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Contents

1. Cover2. Disclaimer3. TitlePage4. Copyright5. Dedication

6.Authors’Note7.CastofCharacters8.Prologue

9. PARTITHEINVENTIONOFJHOLOW

10.Chapter1.FakePhotos11.Chapter2.AsianGreatGatsby12.Chapter3.WinTonsofMoney13.Chapter4.We’reGoingtoNeedaBiggerVan14.Chapter5.ANiceToy15.Chapter6.DoctorLeissner,IPresume16.Chapter7.Saudi“Royalty”(TheFirstHeist)17.Chapter8.HittingaGoldMine18.Chapter9.“IFeeltheEarthMove”

19. PARTIIOVERNIGHTBILLIONAIRE

20.Chapter10.AnEveningwiththePlaymates21.Chapter11.RainingCristal22.Chapter12.HowtoSpendaBillion23.Chapter13.Where’sOurMoney?24.Chapter14.RollthePresses25.Chapter15.WelcometoNewYork26.Chapter16.Shitty,JunkProducts27.Chapter17.MyGoodFriend,Leo28.Chapter18.Two-Million-EuroBottleParade29.Chapter19.“KeepYourNonsensetoYourself”30.Chapter20.BelfortSmellsaScam31.Chapter21.BitterSeverance32.Chapter22.PenthousewithaView33.Chapter23.SwitzerlandoftheEast34.Chapter24.BrazenSky35.Chapter25.GoldmanandtheSheikh(TheSecondHeist)36.Chapter26.BilkingtheState

37. PARTIIIEMPIRE

38.Chapter27.MakingBustaHisBitch39.Chapter28.AlltheWealthintheWorld40.Chapter29.MystiqueoftheOrient41.Chapter30.“681AmericanPies”(TheThirdHeist)42.Chapter31.ArtNoOneCanSee43.Chapter32.JewelersandBankers44.Chapter33.BonaFideBusiness45.Chapter34.140Gigabytes

46.Chapter35.Leo’sWallStreetIndictment47.Chapter36.TheOvalOffice48.Chapter37.SizeMatters49.Chapter38.LosingControl

50. PARTIVBONFIREOFSECRETS

51.Chapter39.“NoCash.NoDeal.”52.Chapter40.GenerousJho53.Chapter41.SacksofMoney54.Chapter42.TheExposé55.Chapter43.ButtocksinaG-String56.Chapter44.StrongmanNajib

57. PARTVTHECAPTAIN’SRESOLVE

58.Chapter45.ProsecutorinanOilDrum59.Chapter46.SpecialAgentBillMcMurry60.Chapter47.PartyingontheRun61.Chapter48.ChinaConnection62.Chapter49.GlassHalfFull63.Chapter50.White-CollarCrime64.Chapter51.KingKhademFalls65.Epilogue

66.Acknowledgments

Authors’Note

In2015,webeganreportingonaMalaysiansovereignwealthfundafterrumorsbegan swirling about its towering debts and shadowy dealings. It was anintriguing story.GoldmanSachs hadmade unfathomably large profits helpingthe fund raise money, and the ensuing scandal over the fate of the cashthreatenedtotoppleMalaysia’sprimeminister.Butthiswasnorun-of-the-millcorruptioncase inyetanotherdevelopingcountry.Mediareports—andsourceswe began speaking to—suggested that JhoLow, a little-known, twenty-seven-year-oldassociateoftheprimeminister,hadhimselftakenthemoney,possiblyhundredsofmillions,ifnotbillions,ofdollars,andusedittobuildaHollywoodproductioncompany,commissiononeoftheworld’sgrandestyachts,andthrowwildlydecadentpartiesaroundtheglobe.Iftrue,theLowaffairwouldrepresentoneofthegreatestfinancialheistsinhistory.

WhowasJhoLow?Andhowdidheemergefromobscuritytobecomethealleged mastermind of a multi-billion-dollar scam—one seemingly pulled offunder the noses of the financial world? We set out to uncover Low’s trueidentity, and what we found was astonishing. Behind the plain outwardappearanceandmildmannersofLowwasaserialfabulistwhofiguredouthowthe world really works. He was everyone’s friend, but few truly knew himbeyond his reputation as one of the greatest spenders ofmoney the jet-settingclasshadseeninageneration.ItwasnotjustawildstoryinvolvingWallStreetbankers, celebrities, and a silver-tongued conman. Low’s very success, at itscore,wasrootedinthefailuresofthetwenty-first-centuryglobaleconomy.Hisability to takesomuch, foolingWallStreetbanks,auditorsandregulators;hissuccessinusinguntoldwealthtobuyhiswayintofriendshipswiththeworld’smost famous actors and models; and the ease with which he made everyonebelievehebelonged.Inallofthis,Lowwastheproductofasocietypreoccupiedwithwealthandglamor.

We realized the amazing life of JhoLowwas too incredible to fit neatly

intothepagesoftheWallStreetJournal.Bywritingabook,wehopedtoshowindetailhowLowdidit,butalsowhatdrovehim,andhowhegotawaywithitforsolong.Thatlargerportrait,aboutcapitalismandinequality,toldthroughthelifeofLow,wouldbeofenduringvalue,weagreed.

The material in these pages is the result of three years of research. Weinterviewedmorethanonehundredindividualsinmorethanadozencountries,fromthetinycityofWillemstadontheislandofCuraçaotoShanghaiinChina.Themajorityofpeoplenamedinthebookagreedtotalktouseitherdirectlyorthrough legal representation, although a small number declined.Many of oursourcesinsistedonanonymityforfearofphysicalorlegalharm.Everyanecdoteisbasedontherecollectionofmultiplesourcesandinsomecasesbackedupbyphotographs, videos, and other documentation. We have reviewed tens ofthousands of documents, including public court records and confidentialinvestigativedocumentsandfinancialrecords,aswellashundredsofthousandsofemailsprovidedtoauthoritiesduringthecourseofinvestigatingthecase.WealsoreliedontheofficialallegationscontainedintheJusticeDepartment’scivilasset-forfeiture cases, as well as court proceedings in Singapore and officialreportsbySwissauthorities.

AsofthiswritinginMarch2018,nopublicchargesofcriminalwrongdoinghavebeenfiledagainstJhoLowormostofthemajorcharactersinthebook.Todate, only a handful of bankers in Singapore have served jail time. As weconcludeworkonthebook,theJusticeDepartmentisinthethroesofamassivecriminal investigation into Jho Low and others at the center of the case.AuthoritiesinSwitzerlandandSingaporecontinuetoinvestigate.

Alltheprincipalcharactersinthisbookhavedeniedcommittingcrimesandmaintained the transactionswere legal, but they have declined to provide anythoroughexplanationfortheirdealings.JhoLow,inparticular,emphasizesthathehasneverbeenchargedwithanycriminalactivityinanyjurisdictionandthatthere have been no findings of fact by any court regarding any criminalwrongdoing.Other figures readerswillget toknow, includingPatrickMahonyandTarekObaid of a Swiss oil company called PetroSaudi International, andMalaysianPrimeMinisterNajibRazak,havemaintained,vialawyers,thattheydidnothingwrong.Anyerrorsareourown.

CastofCharacters

TheLowFamilyLowTaekJho,“JhoLow”LowTaekSzen,hisolderbrotherLowMay-Lin,hisoldersisterGohGaikEwe,hismotherLowHockPeng,“LarryLow,”hisfatherJesselynnChuanTeikYing,JhoLow’sgirlfriend

Low’sAssociatesJasmineLoo,legalcounselat1MalaysiaDevelopment,or1MDB,aMalaysianstateinvestmentfundCaseyTang,1MDB’sexecutivedirectorSeetLiLin,WhartonfriendandvicepresidentofJynwelCapital,Low’sHongKongfirmEricTan,“FatEric,”partyboyandLowassociateNikFaisalAriffKamil,1MDB’sinvestmentdirectorHamadAlWazzan,Kuwaitifriend

MalaysiaNajibRazak,Malaysia’sprimeministerRosmahMansor,Najib’swifeRizaAziz,Rosmah’ssonbyanearliermarriage;cofounderofRedGranitePicturesMahathirMohamad,formerprimeministerandNajibnemesisAnwarIbrahim,oppositionleader

GoldmanSachsTimothyLeissner,chairman,SoutheastAsiaAndreaVella,headofGoldman’sstructuredfinancebusinessinAsia;latercoheadofinvestmentbanking,

AsiaLloydBlankfein,chiefexecutiveGaryCohn,president

PetroSaudiInternationalPrinceTurkiBinAbdullahAlSaud,cofounderTarekObaid,cofounderandchiefexecutiveofficerNawafObaid,Tarek’sbrotherPatrickMahony,chiefinvestmentofficerXavierJusto,headofLondonoffice

AbuDhabi

KhademAlQubaisi,managingdirector,IPICYousefAlOtaiba,UAEambassadortotheUnitedStatesMohamedBadawyAlHusseiny,chiefexecutive,AabarInvestmentsSheikhMohammedBinZayedAlNahyan,crownprinceofAbuDhabiSheikhMansourBinZayedAlNahyan,brotherofSheikhMohammedandchairmanofIPICKhaldoonKhalifaAlMubarak,chiefexecutiveofMubadalaDevelopment

BSIHanspeterBrunner,chiefexecutive,AsiaYakYewChee,chiefrelationshipbankerforJhoLowand1MDBYeoJiawei,awealthmanagementbankerwholeavestoworkforJhoLowKevinSwampillai,headofwealthmanagement

AmBankCheahTekKuang,chiefexecutiveJoannaYu,bankerhandlingPrimeMinisterNajibRazak’saccounts

FalconBankEduardoLeemann,chiefexecutive

Hollywood/EntertainmentJoeyMcFarland,friendofLow’s;cofounderofRedGranitePicturesParisHilton,socialiteLeonardoDiCaprio,actorJamieFoxx,actor,musicianKasseemDean,“SwizzBeatz,”husbandofAliciaKeys,musicproducerBustaRhymes,musicianNoahTepperbergandJasonStrauss,ownersoftheStrategicHospitalityGroupnightclubempireMirandaKerr,modelPrakazrelSamuelMichel,“Pras,”musicianKateUpton,modelMartinScorsese,directorElvaHsiao,TaiwanesemusicianandsometimeLowgirlfriendNicoleScherzinger,musician

JournalistsClareRewcastle-Brown,founderofSarawakReportTongKooiOng,owneroftheEdgeHoKayTat,publisheroftheEdge

FederalBureauofInvestigationWilliam“Bill”McMurry,headofinternationalcorruptionsquad,NewYorkRobertHeuchling,leadFBIagentonthe1MDBcaseJustinMcNair,FBIagentandforensicaccountantonthecase

StealalittleandtheythrowyouinjailStealalotandtheymakeyouking.

—BobDylan,“SweetheartLikeYou”

Yougetsodeepintothingssometimesthattheabnormalseemsnormalandnormalseemslikeadistantmemory.

—JordanBelfort

Prologue

LasVegas,November3–4,2012

Around 6 p.m. on a warm, cloudless November night, PrasMichel, a formermemberoftheninetieship-hoptriotheFugees,approachedoneoftheChairmanSuitesonthefifthfloorofthePalazzohotel.Prasknockedandthedooropened,revealinga rotundman,dressed inablack tuxedo,who flashedawarmsmile.Theman, glowing slightlywith perspiration,was known to his friends as JhoLow, and he spoke in the soft-voiced lilt common toMalaysians. “Here’smyboy,”Lowsaid,embracingtherapper.

The Chairman Suites, at $25,000 per night, were the most opulent thePalazzo had to offer,with a pool terrace overlooking the Strip, and amodernwhite interior, including a karaoke room with wraparound sofas and paddedwalls.Butthehostdidn’tplantospendmuchtimeintheroomtonight;Lowhadamuchgrandercelebrationinstoreforhisthirty-firstbirthday.Thiswasjusttheprepartyforhisinnercircle,whohadjettedinfromacrosstheglobe.Guzzlingchampagne, the guests, an eclectic mix of celebrities and hangers-on, buzzedaround Low, as more people arrived. Swizz Beatz, the hip-hop producer andhusband of Alicia Keys, conversed animatedly with Low. At one point,Leonardo DiCaprio arrived alongside Benicio Del Toro to talk to Low aboutsomefilmideas.

Whatdidtheguestsmakeoftheirhost?Tomanyatthegathering,Lowcutamysteriousfigure.HailingfromMalaysia,asmallSoutheastAsiancountrythatmanyWesternerswould struggle topinpointonamap,Low’s round facewasstill boyish, with glasses, red cheeks, and barely a hint of facial hair. Hisunremarkableappearancewasmatchedbyanawkwardnessandlackofease inconversation,whichthebeautifulwomenaroundLowtooktobeshyness.Politeand courteous, he never seemed fully in the moment, often cutting short aconversationtotakeacallononeofhishalfadozencellphones.

ButdespiteLow’sunassumingappearance,wordwasthathewasloaded—maybe a billionaire. Guests murmured to each other that just months earlier,

Low’scompanyhadacquiredastake inEMIMusicPublishing,and therewasspeculationthathewasthemoneybehindDiCaprio’slatestmovie,TheWolfofWallStreet,whichwasstill filming.Low’sbashfulmannersbeliedahardcoreofambitionliketheworldrarelysees.Lookmoreclosely,andLowwasnotsomuch timid as quietly calculating, as if computing every human interaction,sizingupwhathecouldprovideforsomeoneandwhatthey,inturn,coulddoforhim.Despitehisage,Lowhadaweirdgravitas,allowinghimtoholdhisownina room of grizzledWall Street bankers or pampered Hollywood types. Sincechildhood,he’dmethodicallycultivatedthewealthiestandmostpowerfulpeopleontheplanet.Theboldstrategyhadplacedhimintheirorbitandlandedhimaseat here in the Palazzo. Now, he was the one doling out favors. EverybodyclamoredtobearoundLow.

ThenightatthePalazzomarkedtheapexofLow’sascendancy.TheguestlistforhisbirthdayincludedHollywoodstars,topbankersfromGoldmanSachs,andpowerfulfiguresfromtheMiddleEast.IntheaftermathoftheU.S.financialcrisis, they all wanted a piece of Low. PrasMichel had lost his place in thelimelight since theFugeesdisbanded, butwashoping to reinvent himself as aprivate-equity investor, and Low held out the promise of funding. Somecelebrities had received hundreds of thousands of dollars in appearance feesfromLowjusttoturnupathisevents,andtheywerekeentokeephimhappy.

SwizzBeatzcalledforquietinthehotelsuite,beforepresentingexpensiveDJequipment,emblazonedwithimagesofapanda,toLowasagift.Thegroupburstintolaughter.ThatwaswhatLow’sclosestfriendscalledhim—”Panda”—anodtohisplumpframeandcuddlydemeanor.He’dlovedKungFuPanda,andwhengamblingwithhisclosefriendsfrombackhomethey’deachpretendtobeacharacterfromthefilm.ButeventhosestarslikePrasandSwizzBeatz,whohadreceivedmultiplemillionsofdollarsinappearancefeesandotherbusinessdeals fromLow,couldnot reallyclaim toknowhis story. Ifyouentered“JhoLow”intoGoogle,verylittlecameup.SomepeoplesaidhewasanAsianarmsdealer.OthersclaimedhewasclosetotheprimeministerofMalaysia.Ormaybehe inherited billions from his Chinese grandfather. Casino operators andnightclubs refer to theirhighest rollers as “whales,” andone thingwascertainaboutLow:HewasthemostextravagantwhalethatVegas,NewYork,andSt.Tropezhadseeninalongtime—maybeever.

Afewhourslater,justafter9p.m.,Low’sguestsbeganthejourneytotheevening’s main event. To avoid the paparazzi, they strode through staff-onlyareas,includingakitchen,beforeemergingintoaconcretetunnelleadingtothe

hotel’sparkinggarage.Afleetofblacklimousinesstoodready,enginespurring.ThiswasaspecialarrangementthePalazzopermittedforonlyitsmostlucrativeguests.

Everymovefeltseamlesslyscripted,doorsopeningattherightmomentandyoung,smilingwomengesturingtheway.AsthelimousinesdroveuptheStrip,itwascleartheyweren’theadingtothedesert,insteadpullingupatwhatlookedlike a giant aircraft hangar, specially constructed on a vacant parcel of land.Even theVIPswere in the dark. The cars sailed through security checkpointsbeforestoppingataredcarpetentrance,mannedbyburlysecuritypersonnelinblacksuitsandthefirstofscoresofyoungmodelswearingreddresses,someofwhom handed out drinks and food, while others—in the crude language ofnightclubs—actedas“ambient”decorations.

Thiswashowthesuper-VIPsarrived,butmostofthethreehundredorsoguests,someclutchingbrightredinvitationswith“EverydayBirthday”stylishlyrenderedingoldlettering,checkedinearlieratLAVOnightclubinthePalazzooratasecuritypost.There,theysignednondisclosureagreements,bindingthemto secrecy, and handed in their phones, before getting into minibuses for theshortdistancetothevenue.AmongthemwasRobinLeach,whofordecades,ashost of the TV show Lifestyles of the Rich and Famous, had chronicled thespendingofrappers,Hollywoodstars,andold-moneydynasties.Butthatwasthe1980s and 1990s, and nothing had prepared him for the intemperance of thenight. A gossip columnist for the Las Vegas Sun, Leach was among the fewguestswho had gleaned some details ofwhatwas coming. “WickedwhispersEXCLUSIVE: Britney Spears flying into Vegas tomorrow for secret concert,biggestbigbucksprivatepartyeverthrown,”hetweeted.

One puzzling requirement of Leach’s invitation was that he could writeabouttheparty,butnotnamethehost.He’dmadehiscareerfromthedesireofrichpeopletobragabouttheiraffluence;whatmadethisguywanttospendsomuchcash in secret?hewondered.Anightlifeveteran,Leachwas stunnedbytheaudacityoftheconstructiononthesite.Ashesurveyedthearchofthepartyvenue, which was ample enough to house a Ferris wheel, carousel, circustrampoline,cigar lounge,andplushwhitecouchesscattered throughout,hedidsomecalculations.Onesidewascircusthemed,withtheotherhalftransformedintoanultrachicnightclub.Withthelighting,anddevicesthatsentexplosionsoffireintotheairperiodically,itfeltlikeamajorconcert,notaprivateevent.

Itmusthavecostmillions,Leachestimated.HerewerenewloversKanyeWest and Kim Kardashian canoodling under a canopy; Paris Hilton and

heartthrobRiverViiperiwhisperingbyabar;actorsBradleyCooperandZachGalifianakis, on a break from filmingTheHangoverPart III, laughed as theytookinthescene.Itwasraretogetsomanytopactorsandmusicianstogetherinasingleeventoutsideofabigawardsshow.“We’reusedtoextravagantpartiesinLasVegas,butthiswastheultimateparty,”Leachsaid.“I’veneverbeentoonelikeit.”

As the guests chatted, Cirque du Soleil–type entertainers walked amongthemonstilts,whileacrobatsinlingerieswungonhoopsoverhead.Therewereseveralmonstertrucksparkedonthefringesandatroupeofabouttwentylittlepeople dressed as Oompa-Loompas beating a path through the revelers. In acordoned-offVIParea,LowheldcourtwithDiCaprioandMartinScorsese,whowasdirectingTheWolfofWallStreet.Asthenightworeon,otherguestscameby, fromRobertDeNiro andTobeyMaguire to JonahHill andOlympicgoldmedalistMichaelPhelps.

Noteveryguestthatnightwasacelebrity.Lowwascarefulnottooverlookhis lesswell-knownfriendsandkeybusinesscontacts.Among themwereTimLeissner,aGerman-bornbankerwhowasastardealmakerforGoldmanSachsinAsia, andMohamedAlHusseiny, the CEO of one ofAbuDhabi’s richestinvestment funds. There were whispers amongWall Street bankers about thehuge profits Goldman had beenmaking inMalaysia, hundreds ofmillions ofdollars arranging bonds for a state investment fund, but they hadn’t reachedinsularHollywood.Low’susualentouragewasonhandaswell,including“FatEric,” whom the Malaysian had gotten to know from the nightclub world inMalaysia,hiscousinHowie,andolderbrotherSzen.

Waitresseshandedoutmini-bottlesofchampagnewithstraws.Bartenders,standing behind the twenty-four-foot ice bar, doled out top-shelf liquor andflutesofCristal.ThecrowdwasalreadylivelywhenJamieFoxxstartedofftheshow with a video projected on huge screens. It appeared like friends fromaround the world had volunteered to helpmake a surprise birthday video fortheir good friend Low, each dancing a bit of the hit song “Gangnam Style.”Investment bankers from Low’s Hong Kong–based investment companyperformedinaconferenceroom.AlHusseinydancedonajetskioffAbuDhabi.Intruth,thevideowaspartlyLow’sidea,andlikeeveryaspectoftheevening,from the color of the flowers to the drinks at the bar, it had been carefullyorchestrated at his direction.Although the clips came as little surprise to him,Lowwasbeaming.

Asthevideoended,Psy,theSouthKoreansingerwhohadshottostardom

thatyearfor“GangnamStyle,”playedthesongliveasthecrowderupted.Overthe following hour and a half, there were performances fromRedfoo and theParty Rock Crew, Busta Rhymes, Q-Tip, Pharrell, and Swizz Beatz, withLudacrisandChrisBrown,whodebutedthesong,“EverydayBirthday.”DuringQ-Tip’ssession,adrunkDiCapriogotonstageandrappedalongsidehim.Then,agiantfauxweddingcakewaswheeledonstage.Afterafewmoments,BritneySpears,wearingaskimpy,gold-coloredoutfit,burstoutand,joinedbydancers,serenadedLowwith“HappyBirthday,”asatroupeofwomenbegandolingoutslices of real chocolate cake. Each of the performers earned a fat check,withSpearsreportedlytakingasix-figuresumforherbriefcameo.

Thenthegifts.Thenightlifeimpresarioswhohelpedsetuptheparty,NoahTepperbergandJasonStrauss,stoppedthemusicandtookamicrophone.Lowhadspent tensofmillionsofdollars in theirclubsMarquee,TAO,andLAVOoverthepastfewyears,justasthefinancialcrisishitandWallStreethighrollerswerefeelingthepinch.Hewastheirnumberoneclient,andtheydideverythingto ensure other nightclub owners didn’t steal him away. As Tepperberg andStrauss motioned to staff, a bright red Lamborghini was driven out into themiddle of the marquee. Someone gave not one but three high-end Ducatimotorcycles. Finally, a ribbon-wrapped $2.5 million Bugatti Veyron waspresentedbySzenLowtohisbrother.

Even the low-end presentswere elaborate.A former talent bookerwhomLowhadhelpedtransformintoabigmovieproducer,JoeyMcFarland,presentedLow with a custom wine box with an image of Kung Fu Panda from theanimated film, and the words “Vintage 1981” and “Product of Malaysia”engravedinwood.Itcamewitha$1,000bottleof1981Petruswine,madetheyearofLow’sbirth.Justafter12:20a.m.,theskylitupwithfireworks.Partyingwentintotheearlyhours,withperformancesbyUsher,DJChuckie,andKanyeWest. Surrounded by celebrities and friends, Low piled into a limousine andbrought the party back to the Palazzo,where he gambledwell into the brightlightofSundayafternoon.

ThiswastheworldbuiltbyJhoLow.

“Whileyouweresleeping,oneChinesebillionairewashaving thepartyof theyear,” began an article on thewebsite of local radio stationKROQ two dayslater,mistakingLow’snationality.Itreferredtohimas“JayLow.”Itwasn’tthefirst time Low’s name seeped into the tabloids or was associated withextravagance—anditwasn’tthelast—buttheVegasbirthdaypartywasapeak

momentinhisstrangeandeventfullife.ManyofthosewhocameacrossLowwrotehimoffasabig-talkingscion

of a rich Asian family, a spoiled princeling from the booming region andeconomyof“CrazyRichAsians.”Fewpeopleaskedquestionsabouthim,andthosewhobotheredtodosodiscoveredonlyfragmentsof therealperson.ButLow wasn’t the child of wealth, at least not the kind that would finance acelebrity-studded party. His money came from a series of events that are sounlikely,theyappearmadeup.Eventoday,thescaleofwhatheachieved—theglobalheistshepulledoff,allowinghimtopayforthatnight’spartyandmuch,muchmore—ishardtofathom.

Lowmighthavehailed fromMalaysia, buthiswas a twenty-first-centuryglobal scheme.Hisconspirators came from theworld’swealthiest0.1percent,the richest of the rich, or people who aspired to enter its ranks: youngAmericans,Europeans,andAsianswhostudiedforMBAstogether,tookjobsinfinance,andpartiedinNewYork,LasVegas,London,Cannes,andHongKong.Thebackdropwastheglobalfinancialcrisis,whichhadsenttheU.S.economyplummetingintorecession,addingtotheallureofaspendthriftAsianbillionairelikeLow.

Armedwithmoreliquidcashthanpossiblyanyindividualinhistory,LowinfiltratedtheveryheartofU.S.power.HewasenabledbyhisobscureoriginsandthefactthatpeoplehadonlyavaguenotionofMalaysia.IfheclaimedtobeaMalaysianprince,thenitwastrue.Theheirtoabillion-dollarfortune?Sure,itmightberight,butnobodyseemedtocare.NotLeonardoDiCaprioandMartinScorsese,whowerepromisedtensofmillionsofdollarstomakefilms.NotParisHilton, Jamie Foxx, and other stars who were paid handsomely to appear atevents.Not Jason Strauss andNoahTepperberg,whose nightclub empirewasthriving. Not the supermodels on whom Low lavished multi-million-dollarjewelry.Not theWall Street bankerswhomade tens ofmillions of dollars inbonuses. And certainly not Low’s protector, Malaysian prime minister NajibRazak.

Whathasbecomeclearsinceis thatLowcarriedoutwhatmayhavebeenthe largest financial scheme in history. It involves the purchase of storiedcompanies, friendships with the world’s most celebrated people, trysts withextraordinarilybeautifulwomen,andevenavisittotheWhiteHouse—mostofall,itinvolvedanextraordinaryandcomplexmanipulationofglobalfinance.Asof this writing, the FBI is still attempting to unravel exactly what occurred.Billions of dollars in Malaysian government money, raised with the help of

Goldman Sachs, has disappeared into a byzantine labyrinth of bank accounts,offshore companies, and other complex financial structures. As the schemebegantocrashdownaroundthem,Malaysia’sprimeministerturnedhisbackondemocracy in an attempt to cling on to power. Hiding out in Southeast Asia,wantedforquestioningbytheFBI,Lowsofarhasavoidedjustice.

JhoLow’sstoryepitomizestheshockingpowerofthosewholearnhowtomaster the levers of international finance in the twenty-first century. How hethrived,andwhatitsaysaboutthefailureofglobalcapitalism,isthesubjectofthisbook.

Thestorybeginsonthepalm-fringedislandofPenang.

PARTI

THEINVENTIONOFJHOLOW

Chapter1

FakePhotos

Penang,Malaysia,Summer1999

AshemovedaroundtheLadyOrient,a160-footyachtdockedatagovernmentmarina on Penang island, Jho Low periodically checked he wasn’t beingobserved.Stashedinhispocketwereahandfulofphotographsofhisfamily:hisfather,LarryLow,abusinessmanwhohadmademillionsofdollarsthroughhisstake in a local garment manufacturer; his mother, Goh Gaik Ewe, a proudhousewife who doted on her children; and his two elder siblings. Locatingphotosof theboat’sowner,aPenang-basedbillionaire,heeased the snapshotsone by one from their frames, replacing them with those of his own family.Later, he did the same at aBritish colonial-era holiday home onPenangHill,whichhealsohadborrowedfromthebillionaire,afriendofLow’sfamily.

From Penang Hill, covered in rainforest, Low could see down toGeorgetown, the British colonial capital named for George III, a warren ofwhitewashedmansionsandcrumblingChineseshophouses.Beyond,thenarrowstraits that separated Penang island from continental Asia came into view.Situated at themouth of the Strait ofMalacca, an important sea lane linkingEurope and the Middle East to China, Penang had attracted its share ofadventurers,fromBritishcolonialofficerstoChinesetradersandotherassortedcarpetbaggers.ThestreetsbustledwithPenangites,mainlyChinese-Malaysians,wholovedeatingoutatthemanystreet-sidestallsorwalkingalongtheseasidepromenade.

Low’sgrandfatherwashedupinPenanginthe1960sfromChina,bywayofThailand,andthefamilyhadbuiltasmallfortune.Theywereawealthyclanby any standard, but Low recently had begun attending Harrow, the eliteboarding school in England, where some of his classmates counted theirfamilies’wealthinbillions,notmeremillions.

Larry’s shares in thegarmentcompany,whichhe recentlyhadsold,wereworth around $15million—a huge sum in the Southeast Asian nation, wheremany people lived on $1,000 per month. But Low had begun to mix withmembersof the royal familiesofBruneiandKuwaitatHarrow,wherehehadarrived in1998 for the last twoyearsofhighschool.TheLowhome,apalm-tree-fringedmodernist mansion on the north coast of Penang, was impressiveandhaditsowncentralcoolingsystem,butitwasnoroyalpalace.

Inafewdays,someofLow’snewschoolpalswouldbearriving.HehadconvincedthemtospendtheirsummervacationinMalaysia,andhewaseagertoimpress. Just as his father had raised the family’s station in Penang, earningenoughtosendhissontooneoftheworld’smostexpensiveboardingschools,soLowharboredambitions.HewassomewhatembarrassedbythebackwaterofPenang, and he used the boat and holiday home to compensate. His Harrowfriendswerenonethewiser.Withhispudgyframeandglasses,Lowneverfounditeasytoattractwomen,soheclamoredtoberespectedinotherways.HetoldhisHarrowfriendshewasa“princeofMalaysia,”anattempttokeepupwiththebluebloodsaroundhim.

In reality, the ethnic Chinese of the nation, like the Lows, were not thearistocrats, but traderswho came later to the country in bigwaves during thenineteenthandtwentiethcenturies.ThemajorityofMalaysia’s30millionpeoplewereMuslimMalays,whotypicallytreatedtheChineseasnewcomers,eveniftheirfamilieshadlivedinMalaysiaforgenerations.SomeoftheolderChineseofPenangbegantowonderaboutthisstrangekid.AfterLow’sHarrowfriendshadcomeandgone,thestoryofthephotosbegantocirculatearoundtheisland,as did Low’s claims to an aristocratic lineage. People laughed over the sheerchutzpah.Whodidthiskidthinkhewas?

In the 1960s, Penang island was a ramshackle place. The British grantedindependence in 1957 to its colony of Malaya—a tropical Southeast Asianterritoryrichintinandpalmoil—afterfightinganinconclusiveandsappingwaragainst a Communist insurgency. From their jungle redoubts near the Thaiborder, Communist rebels bid their time, and soon would start a years-longguerilla war against the untested forces of the newly established nation ofMalaysia. This lawless frontier region was an area that Meng Tak, Low’sgrandfather,knewwell.He’dlefthisnativeGuangdongprovinceinChinainthe1940s—a time of great upheaval due to the Second World War, Japaneseoccupation,andacivilwarthatledmillionstofleethecountry—andsettledin

southernThailand,nearMalaya.Hemadesomemoneyasaminorinvestorinanironoremine,andmarrieda localwomanofChineseancestry,beforemovingonagaintoPenanginthe1960s.

TheLowfamilylivedinamodestbungalowinGeorgetown,thecapitalofPenang, just a few blocks back from the peelingBritish-era colonnaded villasand warehouses on the palm-fringed shoreline. Many Chinese had emigratedhereduringcolonialtimestotradeincommoditiesliketinandopium,anarcoticwhose sale theBritishhadmonopolizedbutnowwas illegal.Thereweredarkrumors inGeorgetown’sclose-knitcommunityabout theoriginofMengTak’smoney.Someold-timersrememberedhimrunningacookwareshopinthecity.But perhaps the story about iron-oremining in Thailandwas only part of thetruth.Otherswhisperedthathe’dmademoneysmugglingopiumovertheborder.

ForeachversionoftheLowfamily’shistory,therewasanalternatetelling.Decades later, Low started telling his own story about Meng Tak, one hefabricatedtoexplainhowhewasinpossessionofenormouswealth.Themoney,he told anyonewhowould listen, came from his grandfather’s investments inmining, liquor trading, and property. There was only one problem. Few inMalaysia—neither top bankers nor business leaders—had ever heard of thisfabulously rich family.WithLow’s father, Larry, the family story comes intosharperfocus.

Born inThailand in1952,LarryLowmoved as a young child toPenangandwentontostudyattheLondonSchoolofEconomicsandtheUniversityofCalifornia,LosAngeles, for anMBA.On returning toMalaysia, he tookoverMeng Tak’s business. Despite his elite school, Larry made a disastrousinvestment in the1980s in cocoaplantations that almostwipedout the familywealth. After commodity prices dropped, he used what was left to buy aminority stake in a company that produced clothes for export to the UnitedStatesandEurope.ThistimeLarryhitthejackpot.

The1990swereanything-goesyears forMalaysia’snascentstockmarket.“AsianTiger”economies likeSouthKoreaandTaiwanhadtakenoff fromthe1960s,andnowitwastheturnofotherAsiannations.Malaysia’seconomywasgrowingatover5percentannually,poweredbytheexportofcommoditieslikepalmoil,aswellasgarments,computerchips,andelectronicdevices.Attractedby the hot growth, foreign investors pouredmoney intoMalaysian stocks andbonds. But there was no oversight. Insiders regularly traded on insiderinformationorcolludedtomoveprices,asiftakingtheircuesfromtheexcessof1980s figures such as Michael Milken, the U.S. junk bond king, and insider

trader Ivan Boesky. Malaysians who knew how to play the system becameincrediblyrich,whileminorityshareholderslostout.

Peoplewhoworkedwith Larry considered him charming and awheeler-dealer,albeitwitha lazystreak,preferringdrinking late innightclubs towork,buthebenefitedneverthelessfromarun-upinthegarmentcompany’sstock.Inthe early 1990s, he was involved in an acquisition by MWE, the garmentcompany inwhichheownedaminority stake,ofaCanadian technology firm.Thedealovervaluedthetargetfirm,andLarryarrangedforsomeoftheexcesscashtogointoanoffshorebankaccounthecontrolled.

Usingsuchaccounts,oftenownedbyanonymousshellcompaniessetupinplacesliketheBritishVirginIslands,wascommonforMalaysiancompaniesatthe time. The younger Lows learned from their father about this world ofoffshorefinance,andMay-Lin,Low’ssister,becamealawyerwithanexpertiseinoffshorevehicles.

Whenheuncovered thatLarryhad funneledoff themoney, theownerofMWEwasfuriousand,notlongafter,Larrysoldhisstakeinthecompany.Buttherewasasilver lining:The increase inMWE’sstockprice in the1990shadmadetheLowfamilymillionairesmanytimesover.

Flushwithcash,Larry,nowinhisforties,indulgedhisdesiretoparty.Foroneyachtparty,hearrangedforSwedishmodelstoflyintoPenang,thekindofarrangementforwhichhissonlaterwouldbeknown.Thefamilywasabigfishinasmallpond—andactingthepart.LarrydrovearoundtowninaLexus,andwas a member of the Penang Club, an exclusive sports club founded by theBritishin1868andwhosemembersincludedwell-knownbusinessfamiliesandpoliticiansfromtheisland.TheyoungerLowwasakeenswimmer,oftendoinglapsonSundaysinthepoolbytheoceanbeforeeatingaChinesedinnerwithhisfamily.

But Larry saw all this as parochial, and he had ambitions to raise hisfamily’ssocialstanding.So,in1994,whenLowwasthirteen,hisfathermovedhimout of the local education system toUplands, an international school thatrich Penangites chose to prepare their children for boarding school inBritain.ManyeliteMalaysianshadgottentheireducationintheformercolonialpower,anditwasstillthecountryofchoiceforoverseasschooling.

Larry Low chose to put down roots in England. Around this time,developers of a new gated community in London’s posh South Kensingtonneighborhood began to advertise in Malaysia. Some of the most powerfulMalaysianpoliticiansownedhomesintheKensingtonGreendevelopment,and

LarrysenseditcouldonlybebeneficialforanambitiousfamilyliketheLowstodevelopfriendshipswiththesepeople.Heboughtanapartmentinthecomplex,andthefamilybegantovacationthere,whichgaveLowtheopportunitytomeetthechildrenofMalaysia’selite.

Larry’salertnesstostatusseemedtoruboffonhissons,whobegantoforgeafriendshipwithRizaAziz,acollegestudentwhosefamilyalsohadaplaceinKensington Green. Riza’s stepfather was DefenseMinister Najib Razak, whowastippedasafutureprimeminister.Afewyearsolder,RizawouldbethekeytoLow’sentryintotheupperechelonsofMalaysia’spowerstructure.

Back home, in Penang, Larry ordered a beautiful cream-coloredmansionbuilt on a hill outside Georgetown, which with its sleek steel-and-glass lookcouldhavebeenpluckedfromthestreetsofMiami.ThemodernedificewasastepupfromthesomewhatmodestfamilyhousethatMengTakhadconstructed.

AsLarryacquiredthetrappingsofanupper-classlife,theteenageJhoLowwasbusyinghimselfexploringthenascentonlineworld.Lowtooktospendinghoursathiscomputer,hidingbehindtheanonymityoftheweb.Hebegantofibinanoffhandway,offeringhimselfonanonlinechatsiteformodeling“inanypartofthe world.” On the forum, Low described himself as “muscular, wellproportioned”butreceivednomodelingoffers.Aclassphotofrom1994showsLowasaslightmiddle-schoolstudentdressedinawhiteshort-sleevedshirtandblue shorts,with aneat but unstylishhaircut.Hisonline activities suggested alongingtobecool.Heaskedpeopleonchatroomswhathard-coretechnomusictheysuggestedorwhichhaircutswerepopularindifferentcountries.

Although he vacationed in England, Low appeared more pulled towardAmericanculture,aswastypicalamongyoungerMalaysians.OneofhisfavoriteshowswasTheX-Files, andhe tradedphotosofMulderandScullywithotherfansonline.SincesellingoutofMWE,Larryhadbegun todabble inpropertyinvestment and stock trading, and Low showed an interest in this world. HedevouredHollywoodfilms likeWallStreet,with its taleof insider tradingandcorporate raiding, and atUplands he pooled resourceswith fellow students toinvest in the stockmarket, even though he was only fifteen years old.ManyadultsrememberLowassmoothanddeferential,butadeptatusingthischarmtogetwhathewanted.Onoccasion,hewouldborrowsmallsumsofmoneyfromLarry’s friends, many of them wealthy businessmen, and then not pay themback.

Larrywasplottingthenextphaseofthefamily’srise.Hehadtheapartment

in London and the swishmansion in Penang. Low’s elder brother, Szen, hadstudied at Sevenoaks, a prestigious school in England.Now, hewas about tosendhisyoungestsontooneoftheworld’spremierboardingschools.ItwasadecisionthatwouldcatapultLowintotheexclusiveclubof theworld’srichest0.1percent.

Fordecades,Harrow,situatedonabucolichilltothenorthwestofLondon,hadchurnedoutBritishprimeministers such asSirWinstonChurchill, but by thelate 1990s it was attracting new money from Asia and the Middle East. ForwealthyMalaysians,Harrowin the late1990shadareputationaseasier togetinto thanEton, anotherofBritain’s topboarding schools, but still an effectivewaytogreaseentryintoOxfordorCambridgeandtomakecontacts.Toreducecosts,Malaysiansoftenwouldattendonlythefinaltwoyearsofhighschool—toprepareforA-levelexams—andthatwasexactlywhatLarrychoseforhisson.

In 1998, sixteen-year-old Jho Low arrived at Harrow, some of whosebuildingsdatetothe1600s.InPenang,theUplandsuniformsconsistedofshort-sleevedshirtsandslacks.AtHarrow,pupilswererequiredtodonnavyblazersandties,toppedwithacream-coloredboaterhat.Thefeeswerehigh,morethan$20,000eachyear,butfortheLowsitwasaninvestmentworthmaking.

At Harrow, Low thrived as a member of Newlands, one of the school’stwelve houses of seventy or so pupils. Newlands pupils, which had includedmembersoftheRothschildfamily,theAnglo-Frenchbankingdynasty,livedinafour-storyredbrickdetachedbuildingfromthe1800s,muchlikethetownhouseofawell-to-doVictorian-erabusinessman.Althoughhewasrelativelywealthyhimself,hequicklyfellinwithanewgroupoffriendsfromMiddleEasternandAsian royal families, andwas struckby thecashat theirdisposal.Thesewerepeople, including the son of the sultan of Brunei, a small oil-rich countryabuttingMalaysia,whowerepickedupbydriversinRolls-Roycecarsattheendofterm.

Surrounded by his elite new friends, Low began to display a more risk-takingsidetohispersonality.LowsneakedintoHarrow’slibrarywithagroupofstudentswhohadaminiroulettewheelandplayedforsmallamountsofmoney.Onanotheroccasion,heprocuredtheletterheadoftheBruneiEmbassyfromhisfriend and forged a letter toChinawhite, the famous nightclub near PiccadillyCircus that in the 1990s was one of the city’s hottest spots. In the letter,supposedly from staff at theEmbassy,Low asked for tables to be reserved atChinawhiteformembersofBrunei’sroyalfamily.Thegambitworked,andLow

andhisunderagefriendswentpartyingalongsidePremierLeaguesoccerplayersandmodels.

Itwasalessonthatpowerandprestige—oratleasttheappearanceofit—openedallkindsofdoors.Lowpositionedhimselfinthegroupassomeonewhocouldgetthingsdone.He’dmakethebookingsandcollectmoneywhenitcametime for thebill,making it appear likehewas theonepaying.Hebecame thefixer, trading off his proximity to the truly powerful, and it had the effect ofmakinghimafocusofattention.

On vacations, Low headed to theKensingtonGreen apartment,where hespentmoretimewithRizaAziz.HeknewthatMalaysianpoliticianslikeRiza’sfatherpaidonlymoderateofficialgovernmentsalaries,couldneveraffordtoliveinmulti-million-poundhomes inLondon’s toniestdistrict.EveryoneknewthatMalaysia’s ruling party, the United Malays National Organization, demandedkickbacks from businesses for granting everything from gambling licenses toinfrastructure contracts.Many of those businesseswere controlled byChineseMalaysians, like the Lows. The situation stirred in him amoral relativism. Ifeveryonewastakingacut,thenwhatwastheproblem.

After Harrow, Low opted to attend college in the United States. He hadbusiness ambitions, and America was his choice over stuffy Oxford andCambridge.There,onthecampusofanIvyLeagueschool,hewouldenterthenextstageofhismetamorphosis.

Chapter2

AsianGreatGatsby

Philadelphia,November2001

Low stood in the nightclub he’d rented for his twentieth birthday—Shampoo,oneofPhiladelphia’smostpopular—andsurveyedhisdomain.He’dagreed topayaround$40,000fora fullbarandcanapés,and tokeepout regularguests,givingtheclubanairofexclusivity.Onlyinhissophomoreyear,Lowhadspentweeksflicking throughthestudentdirectoryat theUniversityofPennsylvania.Hehadcold-calledthesocialchairsofsororitiestoensuretheclubwascrammedwithsought-afterwomen.Thiswasn’tanormalstudentnightofbeer-pong,andeveryone turnedup, fromthe jocks to theartycrowdand the foreignstudents.The barwas stockedwith champagne in sufficient supply to keep everyone’sglassbrimmingallnight.

Tipsyandswayingself-consciouslytothepoundingmusicunderagiganticdiscoball,Lowmadeawkwardsmalltalkwiththewomen,askingthemiftheywereenjoying theparty.Heseemedextremelyanxious toplease.Atonepointduringtheevening,amodelwearingonlyabikinimadeoflettuceleaveswalkedacross thedancefloorandreclinedonabar top.Thewaitingstaffcoveredhernear-nakedbodyinsushiforthegueststoeatwithchopsticks.Lowlookedonatthespectacle,smilingasthecrowdroaredwithlaughter.

Among themselves, some partygoers that night referred to Low as the“AsianGreatGatsby,”areflectionofhowtheirhostseemedtoobservehisownparties, rather than partake in them. Like Jay Gatsby, Low’s origins wereshrouded in mystery. The guests felt the need to talk to their benefactor, butconversations were stilted and trailed off. He was friendly enough but reallydidn’t have anything interesting to say, insteadpreferring to repeatedly ensurehisguestsweresated.Doyoulikethechampagne?How’sthesushi?Hewasn’thittingonwomeninthewayothermalestudentsdidwhentheyhostedparties.

Infact,hewasn’tevenflirting.Lowchosetheuniverity’sbusiness-focusedWhartonSchool,whosealumni

includedWarrenBuffett andDonaldTrump, for its reputation as a productionlinefortopfinanciers.For$25,000ayear,studentsintheeconomicsdepartment,where Low was studying, learned the mechanics of capitalism. Many of hisclassmates,wealthystudentsfromacrosstheglobe,envisionedacareeronWallStreet.Lowmajored infinancerather thandrymacroeconomics,buthewasn’tplanning on a regular banking career. TheMalaysianworked hard in his firstyear—hewas a quick studywith a prodigiousmemory—but he began to seeWhartonforemostasaplacetosocializeandbuildhiscontacts.

Thatnight inShampoo—likethemanyothershewouldorganizeover theensuing fifteen years in nightclubs and casinos across the world—was pureperformance,orchestratedbyLowtoimpress.Forsure,heenjoyedpartying,andhe liked having pretty women around, but more than anything this was aninvestment, one thatmade him appear successful and indispensable. Thatwaswhy,aheadofthenightinShampoo,hehadmadeanostentatiousrequest:Thefliersforthepartyshouldhavejholowemblazonedinbiglettersnexttothoseofthesororities.Lowhandedouttwotypesofinvites,standardandVIP,promisinga complimentary “premium open bar,” andwith details of shuttle buses fromcampus to the club. He intuitively understood that people desire to feelimportant,partofanexclusiveclub,andheplayedonit.“Fashionableattireisamust.Nojeansorsneakers,”theinvitesread.

Sure,Lowwasrich,withafamilywealthinthemillions.WhileatWharton,he would receive regular wire transfers of tens of thousands of dollars fromLarryLow to finance gambling trips toAtlanticCity and to pay for partying.Themoneywasagiftfromawealthy,dotingfather,ensuringLowmadeanameforhimselfwiththechildrenofinfluentialfamilieswhoattendedWharton.Butevenwithhisfather’sbacking,LowwasstretchedtoaffordthecostofthenightatShampoo.Unknowntohisguests,hehadputdownonlyaportionofthecostsup frontand later stalledonpaying thebalance to theclub’sowners,hagglingformonthsbeforefinallysettlingonasteepdiscount.

Lowbegan to invite sororitymembers andhisAsian andMiddleEasternfriends togamble, hiring stretch limos for theone-hourdrive toAtlanticCity.ThegroupoftengambledattheTrumpPlazaHotelandCasino,wageringafewhundred dollars a hand. Low even wrote Ivanka Trump, then a student atWharton, invitingher toattend.Low toldhis friendsshedeclined theofferonthe grounds shewould never set foot in one of her father’s “skeevy” casinos.

ThegroupreturnedtoAtlanticCityseveraltimes,andLowatonepointwasupsome$200,000,buthelostallofthegainsduringoneheadynightofgamblingin 2002. Those around himwere shocked at the cavalier attitude he exhibitedwhile betting the equivalent of a year’s tuition. This guy, they thought, musthavemoneytoburn.

TheMalaysianworkedinotherwaystobuildhisbrand.Hewrotearticleson stocks for theWharton Journal, the business school’s student newspaper.One of Low’s pieces, in the November 6, 2000, issue, argued Enron was nolongeraconservativegaspipeline firmbutaprofitable financialcompany thathad made new markets in commodities. It was only a year before Enroncollapsedamidanaccountingscandal, sending its topexecutives to jail.But itwasn’t just that the analysiswas faulty;many analysts had fallen for Enron’slies. Low had plagiarized entire sections of his piece, word for word, from aSalomonSmithBarneyreport.Hewrotemanymoresuchpieces,copyingmostofthemfromanalystreportsonWallStreet.Somehowthisgotpasteditorsatthepaper, andLowbegan todevelopa reputationasa stockpicker,despitebeingonlyafreshmanwithzeroexperienceanalyzingcompanies.

Hebegantofosteranauraofarichprodigy.Oncampus,hedroveroundinamaroon-redSC-430Lexusconvertible,whichhehadleasedbutpassedoffashis own. He deliberately didn’t correct rumors that he was a “prince ofMalaysia,” a claim that made the other Malaysian students laugh when theyheardit.Lowwasplayingapart—anditwasnotjusttoovercomeanyinsecurityabout his provincial background, but was aimed at getting him into the rightsocialcircle.Heidentifiedthewealthieststudentsandpursuedfriendshipswiththem.HegottoknowHamadAlWazzan,thesonofaKuwaiticonstructionandenergy magnate, and he befriended students from the rich Gulf states of theMiddleEast.

Alongside this social striver, there was another Low, one whose friendswerefromhumblerorigins,andwithwhomhe’dspendtimeinthedormroomeating buckets ofKFC fried chicken andwatching piratedDVDmovies fromMalaysia.ThisgroupincludedSeetLiLin,awhip-smartSingaporeanwhowasonagovernmentscholarshipatWharton.WithSeetandtheirgroup,Lowwoulddrop theact.Theywatchedboxingoncable,Low loungingaround inabaggytracksuit,andwouldspendtheoddeveningataPhillystripclubcalledDelilah’soratoneofthejockbarsoncampus.Atonepoint,Lowdatedanexoticdancerfromtheclub,whomhelavishedwithgifts.HefantasizedaboutblondestarslikeParisHiltonandBritneySpears,andwatchedHilton’sdebutfilm,HouseofWax,

halfadozentimes,spurringeyerollsfromroommates.Withhissoftwayoftalking,almostinaudibleattimes,itwaseasytoforget

youwere doingwhatLow desired. In 2003, he persuaded hisArab friends tohelp him set up a tour around theMiddleEast, introducing him to the richestfamiliesandmostinfluentialfirms.Takingasemesteroff,LowwenttoKuwait,whereAlWazzansetupmeetingswithbusinesspeopleandminorroyals.

Then, in Abu Dhabi, in one of these meetings—enabled by his years ofcash-fuelednetworking—Lowmadeaconnectionthatwouldchangethecourseofhislife.

Chapter3

WinTonsofMoney

AbuDhabi,UnitedArabEmirates,Fall2003

In a seafood restaurant overlooking the sparkling PersianGulf, a twenty-two-year-oldLowsatdownfor lunchwithYousefAlOtaiba,a fresh-facedforeignpolicy adviser to the country’s sheikhs. TheMalaysian had begged a mutualfriend to set up the meeting, and, as they ate, Low peppered Otaiba withquestions.During the lunch,Otaibanoted thatLowwasnomere student on aworld tour. Instead, the young Malaysian was eager for specific informationabout power structures in the UAE: which sheikhs held the ear of the crownprinceandwhocontrolledthebiggestpotsofmoney.LowsensedthatOtaiba,aninner-circlefigure,couldhelpguidehimthroughthehallwaysofpowerinanup-and-comingnation.

Situated on an island in the PersianGulf, just off theArabian Peninsula,AbuDhabiwasn’tyetanimpressivesighttobehold,withits1970s-erabuildingsandgenericglassofficetowers.Buttheemiratewasinthemidstofbigchanges.OilpriceswereonanupwardtrajectorythatwouldfillthecoffersofMiddleEastgovernments,andAbuDhabi’sroyalfamilywasoverhaulingthecity,thecapitalof the UAE. Not far from the seafood restaurant, the Emirates Palace, a $3billion edifice slated to become one of the world’s ritziest hotels, was underconstruction.

With intelligent, piercing brown eyes and a closely shaved head thataccentuated his angular features, Otaiba already had tasted more success bythirtythanmanymendoinalifetime.Yethisambition,forpowerandmoney,wasanythingbutsated.Oneofatleasttwelvechildren,fromdifferentwives,ofAbuDhabi’sformeroilminister,Otaibahadaprivilegedupbringing,attendingtheCairoAmericanCollegeinEgypt—hismother’scountry—beforestudyingatGeorgetown (where he attended four years but did not graduate), and later, at

Washington’s National Defense University. Eloquent and charming, hepositioned himself back home as an interpreter of theWest for the emirate’sroyal family.At age twenty-six, he became an adviser toAbuDhabi’s crownprince,MohammedBinZayedAlNahyan,andheassumedtheroleofnationalsecurityliaisonwithforeigngovernments.

Otaibawasalwaysdressed impeccably inaWesternbusinesssuit,andhehadaperfectAmericanaccent,soofficialsinWashingtonoftenforgothewasaforeigner, and the young emirati became a trusted ally during theGeorgeW.Bush era. Over dinners, he expounded to journalists, diplomats, and WhiteHouseofficialsabouttheneedfortheUnitedStatestotakeahardlineonIranand Islamist militants, both of which he saw as an existential threat to AbuDhabi’sauthoritariangovernment.BygalvanizingsupportamongArabnationsfor the escalation of Bush’s war in Iraq, Otaiba cemented his influence inWashington.

Aregularonnightlycablenewsprograms,heexhibitedpoiseandcharm,which masked a stony self-belief and a tendency to curtness with those whoreported to him. In an email exchangewithMohamed El-Erian, then-CEO ofPIMCO, the giant U.S. investment firm, and one of the world’s mostrecognizableArabbusinessmen,Otaibawarnedhim:“Asyouget toknowme,youwillfindoutthatI’mbrutallyhonestandblunt.”

Otaibawasnotaswealthyasmanyemiratis.Hisfather,alsoabusinessmanwithinterestsinfinanceandrealestate,hadaccruedafortune.Butasoneamongsomany children,Otaiba did not have thewealth to keep upwith the royals,withtheirmansions,yachts,andotherluxuries.TheEmiratiledasecondlifethatwascostly tomaintain,andheneededcash tokeepupwith theprincesof theGulf. In conservative Abu Dhabi, Otaiba dressed in billowing robes and agutrah, the traditional emirati headdress. But in the United States, like manyseniorArab figures once they escape the strictures of life at home, he lived adecidedlymorerakishlifestyle.

Not yetmarried, he supplied a Floridamodeling agencywith lists of hispreferred women, mainly brunettes. Professionally successful, he still had aninterest in self-enrichment. While well versed in Arab politics, Otaiba was anovice at business. Tomakemoney, he became involved with a constructioncompanyset-upbyapartner.ThepaircoinvestedinprojectsintheMiddleEast,butOtaibaremainedintheshadows:Hismaincontributiontothebusinesswastoprovidewasta,or“connections”inArabic.

Here was just the kind of contact Low was seeking out: an influential

figure,yetastriver,onewhowasstillontherise,knewnothingaboutbusiness,andwas amenable to ameetingwith an unknownMalaysian.Over the lunch,LowheldouttheprospectofdealsbetweentheMiddleEastandSoutheastAsia,especiallyMalaysia,whichhetalkeduptoOtaibaasagrowingeconomy.Itwasmainlybluster—outsideof throwingcollegeparties,Lowhadnoexperienceofbrokeringdealsand,apart fromhispreviousknack forborrowingmoneyfromfamilyfriends,norealspecialaccessinMalaysia.ButLowdidnotletthosefactsstophim.Ashe listened to thepersuasiveMalaysian,Otaibawas intriguedbyhistalkofpotentialbusinessrelationships,andhebegantoopendoorsforLowinAbuDhabi.

Soon after their first meeting, Otaiba introduced the youngMalaysian toKhaldoonKhalifaAlMubarak, another young, ambitious Emirati who ran aninvestment fund called Mubadala Development. With prominent, archingeyebrowsandsleek,framelessglasses,AlMubarakwasacharmingfigurewhospokecalmlyandeasilybroke intoa smile.Thesonofanemirati ambassadormurdered on the streets of Paris by a Palestinian terrorist group in 1984, AlMubarak was—like Otaiba—a trusted aide to Abu Dhabi’s most powerfulsheikh,CrownPrinceMohammedBinZayedAlNahyan.

At Wharton, Low could be indolent, scraping through with the bareminimumofeffort.YethereinAbuDhabihewasgettingagenuineeducationinhowtheworldworked.AbuDhabihadformedMubadalaayearearlier,in2002,todiversifyitsoil-dependenteconomy.Theideawastoraisemoneyfromglobalmarkets,plowingthemoneyintoindustrieslikerealestateandsemiconductors.LowcouldseehowAlMubarak,onlyinhislatetwentiesandasmoothtalker,was in apositionof considerablepower,with controloverbig chunksofAbuDhabi’seconomy.

Mubadalawas part of a global trend inwhich rich stateswere playing agreater role in the global economy. Sovereign wealth funds had been aroundsincethe1950s,whenSaudiArabiaandKuwaitsetupentities tofindwaystoinvesttheiroilwealthwithalong-termoutlook.Otherexamplesfollowed,fromNorway’sGovernment Pension Fund to theAbuDhabi InvestmentAuthority,the emirate’s main wealth fund. By Low’s visit, sovereign wealth fundscontrolled $3.5 trillion in assets, larger than the annualGDPofmostWesternnations.

ButMubadala was novel: Rather than simply invest oil profits, securingthem for future generations, the fundwas borrowing fromglobalmarkets andactivelytryingtomovetheeconomyinnewdirections.

WhatLowsaw inAbuDhabiplanteda seed inhismind.Malaysiahadasovereignwealthfund,KhazanahNasional,butnothinglikeMubadala.Itwouldtake six years for Low to establish himself as an Al Mubarak–like figurecontrollinghisownfundinMalaysia.Inthenearterm,hehadamoreachievablegoal:toturnhisnewfoundArabcontactsintobusinessopportunities.WhateverAl Mubarak made of this cocksure, young Malaysian, it would not be longbeforetheyfoundcommongroundonwhichtooperate.

Back at Wharton for his final semester, Low set up his first company,BritishVirginIslands–basedtheWyntonGroup.Thenamestoodfor“wintons”ofmoney,hetoldfriends,whowereunsureifitwasajoke.IvyLeagueschoolsdrawstudentsfromacrosstheglobe,whosefamiliespaythehugefeesinreturnfor thenetworkingopportunitiesand thebrandname. In theirsenioryears, thebeststudentscompeteforjobsatGoldmanSachsorMcKinsey&Company.Hisbrother, Szen Low, who studied at Cambridge University in England, joinedGoldmanoutofcollege.

But Low had no time for the well-trodden path, figuring he couldmakemoremoneywithouttheconstrictionsofanofficejob,andhesetaboutpitchingWyntonasavehicleforMiddleEasterninvestorstogetinvolvedinprojectsinMalaysia. It started small,with some seed capital from the families of friendsfromKuwait and other countries, and bought some stocks, but itwouldn’t doanymajordealsuntilLowleftWhartonforgood.

As his senior year ended, in 2005, Low had a plan inmind: to return toMalaysia and look for ways to do business with his Wharton and Harrowcontacts.Ayoungfinancierwithhisowncompany,Lowwasambitious.Butheneededtofindapowerfulbackerathome.

Fortunately,fromhisfather’srealestateinvestmentinLondon,hehadone:thepowerfulfamilyofNajibRazak.

Chapter4

We’reGoingtoNeedaBiggerVan

HongKong,China,December2007

InthelobbyofHongKong’sopulentShangri-LaHotel,perchedonasteephillwithviewsoverthecity’sskyscrapersandthenarrowharborbelow,therewasacommotion.Thethrongofhandlers,securitypersonnel,andassortedsycophantswhoclungaroundMalaysiandeputyprimeministerNajibRazakandhiswife,RosmahMansor,weretryingtoloadthecartakingthemtotheairport,buttherewasaproblem.AndRosmah,herhairinabouffant,theproductofhoursatthesalon,andbedeckedinexpensivejewelry,waslosingpatience.

NajibhadspentthepastcoupleofdaysmeetingfundmanagersfromCreditSuisse, the investment bank, aimed at drumming up foreign investment.Malaysia’s commodities-heavy economywasbeginning to attract the attentionof Wall Street banks. While Najib sat in conference rooms, Rosmah hadindulged in Hong Kong’s plethora of luxury boutiques. Now there was aproblem.Rosmah’stoweringpileofboxesandshoppingbagswouldnotfitintothecartakingthemtotheMalaysiangovernmentjetthatwasonstandbyintheVIP hangar at Chek Lap Kok airport. Scrambling, Rosmah’s staff eventuallyfoundavantohaultheexcessbaggage.Ittooksolongtomakethearrangementsandloadthecargohold,thejetdidnottakeoffforMalaysiauntilaftermidnight.

AstheheirtoaMalaysianpoliticaldynasty—hisfatherandunclehadbothbeen prime ministers—Najib and his wife were accustomed to a retinue ofhandlerswholookedaftertheireveryneed.Inhismidfiftieswiththickredlipsand a salt-and-pepper mustache, his face often wearing a look of happybefuddlement,Najibwastheepitomeofanentitledpolitician.Hisfather,AbdulRazak,triedtoinstillanold-fashionedmoralityintoNajibandhisfouryoungerbrothers. When the boys asked for a swimming pool at the prime minister’sofficial residence, their father rejected the proposal, lecturing his children on

howapublicservantshouldnotusestatefundsforpersonalpleasure.ButAbdulRazak died young, when Najib was only twenty-two, and with him anyrestraining influence also vanished. From then on, the boys, and especiallyNajib, were enveloped in the privileged bubble of the ruling United MalaysNationalOrganization,orUMNO.

EducatedatMalvernCollege,anillustriousBritishboardingschool,andtheUniversity ofNottingham,Najib preferred English toMalay. Like an Englishgentleman, he had a penchant for expensive cigars and watched English TVshowslikeYesMinister,aBritishsitcomaboutabumblinggovernmentminister.Onthebackofhisreveredfather’sname,heheldastringofplumgovernmentpositions. A deputy minister by his midtwenties, Najib didn’t bother himselfmuchwith themundanedetails of governance, preferring to attend events andmakespeeches.Fromtheoutset,hewassurroundedbyyesmen.

UMNOhadruledMalaysiasinceithadgainedindependencefromBritainin1957.Malaysiaheldregularelections,butthesystemwasdeeplyflawedandcorrupt.Inthe1970s,Najib’sfatherusheredinpolicieswhoseeffectwastohelpMalays, themajority ethnic group.The government reserved university placesforMalays,gavespecialfinancialhandoutstoMalays,andevenfavoredMalay-owned companies for state contracts. By 2007, these policies had spawned athickwebofgraftinwhichbusinesses,manycontrolledbyChineseandIndianMalaysians,hadtopaykickbackstothelikesofNajibandRosmahinordertoconductbusiness.

Rosmah’soriginsweresomewhatmorehumble.Herparentsweremiddle-classschoolteachers,butshehadpartlygrownuponthegroundsofthepalaceofaMalaysiansultan,whohadadoptedthefamilyashisown.TheexperiencehadexposedRosmahtowealthfromayoungagebutalsoinstilledinherasenseof insecurity, of not truly belonging to the aristocratic world she inhabited,according topeoplewhoknowher.Fascinatedby royalty, she reportedlyeyedmembers of Brunei’s royal family for marriage before she met Najib in the1980s.

WhenRosmahfirstboardedagovernmentprivatejet,shewasenthralledbyher new surroundings. To compensate for her common origins, she began todressinfinesilksandpreciousjewels.Shecouldbejokey,butshealsoexhibitedadraconianstreak,yellingataidesandcuttingoffcontactwithadaughterfromherfirstmarriagebecauseshedislikedherchoiceofhusband.Relationshipsforher appeared to be transactional. Foreign businessmen seeking governmentsupportforanewventurewouldoftenmeetherfirst,andshe’dsetupafollow-

upencounterwithNajib.Grandees from the rulingUMNOpartygrewconcerned about thedeputy

prime minister and his wife. Most politicians had made money throughkickbacks for government contracts and property deals, and Najib was noexception.Butbythemid-2000sRosmah’sspendinghadreachednewextremes,evenforMalaysia.OnestorythatmadetheroundsinvolvedherbreezingintoaHermèsstoreandinformingtheclerksofthefewitemsshedidnotwanttobuy,beforeorderingoneofeverythingelse.

To financeherpenchant for luxury items,Rosmahwaspilfering the statecoffers. One Malaysian businessmen detailed how it worked: He would buypropertiesfromstate-ownedcompaniesbeforesellingthematamarkuptootherstatefirms,sharingtheprofitwithRosmah.ShewasalreadyanunpopularfigureinMalaysia,havingdevelopedareputationasasocialclimberandmodern-dayImeldaMarcos,whosepenchantforhigh-endaccessories,likeBirkinhandbagsbyHermès,whichcost tensof thousandsofdollarsapiece,seemedbeyondthereachofNajib’sofficialsalary.

In late 2006, aMongolian model, a girlfriend of a Najib aide, was shotdead,andhercorpsewasthenblownupwithC4explosives.Atthetimeshewaskilled, the deadwoman’s boyfriend, an aide inNajib’sDefenseMinistry,wasfacing accusations of accepting bribes worth more than $100 million from aFrench submarine company. A Malaysian court later convicted two policeofficers for the crime. At the time, the officers were part of Najib’s personalsecuritydetail.Najibdeniedanyknowledgeofthekilling,butthesordidaffairstucktohimlikearottingsmell.

By 2007with Najib harboring ambitions for the nation’s top office, oneonceheldbyhisfather,theambitiouscoupleneededsomegoodnews.Itarrivedin the formof a friendofRosmah’s son, a youngman called JhoLowwhomtheyhadmetinLondon.

OnhisreturntoMalaysia,aftergraduatingfromWhartoninthespringof2005,Low set up offices on the seventieth floor of the Petronas Towers in KualaLumpurforhiscompany,Wynton.Thepairoffuturisticskyscrapers,thetallestbuildings in the world in the late 1990s and early 2000s, were the premieraddress in Malaysia’s capital—a symbol of the country’s emergence fromagrarian povertywithin a generation. Encased in shiny chrome steel cladding,witha skybridge linking the forty-first floors, the towers featured in the1999filmEntrapmentwithSeanConneryandCatherineZeta-Jones.Inthelobby,iron

bars inserted into the black marble floor traced a swirling Islamic-inspiredgeometricpattern.

Onlythebest-knownMalaysianfirmscouldaffordanofficeinthetowers.ChiefamongthemwasPetronas,thestateoilcompany,whoseprofitshadfueledMalaysia’s economic transformation. Jho Low, his college graduation barelybehind him, couldn’t really afford such a prestigious address, butmanaged toarrange a loan from a local bank. Using the bank’s money, he decorated theoffice, sparing no expense. The office featured an “island” boardroom in thecenter of the floor, with glass that frosted over at the touch of a button. Awhiteboard insideprintedoutwhateverwaswrittenon it. In therestrooms, thetoiletseatsadjustedautomaticallytotheheightoftheoccupant.Therewasevena wading pool for tired feet. For Malaysia at the time, this was more thancutting-edgetechnology:itwasthemostluxuriousofficespaceinthecountry.

Lowsplashedmoneyonstaff,eventhoughhehadfewinvestmentdealsinthepipeline.Oneofhis firsthireswasSeetLiLin, theSingaporeanwhomhehadbefriendedatWharton.Seethadasoundunderstandingof finance,havinggonetoworkforSingapore’scentralbankaftercollege,beforeLowconvincedhimtojoinWynton.Extremelyyounglooking,withacheerfulsmile,SeetactedasLow’sdetailsguy.Often,LowwouldbeginanegotiationbeforeaskingSeetto takecareof thedetails.Likehisboss,Seetwas impatient togetahead.ThekeytohissuccessatWharton,heonceboasted,wasturninginessaysthatwerebigonbuzzwordsandshortonsubstance.

EricTan—aMalaysianwhomLowreferredtoas“FatEric”—alsobecamea keymember of Low’s entourage.AMalaysianwho spoke heavily accentedEnglish,TanwouldbecomeLow’sdefactobodyman,apartnerso trustingofLowthathewouldsignanydocumentwithoutquestion.LowhadmetTaninthenightclub world in Malaysia, and they would travel everywhere together, forworkandvacations.

NowallLowneededwasbusiness.WhileatWharton,he’dmadecontactsin theMiddleEast.Now, hewated to bring richArabs to invest inMalaysia,perhaps making a fee for brokering a deal. To build allegiances, Low sentchocolates and flowers to prospective partners, and offered personal favors,securing appointmentswith sought-after doctors. But as aChineseMalaysian,LowknewheneededaMalayprotectorifheweretoreallysucceedinbusiness.Hehadone inmind: the familyofNajibRazak,whosestepson,RizaAziz,hehadgottentoknowinLondon.Thedeputyprimeministerhimselfwasstilloutof reach, but a mutual friend introduced him to Nizam Razak, one of the

politician’s four brothers, and Low offered him space for free in Wynton’soffice.LowenticedNizamtocoinvestinahigh-endcondominiumprojectnearthePetronasTowersthatsomecontactsfromPenangweredeveloping.

TheproblemwiththecoinvestmentwasthatLowdidn’thaveanymoney—in fact, he had sizable debts from his bank loans.When it came time for thedown payment, a businessman fixer of the Najib family came in to arrangefinancingandbailLowandNizamoutofthesituation.Lowwasatalowebb.AfterfailingtopaytherentonthePetronasTowersofficesforseveralmonths,hehadtogiveitup.RatherthangetclosetoNajib’sfamily,hiseffortsappearedtobeinvain.

“Theyhaddisdainforhim,”onecloseaideofNajibsaidofLow.But Low was tenacious and resourceful, using every failure as an

opportunity.HehadgottentoknowexecutivesfromtheKuwaitFinanceHouse,anIslamicbank,whichhadcomeinonthecondominiumpropertydeal.In2007,hetriedtobrokeradealfortheKuwaitFinanceHousetotakeoveraMalaysianbank.He failed again, but had added to his contact book.Lowwasbecomingadeptatobtainingmeetingswithpowerful figures,puttinghimself in theroomeventhoughhehadnotrackrecord.

Laterthatyear,heheardKhazanah,Malaysia’spowerfulsovereignwealthfund,waslookingforpartners todevelopagiganticconstructionproject in thesouthern state of Johor, near the border with Singapore, to be known as theIskandarDevelopmentRegion.Theprojectwasanambitiouseffort tocreateafinancial and lifestyle center to rival wealthier Singapore, Southeast Asia’sfinancialandcommercialhub.

Herewas Low’s chance. In AbuDhabi, Low had observed firsthand thehuge amounts of money that sovereign wealth funds control, and he saw anopportunity to broker a deal. Since Low’s Middle East tour, Khaldoon AlMubarak, the chief executive ofMubadala, had grown in prestige.Buoyed bysky-high oil prices,Mubadala had taken sizeableminority stakes in firms likeFerrari and Advanced Micro Devices, and Al Mubarak controlled a multi-billion-dollarempire.

Low’smaincontactinAbuDhabiremainedYousefAlOtaiba,thepoliticaladvisertotheemirate’scrownprince.OnJune17,2007,LowwroteanemailtoOtaiba with details of the plans for the Iskandar development, and suggestedMubadalacouldinvest.HethenarrangedforKhazanahexecutivestoflytoAbuDhabi,wherehesetupmeetingswithOtaibaandothers.

“Otaiba’snamecardistheonlyoneyouneedinAbuDhabi,”Lowjokedas

heintroducedtheemiratitoKhazanahexecutives.Low was punctilious, stage-managing meetings and phone calls between

MubadalaandKhazanah,sendingaroundemailsaheadoftimewithsubjectlineslike“sequenceofevents.”Healsoactedasifthedealwouldgooffthetableifbothsidesdidn’tpouncenow.Situatinghimselfatthenexusofthedealmaking,Low’sbehaviorservedtodeepentheimpressionthathecoulddeliverpowerfulMiddleEasterncontacts.

Low’sabilitytobringMubadalatothetablemarkedarevivalafterthemessof thefailedcondominiumdeal.Hepouncedontheopportunity itpresentedtobuildhispoliticalcontactsinMalaysia.HealreadyknewDeputyPrimeMinisterNajib’s brother and his stepson, and he set about getting close to Najib andRosmahthemselves.In2007,LowsetupanoffshorecompanyforRosmahandNajibtohelppayfortheirdaughter’sexpenseswhilestudyingatGeorgetown.

The Iskandar land project, with a big investment from the Middle East,offered Low a chance to show his worth. The young Malaysian told thepoliticianaboutthedeal,andofferedforNajibtotakecreditforit—allwithouthaving todo the legwork.TheIskandarproject, rightonSingapore’sdoorstep,could burnish Najib’s credentials as a doer, a politician who could attractinvestmentandfinallypropelMalaysiaintotheranksofdevelopednations.

As RosmahMansor took the microphone, she beamed at the crowd. Clad incolorful traditional Malay silks, the wife of the deputy prime minister wasenjoyingplayinghost.Theguests, softdrinks inhand,milledaround thehugestateroomofRosmah andNajib’s official residence, an impersonal, cavernousbuilding,withapointedred-tiledroofandfloor-to-ceilingwindowsthatoffereda sweeping view of gardens bordered by aman-made lake.Outside a tropicaldownpour threatened tobreakout.At thebackof the room, scurryingaround,makingsureeveryonewashavingagoodtimeandmeetingtherightpeople,wasJhoLow.

Thatnight,inlateAugust2007,markedanewturnforNajibandRosmah—andtheyhadtheyoungMalaysiantothankforit.TheguestshadassembledatNajib’s residence in the new city of Putrajaya, just outside Kuala Lumpur.Malaysia hadmoved the government there in the 1990s, hoping to develop aglobaltechnologyhub.AnimpressivesightofmodernskyscrapersandIslamic-inspired domed edifices set around a huge lake, Putrajaya had never attractedsufficientcapitalorcompaniesandfeltsomewhatforlorn,itsmultilanehighwayslargelyempty.

Insidetheresidence,however,themoodwascelebratory.ThepartywastomarkthedealforMubadalaandtheKuwaitFinanceHousetotakeastakeintheIskandar landproject. “I’d like to thank JhoLow for bringingMiddleEasterninvestment toMalaysia,”Rosmah told the room.Then, accompaniedbya liveband, she began to sing a number of ballads, as the bemused delegation fromAbuDhabilookedon.

Afterwards, guests waited in line as Najib introduced Mubadala’s chiefexecutive around the room. Dressed in a headdress, and with a confident yetpolite demeanor, Al Mubarak had added another investment to his growingempire, all thanks to Low. The next morning,Mubadala signed a contract toinvest half a billion dollars in the Johor project of five-star hotels, residences,anda“golfvillage.”

For Low, the deal was a seminal moment. His ability to source MiddleEasternmoneyput him ingood steadwithNajib andRosmah, reinforcinghisclaims toholdsway in theArabworld.The firstcouplewas fascinatedby theGulf,whererulerslivedlivesofexceptionalluxury.Inparallel,Lowwasmakingothereffortstoensurehebecameenmeshedwiththefirstfamily.AfewweeksearlierhehadflowntoLondonforthehighschoolgraduationpartyofNooryanaNajib,NajibandRosmah’sdaughter,whowasleavingtheexclusiveSevenoaksSchooltostudyatGeorgetownintheUnitedStates.

But there was a problem. Low had expected tomake seriousmoney forhimself from the deal, and hewas incensedwhenKhazanah turned down hisrequesttobepaidabrokerfee.Runbyprofessionals,thefundwastoocleanforLow’spurposes.Goingforward,hevowed,hereallyneededtocontrolhisownpotofinvestmentmoney.Todoso,Lowpreparedtodivedeeplyintotheworldofoffshorefinance.

Chapter5

ANiceToy

Washington,DC,August2008

In the fall of 2008, Otaiba’s business partner, a Jordanian named ShaherAwartani,wrote him an email containing some verywelcome news. The pairwas about tomake around$10million through a deal thatLowhad set up inMalaysia. Perhaps worried about too many direct interactions with thisMalaysianbroker,OtaibareliedonAwartanitocommunicatewithLow.YettheMalaysianwasstartingtoproveaverylucrativeconnection.

“Greatnews. It’snice to seeour efforts finallypayingoff,”Otaibawroteback.

Soon after, Awartani suggested buying a Ferrari after what Otaibadescribedasa“transferfromJho.”

“I think we each deserve to buy a nice toy in celebration, what do youthink? The 458 ITALIAmaybe?”Awartani wrote in an email toOtaiba. TheAmbassador responded thatsuchostentatiousconsumption inAbuDhabi“willjustattractunnecessaryattention.”

Otaiba had reason to keep his dealings with Low under wraps. A fewmonthsearlier,hehadbecometheUAE’sambassadortotheUnitedStates,fastestablishing himself as one of Washington’s most prominent diplomats. Hisdinnerparties,attheambassador’spalatialresidenceontheVirginiabankofthePotomacRiver,cateredbycelebritychefWolfgangPuck,attractedWhiteHousestaffers, members of Congress, and top cable-news hosts. Sometimes, theambassadorinvitedguestsdowntohismancave—abasementareawithahugeflat-screen television—to watch basketball. Accompanied by his glamorouswife, Abeer, an Egyptian-born civil engineer, Otaiba seemed to attend everysocialeventinthecapital.WithhisWesternways,andAbuDhabi’ssupportofthefightagainstmilitantIslam,theambassadorwasapopularfigure,whetherat

cocktailpartiesorpropoundinghisviewsonMorningJoe.ButOtaiba,only inhismidthirties,hadahiddenside,abusiness life,one

whichhekeptawayfromthelimelight.TheambassadorhadbeenrighttobetonJho Low. His association with theMalaysian looked like it wouldmake himexceptionallyrich.

Denied a broker fee in the Iskandar land deal, Low had cast around foranother way to profit. He had started out trying to be a classic deal maker,anglingtoearnafeeforbringingMubadalaintotheinvestment.Buthehadbeendenied. To get the payoff he believed he deserved, and to repayAmbassadorOtaiba,Lowwoulddowhateverittook.

He came upwith a convoluted yet brilliant scheme.Malaysiawas abuzzoverMubadala’splansforthegiantIskandarproject.Withplanscallingfornewroads,homes,malls,and industrialdevelopments,builderswouldbe jockeyingto win lucrative contracts. At this time, Low heard about two Malaysianconstructioncompaniesthatwereforsale.Perhapshecouldbuythemcheaply,andwin contractson the Iskandardevelopment?To finance themulti-million-dollarpurchaseprice,Lowneededmoreloans.Buthewasstillanobodyintheeyesofbanks,alow-levelbusinessmanwithapoortrackrecord.Toburnishhisimageandgethishandsonthebanks’money,heonceagainturnedtopowerfulfriends.

As a vehicle to make the purchase, Low set up a British Virgin Islandsentity called the Abu Dhabi-Kuwait-Malaysia Investment Company and gavefree shares to Ambassador Otaiba and minor aristocrats from Kuwait andMalaysia. He was creating the impression that prominent individuals werebehind the company.With such illustriousbackingnow inplace,LowhadnotroublepersuadingMalaysianbankstolendtensofmillionsofdollars.Heusedsomeofthedebttofundtheinvestmentgroup’sacquisitionoftheconstructioncompanies.Atthesametime,asubsidiaryofWynton,Low’scompany,tookoutfurther loans to finance the purchase of aminority stake in the Iskandar landproject alongsideMubadala. Instead of receiving a broker fee, Low became acoinvestor.

He then set about creating a fiction thatmajorMiddle Eastern sovereignwealthfundsalsowereinvolvedinthepurchaseoftheconstructioncompanies.IfLowcouldmakeitappearasifhispersonalventureswerebackedbypowerfulMiddleEasternfunds,hecouldattractevenmoremoney.Tocreatetheillusion,he turned to the opaqueworld of offshore finance. Low knew about offshorefinancialcentersfromhisfather,Larry,whohadamyriadofoverseasaccounts.

ItwasnormalforrichAsians,fearinginstabilityathome,orjusttoevadetaxes,to set up offshore accounts in secretive jurisdictions like the British VirginIslandsandtheCaymanIslands.

The“offshore”designationtypicallyreferstojurisdictionswhosefinancialsystems are much larger than their domestic economies; in other words, thebankingsystemexistspurelyfornonresidentstostashcash,unlikeinternationalfinancial centers inLondon andNewYork that also service local citizens andcompanies.Inrecentyears,offshorecentershavecomeunderpressuretoshareinformation on their clients.Butmany of these centers, reliant on annual feesfromthethousandsofcompaniesseekingacloakofsecrecy,remainsafeharborsformoney launderers and other criminals to wash cash and avoid taxes. Onerecentestimateputsthemoneystashedinoffshorefinancialcenterssince1970at$32trillion—afigureequal to thecombinedeconomiesof theUnitedStatesandChina—withhundredsofbillionslostintaxrevenues.

Thenowtwenty-six-year-oldLowwasalreadymasteringthishiddenrealmoftheglobaleconomy.HewouldhaveknownthattheCaymanIslands,hometobranchesofU.S.banksandhedgefunds,had improvedits informationsharingwithWashington.TheBritishVirgin Islands in theCaribbean,however,hadano-questions-askedapproach tocompany incorporation,andwaswherehehadset up Wynton. (In 2007, his sister Low May-Lin became a solicitor of theSupremeCourtoftheBritishVirginIslands.)AndtinySeychelles,intheIndianOcean,hadtheadvantageofnotseemingtocarewhoowneditsshellcompanies.

Mostimportantly,Lowhadexperiencedtheeaseofsettingupanoffshoreaccount—almost anyone could do it. For only a few thousand dollars, acorporate-services firm like U.S.-headquartered Trident Trust or MossackFonsecaofPanamawouldopenanaccountorsetupacompany,anddealwithallthepaperwork.(ThePanamaPapers,aleakin2016ofhundredsofthousandsofMossackFonsecaclientrecordsgoingbacktothe1970s,showedtheextentofthe use of offshore accounts by the global elite, from the family of ChinesepresidentXiJinpingtoactressEmmaWatson.)

Without this secrecy, thescam thatwasabout tounfoldwouldhavebeenimpossible.Forthenextstepofhisscheme,LowsetuptwoshellcompaniesintheSeychelles.Thefirms—ADIAInvestmentCorporationandKIAInvestmentCorporation—appeared, given their names, to be related to the Abu DhabiInvestmentAuthority,orADIA,andKuwaitInvestmentAuthority,orKIA,twoofthemostfamous,multi-billion-dollarsovereignwealthfundsintheworld.Butthe look-alike companies were purely Low’s creation, with no links to Abu

DhabiorKuwait.In setting up ADIA Investment Corporation, Low experimented with

anotherfinancialtrickthathewouldaddtohisrepertoire.Thecompanyissuedjust one unregistered share, valued at $1, and it was controlled by whoeverphysicallyheldthestockcertificate.These“bearershares”werebannedinmanyjurisdictions, including Great Britain and the United States—Nevada andWyoming in 2007 became the last states to abolish their use—because theyallowed owners of companies to hide behind layers of secrecy and made itnearly impossible for regulators to determine the owner of an asset at a givenpoint in time. Seeking to find tax cheats in the early 2000s, theUnitedStatesstartedtopressureoffshorecenterstohandoverdetailsofthebeneficialownersof companies and accounts. Even the British Virgin Islands had recentlyoutlawedthepracticeofbearershares.ButintheSeychelles,Lowlearned,theywerestillpermitted.

Next,Lowhadtheselook-alikeoffshorecompaniestakeminoritystakesinthe Malaysian construction firms. It now would appeare to any prospectivebusinesspartnerdoingduediligence that royals fromKuwaitandMalaysia,aswellasAmbassadorOtaiba,andtwomajorsovereignwealthfunds,wereLow’spartnersinplanstodeveloptheIskandarproject.

Withthiselaboratestructureinplace,Lowwentfishing.Heneededamark,arichbutfinanciallynaivebusinessmanwhowouldbuythecompaniesandlandfromhissupposedlyillustriousinvestmentgroupforahighprice.HefoundoneinTaibMahmud,theseventy-one-year-oldchiefministerofSarawak,aremote,jungle-coveredMalaysianstateonBorneoIsland,separatedfromtherestofthecountrybyhundredsofmilesofsea.Shortandelfish,withsilver-grayhair,TaibwasoneofMalaysia’srichestindividuals—theproductofdecadesinbusinessessuchasloggingandpalm-oilplantationsthathadledtothedeforestationofhisstate.Awily and long-serving politician, Taib dressed inwhite suits, drove awhiteRolls-Royce,andownedawhitegrandpiano,whichhadoncebelongedtoLiberace.Hewasnot,however,askilledfinancier.

ThechiefministerhadcometohearofLow,whowastoutingMubadala’sambitions to investmorewidely inMalaysiaafter the Iskandardeal.Taibwaskeen for investment to build palm-oil refineries and other energy projects inSarawak.LowheldoutthepossibilityofhugeMiddleEasternoutlays.Butinthemeantime, Low persuaded Taib to buy the construction companies and theIskandarland.

A fewmonths later,Wynton, Low’s company, completed the sale of its

stake in the Iskandar land to UBG, a holding company controlled by ChiefMinister Taib, in return for cash and shares. The deal made Low the largestshareholder of UBG. He crowed to friends that the sale had netted a $110million profit for Wynton by selling to Taib at a significant markup. TheMalaysianhadmadehisfirstkilling,andhetradedinhisE-seriesMercedesforablack-colored Ferrari, taking his new toy for nightime joy rides aroundKualaLumpur.

But therewere problemson the horizon.Low’s haulwas staggering, andTaib,who still held a stake inUBG,wouldbe furiouswhenhe foundout thepremiumhehadpaid.Otaiba,too,startedtoheartalkofthesehugeprofitsthatLowhadreapedandworried thathewasonlybeingfedscraps. ItwasOtaiba,afterall,whohad lenthisname to thisdeal, embellishing the fiction thatAbuDhabiofficiallywasinvolved.

“Our friend Jhomay be shafting us on the IskandarDevelopment regionissue,”AwartaniwrotetoOtaiba.“Myopinioniswemaybegettingjustabonetokeepushappyand[quiet].”

On U.S. nightly cable news, Otaiba had a charming demeanor, as heexplained Middle East affairs to American audiences, but, used to wieldingpower, he could bemercurial in private, and Low’s perceived double-dealinginfuriatedhim.HeviewedLowasausefulcontact,onewhoofferedaccess topotentiallylucrativedealsinMalaysia,butitwastheMalaysianwhoultimatelyneededhim—andhishigh-levelcontactsinAbuDhabi—farmorethanhereliedonLow.

“Heneeds tounderstandVERYclearly thathecan’tdomuchwithoutusknowing,”OtaibarepliedtoAwartani,urginghimtoconfrontLow.“Personally,Ipreferthedirectapproachcuzitwillscarehimabit.”

