Originally taken from CHAPTER FOUR: THE FAMILY FIRM IS LAUNCHED; OR ANWAR. BHD
One might, in reading what I’ve shared so far, assume that the ex-pat community in Malaysia in the 1980s, commercial and intelligence service, were all Anwar obsessives; or at least, that those of us who contributed to the “I” Files were. This is hardly so. I, for example, was busy falling in love with my Malaysian secretary, working up the courage to ask her out, marrying her, and then beginning a family with her. In between, I worked hundreds of matters, the overwhelming majority of which had nothing or little to do with Anwar, and almost all of which revolved around ending the Soviets’ murderous regime once and for all.
Aside from Anwar’s continued ideological war on the Chinese and Christians – he had banned the singing of Christmas carols at shopping malls and public places, and rearranged the school holidays so Christmas did not fall during the long vacation period – his day-to-day doings did not significantly register for most of us.
Most of us had similar stories. The thing about Anwar Ibrahim, you must see, is that he was very different from almost everyone but Mahathir, in that he rapidly began to occupy the centre stage, and not long after he ascended to the post of Education Minister, one could not run any sort of intelligence operation in KL without running into him, his subordinates, his influence, or his financial connections.
We of course from time to time made him our focus, but usually, he simply appeared again and again on our radar. It was especially in his financial connections that he kept intruding into our daily lives, because as one soon discovered, Anwar had his fingers everywhere, directly or indirectly. There were already the Saudi ties, of course, and the House of Saud is composed of terribly shrewd investors; they choose their assets carefully, and they always take the long position.
But one did not then ascend the Umno ranks without money, and more than a few ringgits at that. Whatever his other faults, Anwar has always been a keen student of power, and he understood early the need to develop not only his own funding, but an array of financial backers who would help him rise in the ranks.
His financial empire – which has held him in good stead for decades, through good times and bad – began with the Saudis, but continued with his marriage. It continues to this day, and is how he is able to control his party’s internal elections, and how he always seems to end up in the very best hotels when he travels.
It is here that I must beg your indulgence, dear reader. To understand Anwar’s financial empire – how he built it and how he maintains it – will require that we step outside of the chronological narrative I have largely favoured to date. Nevertheless, it is a story worth telling, especially in light of Anwar’s decisions in the 1990s and after his release from prison to style himself one of the common men of Malaysia – at least in his dealings with ordinary Malaysians and Western reporters.
My understanding of the matter began as I was hunting the Communists’’ last vestiges, not long before the coup that overthrew Gorbachev and ended with the complete dissolution of the Soviet Union.
∞“How is Perak?”
The Yank, a Company man, was not asking me about the weather in the state. As I’d moved up in the world, I’d gained quite the reputation for hounding the Soviets and their allies into the waiting arms of local police and foreign intelligence wherever they hid. My legend was enhanced by my team, a group of brilliant young men from across the globe whose parents to a one had been devout Communists, and had turned away on seeing Stalin’s purges; and by the Americans, who had under Reagan and then the elder Bush launched a multi-front black ops and military buildup war across the globe, determined to shatter the Soviet Empire once and for all. Southeast Asia was no different.
But without being immodest, I was quite good, and I knew it. “Dead,” I replied. “Selangor and Penang are all that’s left, and they’re just stragglers.” I was telling him what he already knew, or I wouldn’t have told him; but we were involved in a clever little game in which he was praising me, and I was pretending not to realise it.
He nodded, a corner of his mouth turning up in a grin. He was almost a stereotype, a muscular fellow from Nebraska with a crew cut and a square jaw, but he was terribly clever, and he knew that Gorbachev was talking about openness to foreign reporters while doing the usual Soviet number on dissidents and ethnic minorities, usually Muslims, at home. He reveled in the Soviets’ demise, and I had him pegged as a future station chief, if he wasn’t already.
But that’s not why he’d come to my office. My new secretary had been uncertain about him, and my old secretary was at home with our new son, so I’d had to clear him in. I was curious, to say the least. I waited for him to speak, and very shortly, he did.
“We’re worried about Malaysia,” he said. I was a bit perplexed – hadn’t I made clear to him and the Box 850 fellows who had my office bugged (telephone, desk lamp, door handle, and left blind string) that the Russians weren’t a threat anymore? – but seeing the look on my face, he shook his head. “Not about them. Have you come across anything about any … Government ministers while finishing Perak?”
Before I could nod, he opened his briefcase. “And would you be interested in some quid pro quo? For you, and for the folks listening through the draw string in your blinds?”
∞Readers by now will be familiar with Anwar’s early financing at some level – the Wahhabis became his foremost financial backers, and remain so to this day. The devil, as they say, is in the details, and the details are remarkable.
