In 2016, the Justice Department alleged that Malaysian officials stole billions of dollars from their people and funneled some of it through the United States.
Reveal teamed up with Washington, D.C., public radio station WAMU to dig into one of the largest investigations ever by the Justice Department’s Kleptocracy Asset Recovery Initiative.
It’s a tale that features cameos from Leonardo DiCaprio, Donald Trump, the world’s largest yacht, a Malaysian playboy known for his lavish spending in New York nightclubs and – as you might imagine – lots of Champagne.
Credits
This week’s show was produced by Amy Walters and edited by Deb George. Lance Williams and Matt Smith helped out on today’s show.
Special thanks to Patrick Madden at WAMU and Reveal’s Katharine Mieszkowski for help with fact-checking.
Original score and sound design by Jim Briggs and Fernando Arruda.
Support for Reveal is provided by the Reva and David Logan Foundation, the Ford Foundation, the John D. and Catherine T. MacArthur Foundation, The John S. And James L. Knight Foundation, the Heising-Simons Foundation and the Ethics and Excellence in Journalism Foundation.
Reveal is a co-production of The Center for Investigative Reporting and PRX.
Transcript
Reveal transcripts are produced by a third-party transcription service and may contain errors. Please be aware that the official record for Reveal’s radio stories is the audio.
| Section 1 of 3 [00:00:00 – 00:18:04] (NOTE: speaker names may be different in each section) | |
| Al Letson: | From the Center for Investigative Reporting and PRX, this is Reveal. I’m Al Letson. I remember when I was a kid my family loved to play Monopoly and I was ruthless. In fact, I don’t play with my kids now because, well I would crush them under my heels. It’s not exactly the type of modeling I want to give my kids, ’cause when I play a game like Monopoly I have to win. King of the World, or at least of Atlantic City. I want to grab everything for myself. All the money, all the power, everything. |
| In real life, that kind of drive for power and money can corrupt and if the wrong people get in the right position they can turn government bank accounts into their personal ATM. Turns out there’s word for it, kleptocracy. It means ruled by thieves. But you don’t have to be king of the world to be a kleptocrat. You can be a king or a prime minister, or a president. The story we’re telling today is about one of the United States biggest kleptocracy investigations. | |
| Loretta Lynch: | The largest single action ever brought by the department’s kleptocracy asset recovery initiative. The Department of Justice is determined to prevent the American financial system from being used as a conduit for corruption. |
| Al Letson: | This caper is world-wide and features Leonardo DiCaprio, one of the worlds biggest yachts, lots of champaign, allegations of a massive money laundering network, and a penthouse suite at Trump International Hotel and Tower. A penthouse that belonged to Donald Trump. Patrick Madden, our reporting partner at WAMU in Washington ran straight into it, right there on Pennsylvania Avenue, outside of President Donald Trump’s hotel. Patrick worked with our reporter, Amy Walters, on the story. |
| Patrick Madden: | It’s Tuesday, September 12th. I’m outside the Trump Hotel in downtown DC and it’s a little after noon right now and there’s about five or six black SUVs that have Malaysian flags in the windows of the car. It looks to be part of some sort of motorcade. |
| Amy Walters: | The Malaysian flag on these trucks looks a lot like the American one. Red and white strips, but on the upper left there’s only one star and a crescent moon. |
| Patrick Madden: | I’m going to try to find out some more information here about whether or not these government officials are staying at the hotel. It would appear to be, because last night I saw the same trucks here. They left at one point but obviously they’re back here and they’re parked in the same place, right outside the front lobby to the Trump International Hotel. |
| Excuse me, hi, are you guys with the Malaysian government? | |
| Malaysian: | Oh yes, yes. |
| Patrick Madden: | Are you guys staying at the Trump Hotel? |
| Malaysian: | Yes, yes. |
| Amy Walters: | These two officials were in an entourage of dozens, more than 60 guests including Prime Minister Najib Razak and his wife, Rosmah. They crossed into the lobby of President Trump’s landmark hotel. |
| Patrick Madden: | How do you like it? |
| Malaysian: | Oh it’s a very good place. |
| Patrick Madden: | Good place? |
| So, Amy and I had been by Trump’s hotel a few times trying to figure out who was spending money there. Looking around you’ll see the Trump base in their red “Make American Great Again” trucker hats settled up to the bar next to these people in Italian suits and fancy shoes. | |
| Amy Walters: | If you come here you might run into the President. He’ll occasionally stop by for a steak dinner. But why did this Malaysian entourage book rooms here? We weren’t the only ones asking that question. |
| Sarah Huckabee: | We certainly don’t book their hotel accommodations, so I couldn’t speak to the personal decision they made about where to stay here in DC. |
| Patrick Madden: | That’s Sarah Huckabee Sanders the White House press secretary a little later that day. She got a little defensive fielding the same question we had at the daily briefing, but this one reporter kept on it. |
| Amy Walters: | He asked if she thought that they were spending money at the Trump Hotel to curry favor. Her answer was brief. |
| Sarah Huckabee: | No, I don’t. |
| Amy Walters: | The Malaysians Patrick bumped into outside the hotel seemed a little friendlier and they had their own reason why they chose the Trump Hotel. |
| Patrick Madden: | What do you like about it? |
| Malaysian: | Very good meeting place. |
| Amy Walters: | They were right about the hotel being convenient. |
| President Trump: | Mr. Prime Minister, it’s a great honor to have you in the United States and in the White House. |
| Patrick Madden: | The Prime Minister of Malaysia, Najib Razak, was part of their entourage and was meeting with President Trump at the White House that same day, just a few blocks from the hotel. |
| PM Razak: | Thank you very much, Mr. President, for your invitation for me and members of my delegation to meet with you at the White House. |
| Amy Walters: | And the meeting went great. |
| Patrick Madden: | At lease Najib said so at a press conference later. |
| PM Razak: | The whole trip has been, I would say, stress free. I was very happy to be received by the President at this date. He received me not as prime minister but as a friend. |
| Patrick Madden: | That was a little weird. |
| Amy Walters: | Yeah, it was really weird. Because remember that kleptocracy investigation? The prime minister of Malaysia is right in the middle of it. |
| Patrick Madden: | See, a year earlier Loretta Lynch, the then attorney general under the Obama administration, laid it all out. |
| Loretta Lynch: | Today the Department of Justice has filed a civil complaint associated with an international conspiracy to launder funds stolen from 1Malaysia Development Berhad, or 1MDB, a company wholly owned by the government of Malaysia. |
| Patrick Madden: | Malaysia Development Berhad was an investment fund started in 2009 by Prime Minister Najib with government money and the Malaysian people were told it would create opportunities for them. |
| Amy Walters: | People hoped it would make the country more successful. |
| Loretta Lynch: | But unfortunately, sadly, tragically, a number of corrupt 1MBD officials treated this public trust as a personal bank account. Now, our complaint alleges that from 2009 through 2015 these officials and their associates conspired to misappropriate and launder billions of dollars from 1MDB. |
| Amy Walters: | Lynch and her team at the Justice Department were determined to recover the alleged stolen money, at least what was funneled through the US. |
| Patrick Madden: | This was a huge announcement but you may have missed it. A lot of people did. |
| Amy Walters: | Because it was July 20th 2016. |
| President Trump: | Thank you. Thank you very much. |
| Amy Walters: | And a day earlier, the Republican Party had announced the Presidential nomination of Donald J. Trump.
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| President Trump: | Friends, delegates, and fellow Americans, I humbly and gratefully accept your nomination for the presidency of the United States.
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| Amy Walters: | Fast forward, Trump’s elected president.
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| Patrick Madden: | Prime Minister Najib books a stay at Trump’s Washington DC hotel and meets with President Trump, but why?
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| Amy Walters: | Why was he staying at Trump Hotel? Why was he meeting with Trump? Why was he in the middle of this investigation?
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| Patrick Madden: | We decided to call Malaysia to see what we could find out.
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| Cynthia Gabriel: | Is he there? Alright, I can hear you better than Amy.
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| Al Letson: | When we come back, Amy and Patrick find out what the Prime Minister of Malaysia might want from President Trump and why the Malaysian people are afraid to speak out. There will also be a cameo by Leonardo DiCaprio and lots of cash.
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| Speaker 1: | You know what a fugasi is?
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| Speaker 2: | Fugasi, it’s fake.
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| Speaker 1: | Fugasi is a wazi, it’s a woozy, it’s a …
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| Speaker 2: | Fairy dust.
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| Patrick Madden: | Was all this legal? Absolutely not.
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| Al Letson: | Coming up on Reveal for the Center for Investigative Reporting and PRX.
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| Byard Duncan: | Hi folks. Byard Duncan here from Reveal. I’m here to tell you about a really cool opportunity we have coming up and I’m going to bring in a friend to help me do it.
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| Alonz Stevens: | Hello.
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| Byard Duncan: | This is Alonz Stevens.
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| Alonz Stevens: | I am a reporter at KEP Austin’s NPR Public Radio station.
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| Byard Duncan: | Alonz is also a former Reveal investigative fellow. I asked him is it something he’d recommend to other journalists.
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| Alonz Stevens: | Oh yeah, yeah, for sure. I went from like kind of a scrappy investigative reporter to, now I’m known as kind of this lean mean investigative reporting machine. You know I have people coming to me all the time for training, to help them out of binds of public information or just to put some teeth on their investigative stories.
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| Byard Duncan: | Applications are due April 19th. To find out more and to apply online, just go to RevealNews.org/fellowship. Again, that’s RevealNews.org/fellowship.
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| Al Letson: | From the Center for Investigative Reporting and PRX this is Reveal. I’m Al Letson. We’re spending this hour looking at one of the Justice Departments biggest kleptocracy investigations. Started as a civil forfeiture under the Obama administration and is now a criminal investigation under President Trump. Reveals Amy Walters and Patrick Madden from Washington DC’s WAMU started reporting this story last September when President Trump met with the Prime Minister of Malaysia Najib Razak.
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| While he was in Washington, Prime Minister Najib and his delegation stayed at Trump’s hotel. Now you’re probably thinking, why is this a big deal? Foreign leaders go to the White House all the time. Well the difference here is that the US Department of Justice was investigating what happened to money stolen from a Malaysian state fund begun by Prime Minister Najib. The DOJ alleges that a certain high ranking official in the Malaysian government, widely reported to be Najib, had hundreds of millions transferred into his own bank account. It’s a claim Najib consistently denies. Malaysia’s attorney general cleared him of those charges but a lot of Malaysians aren’t pleased.
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| Malaysian: | Our government, our leaders are not doing their job. They are only fulfilling their pockets.
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| Al Letson: | When word spread that billions were allegedly stolen from this fund, people got upset. There were huge demonstrations.
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| Malaysian: | These protesters are directing their anger at one man, Prime Minister Najib Razak. He’s been facing allegations of mismanaging a state fund called 1MDB, and also for allegedly taking public money.
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| Al Letson: | What does a kleptocracy mean for Malaysians and what does all of this have to do with Prime Minister Najib’s visit with President Trump? That’s what Amy and Patrick wanted to find out.
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| Amy Walters: | Hello?
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| Cynthia Gabriel: | Yeah, okay, all right, so maybe Amy just says speak a little slower and then it’ll be fine.
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| Amy Walters: | Can you hear me?
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| Cynthia Gabriel: | Okay.
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| Patrick Madden: | That’s Amy and me trying to dial up Cynthia Gabriel in Kuala Lumpur. She’s a Malaysian human rights advocate and she’s trying to get back the money that was supposedly stolen from the Malaysian people.
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| Cynthia Gabriel: | It shocked the entire nation here in Malaysia. It shocked a lot of people here. We’re talking about 4.5 billion US dollars being stolen, and that’s huge.
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| Amy Walters: | The Malaysian currency, the ringgit, dropped in value and news reports say the 1MDB scandal was part of the reason why.
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| Cynthia Gabriel: | A lot of burden is placed on the Malaysian people to actually pay for the burden of the corruption of the political leadership.
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| Patrick Madden: | But it’s not just Malaysian leadership.
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| Cynthia Gabriel: | It was actually being facilitated by a massive industry out there, which includes banks, lawyers, and so on and so forth, to actually facilitate money laundering and dirty money to be scrubbed, to be made clean, and how the United States was actually being used as a hub for buying property in Los Angeles, New York, and that’s huge.
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| Patrick Madden: | Cynthia’s accusations are outlined in the Justice Department’s complaints.
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| Amy Walters: | She came here to the US last year to accept a human rights award for her work fighting corruption. She’d originally studied chemistry and wanted to be a scientist. She never thought this is something she’d be doing full time. Listening to Cynthia talk on Skype now, she sounds very calm, very matter of fact talking about officials allegedly stealing from the Malaysian people.
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| Patrick Madden: | But what she’s doing is a really dangerous job. She says the government has already taken her passport.
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| Amy Walters: | There’s another threat, she says.
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| Cynthia Gabriel: | Yeah, yeah, for my citizenship to be revoked.
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| Amy Walters: | Cynthia’s not alone. She says that several protesters who accused the Prime Minister of corruption ended up in jail.
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| Cynthia Gabriel: | Then there was a deputy public prosecutor who was on the case that was murdered mysteriously. Although there’s no evidence directly to link him with the 1MDB but the timing, the fact that he was working on 1MDB case and his mysterious murder, I mean he was found in an oil drum, just sent shivers down people’s spine.
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| Amy Walters: | The Malaysian government denies the prosecutor was involved in any investigation of 1MDB, but there have been efforts to crack down on criticism. Just this month the parliament passed something they call an anti-fake news bill. It carries a maximum sentience of six years in prison for anyone reporting news which is “wholly or partly false.” Critics say it will allow the government to silence people questioning the prime minister about his connection to the 1MDB scandal. So to Cynthia, the US Justice Department’s ongoing investigation into 1MDB, it’s a rare source of hope.
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| Cynthia Gabriel: | I really hope the DOJ will not disappoint the Malaysian people even more, or the global community for that matter.
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| Amy Walters: | But when news broke in Malaysia that their Prime Minister would be visiting the White House while the investigation was going on, and staying at the Trump Hotel …
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| Cynthia Gabriel: | It certainly raised eyebrows and it’s like, how much? You know. That was the first question on everyone’s mind and why Trump Hotel. Because the Trump Hotel is an active business property of President Trump so why stay at the Trump Hotel? To obviously curry favor from President Trump.
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| Patrick Madden: | This meeting wasn’t a one-off. Najib and Trump had golf together at Trump’s New Jersey country club in 2014 before Trump was president. Trump signed a photograph of the two of them calling Najib my favorite prime minister. The truth is, Najib has a habit of courting US heads of state. He’s hit the links with President Obama as well.
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| Amy Walters: | But Najib’s meeting with Trump at the White House and the stay over at the Trump Hotel was different. The way Cynthia explains it, Najib was using this latest date in their bromance to show the world he’s not a crook.
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| Cynthia Gabriel: | It was very important for the Malaysian Prime Minister to have this meeting to actually show the Malaysian people that “Hey I’m not a wanted man in the United States contrary to what everyone else is saying.”
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| Amy Walters: | The price for a night at the Trump Hotel hovers around $550 dollars on the low end. There were more than 60 guests. Some just spent one night, others were booked for over a week. Adding it all up, the total hovers around $100,000 not accounting for any sort of group discount. But it wasn’t just the hotel bill.
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| Patrick Madden: | More money went to a lobbying group to help get Malaysian officials meetings with officials in Washington DC.
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| Amy Walters: | Patrick and I went on an urban adventure in downtown DC to find out who was paying for that.
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| Patrick Madden: | I mean talk about non-descript right.
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| Amy Walters: | I don’t even see any signs on here. That was like a piece of paper taped to the window. Despite the lack of signage, we found what we were looking for.
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| Patrick Madden: | Hi, we’re looking for the [Feron 00:16:38].
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| Amy Walters: | The foreign agent registration office.
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| Patrick Madden: | It is not exactly one of DC’s great monuments.
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| Amy Walters: | No. It’s a tiny little ground floor office not far from the capital, but it’s a lot more powerful than it looks.
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| Patrick Madden: | Exactly. Foreign governments wanting to lobby the US to spend money, to try to get us to do what they want, have to go through this office. It’s a firewall against an invasion of foreign influence in the United States.
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| Amy Walters: | We can record all the [inaudible 00:17:07] pulling the records?
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| Patrick Madden: | No recording, but we were able to grab some of the information we were looking for. We came out of the office armed with a very small handful of papers.
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| Amy Walters: | We couldn’t really wait to see the forms, so we kind of nerded out here. Instead of heading back to the office, we popped into a restaurant next door and had a look. There it is, name of registrant, the 45 Group.
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| Patrick Madden: | Address, Wheeling, West Virginia.
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| Amy Walters: | 45, like the 45th president of the United States. It’s run by a former Trump campaign spokesperson and the documents show that the office of the Prime Minister of Malaysia paid the lobbying firm $250,000 four months before Prime Minister Najib visited the United States.
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| Patrick Madden: | It says “The 45 Group will assist the Republic of Malaysia via the Godfrey Group-
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| Section 1 of 3 [00:00:00 – 00:18:04] | |
| Section 2 of 3 [00:18:00 – 00:36:04] (NOTE: speaker names may be different in each section)
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| Speaker 3: | … this, the Republic of Malaysia via the Godfrey Group with arranging meetings between the US government officials and Malaysian officials. That’s all we know, but that’s in May, but four months later, there’s a meeting set up at the White House and this group is staying at the Trump Hotel.