EvenhispartnerswerestartingtodistrustLow.Butatthatmoment,hehadfinally hit a gusher of cash, all without holding down a regular job. He wastwenty-seven years old—only three years out of college. While most of hisWhartonclassmatesweregrapplingwith the turmoilengulfingWallStreetandtheworldfinancialsysteminlate2008,Lowwasalreadysittingonafortunethatmost of his finance industy classmates from Wharton could only dream of.Withoutproducinganything,Lowhadshownanunusualabilitytonavigatethechambersofpowerandpersuadeinvestorsbyholdingout thepromiseof largereturns. He had made money for Otaiba and his other influential sponsors,strengtheninghiswebofcontacts.Notallthecashwasreallyhis—he’dhavetofigure out a way to get some money back to Taib—but Low was starting to

developadeal-makingreputation.Hewasno longeranobody,butan investorwitha track recordwhowas

nowafixtureatevents—businessmeetingsbutalsosocietygatherings—heldbyKualaLumpur’selite.Itwasthisprecociousrenownthatlandedhimontheradarscreen of an ambitious banker at Wall Street’s most powerful financialinstitution.

Chapter6

DoctorLeissner,IPresume

TheGreatWallofChina,June2006

WaitersbustledaroundChinesebanquet tables,whichhadbeensetupunderatentattheGreatWallnearBeijingforacelebrationwithaveryspecialguestofhonor. Moments later, Lloyd Blankfein, the aggressive former trader whorecentlyhadbeennamedchiefexecutiveofGoldmanSachsGroup,arrivedwithanentourageof seniorAmericanandChinesebankers.Blankfeinwas thenewkingofWallStreet,andGoldmanwasholdingasymbolicglobalboardmeetingontheGreatWall,asignoftheimportanceofChina—andAsiamorebroadly—forthepowerfulbank.

Hank Paulson, who had just left the chief executive role, had steeredGoldman deep into China, where it made money advising the Communistgovernmentonhowtoprivatizecompaniesandbecameoneofthefirstforeignbankstosetupalocalsecuritiesjointventure.PaulsonhadquitweeksearliertobecomePresidentGeorgeW.Bush’sTreasurysecretary,andBlankfeinwaskeentokeepthefocusturnedonAsia.Theregionremainedsomewhatofabackwater.WallStreetbanksstillmadewelloverhalfof theirprofit in theUnitedStates,raising capital for clients, advising on mergers and acquisitions, and sellingprofitablederivativeproducts,nottomentionmakingheftybetswiththeirownmoney,includingontheteeteringhousingmarket.Aheadofthefinancialcrisis,AsiaaccountedforonlyaroundatenthofWallStreet’sprofits,ofwhichChinawasamajordriver.

By2006,however,thewindswereshifting.TheboardmeetingontheGreatWallwas largely a symbolic affair, but as the attendees lookedout from theirperchdownover theplains towardBeijing, the talkwas tingedwithoptimismabout the futureofAsia,whichhademerged from the regionalcrisisadecadeearlier.Therewasgrowinginterestintheregion,asChina’seconomy,churning

out toys, clothes,machine parts, andothermanufacturedgoods for theUnitedStates and Europe, grew at double-digit rates. Southeast Asian neighbors likeMalaysia,whichsuppliedChinawithrawmaterials,wereregisteringtheirownsolideconomicexpansionsofmorethan5percentannually.Goldman’shonchosbegantellingstafftheyhadbetterchancesofpromotioniftheymovedtoAsia,asweetenertogetemployeestouproottheirfamiliesfromNewYorkandLondonandrelocatetoHongKongorSingapore.

Inearly2009,TimLeissner,arisingstaratGoldmaninAsia,steppedoutofacar at the Istana Negara in Kuala Lumpur. With mustard-colored domes, theimposing hillside official residence of Malaysia’s king evoked an Indianmaharaja’s palace. It was an incongruous location for Leissner, a thirty-nine-year-old German, to be holding a meeting. Six foot three tall and dashing,Leissner, head of investment banking in Southeast Asia, had spent a decadegeneratingnewbusinessforGoldmanthroughouttheregion.

Today’smeetingwasdifferent.AfterflyinginfromhisbaseinHongKong,Leissnerwenttopurchaseasongkok,atraditionalMalayhat,apieceofheadgearthatwasde rigueurwhenmeetingMalaysia’sking.Hewas there tomeetwiththe sultan of Terengganu, Mizan Zainal Abidin, one of the country’s ninehereditary princes,who at the timewas also kingofMalaysia under a systemthat rotates the crown among the sultans. Mizan often received guests inceremonial Malay attire—a headdress made from folded embroidered silk, ashortgolden-threadedsarongoverblackpants,withakrisdaggertuckedintoawaistband—butforthismeetinghewasdressedinaWesternbusinesssuit.

TypicallyLeissnerwouldscoutfordealsinMalaysiabymaintainingclosetieswithchiefexecutivesandpoliticians.Thecountry’seconomywasaminnowcomparedtoChina,whereGoldmanwasfocusingmostofitsattentioninAsia,butLeissner had spent almost a decadebuilding connections inMalaysia, andGoldmanhadstartedtomakerespectablemoneyadvisingondeals.Sometimeshewouldrelyonmiddlemen,politicallyconnectedMalaysianbrokers,whotookafeeformakingintroductions,anormalpracticeinAsia.Thismeetinghadbeenorganized by Jho Low, who was only twenty-seven years old but seemedextremelywellconnected.

LeissnerhadmetLowthrougha localbankeratGoldman,and theyoungMalaysianregisteredanunfavorablefirstimpression.Lowseemedlikeastriver,someonewhotriedtosetupdealsandtakeacutwithoutdoingthelegworkorriskinganymoneyofhisown.Leissner told friends thathe consideredLowa

“dodgy” character. Still, Low had investment ideas, and the Goldman bankerwasambitiousandhungryfor thenextbig thing.Lowhad toldLeissneraboutthesultan’splanstosetupaninvestmentfundtomanagehisstate’soilandgaswealth.Thesultan,Lowhadsaid,wantedtohireGoldman.

Agoodtalker,LeissnerknewhowtocharmAsiandignitaries,andhehititoffwiththesultan.Bytheendofthemeeting,Goldmanhadclinchedacontractto advise on the formation of the new fund, which was to be known as theTerengganu Investment Authority. Goldman’s fee for setting up the authoritywas a paltry $300,000—a sum barely worth getting out of bed for, byWallStreet’s standards. But Leissner knew how to play the long game. TheTerengganu deal was the beginning of a line of business that in short orderwouldearnhundredsofmillionsofdollarsforGoldman.Suddenly,theone-timebackwaterofMalaysiawouldbecomeoneofGoldman’sbiggestprofit centersanywhereintheworld.

Growing up in the northern German town of Wolfsburg, close to Hanover,Leissner led aprivilegedchildhoodas themiddleof threebrothers.His fatherwas a senior executivewithVolkswagen,which is based in the town, and heattended a local high school, playing tennismost afternoons at a private clubfrom the age of ten. In the summers, the familywould send him to exclusivetrainingcamps inEuropeand theUnitedStates,wherehehitwithstarplayerssuchasSteffiGraf.

Whenhewasseventeen,LeissnerspentayearasanexchangestudentattheprivateMillbrookSchoolinupstateNewYork.Hishostfamilyconsideredhimreserved,atrait theytooktobetypicallyGerman,buthequicklydoveintohisnewAmericanlife.Heplayedbasketballandwidereceiverforthefootballteam.The local newspaper described his “slew of life’s gifts” that included“confidence,intelligence,looks,affluenceandathletictalent.”Thesportscoachpraisedhimasthemostcoachablestudenthehadevertaughtanda“greatroleplayer.” He attracted women easily, almost without trying, and had a tennis-playingAmericangirlfriend.

ThetripgaveLeissneratasteforlifeabroad.AftercollegeinGermanyheheadedtotheStates—totheUniversityofHartfordinConnecticutforanMBA.Theclasswasfilledwithinternationalstudents,andhemetaFrenchwomanofIraniandescent.Theymoved toLondon andmarried, andLeissner joined J.P.Morganasanassociate,thelowestlevelofbanker.Hewashungryforsuccess,anddespitehisgiftsthereweresignsofawillingnesstocutcorners.

In1993,whileemployedat J.P.Morgan,Leissneracquiredadoctorate inbusiness administration from the University of Somerset. The college, whichcloseddownafewyearslater,wasknownforsellingdegreesforafewthousanddollars, especially to Americans looking to burnish their credentials with acertificatefromaserious-soundingBritish institution.Leissnerbeganusingthetitle “Dr.” at speaking engagements and soon after he secured a promotion tovicepresidentatJ.P.Morgan.

While in London, hewas involved in a deal to finance a power plant inIndonesia, and the work got him interested in Asia. Hismarriage was fallingapart,andby1997hemoved toHongKong,wherehehadsecureda jobwithLehmanBrothers.

In the 1990s Hong Kong was a city in flux. The territory of 7 million,situatedonmountainousislandsandpartoftheChinesemainland,hadbecomeaplaygroundforexpatriate financiers.Asianeconomies likeThailandandSouthKorea had been through a decade of heady growth, and bankersworked longhours, partied in the bars and fleshpots of Wanchai, the city’s entertainmentdistrict, and took jaunts toHongKong’souter islands inprivateyachtson theweekends.

By1997, however, the party atmospherewas souring.After 156years ofcolonial rule, Britain was handing Hong Kong back to China. The Asianfinancial crisiswas in full swing, the result of years of reckless borrowing tofinanceinvestmentsinpropertyandotherriskysectors.Itwasatypicalfinancialbubble and, when speculators like George Soros attacked the region’sovervalued currencies, angering Malaysia’s then prime minister, MahathirMohamad,foreignbankswereforcedtobooklossesonloansthatwentbad.

For a financier like Leissner, there was an upside to all that volatility.Among foreign bankers, Asia had developed a reputation as a place toturbochargeaWallStreetcareer.CompetitionoutinHongKongandSingaporewaslessfierce,andbankersweregivenmorelatitudetomakebigfinancialbets.In 1995 a rogue trader at Britain’s Barings Bank named Nick Leeson madeunauthorized bets on Japanese stocks that led to the bank’s collapse. But asLeissnerwasarriving,activityincapitalmarkets—theraisingofmoneythroughsellingstocksandbonds—wasdryingupthankstothecrisis.Lehmanwasn’ttooexposed,though,anditbegantoadvisetheregion’scash-strappedgovernmentsonawaveofprivatizationstoraisemoney.

HongKong–basedbankersoftenkept ablisteringpace, travelingnonstoparound the region, and Leissner was no exception. On one deal, he worked

alongsideGoldmanbankerstohelpastate-ownedThaipetroleumcompanysellachunkofshares.Thebankersworkedeighteen-hourdays, finishingat2a.m.and partying in Bangkok’s notorious bars for a couple more hours, beforestartingover.ThecrisisforgedcloselinksbetweentheWallStreetbankerswhohad chosen the less crowded field of Asia to further their careers. Leissner’sworkethicimpressedGoldman,consideredtopofthepileofglobalbanks,andhewasofferedajob.Heaccepted.

ShortlyafterLeissner joined,Goldmanmoved itsAsianheadquarters intogleaming new offices in Hong Kong’s Cheung Kong Center, a seventy-floorskyscraperwithbreathtakingviewsofthePeak,amountainthattowersoverthecentral financial district, and Victoria Harbor, a busy sea channel separatingHongKong island from themainland. One floor hadmeeting rooms adornedwith multi-million-dollar Chinese art, including ancient calligraphy and inkdrawingsofmist-shroudedmountains.Anantique terra-cottahorsedonatedbyLiKa-shing,theHongKongbillionairewhoownedthebuilding,stoodoutsideameetingroom.

AtGoldman,LeissnermetandfellinlovewithJudyChan,ajunioranalystat thebank,and theymarriedafter theGermanbanker’sdivorce fromhis firstwife.ChanwasfromanIndonesian-Chinesefamily thathadmadeafortune incoalmining—andthefirstofmanyconnectedwomenthatLeissnerwouldcourt.TheweddingceremonyataluxuryHongKonghotelfeaturedsucklingpigswithflashinglightsintheireyesockets.Thecouplehadtwodaughterstogether,buthewasrarelyathome.Asanexecutivedirectorinthemergersandacquisitionsdivision, Leissner practically lived on planes, incessantly looking for deals onwhichGoldmancouldadviseorofferfinancing.

After a few lean years, asAsia picked itself up from the crisis, Leissnerbegantostrikegold.In2002,GoldmansoldsharesforaMalaysiancellphonecompanyownedbyAnandaKrishnan,abillionairewhomLeissnerhadgottentoknow. The $800 million IPO was the largest offering in Asia that year, andLeissner was promoted to managing director. The following year, he helpedbring in another Krishnan-related deal, this time selling IPO shares for asatellite-televisioncompanycalledAstro.Then,inMay2006,Leissnerbeatoutother banks to snag a role advising on Malaysia’s largest ever corporatetakeover, a $2 billion deal for a local power company.Goldman’s fee on thedeal,$9million,wasrespectable,evenbyU.S.standards,andmuchfatterthanrun-of-the-millMalaysianpayouts.

GoldmancolleaguesnoticedhowLeissnerhadanuncannyabilitytomake

clients feel like they had a deep, personal connection with him. He was arelationshipbanker,skilledatreelinginimportantexecutivesthroughakindofpersonalmagnetism, rather than a “structuring guy,” one of themathematicalwhizzeswhopricedandsoldcomplexderivativeproducts.

SincecomingtoAsia,Leissnerhaddeepenedhisconnections,especiallyinMalaysia.Hewas jokey and animated, speaking inGerman-accented English,and a consummate networker who told people what they wanted to hear. Hewould sit next to clients in theboardroom rather thanacross the table.Atonesociety wedding in Kuala Lumpur, he spent the entire dinner out of his seat,makingtheroundsofthehotelballroom.

“He loved clients and he loved deals,” said Joe Stevens, a senior bankerwhoworkedwithhimatGoldman.

AsGoldmanSachs ramped up itsAsia business underHalkPaulson and nowLloyd Blankfein, Tim Leissner was a beneficiary. In October 2006, he madepartner,oneof115staff thatyear tobe invited intoGoldman’s innersanctum.Thebankkeptthepartnerpooltoonlyafewhundredpeople,ornomorethan2percent of its thirty thousand full-time employees, and those anointed werepersonally called by Blankfein. The honor came with a pay bump, to a basesalary of almost $1 million, and access to larger bonuses and proprietaryinvestments—deals that Goldman’s top bankers reserved for themselves.LeissnerhadbeguntomakerealmoneyforGoldmaninMalaysia,andhewasreaping the benefits of the bank’s Asia focus. Of those that made partner in2006, more than a fifth were from the region, out of whack with the feesgenerated there. It was a signal from Blankfein that Goldman saw a brightfuture.

But therewerewhispers about Leissner. SomeGoldman bankers greetedhim with, “Dr. Leissner, I presume,” an ironic allusion to his questionableacademic credentials. And there was his string of affairs, which struck somecolleaguesasunprofessional.Hedidn’tsomuchasengageinone-nightstandsasfall in love easily, floating from one serious relationship to another. He hadstruck up a romantic liaison with the chief financial officer of Astro duringnegotiations for the IPO. The relationship, which was not hidden, led rivalbankers tocomplain toAstro’schiefexecutive that itgaveGoldmananunfairadvantage.Afteraninternalcomplaint,Goldmanlaunchedaninvestigation.ButLeissner denied any involvement with the woman, and Goldman dropped thematter.

Healsowaspronetogooffthereservation.Asajuniorbanker,hewouldoverstep his authority. “He never operatedwithin boundaries.Hewould offerclients,andgetpermission later. Itwas toleratedbecausehebrought indeals,”said one Goldman banker who worked with him. In one deal that causedconcern,LeissnergaveawrittenassurancetothechiefexecutiveofMaybank,alargeMalaysiancommercialbank,thatGoldmanwouldunderwritea$1billionrights issue,meaning itwouldpledge itsowncapital tobuyup thesharesandlatersell themintothemarket.Buthedidn’t informhisbossesinHongKong,despite thehuge risks involved.Another time,GoldmancutLeissner’spay forpassinginformationoutsidethecompanywithoutauthorization.Itwasawarningsign,butLeissnerwasmakingmoneyforGoldmanandthebanktooknofurtheraction.

Leissner tooklittlenoticeof theadmonishments—thiswasAsia, theWildWestofcapitalism,afterall—and,seeminglyaslongastheprofitkeptsrollingin,Goldmanhonchosintheregionallowedhimaverylongleash.In2009thatledLeissnertoanupstartMalaysianbusinessmannamedJhoLow.

Inearly2009,afterthetriumphofhisIskandarlanddeal,Lowwaslookingforthenextbigthing.He’dbuiltaquickreputationinMalaysiaasadealmaker,but,as always, Lowwas keenly aware of how his success stacked up on a globalstage.LowhadobservedthepowerandstatusofAlMubarakofMubadala,whorantheemiratisoverignwealthfund.Afundlikethathadbillionsofdollarsininvestments, not mere millions. Why, Jho Low wondered, couldn’t he puttogetherasovereignwealthfundofhisown—onebasedinMalaysia?Butwherecouldhefindtheinitialfunds?

Traditionalsovereignwealthfundsinvestoilprofits,andsoLowhonedinon theMalaysian state ofTerengganu,whichwas rich in offshore oil andgasfields.

Malaysia’s nine hereditary Malay royal families, each ruling a differentstate, coexisted with the nation’s elected officials. These sultans had wide-rangingpoliticalpowers,insomecasesincludingcontroloflocalstaterevenues,creatingampleopportunityforcorruption.HowLowsettleduponMizanZainalAbidin,thesultanofTerengganu,wastypicalofhisabilitytospotopportunities,movingfromonedealtothenext.

The Sultan, who had been educated in theUnitedKingdom,was from aconservative Islamic family. While some royals in Malaysia are entitled andlazy,hewasconsideredtobefairlysmart.LowhadmetMizan’ssister,whosat

on the board of the construction companies, and had used that connection tooffer theSultanfreeshares in theAbu-Dhabi-Kuwait-MalaysiaInvestmentCo.This was the entity which had generated massive profits by flipping theMalaysianconstructioncompanies.

Afterthisinitialsuccess,LownowsuggestedamoreambitiousinvestmentplantoMizan.Whydidn’ttheSultansetupasovereignwealthfund,basedonAbuDhabi’sMubadala,whichborrowedmoneyagainst the state’soilwealth?Low said he knew bankers at Goldman who could advise and tap globalinvestors,creatingahugewarchestforthestatetofunddevelopment.

To buy legitimacy, Low also needed the involvement of Goldman, andLeissner,despitehisinitialconcernsabouttheyoungMalaysian,waseagerforthe business.Low soon arranged forLeissner and anotherGoldmanbanker tomeetMizanandaccompaniedthemtothepalaceinKualaLumpur.

Within months of the meeting with the Sultan, after which Goldmanbecame an adviser, Low was sending Leissner emails that referred to himinformally as “Bro” and discussing ways to portray the fund in Malaysia’smedia.Low’sofficialroleatthefund,whichbeganoperationsinFebruary2009,wasasadviser,butinrealityhecontrolledtheshow,andhehiredahandfulofpeople he knew as staff. Emails between Low and Leissner referred to theendeavorasProjectTiara.

Low talkedMizan into allowing the fund to issue $1.4 billion in Islamicbonds—structured to avoid violating Islamic rules against charging interest—backedbythestate’sfutureoilreceipts.Butasthefundwaspreparingtoraisethemoney, inMay2009, theSultangotcold feet.Lowwas rushing toget thedealthrough,butwithoutaclearinvestmentplan.Mizansawnoreasonforsuchalacrity, especially as the fund didn’t even have a full management team inplace.His representative on the board ordered a delay in the fund-raising, butLowtooknonotice,andpushedforthebondstogothrough.

ButnowMizan,fearfulofgamblingawaythestate’soilwealth,threatenedtoshutdownthewholething.Mizan’sreticencewasfurtherfueledbyrumorsinbankingcirclesthatLowhadsiphonedawaysomeofthebondmoney,andtheSultanscotchedLow’splansbeforetheyevengotofftheground.

Lowwas on the cusp of transforming into a powerful figure, the kind ofyoung fundmanager he had watched up close in theMiddle East, deployingbillionsofdollarsininvestments.Butnowhewasseeminglybacktosquareone,withMizanorderingthefundbeshuttered.Hequicklyhadtofigureoutwhattodo.Atthatmoment,hegottheluckiestbreakofhiscareersofar.

Foryears,NajibRazakhadbeengroomed for thenation’shighestoffice.With a recognizable family name, and years of government service, manyMalaysians assumed one day he would become prime minister. The rulingUMNOpartywas incrisis. In the2008elections, its coalitionhadbarelyheldonto power. Ethnic Indian and ChineseMalaysians, sick of living as second-classcitizens,votedindrovesfortheopposition.Toreviveitsflaggingfortunes,thepartyturnedtotheheiroftheRazakpoliticaldynasty.InApril2009,NajibbecameMalaysia’ssixthprimeminister,asiflayingclaimtoabirthright.

Suddenly,Low’s cultivationofNajib andhiswifewaspayingdividends.Overnight,theambitiousMalaysianhadtheearofthemostpowerfulmaninthecountry.AndNajibneededapotofmoneytohelprestorehisparty’spopularity.Lowmovedfasttocashinandsavehisstillborninvestmentfund.

Chapter7

Saudi“Royalty”(TheFirstHeist)

AboardtheAlfaNero,FrenchRiviera,August2009

AshetookintheopulenceoftheAlfaNero,cruisingoffthecoastofMonacointheFrenchRiviera, PrimeMinisterNajibRazakwas under the impression theyachtbelonged to a sonofSaudiArabia’sking,AbdullahAbdulazizAlSaud.Withamovietheaterandahugeswimmingpoolthattransformedintoahelipad,the269-footboat,estimatedtobeworth$190million,wasanimpressivesight.