By the mid-1980s, it had become obvious that Wan Azizah had brought more than love and devout faith into her marriage to Anwar. She had also brought a spine of steel, more than a little ambition, and a great deal of wealth through her family’s substantial holdings.
His wife had provided much of the seed money for his political career, the Saudis the rest. Anwar’s net worth at the time was estimated – according to these American numbers – at roughly $35 million, a not insignificant sum in 1990. It would grow with time; most private estimates today put his family’s worth at roughly $4 billion.
Most of the papers I received that day were simply warming over much of what we already knew: The Saudis funded Anwar both directly and through the increasing number of third parties through which he was tied – universities, NGOs, and banks with significant ties to the man who, it was believed, would be Finance Minister within a year.
The growth came through some of the canniest and most blatantly corrupt financial dealings Malaysia has ever seen. He was always careful to leave the direct wealth accumulation in the hands of proxies in and out of Government – except in Bumiputra shares, an oversight that would cost him dearly at a critical time.
His involvement in Communist funding was more extensive than one would think, but we believed it was quite accidental – the Saudis had no love for the militant atheists in Moscow, and even less for the rival insurgents they had planted against the Saudis throughout the world. His name, his front companies, his personal banking arrangements – all arose more from his omnipresence than any sort of explicit association with the Russians.
But the new details were quite something to behold.
One name recurred again and again, one I’d not to that point seen connected to Anwar: Saleh Abdullah Kamel, one of the wealthiest men in Saudi Arabia. The Americans were some of the least trustful allies the Saudis had – quite the statement, to be sure – and they were diligent trackers of the wealthiest of the wealthy. Saleh Kamel had founded Al Baraka Bank, the largest source of Islamic finance in the world, and had generously spread his wealth around – with a catch.
His money went exclusively to Saudi proxies and their causes. Anwar was a direct recipient of a great deal of his largesse, and had been since his ABIM days. Saleh Kamel would become important again later in the I-Files, but at the time the extent of his fingerprint was already remarkable. Anwar’s radical charities in other countries, his charities here – all of which of course paid him some sort of management fee – and his every project at home received some amount of Saleh Kamel’s largesse.
All of this would be remarkable enough, but even then, those of us who did wetwork against the Soviets knew Al Baraka and Saleh Kamel from another source: He funded the mujahedeen in Afghanistan, or more accurately, the mujahedeen who truly believed in the Saudi vision. He funded the madrassas in Pakistan and the unreachable parts of Afghanistan that would birth the Taliban a mere handful of years later – even then, we were aware of some of the danger he posed.
Al Baraka would later be Osama bin Laden’s and al Qaeda’s first choice in banks, a fact that have never seemed to bother Anwar or Saleh Kamel – and certainly did not slow Anwar down from joining the board of Al Baraka on leaving prison. He even proudly boasts of it to this day.
Anwar understood the importance of maintaining a good relationship, and so worked to keep his patron happy. In 1994, while Finance Minister, Anwar privatised Bank Islam (which Anwar himself had founded), selling 2.89 million shares to Joint Arab Malaysian Investment, which already controlled 5.27 million shares. JAMI’s largest shareholders were Al Baraka and Saleh Kamel; Anwar’s longtime associate Kamaruddin Mohd Nor, several Saudi-controlled companies, and a handful of Anwar front groups were the remaining major shareholders. JAMI saw hundreds of millions off of the deal through off-books transactions.
As Finance Minister, Anwar always made certain that Al Baraka and Saleh Kamel received their share – they, and a mysterious figure we would come to know as ‘Mr Ten Per Cent.’
The relationship has always been symbiotic. Anwar has over the years taken “consulting fees” for “introducing” foreign firms to Al Baraka and other Saudi enterprises; for example, in the last decade, he took $25,000,000 from the Hong Kong firm Pearl Oriental to “solicit investments” from Al Baraka.
It’s good to be the king; or, failing that, the Finance Minister.
There was more, and it filled in more gaps that we’d never imagined existed from Anwar’s early days. Ahmad al-Haj Totonji, the Iraqi who had apparently brokered Saudi funds to Anwar during his ABIM days, and Dr Abdul Hamid A Sulayman, his superior – and Anwar’s appointment as second Rector of the International Islamic University Malaysia – helped fund Anwar’s first American project, the International Institute of Islamic Thought. The Institute was not only a way for Anwar to help internationalise Saudi teachings under the cover of working with the more moderate factions of the Muslim Brotherhood, it was also a channel for Saudi funds into Anwar’s coffers.