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| Byard Duncan: | What was the Prime Minister’s office trying to get out of its visit to Washington?
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| Amy Walters: | To try and find out, I headed to the quiet suburbs of northern Virginia.
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| Hi, Don.
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| John Malott: | Hi, Amy, come on in.
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| Amy Walters: | Thank you.
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| John Malott: | You’re welcome.
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| Amy Walters: | Ambassador John Malott retired to this neighborhood of cul-de-sacs and stately homes. These days he spends a lot of time with his small and aging canine friend.
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| John Malott: | Good dog.
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| Amy Walters: | But 20 years ago, he had a different life on the other side of the world. In the mid ’90s, he was a US Ambassador to Malaysia. You can tell talking to him, it’s a time he hasn’t forgotten.
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| John Malott: | I knew Najib when I was in Malaysia so I’m frequently … I knew his wife, I liked her, always got along very, very well. So to me, it’s not personal.
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| Amy Walters: | It may not be personal, but Malott’s pretty clear he’s disappointed about the inflation of corruption in Prime Minister Najib’s Malaysia now.
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| John Malott: | In the old days, we were talking millions and now we’re talking billions that are being stolen and passed around. To me, it’s a very different thing because, at the end of the day, I love Malaysia and I like the Malaysian people. And it pains me to see what has happened to that country under his rule.
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| Amy Walters: | In this case of 1MDB, 4.5 billion dollars were stolen according to the Justice Department. Some of that money landed in the US and the DOJ’s going after more than a billion by civil forfeiture.
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| Byard Duncan: | In August of 2017, things escalated and a separate criminal investigation was announced. The civil complaint mentions money laundering a dozen times. If criminal charges are brought and proven in court, a big if, the maximum sentence for money laundering is 20 years in prison.
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| Amy Walters: | So after President Trump invited Prime Minister Najib to the White House, Malott says Najib took that as a positive sign.
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| John Malott: | Before he came to see Trump, the expression of interest was being made in Malaysia like, “I hope this invitation means that the case is going to be dropped,” because they definitely would like to see the case dropped.
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| Amy Walters: | Joseph Yun was Ambassador to Malaysia when the Justice Department announced its investigation. I reached out asking if he’d been contacted by Najib or people connected with him about getting the investigation dropped. He didn’t respond to the question. Whatever the outcome of the investigation, Ambassador Malott says Prime Minister Najib has nothing to worry about in the short term.
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| John Malott: | My understanding is, based on international precedent, that as long as he is the head of the government, he cannot be indicted. If the day ever comes when he is no longer Prime Minister, then of course, he can be charged.
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| Amy Walters: | A former Justice Department attorney I spoke with said, “It’s not that a foreign head of state can’t be arrested when they’re on US soil, it’s that it doesn’t happen, not very often at least.” But there’s one person Ambassador Malott doesn’t think would fare as well as Najib if charges are brought.
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| Byard Duncan: | His name is Low Taek Jho and everyone knows him as Jho Low.
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| Amy Walters: | Do they care about Jho Low?
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| John Malott: | He’s expendable.
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| Byard Duncan: | We find out who Jho Low is. How he’s connected to Prime Minister Najib and which expenses made him so expendable.
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| Clare R Brown: | Jho Low was becoming one of the world’s most notorious big spenders, at the same time as he was the known advisor to the Prime Minister of Malaysia for an investment fund where all the money seemed to be disappearing.
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| Speaker 5: | That part of the story when we come back on Reveal.
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| Byard Duncan: | Hey, folks, Byard Duncan again. I wanted to tell you about a major scoop we published this week on our website. A little while back Interior Secretary Ryan Zinke told a Senate committee that his department had no intention of messing with science. He even challenged everyone there to, “Find a document we’ve changed on a report.” Well, Elizabeth Shogren, one of our reporters, did just that. In a draft report on sea level rise and storm surge, Elizabeth found that National Park Service officials deleted every mention of man’s role in causing climate change. How do leading scientists feel about this? They call it censorship. To read this story right now, just text Wipeout to 63735. Again, that’s one word Wipeout to 63735. You can text Stop or Help at any time and standard texting rates apply.
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| Al Letson: | From the Center for Investigative Reporting and PRX, this is Reveal. I’m Al Letson.
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| Amy Walters: | Do they care about Jho Low?
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| John Malott: | He’s expendable.
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| Al Letson: | So who is Jho Low? Low Taek Jho is his full name and the FBI claims he and his associates helped siphon off billions of dollars meant to help the people of Malaysia. They also claim Jho Low and his associates were laundering some of that money right here in the United States.
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| Andrew McCabe: | They used the money to pay gambling debts at Las Vegas casinos, they rented luxury yachts, they spent millions on property, some of which is subject to seizure and forfeiture based on the complaint filed today.
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| Al Letson: | That’s Andrew McCabe when he was the Deputy Director of the FBI in 2016. The FBI claims Jho Low and Malaysian government officials took money from a Malaysian development fund, 1MDB. Jho Low is also family friends with the man who started 1MDB, Prime Minister Najib. The Justice Department complaint never mentions Malaysian Prime Minister. It only refers to Malaysian official one, but Jho Low’s name appears more than 600 times. While most people in the US might not have heard of him, he did make a name for himself in the New York party scene. Patrick Madden of WAMU in Washington DC and Reveal’s Amy Walters, pick up the story from here.
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| Amy Walters: | Before we start the party, we have to set the scene. This was around 2009, remember 2009?
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| Patrick Madden: | People were still losing their homes and their jobs due to the Great Recession. There were not a lot of champagne celebrations going on.
