24 Jun 2016
As international prosecutors continue to unravel 1MDB, an earlier investigation by Sarawak Report has achieved a separate landmark ruling in Switzerland, with the top bank UBS ordered to produce documents relating to Sabah Chief Minister Musa Aman’s vast earnings from timber kick-backs.
Sarawak Report exposed Sabah’s shocking timber corruption in a series of articles in 2012. Using evidence obtained from a web of off-shore timber companies, related to Singapore and Hong Kong bank accounts, we detailed how just shy of a hundred million dollars had been siphoned out by Musa, much of it funnelled directly into his Zurich bank accounts.
Fronting the network of companies was youthful Michael Chia, son of a business associate of Musa Aman’s, making for an uncanny parallel with Jho Low and his own relationship with Malaysia’s federal leader, Najib Razak.
Chia was originally arrested in Hong Kong, just before the Sabah state election, with a bag full of millions of dollars in cash. The subsequent investigation sparked an MACC investigation in Malaysia and the discovery of substantial evidence of long-suspected extensive timber corruption in the state, managed by Aman.
In another parallel to the later federal scandal unearthed by SR, Najib closed down all investigations into the matter, despite overwhelming evidence handed to the then Attorney General (a relative of Musa) by investigators.
Since the cash in Musa’s bank accounts could not be denied, however Najib again fell back on the excuse that the money was meant for election expenses, as the reason for not pressing charges. This was despite records of numerous payments to Musa’s own sons and personal employees.
The excuse echoed that which Najib later gave for his own vast accounts – as if stealing money for party political purposes is acceptable, opposed to politicians spending it on themselves, which there is plenty of evidence they also did.
UBS duty to report suspicious transactions by politically exposed persons
Sarawak Report presented numerous exposes to show how these huge sums linked to kickbacks lay behind the otherwise unexplained wealth of Musa and his brother, who is Malaysia’s Foreign Minister.
Like Taib Mahmud in neighbouring Sarawak, Musa has been a career civil servant, UMNO treasurer and politician, positions which do not legitimately provide the enormous sums flowing through his bank accounts.
This is something that has been mentioned numerous times in the series of articles on Musa’s money written by Sarawak Report and it is a basic point that should likewise have been picked up under money-laundering regulations by the various international banks, particularly UBS and HSBC, which handled Musa’s huge transactions.
That a politically exposed person like the Sarawak Chief Minister and his known contact Michael Chia were passing tens of millions of dollars through accounts ought to have flagged up warnings within these banks.
Indeed, Sarawak Report reported that when the Chief Minister moved the contents of these accounts from HSBC to UBS his close banking team also changed to the new bank and they transferred the huge sums using a series of bankers’ drafts worth millions of dollars, but giving no chain of evidence.
UBS are likely to be questioned now over why its Singapore branch was willing to accept such suspicious money? Much of the cash was later transferred on again to China’s Overseas Bank, also in Singapore, but much had also filtered on to Switzerland.
Najib may have decided to squash the MACC investigation into his UMNO crony (a vast dossier on the case remains stranded in the office of the Attorney General)
But, having been passed the documents from the Sarawak Report investigation, the Swiss environment NGO, the Bruno Manser Fund, launched its own private complaint against UBS to the Prosecutor in 2013.
The Swiss prosecutors then took up the case themselves.
UBS has fought off the official investigators on privacy grounds, refusing to produce the evidence requested by officials. On Thursday, after a hearing that lasted a full year on this issue, the Swiss Court has dramatically ruled in favour of the prosecutor and against the country’s biggest bank.
BMF has closely followed the case:
“Despite its public announcement that it was fully cooperating with the investigation, UBS had key documents on its relationship with Musa Aman sealed and refused to share them with the prosecutors. The bank argued that no accused could be forced to testify against itself, an argument which the Swiss federal court refused to follow in this case. The court stated that the investigation of this grave case of international corruption and money-laundering justified the release of the relevant bank records to the prosecutors. The judges also said that bank records helf for regulatory purposes must be made available to prosecutors in criminal proceedings.” [BMF Press Release]
The decision looks set to throw further crucial light on the practices of Malaysia’s corrupted ruling politicians and the facilitating role of global banks and off-shore entities.
It is also the latest in a series of landmark decisions, which indicate that potentially important new steps towards stronger regulation against major kleptocracy could start to be achieved through global efforts on the part of regulators. If so, it would be to the benefit of communities and the environment in countries where there is poor accountability on the part of political elites.
NGOs like Sarawak Report and BMF have throughout campaigned against the damaging effects of massive scale kleptocracy on emerging economies, where it is the single most power driving force behind poverty and environmental catastrophes such as the destruction of the Borneo Jungle in Sabah and Sarawak.
Earlier stories from the Musa Aman investigation by SR: