Global HotSpots, Global Pairings

Malaysia and the Trump Connection

Will Donald Trump, in order to protect his golf buddy, have his administration close down the investigation into 1MDB?

Najib Razak. Credit: Firdaus Latif (


  • Najib's cosying up to China is largely thanks for its help towards bailing out 1MDB.
  • Najib was one of the few developing nation leaders with whom Trump spoke on the phone soon after his election.
  • Goldman Sachs is often referred to as "Government Sachs" considering how it penetrates the U.S. government

Malaysia’s prime minister Najib Razak has described Donald Trump as a buddy. It helps that he has played golf with Trump in the past.

Unlike President Duterte in the Philippines, Najib has no reason to offend the United States.

His largely Malay military enjoys good relations with their American counterparts though linkages including education, equipment, and suspicion of China and, from a creditable record in combating Islamic terrorism.

Najib’s dubious dealings

But Najib is also an embarrassment. His apparent cosying up to China is largely thanks for its help towards bailing out 1MDB, the government-controlled, but off-the-books company which has gotten into a spate of trouble.

Associates of Najib are widely believed to have plundered hundreds of millions of dollars, then invested in assets ranging from paintings to luxury yachts and a Hollywood movie (fittingly, The Wolf of Wall Street).

In 2015, an investigator from the Malaysian Attorney General’s office looking into 1MDB was found dead in a concrete-filled drum.

Bailed out by Trump?

Financial aspects of 1 MDB are under investigation in several jurisdictions, including Switzerland and Singapore. But the most important is the ongoing one by the U.S. Justice department. It has already implicated by Najib by description, though not by name.

The question now is whether a Trump administration will close this investigation down. Perhaps it matters in that context that Najib was one of the few developing nation leaders with whom Trump spoke on the phone soon after his election.

Covering up for “Government Sachs?”

What certainly matters big time in this context is that the one U.S. company whose embarrassing role in raising $3 billion for 1MBD is now under scrutiny is none other than Goldman Sachs.

Goldman’s then point man in the region, the high-profile Tm Leissner, had to quit and has been banned from management roles in Singapore because of his 1MDB role.

The firm is often referred to as “Government Sachs” to reflect the depth with which it regularly penetrates the top levels of U.S. government – no matter who the President at the time happens to be.

Gary Cohn, now Trump’s Director of the National Economic Council, was then Chief Operating Officer. And the new U.S. Treasury Secretary Steve Mnuchin, although no longer at Goldman at the time, is an alum of the firm, working there for seventeen years until 2002.

Najib on icy ground

1MDB is just the latest of major scandals which have followed Najib as he has sought to buy the loyalty of key members of his ruling party, the United Malays National organisation (UMNO).

Najib has faced several senior defections, including previous deputy prime minister Mohyiddin Yassin. Former prime minister Mahathir Mohamed is a constant thorn in his side. But for now at least, the flow of funds to party delegates has quelled rebellion.

Mahathir’s influence has waned and the opposition parties are in disarray with their most credible figure, Anwar Ibrahim, in jail for alleged sodomy offences.

However, if evidence linking Najib and associates to the 1MDB trough becomes manifest, enough UMNO members of parliament may fear for their seats and dump him.

Let the investigators and prosecutors do their work

Even long before Trump’s arrival in the White House, the United States had no reason to lecture foreign nations on morality.

Nonetheless, it would be wise to uphold the rule of law in the field of dubious international financial (trans)actions.

That is the one area where the otherwise in many ways infamous George W. Bush administration established a powerful standard of exposing illicit financial transactions not just to broad daylight, but prosecute those who violated the law.

Donald Trump should hold on to this tradition, rather than accommodating his golf “buddy” with stopping or sidelining the investigation.

Strengthening democracy and prosperity

The people of East Asia can only benefit if their leaders’ illicit actions are investigated and prosecuted to the fullest extent of the law. That is a critical part of strengthening democracy and making the foundation for future prosperity truly solid and broader-based.

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About Philip Bowring

Philip Bowring is an Asia-based journalist, formerly the editor of the Far Eastern Economic Review and columnist for the International Herald Tribune.

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