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| Amy Walters: | But in the nightclubs in New York, this 20 something guy, Jho Low, starts showing up with a different vibe.
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| Patrick Madden: | Jho Low would go a club and start passing around bottles of [crystalle 00:25:41]. And when you do that enough times, you get a writeup in the paper. New York nightclubs were fighting over him according to one gossip column.
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| Amy Walters: | And it started to seem like A list celebrities were fawning over him too, celebrities like Paris Hilton. In this video, Paris is waving a bottle of [crystalle 00:26:02] with a sparkler, leaning on Jho Low and his fedora and sunglasses while he’s struggling to sing into the mike. At one point, she sort of falls on top of him.
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| Patrick Madden: | You know, the sign of a good party.
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| Amy Walters: | But with all this attention, people started asking, “Where’s the money coming from?”
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| Patrick Madden: | Clare Rewcastle Brown is a former BBC journalist. She lives in the UK now, but grew up in Malaysia and writes a news blog about the country called the Sarawak Report. That’s one of the Malaysian states.
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| Amy Walters: | And Clare had her eye on Jho Low.
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| Clare R Brown: | Jho Low was becoming one of the world’s most notorious big spenders at the same time as he was the known advisor to the Prime Minister of Malaysia for an investment fund where all the money seemed to be disappearing.
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| Amy Walters: | Both the Prime Minister and Jho Low denied the allegations. The Malaysian Attorney General also cleared Prime Minister Najib of any wrongdoing. But Clare didn’t. She started writing about Jho Low’s links to 1MDB and the Prime Minister.
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| Patrick Madden: | Once the story started getting out, a tidal wave of leaked documents washed her way.
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| Clare R Brown: | It was a fairly painstaking piece of research, but those emails and documents showed very clearly the crucial role that Jho Low was playing.
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| Patrick Madden: | Jho Low siphoned off 700 million dollars from 1MDB according to Clare’s reporting.
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| Clare R Brown: | Which he’d stolen and they were looking to invest that money in the United States.
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| Patrick Madden: | US investigators allege 700 million was deposited into a bank account controlled by Jho Low and that he laundered the money in a huge spending spree here in the US.
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| Amy Walters: | One of Jho Low’s first projects was the Le Meritage, a Beverly Hills hotel..
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| Speaker 7: | Celebrities past and present are no stranger to the famous hotel.
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| Amy Walters: | This is a recent promotional video.
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| Speaker 7: | From movie stars, such as Richard Burton and Elizabeth Taylor, to today’s Hollywood elites.
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| Amy Walters: | In 2009, the hotel was owned by Colony Capital. Thomas Barrack was its founder and CEO after a merger, it’s now Colony Northstar.
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| Patrick Madden: | Barrack is also very close to Donald Trump.
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| Thomas Barrack: | I really consider him a really good friend, a person I know in a way that most people don’t.
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| Patrick Madden: | That’s from a 2016 Bloomberg interview with Barrack. He was a huge fundraiser for the Trump campaign, the chairman of his inaugural committee. His name had even come up as one of Trump’s favorites for White House Chief of Staff.
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| Amy Walters: | In 2009, Barrack was accepting bids on the Le Meritage Hotel and Jho Low put in an offer.
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| Patrick Madden: | Remember, Jho Low was just starting out. He had a reputation in some circles for spending money on parties. Now he had to prove he had enough cash to buy a whole hotel. His bar tabs were steep, but not that steep.
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| Amy Walters: | But maybe Jho Low had a solution. He’d been cozying up to oil money from the Persian Gulf for some time.
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| Jho Low: | Saudi Arabia’s in the house.
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| Amy Walters: | That’s Jho Low screaming, “Saudi Arabia’s in the house,” from another party video. According to the Justice Department, there were Saudi nationals working with Jho Low.
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| Patrick Madden: | But his most important contact in this story isn’t from Saudi Arabia.
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| Yousef Otaiba: | The UAE takes our responsibility to stand with our allies very seriously. And we are proud.
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| Patrick Madden: | Yousef Otaiba is the Ambassador to the United States from United Arab Emirates.
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| Amy Walters: | And according to Clare, Otaiba was Jho Low’s guy.
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| Clare R Brown: | Jho Low was using Otaiba from early on, from at least 2008 to give an appearance of him being a guy with access to Arab cash.
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| Amy Walters: | And it seems like Otaiba helped because we have some emails from him. They were obtained by a group calling itself GlobaLeaks. Some of them were published in Clare’s Sarawak Report. In one email, Otaiba introduces himself to Thomas Barrack, then he writes, “I’m contacting you today to endorse this bid.” He’s referring to Jho Low’s bid to buy the Le Meritage Hotel in Beverly Hills though he doesn’t mention Jho Low by name. “As the UAE Ambassador,” he continues, “I’m confident the bid will surpass your expectations.”
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| Patrick Madden: | And Barrack responds, “Thank you so much for your kind note. I will speak to our team today and get back to you soon. I hope to see you in person in the near future.”
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| Amy Walters: | About a month later, the sale went through.
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| Patrick Madden: | Jho Low bought the hotel for 44 million, 800 thousand dollars. We confirmed that amount with public documents.
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| Amy Walters: | According to the Justice Department complaint, Jho Low bought the hotel with money stolen from 1MDB in Malaysia.
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| Patrick Madden: | And Thomas Barrack made a big investment with a very similar amount of money just two months later. That investment came after a conversation with his good friend, Donald Trump. That’s according to reporting by The Washington Post. Here’s Barrack again from that Bloomberg interview in 2016.
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| Thomas Barrack: | I’ve been a financial partner of his on many things that he’s done. He’s been a partner of mine on many things that I’ve done.
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| Patrick Madden: | And that relationship extends to Trump’s son-in-law as well.
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| Amy Walters: | In 2007, Kushner Companies bought a skyscraper in Midtown Manhattan.
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| Speaker 8: | It’s 666 Fifth Avenue, is a very interesting one.
