Hot money trail from Sabah to Swiss banks

By Luke Rintod of FMT

KOTA KINABALU: Fear and euphoria reign in Umno Sabah over renewed allegations of money-laundering by Sabah Chief Minister Musa Aman. The trail is said to lead from the forests of Sabah to the bank vaults in Hong Kong and on to Switzerland.

Politicians on both sides of the political divide are either rubbing their hands in anticipation or getting ready to edge away from potential trouble that has been floating in the online media for years but has gained new life with further revelations by news portal Sarawak Report (SR).


While word has spread in the online media and blogs that the evidence appears to show something is stinking in the various cash transactions purportedly made by Musa through various proxies, few politicians on either side of the fence have come out to demand an investigation.

But it is also certain that those in various Sabah Umno and Barisan Nasional camps who want Musa to give way to their own favourite, are sharpening their knives in the off-chance that this new twist will dim Musa’s chance of being retained as chief minister by Prime Minister Najib Tun Razak.

A senior local Umno leader, who wished to remain anonymous, told FMT that those siding with Umno vice-president Shafie Apdal are quite happy with what is going on in the money-laundering saga.

“You know what I mean… the other day when a news report came out about Shafie’s alleged liaison with an actress, Musa’s boys were smiling. This is politics… it’s all about going up the ladder and pulling down the other,” he said.

His nonchalant remark hides the fact that the money-laundering case against Musa is far more serious. It also has a bearing on public perceptions of his capability to manage Sabah’s affairs, especially with the general election looming.

The detailed tell-tale marks – supported by bank slips, names on bank accounts and flow of money being “laundered” – tracked to several countries and continents are exposed by SR. And now with disclosures by a Swiss weekly, it will be difficult to hide the truth from the public, said political observers.

Surprised and shaken by the stack of details pouring out, Musa has insisted that he is not involved and it is all old innuendo dredged up by his enemies.

Swiss report links Musa

Well before this detailed exposé by London-based journalist Clare Rewcastle-Brown, Musa was widely reported to have said that he did not know Michael Chia, the man caught in Hong Kong with S$16 million cash four years ago.

In leaked investigation papers, however, Chia reportedly told the Hong Kong authorities that the money belong to Musa.

Last Sunday, a Switzerland national weekly, Sonntagszeitung, published an article on the on-going investigation on Musa, quoting spokespersons of the office of the Swiss attorney-general confirming for the first time that Switzerland has given legal assistance to Hong Kong in the money-laundering case against Musa and Swiss banking giant UBS.

In the article, Musa was mentioned as Sabah chief minister and also the older brother of Malaysia’s Foreign Minister Anifah. That’s already a black eye for Malaysia even before the whole truth is fully revealed.

In return, popular blogger London-based Raja Petra Kamarudin or RPK in his MalaysiaToday blog picked up the Swiss report and got it translated to English, making it one of his all time good hits for the day.

The Zurich-based weekly said spokespersons for the attorney-general office and the Swiss Federal Office of Justice also revealed that files on the case were transmitted to Hong Kong authorities on March 31 last year.

UBS headquarters in Zurich, however, refused to comment on the matter. UBS said that in all markets it was operating in, the bank complied with the regulatory and legal framework.

The Malaysian media reported last week that Musa was being investigated by Hong Kong’s Independent Commission Against Corruption (ICAC) for having laundered over US$90 million of timber corruption money through UBS bank accounts in Hong Kong and Switzerland.

According to the reveal-all SR, Malaysian prosecutors refused to cooperate with Hong Kong in the matter because Attorney-General Abdul Gani Patail, who is from Tawau, Sabah, is a relative and a close political ally of Musa.

It was alleged that in return for the kickbacks, Musa, who has overall say of the state’s timber resources as chief minister, granted concessions to log tropical hardwoods in forest reserves.

Logging concessions revealed

Ironically in February 2007, Malaysia, Indonesia and Brunei committed to protect the Borneo rainforest in the trilateral “Heart of Borneo” declaration.

Swiss writer, Guido Schaetti, in his article said that about the same time, politicians concluded yet other deals and one of them was Musa who allegedly distributed logging concessions to timber companies, allowing them to log even protected areas and received millions in bribes for it.

According to the article, the money then flew through several accounts of UBS in Hong Kong.

It was discovered that those involved operated a network of front companies and nominees, in order to cover the money trail, wrote Schaetti.

Local loggers paid the kickbacks through third party companies into the accounts of Musa’s proxies, allegedly local lawyer Richard Barnes and Chia.

From there, the money was distributed to financial vehicles in the Caribbean and again collected in Hong Kong. Finally, the money allegedly ended up on Musa’s account with UBS in Zurich.

The widely-read Swiss weekly further revealed that in May 2008, the investigators found US$29.6 million in a UBS-account in Hong Kong run by Barnes. In total, more than US$90 million were reported to have flown through the account.

Musa was thought to be the beneficiary. The kickback system was exposed four years ago when Chia was caught in Hong Kong with S$16 million cash. The Hong Kong prosecutors sent their report to Malaysia. That was the end of the line. Gani refused to investigate.

In the SR article, it was revealed that “big” money was also regularly banked into the accounts of Musa’s two sons in Australia.

On Asian websites, the facts can be read in all the details. On a UBS payment slip, which the Sonntagszeitung has seen, even the purpose of the payment is given: “Deposit for logging concession”.

Who’s money is it?

Lukas Straumann, director of the Bruno Manser Fund (BMF), meanwhile accused the bank of heavy breaches of its due diligence duties.

“The documents are proving that funds from the criminal logging of rainforests have been laundered by UBS employees for years. It is shocking that the bank claims not to have been in the know,” noted BMF.

The UBS takes no position on the case, because the identification of customer names would injure its famed banking secrecy. However since 9/11, it’s been much harder to hide “hot” money.

Musa has been fingered but has denied he is involved in any way. So whose money is it? From where did all those hundreds of millions dollars come from?

Surely state financial authorities and those in the state Cabinet are aware what’s going on in their backyard?

Even if they don’t, they are nevertheless collectively responsible and will be held accountable.