The RM150 billion Mahathir never told you about

Raggie Jessy

Journalistic scruples are being pushed to the wall following a series of exposes that implicated the Malaysian Prime Minister of out-and-out corruption. Set on conspiracy, the Wall Street Journal claims to have tracked an obscene amount of funds right up to Dato’ Seri Najib Razak’s personal bank accounts.

Najib was quick to respond with investigations and appears hot on the trail of a plot to depose him as Prime Minister. His attorneys have since undertaken to demand from the Journal its position on several issues that were raised in its editorials.

Alarm bells were triggered almost immediately after the articles went into circulation. The integrity of the entire Malaysian banking system was hung on the balance over prospects of a confidentiality breach that may have compromised parties directly or indirectly linked to 1MDB.

The reports implicated several companies, both local and foreign, as agencies through which Najib was insinuated to have siphoned some RM 2.6 billion into his personal accounts. But the terms of assessment by which the Journal blackened the name of the Prime Minister was never expressed to the hilt.

Investigators are now gritting their teeth trying to plug the leak of information. They have narrowed down those suspected of conspiring with the Journal to three bankers. The squealer is said to have infringed a non-disclosure contract by disposing confidential information to a third party, who may or may not be associated with the Journal.

Several sources close to Tun Dr. Mahathir seem to think that a conspiracy to posture Tan Sri Muhyiddin Yassin against Najib has been re-launched at full steam. The staggering heap of slander hurled against Najib since the days of Adam failed to trigger a much anticipated coup, which, of course, is the reason why Mahathir and his cohorts are now facing off with Najib in a ‘no holds barred’ poker match.

The former Prime Minister has begun to weave a web of conspiracy that is going way over the top. Mahathir has since accused Najib of just about anything and everything under the sun to overwhelm the latter and stupefy investigators. It is believed that Mahathir has that much to hide, and worries that skeletons may come crawling right out of his vaults should investigators dig too deep into 1MDB related accounts.

With that, Mahathir is rumoured to have sought the services of the aforementioned squealer to parcel out crumbs of information and fashion media frenzy. The sole purpose of the said pursuit was to lay a gambit designed to bury Najib before investigations into the 1MDB scandal blow into proportions even Mahathir wouldn’t be able to handle.

It was with these crumbs that the Journal worded its think on alleged conspiracies that involved the channelling of funds from 1MDB into charitable establishments that financed electoral campaigns for Najib.

The bush telegraph appeared to have a tap on a certain ‘Tun’ who may have architected a scheme to draw Najib to the guillotine in record time. However, it is not immediately apparent if the Tun that was being referred to was in fact Tun Dr. Mahathir. You see, the gossip vineyard appears to have a tack on another Tun, who was known to have been intimately involved with the Finance portfolio and circles that conformed to Bank Negara Malaysia’s (BNM) highest rungs.

Be that as it may, it is unthinkable how anyone as foolish as Tony Pua could have been fingered by conspiracy theorists as being the ‘genius’ who crafted the Journal’s expose. The only kind of ‘genius’ I would ever associate Pua with is the kind that tells you ‘why a monkey would prefer a peanut over a banana’.

Why stop at 1MDB?

Mahathir’s touchy-feely antics over the future of UMNO did little to subvert the Najib administration. But the spate of lies and half-baked truths being spun like tops in social media appear to have delivered a niche to journalists with an opposition bent. These ‘political-assassins’ would go as far as the moon and probably a light-year further to sell their dignity and souls like prostitutes.

In light of the ‘no holds barred’ smear campaign against Najib, it remains imperative that investigators recognise a possible attempt by Mahathir and his cohorts to subvert the government of Malaysia and by extension, the Yang di-Pertuan Agong. The act of treason could well be construed as an attempt to sweep further under the carpet dirt the Mahathirian regime fears exposure of.

As such, investigators ought to find themselves obligated to pick the seams off banking books  a stitch at a time and predate their assessments to a time when Malaysia lost as much as RM100 billion under the reign of Mahathir and his cabal of debauched capitalists. But we’ll take it a step at a time and begin with a conspiracy that saw the ringgit being diced mercilessly in the foreign exchange market.

The said conspiracy may be traced to an accord that was ratified in 1985. Back then, dignitaries from the (then) G-5 nations (France, Japan, the United Kingdom, West Germany and the United States) met at the Plaza Hotel in New York, and undertook to deliberately depreciate the US dollar by about 50 percent for reasons that are far too tedious to be spelt out in this article.

Notwithstanding, the agreement resulted in the appreciation of several currencies worldwide, notably those from West Germany, France, the U.K. and Japan. On the downside, BNM registered a diminution of its foreign exchange reserves, valued somewhere around 5 billion on the US dollar.

To regain the losses, Mahathir is believed to have conspired with the governor of BNM to sanction a speculative spree through which BNM may have ‘looted’ the currency market with a zeal that bordered on sheer gluttony. The central bank was said to have relied on information procured from other central banks to earn short-term profits from interest rate differences and exchange rate shifts.