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| Speaker 9: | Major, Kushner real estate properties, 666 Fifth Avenue.
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| Amy Walters: | Kushner Companies bought 666 Fifth Avenue for a record-breaking price, 1.8 billion dollars and it came with an equally hefty mortgage, 1.2 billion. In 2008, the recession hit and in 2009, Jared Kushner married Ivanka Trump. All of a sudden, Trump had the new son-in-law with a lot of debt. So according to The Washington Post, he went to his buddy Thomas Barrack hoping to get a little help. Jared Kushner reportedly flew to California for the meeting.
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| Patrick Madden: | In the end, Barrack bought some of Kushner’s debt. In fact, Barrack’s Colony Capital paid almost the exact same amount for the Kushner debt, 44.9 million, as Jho Low paid for the Le Meritage Hotel two months earlier.
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| Amy Walters: | We should say there’s no evidence Thomas Barrack or Jared Kushner knew where Jho Low got the money to buy the Le Meritage Hotel, but the Justice Department is alleging Jho Low stole it.
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| Barak Cohen: | Money laundering essentially is taking the proceeds of illegal activity and making it very difficult to trace.
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| Amy Walters: | Barak Cohen is a former army ranger and a white collar criminal defense attorney at the Perkins Coie law firm in Washington DC. He used to be an attorney at the Justice Department and he knows what he’s talking about when it comes to money laundering.
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| Barak Cohen: | I’ve experienced both prosecuting and defending against claims that involve money laundering.
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| Patrick Madden: | And Cohen says if that money was stolen, the government would have the right to seize it.
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| Barak Cohen: | Even if you know nothing about it and you’re the best person on earth who would never get involved in money laundering, the asset can still get seized and that obviously has a financial impact on you. On the other hand, if you sold me the asset and I knew that it was part of the money laundering, well then, maybe I’m a co-conspirator too.
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| Patrick Madden: | Now the Justice Department lists the Le Meritage Hotel among the assets it wants to seize, but doesn’t list the proceeds from the sale, the 44.8 million Jho Low paid for it.
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| Amy Walters: | We asked the Justice Department why wouldn’t they go after that money. They declined to comment as it’s on ongoing case. So we spoke to Sam Buell. He’s a former federal prosecutor and now professor at Duke. Buell proposed some theories.
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| Sam Buell: | If you went to Colony Capital and said, “We are trying to seize 44.8 million dollars in account X which we have traced to the sale of this hotel, then Colony Capital’s going to say we didn’t have any reason to believe that there was anything wrong with that money.” If the government thinks it’s going to lose that argument, then they’re not going to take it on because it’s going to be expensive to litigate and not worth the effort. That’s one possibility. Another possibility is just that the government hasn’t gotten around to it yet.
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| Amy Walters: | Once in the White House, Kushner resigned as CEO of Kushner Companies and sold some interests to his mother according to The New York Times. But his company still holds the 1.2 billion dollar mortgage.
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| Patrick Madden: | And it’s due next year. There are a lot of questions about Kushner’s entanglements. We talked to Democratic Congressman, Ted Lieu and he’s concerned about Kushner’s relationship with the United Arab Emirates.
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| Ted Lieu: | Foreign countries including UAE think that they can manipulate Jarod Kushner because of his debts and financial arrangements. And he certainly should not be Senior White House Advisor.
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| Patrick Madden: | Kushner’s top secret security clearance has been downgraded, but he’s still in charge of pushing through Trump’s Middle East peace plan. In his political reports, he’s in regular contact with Ambassador Otaiba from the UAE.
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| Amy Walters: | We contacted Kushner Companies, we contacted Jared Kushner’s attorneys, and we contacted the White House. No one responded.
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| Section 2 of 3 [00:18:00 – 00:36:04] | |
| Section 3 of 3 [00:36:00 – 00:52:54] (NOTE: speaker names may be different in each section)
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| Patrick Madden: | After buying the L’Ermitage Hotel, Jho Low kept doing deals.
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| Jho Low: | Trust is the fundamental aspect to our way of life.
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| Patrick Madden: | Here he is in a promotional video for his company, Jynwel Capital.
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| Jho Low: | Each deal changes a community, a country and a world.
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| Patrick Madden: | Some of these deals were with people very close to Donald Trump.
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| Amy Walters: | People like Steve Witkoff.
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| Donald Trump: | A friend of mine, Steve Witkoff, who is a great developer in New York City, Steve has been one of my great friends over the years. Tremendously successful man.
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| Amy Walters: | In November of 2013, Jho Low purchased Manhattan’s Park Lane Hotel, partnering with Steve Witkoff’s Witkoff Group. It started to look like either Jho Low was taking advantage of Trump’s friends, or Trump’s friends were taking advantage of the money Jho Low was throwing around.
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| Patrick Madden: | We should say, Jho Low’s spending didn’t slow down. The DOJ complaint lists more items: Fine art, a private jet, a yacht.
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| Leslie Caldwell: | A California-based motion picture company called Red Granite Pictures.
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| Patrick Madden: | That’s Leslie Caldwell from the 2016 Justice Department press conference.
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| Leslie Caldwell: | Red Granite Pictures in turn used more than 100 million dollars of that money to finance the award-winning 2013 film, The Wolf of Wall Street.
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| Patrick Madden: | Yup, that Wolf of Wall Street.
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| Matthew M.: | You know what a fugazi is?
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| Leonardo D.: | Fugazi, it’s a fake.
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| Matthew M.: | Fugazi, fugazi. It’s a whazie, it’s a woozie. It’s fairy dust.
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| Leonardo D.: | Was all this legal? Absolutely not.
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| Patrick Madden: | The Malaysian Prime Minister’s stepson paid for the film, according to the DOJ. He got an executive producer credit, and Jho Low got a special thanks.
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| Amy Walters: | There’s still one more deal we have to talk about, a property that once belonged to Donald Trump.