The IIIT would be a money channel for funds to pour into other groups and enterprises Anwar controlled through surrogates over the decades. Over tea and spread manila folders in 1999, some colleagues and I estimated he’d made somewhere on the order of £30 million off of IIIT’s several ventures, in funds nominally dedicated to spreading a moderate and tolerant version of Islam.
By now, Anwar’s closet extremism and his Saudi ties were no surprise; his ties to the advocates of violent jihad, however, were a bit jarring. The files also suggested that the Saudis had taught Anwar the value not merely of front companies, but of dealing with banks who could be trusted to be discreet, and who could maintain anonymous accounts indefinitely. The size of those accounts was an outright mystery.
We eventually learned the size of some of those accounts. By the time Anwar made his putsch attempt on Mahathir, he apparently held roughly RM3 billion in Bank Negara, through proxy accounts and straw holder accounts – a neat little trick he’d learned from the Saudis, who hold so much of their wealth in Asian and, until recently, Swiss banks through dummy corporation after dummy corporation. Although we had some inklings before Abdul Murad’s statutory declaration just after Anwar’s fall, the sheer scope of Anwar’s holdings in Malaysia simply stunned us all as much as it did Mahathir.
We’d thought we had him pinned down, but there he was drawing down tens of millions of ringgits at a time underneath everyone’s nose. More importantly – as we would later discover – Anwar had used those very accounts to create the network of public relations consulting agencies that would later rally to his side after his downfall.
But that is getting ahead of the story a bit.
Though much of this was an open secret in KL at some level, Mahathir was absolutely blind to it.
He was still fighting his internal battles, and Operation Lalang had damaged both the Barisan Nasional coalition and Mahathir’s attention to his own Cabinet. It seemed beyond dispute that he was relying more and more on Anwar – faithful Anwar, who’d stayed with Umno Team A, who had become the perfect party man – to reliably keep doing whatever it was he was doing. Mahathir was too busy doing a march through the institutions and repairing his coalition to notice the corruption and extremism developing just beneath his nose. Or perhaps he did not wish to see it.
One place where money was already flowing was the new administrative capital, for which Mahathir had selected a choice spot in Selangor. Mahathir would later boast of the extent to which planning, materials, design, construction, and waste removal were handled by companies domestic to Malaysia. The files made clear that Anwar intended that his own, and his patrons’, companies would be those domestic corporations.
Anwar’s time in Government was therefore both a blend of cronyism and radical Islam, and a level of corruption and profit-taking from the public on a scale that would shame a lesser man. But then, Anwar never thought himself a lesser man, which is perhaps why he always seems so surprised when challenged in public.
But in the 1990s, Anwar intended to be the indispensable man, more than Mahathir had ever imagined being. And he was well on his way.
That, in turn, led to Petronas.
∞Roughly a month later, I was puttering about the office, trying to determine if I was needed that day or not. The tremendous advantage to being the boss is that one need only ask oneself permission to check out for the day; the tremendous disadvantage is that one rarely gives oneself permission.
This was shaping up to be one of the exceptions. Like most new fathers, I was convinced that my son had reinvented the fact of infancy, and his every movement was a delight. We were trying him on solids, and I was inclined to see him spit up first-hand. I called in my most senior subordinate to hand off some tasks.
By the time Phillip entered, I was already mentally on the walk home. I motioned for him to sit and opened my mouth when he uncharacteristically intruded.
“Sir,” he began, his American upbringing showing. Half-Chinese, half-Welsh-French-Something American mix, I suspected he’d be supplanting me in this operation soon. No matter. Today he was my excuse to depart early. “Have you seen the latest data on Petronas?”
This was quite the last thing I’d expected him to say, so I reached across the desk to receive the folder he was handing me. I opened it up and resigned myself to being around a bit longer. I read, reviewed the graphs, stopped on the second page, backed up, started again, and finished. I closed the folder and looked up.
“What are they doing with the money?” I asked. Piercing through the financial gobbledygook, graphs, charts, and formulae was a single conclusion: Petronas was apparently selling a small part of its oil at a price well below market. Not all, not most, and unless one was running intelligence on the biggest companies in Malaysia, not enough to notice.
Phillip had noticed. Bright lad. However, he was as puzzled as I. “Not sure, chief. A lot of state oil companies use this as a way to take assets off the books. They allow majors to take the oil at a low price, sell at a good markup, split the difference with the state oil company, and the state concern gets to book a loss and take an off-books profit at the same time.
“Thing is, this is so small. It’s barely worth the trouble. It’s almost like they’re running a pilot operation, trying to see if they can manage this without getting caught.”
“They?” I asked. “Is ‘they’ Petronas or some of its executives?”