Under the governance of Tan Sri Jaffar Hussein, BNM was able to manoeuvre the ringgit to a surplus in liquidity. Jaafar triggered colossal flows of ‘hot money’ across international boundaries and got other central banks treading on BNM’s heels. Soon, regional central banks were reaping a steady harvest as they took the cue from Jaafar and his team of speculators.

By the turn of the decade, Jaffar had pulled off incredible feats in the foreign exchange market under Tun Daim Zainuddin’s and Mahathir’s vigilance. In the interim, Asian countries granted Jaafar the unspoken distinction of being a trailblazer in the exchange market, owing to his rabid urge to roll the dice on the ringgit.

In 1990, BNM drove market perception once again by relieving itself of massive amounts of the pound sterling. Back then, the United Kingdom had entered into an agreement with other European nations to abide by an Exchange Rate Mechanism (ERM) as a measure of financial security.

A partially pegged system, the ERM confined participating nations to strict exchange rate margins that were meant to stabilize European currencies. By speculating on the pound, BNM drove the British currency down by as much as four cents just as Britain was delivered its membership to the ERM.

Jaafar’s speculative whirlwind yanked in a vault full of ringgit, a significant portion of which is rumoured to have meandered its way into the accounts of government ‘trustees’ who later helped finance the 1990 general elections.  It remains imperative that media conspiracy theorists now test the legitimacy to this hypothesis with the same zeal they manifested in their fishing expedition on the 1MDB conspiracies.

Regardless, key figures that were implicated years later in this very exciting and thrilling adventure included Mahathir and Daim, the two Tuns I made mention of earlier. Ironically, Daim tendered his resignation in 1991 and drove the gossip vineyard wild with conspiracy theories, one of which had to do with the 1990 general elections and an unnamed ‘trustee’ who refused to part with the money he held in trust.

The Prime Minister who refused to resign…

By 1992, the United Kingdom had lured investors to the pound by inflating interest rates to artificially buoy its currency. The measure occasioned mass purchases of the pound by BNM, which bargained on Britain’s perpetual commitment to the ERM as a measure of stability and security.

BNM was said to have stocked up on the pound to defend its value against attempts by George Soros and other powerful speculators to devalue it. While it is true that Soros had begun heavily shorting of the pound in the currency market, another version seems to depict the Malaysian central bank as cashing in on lucrative interest rates Britain’s central bank had to offer, with the intent of dumping these gains into regional speculative programmes.

Whatever the reason, Britain began mulling over risks that came along with massive purchases of the pound by rogue speculators who were financing hot money into South East Asia. When the United Kingdom withdrew from the ERM, the British pound dropped in value like a sack of hot potatoes and saddled the Malaysian government with losses that were estimated at 3.6 billion on the dollar.

A year later in 1993, BNM dissipated yet another USD2.2 billion in speculative trading and was a meagre notch below the 5 billion mark. By 1994, the central bank was declared insolvent and bailed out by the Finance Ministry, a portfolio which was then held by Dato’ Seri Anwar Ibrahim.

Jaffar went on to tender his resignation, though he was never really investigated for his role in the scandalous venture and got away scot free. By then, losses had ballooned to proportions that were never really accounted for, at least in public. Be that as it may, Jaafar did the most honourable thing anyone in his position could do, which was to resign from his post as governor of Bank Negara.

And that’s just about as far as we will go on the BNM conspiracy insofar as this article is concerned. Coming back to the here and now, let us see where we stand against the damning conspiracies of the nineties.

Today, Mahathir is heard demanding Najib’s unconditional resignation as Prime Minister over ‘colossal losses that have shamed the nation’. Back in 1994, Bank Negara registered losses that may have revolved around the RM30 billion mark, which by today’s standards is worth a staggering RM 150 billion. Isn’t it amazing how the thought of an early retirement over ‘colossal losses that shamed the nation’ never crossed Mahathir’s mind back then?

And you would think that The Malaysian Insider or Malaysiakini would have picked up on the hypocrisy by now. But what would you expect of editors that ‘carry fire in one hand and water in the other’?

Anyway, that’s how it is with Mahathirism, the cancer that plagues the nation and apparently, opposition friendly media portals.

Writers from The Malaysian Insider will paint you a picture of Najib in a monkey suit and tell you that the monkeys have evolved and are now aping around in Parliament, while those from Malaysiakini will tell you how Najib wrestled a Panda in the zoo just before Christmas.

Do you see the role these ‘political-assassins’ play in skewing public perception? Back in the day when the internet was unheard of, Mahathir pretty much got away with murder and had a free hand in moulding perception through government controlled media. And back then, all we got was stories of a boy who cried wolf.

Well, that settles it for the first episode of ‘the exiting adventures of Tun Dr. Mahathir’ and the whopping equivalent of RM150 billion he dissipated into thin air. I’ll be back when I have the time with yet another exiting instalment that may explain how the Chinese saved Mahathir’s ass during the 1995 general elections.

And while I’m at it, we’ll probably be able to put two and two together and figure out how Mahathir may have financed the 1995 general elections.