BOOK REVIEW: The Siege Within

By Leslie Lopez, Penguin Books, Singapore. Soft cover, 192 pp. US$12.99

On June 2, 2009, Asia Sentinel’s headline read: A Malaysia State’s Suspect Investment Fund.” It went on to say that “those thinking about Malaysia’s medium- to long-term health should be sending up red flares over the Terengganu state government’s effort to borrow RM10 billion (US$2.87 billion) for a so-called sovereign wealth fund.” With Federal guarantees, it “could easily become a slush fund to support the projects of UMNO cronies”.

Little did the writer know that the Terengganu fund would soon morph into 1Malaysia Development Berhad (1MDB), raise several times the initial RM10 billion and much more, not so much into crony projects but into the pockets of UMNO leader and Prime Minister, Najib Abdul Razak and from there to many other UMNO figures, bankers’ bonuses and the high living of the fund’s mastermind Low Taek Jho (Jho Low) and others.

Given that a journalist sitting in Hong Kong could spot the dangers of the venture in its earliest days, it may seem surprising to normal people that this debt-financed “wealth” fund could find support from some of the biggest names in banking over several years. But the bankers, headed by Goldman Sachs, were mostly not putting their own money at risk while benefiting from the fees and commissions earned on these debt deals, some of which ended in their own bonus packets…