By Frédéric Crotta
100 days of solitude for Spanish judge José-Louis Calama. The Madrid court’s investigating magistrate is still awaiting answers from the judicial authorities in three European countries: France, the Netherlands and Luxembourg, in a highly sensitive case with international repercussions, known as the “1Malaysia Development Berhad” or 1MDB scandal. Police and judicial authorities in 13 countries, including France, are mobilized to shed light on the “heist of the century”, but they seem to be taking their time.
Three months ago, the Spanish judge sent a request for mutual assistance in order to question the Emirati billionaire, Khadem Al-Qubaisi. The judge wants to know how the businessman, KAQ to his friends, was able to launder billions from the Malaysian state fund 1MDB via Spain.
This fund was originally set up to develop Malaysia’s economy, using the savings of small Malaysian savers. In reality, 1MDB only served to inflate the bank accounts of the then Malaysian Prime Minister Najib Razak, his Chinese business partner Jho Low and Khadem Al-Qubaisi, a billionaire from the United Arab Emirates. A case considered to be the scam of the century.
Personalities in the spotlight
Some $4.5 billion was embezzled between 2009 and 2014. The former Malaysian Prime Minister had created a joint venture between the Malaysian sovereign wealth fund and Saudi Arabia. In reality, the idea was to line his own pockets through bogus investments in the oil industry.
When, in 2014, the media began to focus on this dossier, launched by the revelations of a Swiss banker, the Saudis took to the streets. But the managers of the Malaysian fund persisted, signed and continued to fill their bank accounts. A new partner appeared, IPIC, one of the world’s largest sovereign wealth funds, financed by Abu Dhabi.
At the head of this enormous economic powerhouse is Khadem Al-Qubaisi. A businessman with close ties to Sheikh Mansour, Deputy Prime Minister of the United Arab Emirates, KAQ headed up the embezzlement operations: between 2012 and 2013, together with Jho Low, KAQ embezzled over $3 billion from the 1MDB fund.
How? Simply by transferring the money to tax havens through company accounts in their own names.
This money has splashed out on numerous celebrities from all over the world. As well as high-ranking politicians. An investigation has been launched to determine whether the millions embezzled were used to finance the election campaigns of Barak Obama and Donald Trump, among others.
The heist of the century
This “heist of the century” broke in 2016 and turned into a scandal. The discovery of the 1MDB heist also brought to light the actions of some of the biggest names in high finance. Several financial institutions were suspected of complicity, prosecuted for money laundering and convicted. Falcon Private Bank and BSI (Banca Svizzera Italiana) closed down, and UBS was sanctioned by the Swiss courts. The same goes for the Luxembourg bank Edmond de Rothschild, not forgetting one of the biggest names on Wall Street, Goldman Sachs, which raised $6.5 billion by organizing the issue of bogus bonds on behalf of 1MBD. As a result, Goldman Sachs, who was paid handsomely for his services, was sentenced to almost $6 billion. The big boss of the time was disbarred for life and banned from all stock market activity.
In France too
The French justice system is also concerned. The National Financial Prosecutor’s Office (PNF) opened a judicial investigation in the spring of 2017 and sequestered KAQ’s real estate empire. Between 2009 and 2015, the Abu Dhabi billionaire had done his shopping in the south of our country and made some fine acquisitions. The PNF assumes that with the money diverted from 1MDB, KAQ acquired seven villas or apartments in Saint-Tropez, a residential and commercial complex on the Croisette in Cannes, two luxury residences in Ramatuelle and two buildings on Avenue d’Iéna in Paris. Between 130 and 150 million euros were seized by the courts.
90 million euros in 24 hours
In 2016, just before his arrest and imprisonment, KAQ made one last masterstroke in Spain, As CEO of IPIC, he controlled the Spanish oil company Cepsa, whose headquarters were located in Madrid, in a building designed by architect Norman Foster, the Cepsa Tower. With a 400 million euro loan issued by Bankia to the Dutch company Muscari, of which KAQ was a shareholder, he bought the Tower and sold it… 24 hours later at a profit of 90 million euros.
Politics and diplomacy
In 2018, the Spanish judiciary opened an investigation on suspicion of money laundering. And entrusted the case to Judge Calama of the anti-corruption prosecutor’s office. After interviewing the Spanish bankers, this courageous judge would like to interview six bankers from France, Luxembourg and the Netherlands, but according to judicial sources in Madrid, none of his requests for European mutual assistance have so far received a response from the three requested countries.
According to our information, the PNF has confirmed that the investigation targeting the former head of Abu Dhabi’s sovereign wealth fund is still open in France, but the public prosecutor’s office is not aware of the Spanish request. The same applies to Luxembourg.
It seems that high-level politics and diplomacy are interfering in this case, which illustrates the slow pace of international cooperation between judges. But that’s without counting on the stubbornness of this Spanish judge known for his integrity and patience. This is the same magistrate who is investigating the Pegasus case, an ultra-sensitive cyber-espionage case.