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| Howard Margolis: | We’re here today in my exclusive listing at 1 Central Park West. This is the Trump International Hotel and Tower, Apartment 52A.
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| Amy Walters: | That’s Howard Margolis, a Manhattan real estate broker, showing the penthouse. 52A, 1 Central Park West.
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| Howard Margolis: | Which was formerly owned by Donald Trump himself. When they built the building, Donald Trump took this particular apartment as his own unit. Donald bought the apartment for five million dollars from the developers he was working with.
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| Amy Walters: | Then Trump sold it to an Italian film producer who soon found himself in debt to the tune of 33 million dollars. The Penthouse went up for auction.
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| Speaker 11: | We have a bid from an entity named: 1 Central Park West, NYC LLC. This was submitted by its counsel Shearman & Sterling …
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| Amy Walters: | Starting at 18.5 million, it quickly turned into a bidding war …
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| Speaker 11: | 21,600,000 net to the estate.
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| Speaker 12: | 21,700,000 net to the estate.
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| Amy Walters: | According to Justice Department documents, Jho Low transferred 35 million dollars to his New York attorneys for the winning bid on penthouse 52A, 1 Central Park West.
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| Speaker 12: | Your honor, 1 Central Park West bids 31,850,000 on a net basis.
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| Speaker 11: | Your honor, WF, is out. We’re … wish them good luck.
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| Patrick Madden: | That would be the most expensive residential condo purchase of the year, according to a New York real estate trade magazine, leaving Trump with bragging rights to this record-breaking sale.
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| Al Letson: | Amy and Patrick, let me get this straight, the Justice Department claims that Jho Low was involved in using stolen money for a bunch of business deals, and we’ve learned that some of those multi-million dollar deals involved President Trump’s closest friends. Now, did any of them know? Did they know who they were dealing with?
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| Amy Walters: | It’s actually a really crucial question, Al. Did Thomas Barrick know? Did Steve Witkoff know? Did any of them know that the money behind these business deals could have been stolen from the people of Malaysia?
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| Patrick Madden: | Up until July 2016, it’s hard to know what they knew. There aren’t a lot of people with the kind of money Jho Low had to throw around. There were news reports alleging Jho Low was buying millions in property, gossip columns were speculating about the sources, but without access to conversations, emails, bank accounts, it’s impossible to know who knew what. The Justice Department is not sharing information because it’s an ongoing investigation.
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| Amy Walters: | But in July 2016 … and this is a crucial point … the DOJ announced their 1MDB investigation. Eileen Decker was the US attorney in L.A. then, she said the government was going to be seizing assets. Those assets included the L’Ermitage Hotel in Beverly Hills and the Park Lane in New York, two of the properties we’ve been talking about.
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| Eileen Decker: | The Department of Justice is sending a message that we will not allow the United States to become a playground for the corrupt, that we will not allow it to be a platform for money laundering or a place to hide and invest in stolen riches.
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| Al Letson: | Do we know if the Justice Department is talking to any of these people you’ve reported on as a part of this story?
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| Patrick Madden: | We don’t know, but it’s hard to subpoena witnesses overseas. The question is: Are investigators talking to people in the US to trace the Malaysian money, people like Thomas Barrick, Steve Witkoff, maybe even Kushner and Trump?
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| We asked Matt Klecko, one of the former Justice Department attorneys we spoke to, if he thought they were talking to Thomas Barrick.
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| Matt Klecko: | I would hope so. He doesn’t have to speak to investigators. He has a right not to, but I would hope that they did. I would strongly, strongly suspect that this is ongoing.
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| Al Letson: | You stumbled onto this by walking by the Trump hotel where this Malaysian delegation, including the Prime Minister, was staying?
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| Patrick Madden: | Yes, last September. Keep in mind, we don’t have receipts showing they paid, but they did stay at the hotel, so we had some questions. First, does this violate the emoluments clause, which says, “Elected officials can’t profit from being in office?” Specifically, they can’t accept payments or gifts from foreign governments.
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| Amy Walters: | We talked to John Mikhail, a professor at Georgetown University’s law school. He filed friend of the court briefs for several of the emoluments clause cases against President Trump. He had a strong response.
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| John Mikhail: | It’s truly outrageous. It’s clear, or what I call the clearest kind of case, because even on the government’s definition of emolument, a profit arising from office or employment, that seems to fall squarely within that definition in the following sense, there’s a causal connection between his holding the office of president and the payments that he’s receiving.
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| Amy Walters: | But so far these emoluments lawsuits are still working their way through the courts. One was tossed out. Others are pending.
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| Patrick Madden: | But Professor Mikhail also said that Trump’s failure to divest from his company, including his hotels, is troubling. He says it looks a lot like the corruption we see in other countries around the world.
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| Al Letson: | Is this kleptocracy investigation still happening?
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| Patrick Madden: | Yes. In December of last year, Attorney General Jeff Sessions was pretty clear on that. He made a big statement about the investigation.
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| Jeff Sessions: | 1MDB officials allegedly laundered more than 4.5 billion in funds through a complex series of opaque transactions and fraudulent shell companies with bank accounts in countries ranging from Switzerland to Singapore, Luxembourg and the United States. This is kleptocracy at its worst. Today, the United States Department of Justice is working to provide justice to the victims of these alleged schemes.
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| Amy Walters: | He doesn’t say what will happen to the alleged perpetrators, but it does sound like it’s full-steam ahead, and some of the assets have been turned in. Leonardo DiCaprio gave back an Oscar once owned by Marlon Brando. He says he received that as a gift. According to the Justice Department complaint, Victoria Secret Angel Miranda Kerr also received a heart-shaped diamond from Jho Low. The Wall Street Journal reported she turned that over to the Justice Department too.
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| Al Letson: | We also heard that Jho Low’s super yacht, the Equanimity, just got confiscated. How did that happen, because the Justice Department recently announced it stopped seizing assets?
