 12-year jail sentence and RM210 million fine for misappropriating RM42 million of the company’s funds, be upheld.

He was granted a stay of execution pending an appeal at the Federal Court.

“People should ask, why is Najib still popular despite being at the centre of the 1MDB crisis,” Azeem added.

“Leissner’s revelations, and the 1MDB saga in general, will have no impact in the Johor elections. The politics here is very localised. At the same time, the opposition is too fragmented.

“The only way to defeat Umno is for the opposition to come together, like they did in 2018, booting out BN from Putrajaya. But with so many parties entering the field, and depending on the voter turnout, we are going to see a repeat of Melaka.

“This will not bode well for reforms in the country,” he added.