He frowned. “I’m not sure,” he said, tasting the words as they left his mouth. “Without better contacts inside, I’m not certain there’s any way to tell.”
I steepled my fingers and thought for a moment. The sun was shining, the weather was unusually pleasant, and I had a beautiful wife and baby at home. Phillip had a young wife who was expecting, too. Most of my team either had families or were auditioning for the process.
“Close the office for today,” I announced. “Petronas isn’t going anywhere, the difference in the list price and the spot price won’t change, and we need a break.” I stood up, grinning, and practically raced home, feeling like a schoolboy let out early.
∞By itself, that episode apparently had little to do with Anwar; I tell it because like so many of the stories in the “I” Files, it would take later data to understand how it all tied together.
Friends of Anwar from his university and ABIM days had a way of entering into important positions in Government, state-owned industry, or private industry with Government contracts.
Over a decade later, I would discover Petronas apparently doing the same thing, but on a larger scale, never bothering to identify its rationale, and unwilling or unable to explain what happened to the difference or why they were using an under-market pricing method.
Digging to the bottom of that yielded more Anwar Ibrahim.
Another name would later be added to these files. Hassan Marican, who was in 1990 a rising star in Petronas, drew an enormous number of foreign intelligence reports. He’d been recruited there by Basir Ismail (Chairman of Petronas at the time, and a close confidant of Dr M) just a short time before, and was already making waves – and clearly aiming for the Presidency, then occupied by Azizan Zainul Abidin.
Hassan’s rise mirrored Anwar’s rise – if the files are to be believed, not coincidentally. Hassan’s father had been one of Wan Azizah’s father’s colleagues in Psy-Ops in the 1970s. Hassan had attended Malay College, a scant five years Anwar’s junior there, and had walked into the network Anwar developed. Anwar and Hassan worked hand-in-glove to engineer Hassan’s rise up the ranks. By 1995, they had engineered Basir’s retirement, moving Azizan into the position of Chairman. The petrochemical group naturally needed a President and CEO, and so Anwar proposed Hassan.
Mahathir was uncertain – Hassan was only 43 at the time – but by then, the old man trusted his Deputy Prime Minister implicitly, and so agreed to the appointment.
Hassan therefore had full rein on Petronas’s coffers – and, more importantly, its operations. The trickle of underpriced crude Phillip had noticed expanded significantly and almost immediately, and all of our intelligence indicated that the missing money was being directed to Wahhabi and radical causes. As time went by, numerous intelligence services, including the Americans, developed credible information that Petronas – which had numerous Anwar allies and friends in its upper echelons – was diverting funds to Anwar front groups at home and abroad.
But the files told a bigger story. Price fixing was only the cleverest of the schemes the two MCKK men worked up together. Anwar cronies and vassals received the choicest construction, development, procurement, and service contracts from Petronas – billions of pounds’ worth.
Between them, they almost singlehandedly created what amounted to an oil mafia, a source of constant graft and kickbacks to fund Anwar’s war chest and to help him in his drive for Mahathir’s seat.
All of this had the effect of diverting untold billions in revenue and savings from Malaysia’s crown jewel – and source of so much public money. For all of the file material on this matter, for all of the several pages of graphs and analysis, there is no indication that either man lost a night’s sleep over this.
Hassan was an interesting fellow in his own right. A frequent and open lover of alcohol – he was regularly observed nursing a tall draught of beer at the Long Bar of the members-only Royal Selangor Club – he was prone to let the wrong word slip with a bit too much beer in him.
More than once, he’d talk about his close relationship with Anwar – and with Mahathir – and of holding both men’s affections as hedges against the other. There is a reason that he supported Mahathir’s various pet projects aside from the enormous kickback system he and Anwar developed – Proton, Putrajaya, the acquisition/bailout of Mahathir’s son Mirzan’s disaster of Konsortium Perkapalan, all because he was determined to ride both men’s coattails as long as possible.
It was only when Najib Razak became Prime Minister and summarily engineered Hassan’s removal from Petronas that this enormous source of funds would stop flowing to Anwar.
Whether all of this was true or not was – when I first heard of Petronas’s price fixing – not my concern, but in toto, it completed a web of funding that explained how Anwar, who had had so much taken from him after his fall, was immediately able to resume his old lifestyle at home and abroad much later, in 2004.
Thus, the story of Anwar is much like the story of a spider and its web – always adding a strand here, tending a strand there. Like his patrons the Wahhabis, he learned early the importance of taking the long view, and developing contingencies and protectors. It is thus that he began cultivating foreigners – especially Americans of both major political parties – and thus that the next chapter begins.
Excerp from the I Files