In the stateroom,with comfy sofas and a view out to theMediterranean,Najibwas greeted by the purported owner,His RoyalHighness, Prince TurkiBinAbdullah.Wearingawhitebaseballcapandmatchingbluelinenpantsandshirt, Prince Turki, a broadly built thirty-seven-year-old with a mustache andstubble,gaveoffarelaxedair.AformerSaudiAirForcepilot,whohadbeguntodabbleinbusiness,hejoviallyclaspedNajibbythehand.

Casuallydressedinashort-sleevedwhiteshirt,theprimeministerlaughedas he handed Prince Turki a gift in a green box. Najib’s wife, Rosmah, in ablack-and-white leopard-print shirt, who had joined the trip accompanied bytheir twochildren,smiledandjokedwith theirhost.Rosmahlookedthrilledtobe in the presence of Saudi royalty, especially in such an intimate setting.Respecting Islamic tradition, the guests drank fresh juices. A photographersnappedpicturesofthemeeting.NajibandPrinceTurkithensat,eachperchedontheendofasofa,todiscusswaysinwhichMalaysiaandSaudiArabiacouldfosterdeepereconomicties.

Ontheperipheryof thegroup,alsodressedcasually inagreenpoloshirt,stoodJhoLow.Onlyheknewwhatthismeetingwasreallyabout.

In the few months since Najib became prime minister, he and Low hadspoken frequently. Lowhad convincedMalyasia’s new leader to focus on theMiddleEast.He’dalreadydeliveredAbuDhabifinancingfortheIskandarland

project, and now Low held out the prospect of access to Saudi’s inordinatewealth.Agedonlytwenty-seven,theyoungMalaysianhadmanagedtopersuadeNajiband,justasimportant,Rosmah,thatheheldthekeytofutureMiddleEastinvestment.

Inthefirstfewweeksofthenewadministration,Lowactedasanunofficialaide toNajib, helping the primeminister organize a visit to theMiddle East.NajibhadgrandambitionstoturnMalaysiaintoadevelopednationwithinafewyears,andforthathewouldneedamajorsourceofcapital.Lowpersuadedhimit would come from Arab nations. Najib and Rosmah, accompanied by Low,toured the Middle East, meeting King Abdullah in Saudi Arabia and CrownPrince Sheikh Mohammed Bin Zayed Al Nahyan of Abu Dhabi. To manyonlookers, Low seemed to be an official emissary for Najib, such was hisproximitytotheprimeminister,andsomebusinesspeoplewhometLowonthetripmistookhimforaministerofinvestment.

In Abu Dhabi, after a dinner with the crown prince at the sumptuousEmirates Palace hotel, Najib announced the formation of a new Malaysiansovereignwealthfundtobecalled1MalaysiaDevelopmentBerhad,or1MDB.The1MDBfundwassimply theTerengganu InvestmentAuthority,whichhadrecently raised$1.4billion in Islamicbonds, transformed intoa federal entity.The1MDBfundwouldberesponsibleforrepayingthebonds.

Once Najib came to power, Low convinced him to take over the fund,broaden its remit, and look forMiddleEastbacking.Fromhereon, the sultanwashedhishandsofthewholeaffair.

Lowhadpulledonhis connectionswithAmbassadorOtaiba tohelp fast-trackNajib’smeetingwith the crownprince and toobtain apledge fromAbuDhabi,howevervague,toinvestinMalaysianprojectsalongsidethefund.

The 1MDB fundwas supposed to invest in green energy and tourism tocreatehigh-qualityjobsforallMalaysians,whetherofMalay,Indian,orChineseheritage, hence the slogan “1Malaysia.” The fund, Low promised the primeminister, would suck in money from theMiddle East and borrowmore fromglobal markets. But he had another selling point, one which Najib, who wasambitious,foundextremelyattractive:Whynotalsousethefundasapolitical-financingvehicle?Profits from1MDBwould fill awar chest thatNajib coulduse to pay off political supporters and voters, restoring UMNO’s popularity,Lowpromised.

Onthesurface,suchspendingby1MDBwouldbepackagedas“corporatesocialresponsibility,”toborrowaphrasefromthecorporateworld.Thefund’s

charitablearmwouldawardscholarshipsandbuildaffordablehousing inareaswhereUMNOneededvotes.Ontopofthat,LowtoldNajibthatMiddleEasternnations,throughtheirinvestmentsinthefund,wouldcometoseeMalaysiaasacoveted ally in Asia, and also back Najib’s administration with a flow ofpoliticaldonations.

Was thisyoungbusinessman,barelyoutofschoolandwithaprettyshorttrackrecord,reallyabletodeliverArabinvestment?Heseemedwellconnected,butwouldthesepowerfulMiddleEasternkingdomspourbillionsofdollarsintothe1MDBfundjustbecauseLowwantedittobeso?Whydidtheyneedhimasa broker? Low was doing his all to give the impression that he wasindispensable,andthemeetingwithPrinceTurkiontheAlfaNeroinAugustwasmeanttodeepenthatfeeling.

UnbeknownsttoNajibandRosmah,itwasasetup,afacadeofofficialdom,aimedatmakingtheprimeministerandhiswifefeeltheyweregettingclosetoSaudiArabia’s royal family.Luckily forLow,Najibwasn’tone to scratch thesurfacetoodeeply.Aftera lifetimeofenjoyingtheperksaffordedtoa leadingMalaysian politician—theVIP limousines, hotel suites, and yachts—he didn’taskmanyquestionsatall.

In truth, Prince Turki was a new contact of Low’s rather than an officialemissaryofSaudiArabia.ManypeoplethinkofSaudiprincesashavingalmostunlimited funds, but Prince Turki faced an uncertain future. His father, KingAbdullah,wasaroundninety,had twentychildren,and itwasuncertainPrinceTurki would remain close to power once his father died. After his militarycareer,he’dtriedhishandatbusinessbuthadachievedlittlesuccess.Intheearly2000s,PrinceTurki setupPetroSaudi International,anoilexploration firm, inan attempt to leverage his royal connections. The idea was that PetroSaudi,nominallybasedinAlKhobar,aSaudicity,wouldwinoil-explorationrightsinforeigncountriesthatwerekeentogetclosetoSaudiArabia.

Likemanyminor aristocrats, Prince Turkiwas trading off his name, andPetroSaudi was little more than a shell, with little business to speak of. Thecompany’ssuccesswasconstrainedbythelaid-backapproachofTurkiandhispartner,TarekObaid,athirty-three-year-oldSaudifinancier.ThesonofaSaudibanker who moved his family to Geneva, Obaid had a round face, bushyeyebrowsandastubblybeard.HisfatherhadmadeandlostafortunewheelinganddealingalongsideprominentSaudifamilies,includingtherulingAlSauds.

Obaid attended international school in Geneva before Georgetown in

Washington, and spoke fluent French and English, as well as Arabic. Afterstudying, he hadworked in finance, including for a small Swiss private bank,wherehewasconsideredlazybycoworkers.AschiefexecutiveofPetroSaudi,whoseoperationswererunoutofanondescriptGenevaofficebuilding,ObaidplayedatbeingaSaudiroyal,allowinghisbankersinGenevatorefertohimas“Sheikh”—a designation for royals or religious clerics—though he was ofcommonstock.TheyoungSaudi liked todrinkheavily andparty inGeneva’snightclubs, and it had aged him prematurely. He also was a hypochondriac,perpetuallycomplainingofphantomillnesses.

PrinceTurkiwasjustthekindoffigureJhoLowwasseekingout:abonafide Saudi royal to dazzle the newly installed prime minister Najib, but onewhose need for cash made him malleable. Low recently had befriended thePrinceandObaidthroughathirty-nine-year-oldEritrean-AmericancalledSahleGhebreyesus. In a former life,Ghebreyesus owned Lamu, a high-endAfricanrestaurant in Manhattan that attracted minor celebrities and bankers. Thebusinesshadshutteredand,tobuildhimselfbackup,hebegandoingfavorsforsome of his former customers—arranging private jets, getting reservations atsought-afterrestaurants,andfulfillingotherwhimsofthesuperrich.

Before long, he found a new calling: concierge for millionaire MiddleEasternerswho traveled to theWest toenjoy thecompanyofmodels,alcohol,andothervicesnoteasilyavailableathome.Hewouldarrangeboatsandhotels,andmakereservations.

ThislineofworkbroughtGhebreyesusintocontactwithPrinceTurki.HealsocametoknowLow,whosepartieshadgrowninsizesinceWharton,fueledbythemoneyhemadeontheIskandardeal.

LowwantedtoshoreuphisbuddingrelationshipwithNajib,andhereliedonGhebreyesustoseetothedetails.InAugust2009,heaskedGhebreyesustoarrangeasumptuousvacation forNajibandRosmahand theirchildrenoff thecoastofFranceaboard theRMElegant, a superyachtwhichcamewith fifteenstateroomsandanArtDeco–stylediningroom.Lowarrangedthepayments.

Atthesametime,PrinceTurkiandhisentouragecharteredtheAlfaNeroatmore than $500,000 a week. Low’s plan was to bring Najib and his familytogetherwith theprince,againmaking itappears likehecouldorderupSaudiroyaltyonawhim.Asplanned,NajibandhisfamilyboardedtheAlfaNeroandmetTurki.

On the boat, Prince Turki and Najib began discussing the possibility ofPetroSaudi partneringwith the new 1MDB fund.After themeeting, Low and

TarekObaidseizedon the interestNajibhadshown,quicklyhammeringoutaroughoutlineofhowapartnershipmightwork.Onlyamatterofdaysafterthemeeting on the Alfa Nero, Prince Turki wrote Najib on official Saudigovernment letterhead,proposing“apotentialbusinesscombination.”Withhismissive,datedAugust28,he includedaproposal fromChiefExecutiveObaidoutlyingabusinessventure.Theplan,accordingtoObaid,wasforPetroSauditoput its oil assets—supposedly rights to develop fields in Turkmenistan andArgentinaworth$2.5billion—intoajointventure.

1MDB,meanwhile,wouldcontribute$1billionincash—tappingsomeofthemoneyithadsittinginitsbankaccountinMalaysia.

Chapter8

HittingaGoldMine

NewYork,September2009

Fromthethirty-fifth-floorlobbyoftheMandarinOrientalonColumbusCircle,PatrickMahony took in panoramic views across the green canopy of CentralPark.LocatedinoneofthetwotowersoftheTimeWarnerCenter, thehotel’ssleek lounge, with floor-to-ceiling windows and a cream-and-marble-themedinterior,was the kind of placeMahonywas used to inhabiting.TheMandarinwasafavoriteofJhoLow,wholikedtobeclosetoagoodAsianmeal,andhe’darrangedtomeetMahonyinthelounge.

TheBritishbankerworkedforAshmore,aBritishinvestmentfund,buthealso had taken on a role at PetroSaudi as director of investments. After hismeetingwithPrinceTurkiontheyacht,PrimeMinisterNajibhadagreedtotheoutlineof thedealpresentedbyObaid,Turki’sbusinesspartneratPetroSaudi,andMahonyandLowwereattheMandarintogettheballrolling.

Handsome,withhairsweptbacktojustabovehisshirtcollar,Mahonyhadareputationforbeingsmartbutcold,oftentakingaperemptorytoneinbusinessdealings,firstasabankeratGoldmanSachsandlaterAshmore.OlderbankerswhocameacrossMahony,dressed in tailor-cut suits and fullofbluster, foundthe thirty-two-year-old talentedandambitious, if abit pretentious.He liked toemailbankerfriendsaboutexpensivewatches.Whenhisniececheatedatcards,Mahonyjokedthatshesharedhisgenes.Aproductof therootlessglobalelite,hecommunicatedwithObaidinamixtureofEnglishandFrench.InEnglish,hespokewithatransatlanticaccentcommonamongderacinatedAnglophones.

Born in 1977,Mahonymet TarekObaid at the international school theyattended in Geneva. In 2009, Obaid persuaded his ambitious friend to joinPetroSaudi, and Mahony jumped at the chance of a position of power in asmaller firm.Mahony’s role at PetroSaudiwas towork on a plan to ramp up

PetroSaudi’sbusiness.Quicklyhebecamethedrivingforcebehindthecompany,enticingRichardHaythornthwaite,awell-knownformerBPexecutivewhowaschairmanofMasterCardInternational, tocomeonboard torun theoil-and-gasbusiness. In2008,PetroSaudihadbought the rights to fields inArgentina andreachedanagreementwithaCanadiancompany todevelopapotentiallyhugeoffshore field in Turkmenistan. Now, this Malaysian businessman called JhoLowwaspromisingtobring$1billioninsovereignmoneyintoadeal.

Mahony knew little about Low before their meeting at the Mandarin,occurring less than twoweeksafterObaidhadwritten toNajib suggesting thejointventure,but—withtheprospectofagiantdealinthemaking—hemadeitapriority.Inthehotelloungethepairsketchedthecontoursofaplan.PetroSaudiwouldputinitsoilassets,withthe1MDBfundcontributing$1billioninfunds.Onthesurface,theideawastousethemoneytoexploreforoil.ButLowsensedtherewasanopportunitytomakeafinancialkilling,andheleftthemeetinginthe Mandarin Oriental ecstatic. Soon after, he emailed his father, mother,brother,andsister,withwhomheoftenshareddetailsofhisdealmaking.

“Justclosedthedealwithpetrosaudi—lookslikewehavehitagoldmin[e],”Lowwrote.

Withabillion-dollardealintheworks,itwastimefor1MDBtostaffup.PrimeMinister Najib himself held the highest position as chairman of the board ofadvisers, with power to appoint boardmembers and veto decisions. The fundappointedShahrolHalmi,aformerconsultantatAccentureinMalaysia,aschiefexecutive.Other hires includedCaseyTang, a financedirector at aMalaysianretailer,whobecameanexecutivedirector,andJasmineLoo,asmartMalaysianlawyer,aslegalcounsel.

Onenamewasmissingfromthelistofpositions,however:JhoLow.Lowdecidedtotakenoofficialrole,butintruth,hewasbehindeverydecision.Najibhad given Low a free hand to run the fund, and Low had stuffed it with hisassociates.TangandLoowereamongtheMalaysiansLowhadgottentoknowwhiledoingdealsafterreturningfromWharton.Pluckedfromrelativeobscurity,Shahrolwouldsoonshowhecouldbereliedon toblindlyfolloworders.Withstaffinplace,thingsbegantomovequickly.

JustdaysaftertheMandarinOrientalmeetingbetweenMahonyandLow,alarger group assembled in Geneva. Obaid, Low, Mahony, and Seet Li Lin,Low’s Wharton school friend who worked for Wynton, met for breakfast inGenevanearthelakeatthecenterofthecity.Thesmallcityforyearshadbeen

accepting fugitives, at one time Protestants escaping persecution from theCatholic Inquisition—and, more recently, financiers from the world over,lookingtostashtheirwealthinpropertyandprivatebankaccounts.

Before the Geneva meeting Low had sent an email to his inner circle,ordering them to “move fast” to get the joint venture off the ground. Afterbreakfast, Low took out his BlackBerry and connected Obaid with ShahrolHalmi by email. Although the two heads of the organizations had nevermet,Lowinformedthemboththejointventurewasontrack,makingitclearwhowasboss,whileinsistingheremaininthebackground.

“Itrustallofyoucannowofficiallycommunicateanddon’tneedtoccmeforpropergovernancepurposes,”Lowwrote,whoalsobegan to askhis innercircletodestroyemailsafterreadingthem.Withoutaformalpositionat1MDB,Lowdidn’twantcomplianceissueswithbanksorlawyers.

Shahrol replied to Low’s email asking for more information aboutPetroSaudi,andMahonyappearedtotryandcoverforthepaucityofbusiness.

“PSIisverypressshyandusuallyneverannouncesourinvestments(oneofthemainreasonsgovernmentsliketoworkwithus),”hewrote.

Heattachedapresentation,whichhesaid“shouldgiveyouasenseofwhatweareabout,”butitincludednodetailedinformationaboutthesizeofthefirm’sassets.

AfterthegroupleftthebreakfastinGeneva,theparticipantswastednotimeinsettingupthejointventure.MahonyemailedPetroSaudi’sbank,BSI,asmallSwissprivatebank, tostart theprocessofarrangingabusinessaccountfor thenewentity.LowwenttomeetBSIstaffinGeneva,andMahonyexplainedtothebankers how the new venture would soon be receiving $1 billion from aMalaysianfund,andLowwouldbetakingacutasafeeforhelpingputthedealtogether—just as he had attempted to do, but without success, during theMubadalainvestmentinMalaysia.

Yetagain,however,Lowwas thwarted.TheBSIbankerbalkedat suchastrange arrangement, and turned down the account request. “I don’t like thetransactionatall! Inparticular the roleand involvementofMr.LowTaekJho‘looks and feels’ very [suspicious] to me,” the banker wrote in an email tocolleagues.

Evenatthisearlystage,anycompetentbankofficialcouldsensesomethingwasoff.Bankersaresupposedtocatchwrongdoingandreportittoauthorities.But this self-policing system doesn’t work. Turned down by one institution,financierscansimplyshoparounduntiltheyfindsomeonewillingtoassistthem.

AfterfacingproblemswithBSI,Mahonyturnedtohisprivatebank,J.P.Morgan(Suisse). J.P. Morgan agreed to open an account, seemingly asking fewquestionsaboutwhyasovereignwealthfundneededarelationshipwithaSwissprivatebank.

If the Swiss bankers had asked Low and Mahony more about theirintentions—andthepairhadtoldthetruth—whatwouldtheyhavesaid?Perhapsin thebeginningLowand thePetroSaudiprincipalsmeantonly to takebrokerfees for setting up 1MDB with PetroSaudi—a questionable practice whichneverthelessiscommoninemergingmarkets.Ormaybetheyplannedtoinvestwhat they saw as government money—not anyone’s personal piggy bank—making returns and putting the cash back. What’s for sure is that Low wasimprovising,searchingoutwaystomakemoneyateachtwistandturn,andthescopeofhisendeavorswouldsoonbroadenconsiderably.

As Low’s group forged ahead, theyworked hard to ensure the pillars ofcapitalism—lawyers,investmentbankers,auditors,andvaluationexperts—wereinvolvedateveryturn.TheeffectwastogivethedealbetweenPetroSaudiand1MDBapatinaofrespectability.Forafee,mostwerehappytooblige.Justovera week after the Geneva meeting, Mahony reached out to Edward Morse, aformer senior U.S. State Department official and energy analyst at LehmanBrothers, to conduct an independent valuation of PetroSaudi’s assets, which1MDB’sboardhadrequestedbeforethefundsentits$1billioninvestment.Oneof theworld’s foremostexpertsonglobaloil,MorsehadworkedwithObaid’selder brother, Nawaf Obaid, who had written a book-length study on Saudienergymarkets.MahonytoldMorsehewasseekingavaluationof$2.5billion.

“Ok.Gotit!”Morsereplied.Onlytwodayslater,Morsewasdonewithhisreport,atechnicalanalysisof

reservesandpricesbasedonnumbersthatPetroSaudihadprovided.“I think you won’t be displeased with our conclusions either on

TurkmenistanorArgentina,”MorsewroteMahony.His valuation range went up to $3.6 billion, more than Mahony had

requested,andahighnumbergiven theTurkmenistan fieldswere inwatersoftheCaspianSeathatweredisputedwithAzerbaijan.Inthereport,Morsemadeitclearhisanalysiswaspurelyaneconomicvaluationof theoilcontained in thefields.Hewaspaid$100,000forthework.

Othersinvolvedwerehappytofacilitateinthedeal,evenwhenaspectsofitmadenosenseatall.TimothyBuckland,aNewZealandnationalwhoworkedfor theLondonofficeofU.S. lawfirmWhite&Case,counsel forPetroSaudi,

was eager to please his client. On September 22, Mahony, in an email toBuckland,copyingotherWhite&Caselawyers,askedthelawfirmtoprepareadocument to send$2million toanunnamed“broker” forhelpingput the jointventuredealtogether.Bucklandsimplyreplied,“Willdo.”It’sunclearwhetherthebrokerfeewaseverpaid.

White & Case also helped PetroSaudi prepare a presentation of theproposeddeal.Theslides,repletewithprofessional-lookingdiagramsofmoneyflows,showedhowPetroSaudiwouldinject itsassetsand1MDBwouldputin$1billion for aminority stake in the jointventure,based in theBritishVirginIslands—allasagreed.Butthepresentationalsoindicatedastrangepaymentof$700millionthatthejointventurewouldmakebacktoPetroSaudi.ThepaymentsupposedlywastorepayaloanthatPetroSaudihadextendedtothejointventure.Infact,theloancouldnothaveexisted;thejointventurehadn’tevenbeensetupanddidn’thaveabankaccount.

OnSeptember26,1MDB’snewlyconstitutedboardmetinKualaLumpurtoapprovetheinitial$1billiontransferfromthefundtotheSwissaccountsetup for the joint venturewithPetroSaudi.Before themeeting,Low telephonedNajib to apprise him of what was about to transpire. Then Low attended themeeting, one of the few times he was physically present at a 1MDB officialgathering.Atthemeeting,Lowexplainedtheplan.Hedidnotmentionthe$700millionpayment.Theboardagreedtofundthejointventure.

In the space of a month, since Prince Turki had written Najib with hisproposalinlateAugust,amulti-billion-dollarjoint-ventureagreementhadbeencompleted.Suchatimeframe—tocompleteduediligence,assetvaluations,andother legal checks—was virtually without parallel. Such deals normally takemonths,ifnotayear,towrapup.A1MDBemployeelatercomparedtheprocesstoattemptingtoreadtheentireworksofShakespeareinanhour.