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| Patrick Madden: | Well, first about the yacht, this boat is amazing. It has its own swimming pool. It’s worth a quarter-of-a-billion dollars. The Equanimity was seized by Indonesian police while it was moored in Bali. According to court documents, the US government asked Indonesia to hand it over to the US. That hasn’t happened yet. Jho Low, it turns out, wasn’t on the boat when it was seized, and his whereabouts are still a big question.
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| Amy Walters: | As far as seizing assets though, you’re right. Last year the Justice Department announced this 1MDB civil seizure was stayed, it just means paused for those of us who don’t speak legalese. The reason is, now there’s a criminal investigation. Borat Cohen, the attorney we spoke with who has worked on money laundering cases, he says the criminal investigation, it’s a big deal.
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| Borat Cohen: | It’s absolutely more serious if it becomes criminal. Obviously there are court proceedings and grand juries that are open, so there was information gathering, that’s pretty aggressive. It’s a lot more serious.
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| Amy Walters: | There’s a maximum penalty of 20 years in prison. As of now, no one’s been charged.
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| Al Letson: | From your reporting, it sounds like there’s been interest in getting this investigation dropped.
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| Patrick Madden: | Yes, that’s right. Just a few weeks ago, a Republican donor was proposing Jho Low pay him 75 million dollars if he succeeded in settling the matter, presumably the DOJ investigation, in 180 days. Now this is according to emails obtained by the Wall Street Journal. We should say, the deal never went through.
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| Amy Walters: | We also have email obtained by the group GlobaLeaks. In one of them from October 2015, a D.C. lobbyist reaches out to the UAE ambassador Yousef Al Otaiba. Otaiba’s the one who emailed Thomas Barrick trying to get him to sell the L’Ermitage Hotel to Jho Low. In the email, the lobbyist advises that the UAE assess whether to engage with the Justice Department at quote “the early stages, to steer the direction of the FBI’s investigation.” This was before the investigation was announced publicly. We reached out to the lobby firm, and they wouldn’t comment on the legitimacy of the email.
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| Al Letson: | Do we know if President Trump has had any impact on this investigation?
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| Amy Walters: | We don’t know of anything. The truth is, it’s really hard to know. This is an ongoing Department of Justice investigation, which means no one is saying anything. It’s like a black box.
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| What we do know is President Trump started his administration firing the head of the FBI, James Comey. Attorney General Jeff Sessions seems to be hanging onto his position by a thread.
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| Patrick Madden: | Adam Schiff, a Democratic congressmen, told us he’s very concerned about the Justice Department’s independence from the President overall.
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| Adam Schiff: | Justice Department sadly takes some steps to accommodate the President, steps that break down the wall of independence between the White House and the Justice Department.
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| Patrick Madden: | Andrew McCabe was one of the FBI officials who announced the 1MDB investigation.
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| Amy Walters: | Maybe you remember, he was recently fired, hours before he was set to retire with a full pension.
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| Patrick Madden: | President Trump tweeted McCabe’s firing was “A great day for democracy.” But for Republicans like Senator Jeff Flake, it was a step too far.
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| Here’s Senator Flake on CNN’s State of the Union.
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| Jeff Flake: | I think it was a horrible day for democracy. To have firings like this happening at the top, from the President or the Attorney General, does not speak well for what’s going on.
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| Al Letson: | Did you reach out to the White House and President Trump?
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| Amy Walters: | We did. We reached out to the White House. They referred us to the Trump Organization. We reached out to them, but no response by Twitter or otherwise.
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| Al Letson: | What happens now?
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| Patrick Madden: | Well, first, we have to see what happens with the Justice Department’s investigation into 1MDB. One of the attorneys who was working on the investigation with the money laundering and asset section of DOJ has now been pulled over to Special Prosecutor Mueller’s team.
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| Amy Walters: | In Malaysia, there’s an election coming up as early as this spring. Prime Minister Najib has a lot hanging on that. If he loses the election, he wouldn’t only lose his position, he’d be more vulnerable to investigations that are happening around the world. Several countries, including the US, but also Switzerland, Singapore, Luxembourg, all these countries are trying to figure out what happened to the money that was supposed to be invested in 1MDB.
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| Al Letson: | What about Jho Low? Where is he?
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| Amy Walters: | Right now, no one knows. There’s no warrant out for his arrest, but he’s fallen out of site and hasn’t been seen in any of those wild New York City parties in quite a while.
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| Al Letson: | Amy Walters is our reporter here at Reveal. Patrick Madden is our partner on this story from Washington D.C.’s public radio station, WAMU. Thanks, guys.
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| Patrick Madden: | Thanks, Al.
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| Amy Walters: | Thank you, Al.
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| Al Letson: | Lance Williams and Matt Smith helped out on this week’s show. Amy Walters was our lead producer this week. Our show was edited by Deb George. Special thanks to WAMU and Catherine Mieszkowski for helping out with fact checking. Our production manager is Mwende Hinojosa. Our sound design team is the dynamic duo, “Jay Breezy,” Mr. Jim Briggs and Fernando, “My man, yo,” Arruda. We had help this week from [inaudible 00:52:04], Katherine Rae Mondo and Cat [inaudible 00:52:07]. Acting CEO is Krista Scharfenberg. Amy Powell’s our editor-in-chief. Our executive producer is Kevin Sullivan. Our theme music is by Camerado-Lightning.
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| Support for Reveal’s provided by the Reva and David Logan Foundation, the John D. and Catherine T. MacArthur Foundation, the Jonathan Logan Family Foundation, the Ford Foundation, the High Sing Simons Foundation, and the Ethics and Excellence in Journalism Foundation.
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| Reveal is a co-production of the Center for Investigative Reporting and PRX.
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| I’m Al Letson, and remember, there is always more to the story.
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| Section 3 of 3 [00:36:00 – 00:52:54] |