Chapter9

“IFeeltheEarthMove”

KualaLumpur,September2009

ShortlyafterlunchonSeptember30,JacquelineHo,anemployeewithDeutscheBank inMalaysia,was in a quandary.Shewas the relationshipmanager for anewclient,1MDB,andCaseyTang, the fund’s executivedirector,wason thephonepressuringhertopushaheadwithaseriesofsubstantialpaymentsoutofthecountry.

EarlierthatdayDeutschehadreceivedaletterfromTang,oddlydeliveredby hand, which asked for the bank to complete the transfers. But Deutsche’scompliancedepartmenthadsomequeries.Whywasn’t$1billionflowingtothejoint venturewithPetroSaudi,asagreedby the1MDBboard?AndhowcomeTangwasaskingfor$700milliontobeputintoanunnamedaccountwithRBSCouttsinZurich?

Tang replied that the account, identified in the wire request only by anumber,wasownedbyPetroSaudi,andthetransferwastorepayaloan.

“If they’regoing tooverkillon thecompliance thing,uh, theyhave toberesponsible you know,” Tang told Ho, according to a transcript. He seemedagitated,warning thebanker that the jointventuremight fail ifDeutscheBankdidn’thurryupandtransferthefunds.

“Yes that’s, that’s fine. But just one question as to why this is going to[PetroSaudi]itself?Isthereanyparticularreason,”Hoasked.

“For us, we don’t care. Because $700 million I mean it’s an advance[that’s]owedtothem,”hereplied.“Thisiswheretheywanttosend.TheywanttosendtoTimbuktualso,wedon’tcare.”

“Yeahthat’sfine.Alright.Wejustwantedtounderstandthebackground.”Ho’ssupervisorcalledBankNegaraMalaysia,thecentralbank,tocheckif

itwasokaytoproceedwiththeenornmoustransaction.Thebankgavethegreen

light,aslongasthemoneywasgoingtothejointventure.Despitetheconfusion,Deutsche sent two wires around 3 p.m., one of $300 million to the jointventure’snewaccountatJ.P.Morgan(Suisse)andanotherof$700milliontothemysteriousaccountatCouttsinZurich.Asitwasadollartransaction,themoneyneeded to pass through a U.S. bank. Under American anti-money-launderinglaws, these correspondent banks are obliged to check the source and use offunds. But with trillions of dollars flowing daily through the global foreign-exchangemarkets,suchchecksarelittlemorethanperfunctory,andinthiscase,J.P.Morganletthemoneythrough.

Twodays later, an employee fromCoutts’s regulatory risk department inZurichsentanurgentemailto1MDB.TheemployeewasconfusedbyDeutscheBank’somissionofthefullnameofthebeneficiaryofthe$700milliontransfer,which is requiredonbank-transfer requests.Whenpushed,ShahrolHalmi, thefund’s chief executive, acknowledged the accountwas ownedby aSeychellescompanycalledGoodStarLtd.

“GoodStarisowned100%byPetroSaudiInternationalLtd,”hewrote.ShahrolwasparrotingwhatLowtoldhim.Intruth,GoodStarwasanother

bearer-sharecompany,thekindmadeillegalinmanyjurisdictions,anditssinglesharewasheldbyJhoLow,whoalsowassignatorytoitsaccounts.Onlymonthsbefore,hehadsetuptheshellcompany,usingtheservicesofatrustcompany.Itwasasimulacrumofabonafidebusiness,afronttheperpetratorshopedwouldshieldthemfromdetection.

Still,Couttsbankerswerenotsatisfied,andLowandCaseyTangflew tothe bank’s headquarters in Zurich to smooth things over. Here they told adifferent story from the one Tang had spun to Deutsche Bank about thePetroSaudi loan: Good Star was an investment management company, and1MDBhaddecidedtoputin$700millionofitsmoney.WhywouldaMalaysianstate fund put so much cash into an unknown Seychelles fund managementcompany?WhatevertheCouttsbankers’concerns,however,thebankpushedthetransferthrough.

The1MDBmoneybegantomoveacrosstheworld.Lowhadcarriedoffamove so brazen, itwas hard to fathomhow no one had stopped him. Severalyears before, in Abu Dhabi, he’d learned how sovereign wealth funds likeMubadalawerepotsofgold,andheyearnedtocontrolone.DrawingontheAbuDhabimodel,LowhadconvincedPrimeMinisterNajibthatMalaysianeededitsownpowerful fund to tapglobalmarkets,and thathe,a twenty-eight-year-old,shouldbepermittedtorunitsaffairs.

Low had tried to earn a commission for putting 1MDB and PetroSauditogether, just as broker feeswere common in theMiddle East, but he’d beenstymiedbyBSI.Atsomepoint,Low’sschemehadevolved.MaybePetroSaudihadbeenplanningtoinvest themoneyinoil-fielddevelopmentwiththehopesofearningafatshareofprofitsusingMalaysiangovernmentmoney.

ButNajibwasgivingLowsomuchroomtomaneuver,hedaredtothinkona grander scale. His people were running 1MDB, with cover from the primeminister.The involvement of PrinceTurki, the co-owner of PetroSaudi, and aMalaysianstatefundofferedasheenofofficialdom.(Indeed,PetroSaudiwouldlater argue that it was an arms-length transaction between sophisticated andwell-represented sovereign parties.) An idea had taken shape in Low’s mind.Perhaps,hewondered,itwaspossibletotakehundredsofmillionsofdollarsinbroaddaylight,foolingWesternbanksandregulators.

ForSaudi royalty, theboundariesbetweenstateandpersonalwealthwereblurred,andsoitwasbecomingforLow.Whatifsomeonecaughton?DidLowhave a deeply thought-out plan about what to do when someone noticed thefinancialhole?Theeventsofthepastmonthhadhappenedatarapidpace,andhewasad-libbing.Itwasanopportunisticmove,andLowhadpulleditoff.Likehehadalwaysdone,Lowwouldrelyonhisabilitytothinkonthefly.

Inthisageofsocialsharing,theconspiratorscouldnotevenhidetheirglee.SeetLiLin,Low’sWhartonfriend,tooktoFacebookonthedayDeutscheBanksentthe$700milliontoGoodStar.

“ifeeltheearthmove…,”hewroteinapublicmessageonhiswall.

FromGoodStar’saccountatCoutts,Lowdistributedmoneyamongthegroup.In early October, he transferred $85 million to Tarek Obaid’s J.P. Morganaccount in Switzerland, under the pretense the amount was a private-equityinvestment. Coutts permitted the transfers, and three months later the banksimilarlyletthroughanotherpaymentof$68millionfromGoodStartoObaid.

Weeksafter,Obaidpaid$33milliontoPatrickMahony,andover2009and2010,sent$77millionfromhisaccounttoPrinceTurki.Monthslater,Buckland,theWhite&Caselawyer,leftthefirmtotakeanewpositionasin-housecounselatPetroSaudiUK.

Low had pulled off his first major heist, and even after paying off hispartners, enjoyed virtually sole control over hundreds of millions of dollars.Armedwithinordinatewealth,hesetofftoseewhatwasforsaleintheUnitedStates.Theanswerwasalmostanythinghewanted.

PARTII

OVERNIGHTBILLIONAIRE

Chapter10

AnEveningwiththePlaymates

LasVegas,October2009

ThePlaymateswerenervousas theymadetheirwayacross thecasinofloorofthePalazzo.Theyoungwomen,abouttwentyofthem,amixofblondeanddark-haired models, had worked in Las Vegas on multiple occasions. But theinstructionsforthisjobwereespeciallysecretive:Checkintoyourroom,putonablackcocktaildress,andpackabikini.Thewomenhadnoideawhohadhiredthem.

ItwasOctober 22, 2009, only threeweeks since Low took $700millionfrom 1MDB. Hours earlier, the Playmates had flown in—first class—fromacrosstheUnitedStates.OneofthenewesthotelsontheStrip,thePalazzowasan impressive sight, with stately stone staircases that brought visitors up to alobby with an indoor waterfall. Beyond that was the casino floor, one of thelargestinthecountry.

Cloudsthatafternoonhaddispersed,anditwasabeautifullyclearlate-fallevening.Ataround8p.m.,thePlaymatesarrivedatthedoorofaVIProomandentered.Inside,aroundalongcardtable,wereahandfulofAsianmenplayingpoker, accompanied by LeonardoDiCaprio. Some of themodels hadmet theactorbefore,buthispresenceinthisgatheringstrucksomeofthemaspeculiar.Theparty,thewomenquicklylearned,wasanearlycelebrationforthebirthdayofaportlyAsianmanwhointroducedhimselfasJhoLow.What,someofthemwondered,was theactordoing in thecompanyof theseanonymousand ratherdullmen?

Afterabouttwentyminutesofwatchingthegroupplay,Lowbegantopass$1,000 chips down the table, one for eachwoman, andmade a signal for thepartytomovetoasuiteinthehotel.Withahugesecurityentourage,thegroupmadeitswayacrossthegamingfloor,astouristslookedon.Nooneappearedto

recognize DiCaprio, who was wearing his trademark battered baseball cap,pulleddowntightlytoassureanonymity.

AtthedoorsoftheChairmanSuitesonthefifthfloor,themostopulentatthePalazzo,securityguardswaited.Theburlymen indarksuitsandearpiecesrequired the Playmates to hand over their bags, phones, and driver’s licenses,and then sign a nondisclosure agreement before finally entering the suite.Thewomen were used to attending openings and nightclub events, but this high-security atmosphere was strange. Nonetheless, the $3,000 fee they had beenpromisedtohangoutforjustafewhoursovercameanyqualmstheymighthavehad.

Inthesuite’slivingroom,withawoodfire,plushcouches,anddoorsthatopenedouttoapoolterraceoverlookingtheStrip,theatmospherewassomber.The lightswereoff,andhotel staffhadconstructedamakeshiftdance floorofwhite tiles,withadiscoballhangingoverhead.ThePalazzoalsohad setupacardtableinthesuite,andLow,DiCaprio,andthefewotherAsianmenwentofftoplaybaccarat,whichtheytaughttosomeofthePlaymateswhodidn’tknowthe game. With the ice broken, the gambling took off. Baccarat was Low’sfavorite. It involves little skill, revolving around whether the player or the“bank”getsthehighesthandinacomplicatedscoringsystem,butrewards—orpunishes—thosewillingtowagerbig.

StephanieLarimore,adark-hairedmodel,wearingablackdresswithsilvermaterialaround thebust, tried tomakeconversationwithLow.Hewaspolite,butshyandalmostunabletothinkofwhattosay.BoxesofGermanchocolateswerestackedroundtheroom,andLowofferedherone,sayingthegold-wrappedsquareswerehisfavorite.He’sintimidatedbywomen.Whyhavetheyhiredustobehere?Larimorethought.

Themen,smokingcigars,begantogamblelargeamountsofmoney,puttingdownchipsof$5,000,andafteranearlywinningstreakagainstthehouse,someoftheAsianmenbegantothrowchipsaroundtheroom.SomeofthePlaymates,whowereminglingonthesofasandaroundthetable,chasedafterthem,downontheirhandsandknees.Afteracoupleofhours,abirthdaycakecameout,andthewomencrowdedaroundLow.

Later, DiCaprio and Low sat on a sofa in the dark, smoking cigars andtalking,astheywatchedthreeorfourwomendancinginthelivingroomunderdiscolighting.Lowthenaskedforsomeofthegirls tochangeintobikinisandswiminasmallpoolonabalconyoutside.

“Ithinkhewasselectingpeople,”saidStarRamirez,amakeupartistwho

was present that evening, referring to Low. “It was weird wewere there. Hedidn’tsocializewithus.”

Aroundthepoolwere traysfilledwithbarbecuedfoodandicecream,butnooneatemuch.EverythinghadbeenselectedinadvancebyLow,whoquietlyorchestratedthenight’sactivitieswithafewwordstostaffstandingbytocatertohiseverywhim.

Someone took offDiCaprio’s baseball cap andwore it. But therewasn’treallyapartyatmosphere.Theactorhad just finishedfilmingShutter Island,atensepsychologicalthriller,and,tosomeofthemodels,hestillseemedtobeincharacter, focusedanddistant.DiCapriodranksomebourbon,but therewasn’tmuchalcoholflowing.

“Theyweren’tcrazypartyguys,”Larimoresaid.ThenLowaskedLarimorewhethershe’d like tospenda fewdays longer

withhiminVegas.Hewouldpay$10,000andtakehershoppingontheStrip.Someofthewomenstayedthenightinthesuite,butLarimoredeclinedtheofferandlefttoherownroomaroundmidnight.

“Itwaslikehewasbribingyoutostay.”

At thatmoment, in late2009,Lowhadaccess tomore liquidcash thanalmostanyoneonearth—andhewasn’tshyaboutspendingit.Evenbeforehisbighaul,LowhadspenttimeinNewYorkandLasVegas,droppingexorbitantsumsofcash,profitsfromtheIskandardeal.Butinthefallof2009,armedwithalmostendlessamountsofmoney,Lowembarkedonaperiodof incessantpartying—and networking. Even after the payments to Obaid and others, hundreds ofmillions of dollarswere just sitting in theGoodStar account he controlled inSwitzerland, for Low to deploy in any way he saw fit. There were noshareholders,nocoinvestors.

Hiswasn’taPonzischemelikeBernieMadoff’s,whichusednewmoneytopay “profits” to earlier investors.Madoff’s fraud led to losses of at least $18billion,buthis takewasa fractionof that,as the“profits”weresharedamongother investors. By the time the scheme imploded in late 2008, Madoff hadamassedapaperfortuneof$800million,butmostof thiswasthevalueofhismarket-making business; the amount he personally stolewas a fraction of theamount lost. Low’s mark—the little-known 1MDB, a Malaysian governmentfund—wasn’t asking for any money back and it wouldn’t so long as hecontrolleditthroughhisproxies.

Lowalsowasn’taninsidertraderlikejunk-bondkingMichaelMilkenand

arbitrageur Ivan Boesky, who had amassed personal fortunes in the 1980sthroughmakingbetsonillegallytradedcorporateinformation,beforethey,likeMadoff, ended up in prison. The Malaysian had simply taken hundreds ofmillions of dollars. The excesses ofMadoff or the 1980swould seem prosaiccomparedtothemultiyearspendingspreeonwhichLowwasabouttoembark.

Hiswasaschemeforthetwenty-firstcentury,atrulyglobalendeavorthatproduced nothing—a shift of funds from a poorly controlled state fund in thedeveloping world, diverting it into the opaque corners of an underpolicedfinancialsystemthat’sallbutbroken.

Did he really think he could get awaywith it? PerhapsLow believed hecouldmakeinvestmentsthatwouldmorethancoverforwhathehadtaken.Withthecoverofaprimeminister,whowouldstophim?Topullitoff,Lowreliedonskills he’d honed for years. He knew that transactions between governmentsattractedlessscrutinyfromauditorsandbanks,andsohehadsetaboutbuildinghigh-levelconnectionsinMalaysia,theUAE,andSaudiArabia.Heunderstoodthatoncemoneywassentintoananonymousoffshoreaccount,itwasdifficulttotrace, and he’d learned how to layer transactions—sending cash around in awhirlbetweenshellcompanies.And tokeepeverything flowing,heconstantlymisrepresentedmoney as investments or loans, giving his scheme a veneer offormality.

ButitwasonethingtotakemoneyfromaMalaysiafundandfunnelit toSwissbankaccountsundertheguiseofasovereigninvestment,usingfriendsinofficial positions to address any concerns of compliance executives at banks.Now,LowwantedtogetthemoneyintotheUnitedStatessohecouldspenditon luxuriesandbeginbuildinghisempire.Thatwas risky,because theUnitedStateshad started clampingdownon corrupt foreignofficials buying assets inWestern nations. To do so, Low turned to Shearman & Sterling. Founded in1873, with its headquarters at 599 LexingtonAvenue inmidtownManhattan,Shearman was as white-shoe a law firm as they came, an organization moresuitedtohandlingmajormergersandacquisitionsthandealingwiththelikesofLow.

LowclaimedtohavearelationshipwithalargeMalaysiansovereignfund,and he appeared to have a close relationship withMubadala, the Abu Dhabifund,soShearman’spartnersapparentlyfeltcomfortedabouthisreputation.Thefact Low heldmoneywithCoutts, banker to theQueen,was another level ofassurance,asifthefundshadaccruedtheirownrespectabilitysimplybypassingthroughstoriedinstitutions.

Lowinformedhisnewlegal teamthathewouldbemakingasequenceofmajorinvestments,buthewasveryconcernedaboutprivacy.Heoptedtousethefirm’s Interest On Lawyer Trust Accounts, or IOLTAs, to help distribute themoney. These trust accounts are typically formed by U.S. law firms to poolclients’money,say,whentheyareholdingshort-termfundsforbusinessdealsorproperty purchases. This arcane corner of the financial world came intoexistencethreedecadesagoasawayforlawfirmstoearnshort-terminterestonclient money to finance legal aid for the poor, but over time the accountsdeveloped a reputation for shielding the identity of clients in transactions andhelpingtohidetheoriginoffunds.Somestatesmandatelawfirmssetthemup.IOLTAsareatoncegoodforsocietyandapowerfultoolforcrime.

Lawyers,unlikebankers,don’thave toconductduediligenceonaclient.DetailsoftransfersthroughIOLTAs,meanwhile,areprotectedbylawyer-clientprivilege.Whileit isillegalforlawyerstoabetmoneylaundering,theyarenotrequired to report suspicious activity to regulators. TheFinancialActionTaskForce, a Paris-based intergovernmental group that sets standards for stoppingfraudulentuseof theglobal financesystem,hashighlighted theUnitedStates’poor oversight of lawyers as a weak spot in its defenses against moneylaunderers.

In just a few years since graduating fromWharton, Low was becomingskilled inworkingoutways touse relativelyunobservedpartsof the financialsystem to avoid detection, darkened corners where regulators don’t have fullvisibility and others had no reason or duty to be suspicious. These lawyeraccounts fit the bill perfectly, especially because wire transfers leaving anIOLTAaccount generally denote only the nameof a law firm, not that of theclient,makingithardforcorrespondentbankstodetectsuspiciousactivity.

OnOctober21,2009,Lowwired$148millionfromtheGoodStaraccountin Switzerland to an IOLTA account at Shearman in New York, part of astaggeringtotalof$369millionthatwouldentersuchaccountsat thelawfirmoverthenexttwelvemonths.ThereasonsLowgaveforthetransfers,notedonwiredocuments,rangedfrompropertypurchasestodealstobuycompanies.Butatfirst,hesimplyusedthismoneytofundendlessroundsofpartying.

BetweenOctober 2009 and June 2010—a period of only eightmonths—Lowandhisentouragespent$85milliononalcohol,gamblinginVegas,privatejets, renting superyachts, and to pay Playmates and Hollywood celebrities tohangoutwithhim.Hesethimselfupat thePark Imperialon230WestFifty-SixthStreet inNewYork, a granite apartment buildingwith geometric angles

that resemble bookends and sweeping views of Central Park and the HudsonRiver.ThemoveputLowinthecompanyofboldfacednamesofentertainment.James Bond actor Daniel Craig was staying in a $38,000-a-month apartmenttherewhilestarringinaBroadwayplay,andSean“Diddy”Combshadaplaceinthebuilding.

Lowrentedasuiteofroomsthatcost$100,000permonth.Theflashy,newresidentshowedupatthebuildinginaconvoyofblackCadillacEscaladeswitha retinue of security, and he paid for a number of other apartments in thebuilding for his entourage, which included Hamad Al Wazzan, his wealthyKuwaiti friend from Wharton. Long-term residents complained about thebodyguardsandtheostentation,butthatwasexactlyLow’saim:toshowhehadarrived.

Hebegantospendeye-poppingamounts,runningupa$160,000barbillinAvenue,anewclubinNewYork’sChelseadistrict,onasinglenightduringfallfashionweek in 2009.On another occasion, Low sent twenty-three bottles ofCristaltoactressLindsayLohan’stablewhenhespottedherduringanightoutinManhattan.TheseenormousoutlayslandedLowintheNewYorkPost,whichcalledthe“big-spendingMalaysian…themysterymanof[the]cityclubscene.”

Lowwasn’t a total newcomer to the partyworld. Since at least themid-2000s,hisbehaviorhadraisedeyebrows.HewouldappearatclubsandoutspendeventhebiggestWallStreetbonvivants—ordering$900bottlesofCristalfornoseeming purpose on a midweek night. Tracy Hanna, a cocktail waitress whoserved him in the Hamptons, remembers Low around 2005 spending some$30,000,asumnearlyequivalenttothemedianU.S.annualincome,inonlyoneevening.Inthiseraofinequality,however,Low’sbehaviorwasn’tsonotable.

“We just thought he was some kind of royalty,” Hanna recalled. “Therewerealotofprincesat thetime,especiallyfromSaudi.Wethoughttheycan’tdrinkorpartywherethey’refrom,sotheygocrazyinAmerica.”

OnanotheroccasionheflewwaitressesfromNewYorktoMalaysiaforaparty.

WhenNawafObaid,thebrotherofTarekObaid,thePetroSaudicofounder,came across coverage ofLow in theNewYorkPost, hewas livid.A securityexpert,NawafObaidhadspentdecadesatWashingtonthink-tanksandadvisingSaudiambassadorstotheUnitedStates.

“Wowthisisverydangerous,heneedstobecurtailedcauseatanymomenthe can lose hismind and blow thewhole thing!” hewrote in an email to hisbrother.

Patrick Mahony and Tarek Obaid would have surely been happy to remainanonymousandenjoytheirriches.ForLow,suchbehaviorwouldhaverenderedthe scheme pointless. He desired to exist—and be seen—at the center of apowerfulworld.Theverypoint,itseemed,wasforhimtogethimclosetotherich and famous, and to publicize it, just as he had wanted his name on thesororitypostersbackatWharton.Inthedaysafterhisheist,Lowwasdrivenbythe need to live among celebrities, as if thiswould validate hisworth. In thefuture, hewould seeHollywood as an investment opportunity.But right now,flush from the success of his scheme, Low just wanted to enjoy the thrill ofbuyinghiswayintocelebrityfriendships.Todoso,hehadtofigureoutawaytocozyuptotrulyA-listHollywoodnames.ThekeywouldbeapairofnightclubentrepreneursnamedNoahTepperbergandJasonStrauss.

The men were co-owners of Strategic Hospitality Group, a nightclubempirethatincludedAvenue,aswellasNewYork’spopularMarqueeclubandapartshareinLasVegas–basedLAVOandTAO.TepperbergandStrausswereamongthecountry’stopnightlifeentrepreneurs—HarvardBusinessReviewhadeven conducted a case study of their operations.Now in theirmidthirties, thepairwerenativeNewYorkerswhohadknowneachothersinceworkingasclubpromoters while still in high school. Strauss, who is tall and lean with apermanent tan,andTepperburg,who isheavysetwitha shavedhead,madeanoddcouple,buttheywerenearlyinseparable.Aftercollege,theybeganopeningclubsintheHamptonsandNewYork.Theyrealizedclubslivedordiedonwhoattended,andbuiltdatabasesofcelebritiesandbigspenders.

ThepairopenedMarqueein2003,anditquicklybecamethehottestplaceintown.OnaFridayorSaturdaynight,tosecureaspotatMarquee,withitsold-schoolgentlemen’s-clubfeelanddiscoballenclosedinasphericalframe,guestshadtosigncontractstoorderaminimumoftwobottlesofchampagneorliquor,costinghundredsoreventhousandsofdollarseach.Hollywoodcelebrities likeLeonardoDiCaprioandTobeyMaguirewereregulars,andcountedTepperbergand Strauss as friends. But the financial crisis of 2007 and 2008 had dentedbusiness, asWall Street bankers shied away from dropping huge amounts inNewYorkclubs.Low’sadventonthescenecouldn’thavebeenbettertimed.

TepperbergandStrausshadseenhighrollersspendthousands,eventensofthousandsofdollarsatatime,butLowwasonanotherlevel.Hewaswillingtopartwithmillionsofdollars inanight.Theduo,whoalsoowneda successfulevents and marketing business, made themselves available to cater to Low’severywhim.Wordof thebig-spendingAsian alsobegan to spread around the

HollywoodtypeswhoknewTepperbergandStrauss.It’salittle-discussedsecretthateventhebiggestmoviestarstakepayment

toattendevents,andLowbegantoseekoutthemanagersoftopactors,orpullon the Strategic Group’s network of club promoters, to get celebrities to hisparties.TherumorthatLowwasabillionairewithunlimitedfundsmadehimanattractivepersontoknow.EvenforDiCaprio,oneoftheworld’stop-paidactors,with a sizable fortune of his own, the scope of Low’s purported wealth wasalluring. The night at the Palazzo inOctober 2009was just the start ofmanypartiestheactorwouldenjoywithLow.

LowmetDiCapriothroughDannyAbeckaser,aclubpromoterforStrategicGroupwhowas trying tocarveouthisowncareerasanactor.Toppromoterslike Abeckaser were powerful figures in the nightlife world, bringing in big-spendingcustomersinreturnforafee.WhilestillatWharton,LowhadgainedAbeckaser’sattentionbylayingout$3,000inanight.Thosesumshadrampedup to $20,000, then $50,000. Now, Low thought nothing of putting down $1million. No one had ever encountered such profligacy. The spending fueledrumorsamongthisnightclubsetthatLowwasanewAsianbillionairelookingtoinvestinHollywood.

ByearlyNovember2009,fueledbythe1MDBmoney,Lowwasreadytotakehissocializing to thenext level. Itwashis twenty-eighthbirthday,andhewantedtomarkhisarrivalontheHollywoodscenewithasplash.Thefestivitiesran over several days, including a party at the pool area ofCaesars Palace inVegas that featured caged tigers and lions, as well as bikini-clad modelsfrolickinginthepool.Guestsplayedcarnivalgamessetupatboothsaroundtheproperty. This was Low’s magic—to throw the craziest party, stunning evenmodelsandactorswhowereusedtothemostsumptuousevents.SomeofLow’searliestHollywoodfriendswerethere,includingDiCaprio,themusicianUsher,andJamieFoxx,theactorandcomedian.

On nights when he went clubbing, Low acted as much as a master ofceremoniesasareveler.Often,hewouldholdamicrophoneandorderwaitingstafftodeliverCristalchampagneorPatróntequilatothewholeestablishment,while only sipping on a Corona himself. A poor small talker, he nonethelessdevelopedasenseofshowmanship,oftenshouting“Malaysiainthehouse”intohismicrophone.He had the StrategicGroup staff draw up elaborate plans forevents,includingthesmallestfeaturesofthedecor,theflowersondisplay,andthealcoholbehindthebar.Heensuredthebest-lookingmodelswereonhandtominglewiththeguests.

Wasthereajustificationforallthisconspicuousconsumption?ToLow,itwaspartofalargerdesign.Ifthepartiesweresuccessful,Lowfigured,hewouldgrowinstature,enticingmorepowerfulfiguresintohisworld.Evenanup-and-comingrapstarlikeO.T.Genasis,himselfnotshortofcashandwomen,wasinaweafterwitnessingLowonenightbuymultiplesbottlesofchampagnecosting$50,000each.

“I’mlike,‘What?’Never!Thisisnotforreal,”hesaid.Surrounded by women who looked like they came straight from a

Victoria’s Secret shoot, Genasis, who had accompanied Busta Rhymes to theparty,wasoverwhelmed.

“I’veneverbeeninnothinglikethat.”Lowwaspartlyacalculatingshowman,buthestruggledtobepresentinthe

moment.Hewasafflictedbyadeep-seatedcompulsionthatdrovehimtospendmore,acquiremore,andmoveincessantly.Once,hewenttoamalltogetjuiceandreturnedhomewitheightidenticalpairsofblackshoes.HeboughtHermèsBirkinbags,whichstartat$12,000andgouptosixfigures,forfriends,friendsoffriends,andevenpeoplehejustmet.

“Hewas thebiggest spender I’veevermet inmy life,” saidone jet-setteralong for the ride. “You could be having lunch in a restaurant inLondon andhe’ll saywhowants tohavedinner inNewYork.Thenhe’d charter a jet andbefore you know it, you’re having dinner with the best wine of your life inManhattan.Nothingwasoutofreach.”

Inadditiontohisbingespending,peoplenoticedanothertraitofLow’s:aseemingly photographic memory. Some friends noticed he had an ability toremember very specific details ofwhatmoneywasmovingwhere, down to adecimalpoint.“Hewasalwaysabitextreme,”saidonepersonwhoknewhim.

Intheautumnof2009,theMalaysianwasachievingsomethingremarkable.Injustafewshortmonths,hehadinfiltratedtheworld’smostelitecirclesandwasbecomingfriendswithcelebrities.Someofitcamedowntomoney—hewaspayingforstarstoattendhisparties.Partly,heknewhowtothrowanamazingevent, and with the help of Strategic Group was building a reputation as asocialite.ButhealsofiguringoutwhatmotivatedstarslikeDiCaprio,andhowhismoneycouldassistthemdomorethanjustparty.

Therewasonestarforwhompartyingandbusinesswereoneandthesame,amodelandactoroverwhomhe’dfantasizedsincehiscollegedays.IttookLownotimetobefriendher.

Chapter11

RainingCristal

Whistler,BritishColumbia,Canada,November2009

ParisHiltonwasgettingincreasinglyagitated.LowhadsentaleasedprivatejettoLA towhiskher toVancouver, thenearest internationalairport toWhistler,theCanadianskiresort,butithadsatforsixhoursonthetarmacwhileCanadianimmigrationdecidedwhethertoletherintothecountry.TheholdupwasduetoHilton’s legal history—a DUI conviction in the United States, which hadgarnered worldwide press attention. Eventually she was waved through, andLow’sstaffferriedhertotheFourSeasons.Itwasearlyskiseason,andLowwastreatingHilton.

LowhadcontactedHilton’smanagerafewmonthsearlierandarrangedforhertocomealongtohisparties,forwhichshetoldfriendsthatLowpaidaround$100,000perevent.But therewasmore toLow thansimplycash,andHilton,herselffrommoneyandwithablossomingtelevisioncareer,wouldgrowcloseto himover themonths ahead.Manypeoplewhogot to knowLowdescribedhimaskindandgood-hearted,andhisdesiretoplease,toensureeveryonewashaving a good time, compared favorably with the arrogance that oftenaccompaniesextremewealth.

HiltonbroughtalongafriendcalledJoeyMcFarland,anativeofLouisville,Kentucky, who hadmoved to LA a few years before, and begun helping hisfriendsoutinabusinessthathiredstarsforpartiesandevents.Tallwithshort-cropped blonde hair and an approachable, open manner that reflected hisSouthernupbringing,McFarlandgottoknowHiltonthroughthetalent-bookingbusiness. Only a few years earlier, he had been a small-time investor in abuilding inCincinnati thathousedagyrosrestaurant,andhischange instationmadehimeagertoplease,obsequiouseven.McFarlandbecameclosetoHilton,allowing her at one point to tweet from his account that shewas a “celebrity

princess.” He would run around taking photos of her at events. She giftedMcFarlandaLouisVuittontoiletriesbag.

Atthehotel,LowwassurroundedmainlybyhisfamilyandMiddleEasternfriends, including Al Wazzan, the Kuwaiti Wharton classmate, who braggedoverdrinksaboutarecentarmsdealheclaimedtohavedone,unsettlingsomeofHilton’sentourage.Thiswasthefirstofwhatwouldbecomeannualend-of-yearskivacations,paidforbyLowtotreathisclosestfriendsandcelebrities.Mostofthegroupwasjust learningtoski—Lowwastakingsnowboardinglessons—soHilton,apracticedskier,spentmostofthedaysontheslopeswithotherfriends.

RizaAziz, thestepsonofPrimeMinisterNajib,alsowaspresent.Hewasshort, balding, and rarely saidmuch,buthis calmnesswasalluring towomen.HewasatalentedtennisplayerandpostedpicturesonFacebookofhimselfwithstars like Rafael Nadal. Relatively smart, he had entered banking after theLondonSchoolofEconomics,andhadrecentlyquithisjobinthemergers-and-acquisitionsdepartmentofLondon-basedHSBC.

Rosmah’schildfromanearliermarriage,RizawasafewyearsolderthanLow,andeventhoughthepairhadknowneachotherforyears,theirrelationshipwaspoliteandformal.SincecomingintoNajib’sorbit,Lowwasalwayscarefulto remain subservient to the prime minister, calling him “my PM,” and thisextendedtoRosmahandherson.

Now,RizawaslivinginLosAngeles,readytohelpLowinvestsomeofthemoneyathisdisposal,andthateveninginWhistlerledtoanidea.Afilmbuff,JoeyMcFarlandhadhelpedproducesomelow-budgetmoviessincerelocatingtoLosAngelesandformonthshadbeentellingfriendsabouthisdesiretostartafull-fledged production company. McFarland and Riza shared an interest incinema, and immediately hit it off on the ski trip, bonding over Hollywoodmovies.RizawasafanofItalianpostwarneorealisticcinema,whileMcFarlandpreferred contemporary films with Hollwood A-listers like Brad Pitt andLeonardo DiCaprio. Nonetheless, a connection had been made, and over thecomingweeks Low,Riza, andMcFarland got talking about an idea.Why notleverageLow’smoneytogetintothefilmbusiness?

The rise of McFarland and Riza in the filmmaking world would beunexpectedandmeteoric.Ashereinventedhimself,McFarlandsoonwouldbedisavowinghistalent-bookingpast,eventothoseclosesttohim.Andlikeothers,amidtheexcitementofmoneyandrecognition,hewouldaskveryfewquestionsabouttheoriginofLow’sfunds.

On February 20, 2010, a Saturday night, a few months after the Whistlergetaway,ParisHiltonlaughedwhileputtingdownbetsonthebaccarattableataprivateroomonthefloorofthePalazzoinVegas.Inamatchingwhitedressandheels, with Chanel earrings and her hair parted tightly to one side, she wascelebrating her twenty-ninth birthday, carrying herself with the assurance ofwealth. But even such amonied heritage—her family had founded theHiltonhotelchain—hadnotpreparedher tosit in frontofaquarter-milliondollars ingamblingchips.

Earlierintheevening,HiltonhadpartiedatTAOnightclubinthecomplex,cutting a tiered birthday cake that advertised her new line in shoes. It was atypical public-private performance for the heiress, part family celebration andpart promotion in front of the cameras, The after-party downstairs was moreintimate, the portion that wasn’t curated for the paparazzi. There in a privategambling room, Low surprised her with a very generous birthday present: aCartierwatch.As if thatwas insufficient, he thenhandedher the $250,000 ingamblingchipsandaskedhertojoinhimatthebaccarattable.

JhoLow’s party crewhadbegun to assemble.Apart from the celebrities,thereweremodels. Someof thesewomenhad fallen inwith the group atLasVegas or NewYork clubs; some knew the nightclub owners Tepperberg andStrauss,while otherswere recruited through theirmanagers and agents. Somewereonlyteenagers.JoeyMcFarlandwasonhand,ofcourse,andsowereLow’srichMiddleEasternandAsianbuddiesfromcollege,likeAlWazzanandSeetLiLin.

“in vegas, bring a jacket cos its raining cristal haha!” Seet wrote onFacebook,postingapictureofhimselfwithajeroboamofthechampagne.

As the gambling at Hilton’s birthday heated up, the partygoers—Low’sAsianclique,minorcelebritiesfromshowslikeTheHills,models,andotherrichkids—leanedintothetable.Thesewerewealthyfolk,manyofwhomhadgrownupprivileged inOrangeCountyorSantaMonicaandformedthecoreofLA’srichset,but theyhadneverseenanyonequite likeLow.Hewasputtingdownbiggerandbiggerbets,hundredsofthousandsofdollarsonsinglehands.

Then,inacascadeofbadluck,takingalloftenminutes,helost$2million.The stunned entourage couldn’t compute the way he parted with money—seeminglywithoutbreakingasweat—andsomebegantowhisperaboutthisguy,andhowheactedlikethecashwasn’thisown.

Rumorsswirled.He’sanarmsdealer.He’sconnectedtoaforeignleader.He’ssomekindofoverseasroyalty.As thenextmagnumofCristalarrived,or

someone handed out thousands of dollars in chips, questions about Low’sprovenanceflickeredmomentarilyandthenfadedaway.

For all his carefree spending,Lowknew that themoneywasn’t all his tofritteraway.Intheseearlystages,hebegantofocusonhowtorewardhisallies—foremostamongthemAbuDhabiexecutivesandthefamilyofPrimeMinisterNajib Razak—and start building a business that would generate profits. Heneededtofindawaytosustainhisnewlife.

Chapter12

HowtoSpendaBillion

LosAngeles,December2009

Lowwaslookingforedge.Hiscompany,Wynton,wasmakinga$45millionall-cash bid for the L’Ermitage hotel—a $500-a-night, 117-room luxuryestablishmentjustofftheSunsetStripinBeverlyHills.ButhefacedarivalofferfromIanSchrager, theU.S.hotel investor, andLowwas looking foraway toswingthedealinhisfavor.HeturnedtoMubadala,theAbuDhabifund.

LowwrotetheexecutivedirectorofMubadala’srealestatedivision,askingif anyone at the fund could put in a goodword for himwith the seller, TomBarrack Jr., the U.S. real estate billionaire. Khaldoon Al Mubarak, the chiefexecutiveofMubadala,promisedtogetAmbassadorOtaibatohelp.

In an email to Barrack Jr., Otaiba put the official weight of Abu DhabibehindLow’soffer,althoughhedidnotmentiontheMalaysian.

“I’mcontactingyoutodaytoendorsethisbidbothastheUAEambassadorbutalsoassomeonewhounderstandsthatthefullweightofamajorinvestmententityisbehindthisproject,”hewrote.

BarrackJr.repliedcordially,notinghehadmetOtaiba’sfatherthirtyyearsearlier, while a young lawyer. “Mubadala and Al Mubarak are first classinvestorsandwearehonoredattheirinterest,”hewrote,promisingtoseewhathecoulddo.ThebidwentLow’sway.

ThesuccessofLowwasbynowimportanttoAbuDhabionmultiplefronts.Mubadala had recently acquired Viceroy Hotel Group, a hotel-managementcompany,andLowhadofferedtobuytheL’ErmitageandthenrebranditasaViceroyHotel.AmbassadorOtaibahadmademoneyfromhisdealingswithLowontheIskandarlandprojectinMalaysia,andhehopedtogetinonmoredeals.

Lowknewtheschemewouldfalterunlessthemoneyhe’dtakenwasputtowork,andhesetouttoconstructabusinessempire.Yearsago,thepowerofAl

Mubarak at Mubadala had inspired Low, and pushed him to create his ownsovereignwealthfund.NowtheMalaysian,armedwithhundredsofmillionsofdollars,wasabletododealswithMubadalaonanequalfooting.AlMubarakdidnotseemtocarewhereLowwasgettinghismoney.

To pay for the L’Ermitage, Low set up a trust account at Shearman &Sterling in the name of Wynton Group, and the law firm represented thecompanyinthepurchase.HethensentmoneyintothetrustfromhisGoodStaraccount,theonewhichhadreceived$700millionin1MDBcash.Lownotedonbankdocumentsthatthemoneywasfor“STAKEV.H.”Hewasusinghistie-upwithViceroyHotelstogivelegitimacytothehugemovementoffunds.Hehadmade his first major investment, the first step to build a reputation as abusinessman.

Ashepartiedandboughtassets,Lowneeded topayback thepeoplewhohadmadeallthispossible:thefamilyofMalaysianprimeministerNajibRazak.Justas he had misrepresented Prince Turki as an official Saudi envoy, Low wascarefultokeepthefullscopeofhisactionsfromNajib.Butinreturnforgivinghimalongleash,Lowneededtomakehispatronhappy.

From the early days of his scheme,Lowmade sure not to leave the firstcoupleoutoftheprofits.FromtheIOLTAaccountsatShearman&Sterling,hesent$3milliontoRoseTrading,aHongKong–basedjewelrytradingfirmthatsuppliedRosmah.Itwasonlythestartof tensofmillionsofdollarsof jewelrythatLowwouldprocureforRosmah,andsoonNajibalsowouldbeginreceivingspoilsintheformofpoliticalfunding.

Beginningin2010,Lowalsoacquiredmulti-million-dollarluxuryhomesinLondon,LosAngeles,andNewYork,making themavailable toNajibandhisfamily. A Low-controlled shell firm acquired a condominium in NewYork’sParkLaurelbuilding,justoffCentralParkWest,for$36million.ButitwasRizaAziz, Rosmah’s son, who made the 7,700-square-foot duplex, with floor-to-ceilingwindows,hishomeinNewYork.

Theseller’sagentwasRaphaelDeNiro, thesonofRobertDeNiro (whohimself would soon get to know Low and PrimeMinister Najib Razak). Theyounger De Niro worked for high-end property firm Douglas Elliman RealEstate,which, likeallU.S.brokershandlinghundredsofmillionsofdollars inpropertytransactionseachyear—aswellaslawyersinvolvedinrealestatedeals—was not required underAmerican laws to conduct due diligence of clients’finances. In fact, De Niro didn’t even need to know the ultimate buyer of a

property, and Low purported to be representingMalaysia’s primeminister orotherrichbuyersashetouredapartmentsandmansions.

By2010,facelessshellcompanies,manyofthembasedoffshore,accountedfor more than half of the hundreds of billions of dollars in high-end U.S.propertysaleseachyear—anarrangementthatwaswhollylegalunderU.S.law—andLowwas becoming adept at hiding his involvement. The agreement tobuytheParkLaurelapartment,forinstance,wassignedbyoneLow-controlledfirm,althoughitthenassigneditsrightstoanotherBritishVirginIslands–basedshellcompany,whichlaterchangeditsname.

A Seychelles-incorporated shell company controlled byLow purchased a$17.5-millionmansionat912NorthHillcrestinBeverlyHillsinMay2010asaplaceforRizatostayontheWestCoast.KnownasPyramidHouse,foragoldleaf-covered pyramid surrounded by a water feature in the entrance hall, the11,573-square-footresidencehadthefeelingofatropicalvilla,withalappoolandsemi-openroomswithsweepingviewsoverLosAngeles.While thehomeunderwentamajorrenovation,RizaoftenstayedintheL’ErmitagewhileinLosAngeles. Low, through another entity he controlled, bought an imposingredbricktownhousefor17millionpoundsintheupmarketBelgraviadistrictofLondon.NotfarfromHarrods,oneofRosmah’sfavoriteshops,theNajibfamilywouldstaythereonregulartripstothecity.

Lowwas acting as a front for theNajib clan, and eventuallyRizawouldbecome the owner of all three properties—inLondon, LosAngeles, andNewYork—purchasing them fromLowwithmoremoney stolen from1MDB.TheMalaysianwaswellonhiswaytorepayinghisdebttoNajibforallowinghimtorunthefund.Theprimeministerdidnotpryabouttheoriginsofthemoneyfortheseluxurioushomes.TheinvolvementofLow,whoonpaperwasbehindthepurchases,allowedNajibtodenyanyknowledgeoftheoriginsofthemoney.Hewasafigurewhopermittedtheprimeministertokeephishandsclean.

Despite purchasing this stringof homes,Lowbegan to travel obsessivelyaroundtheglobe,aschedulethatfithisinabilitytofocusonthepresentmoment.Inatypicalthree-weekperiod,LowwouldspendafewdaysinKualaLumpurtomeetPrimeMinisterNajib,andreturnhomeforavisitinPenang,beforemovingontoSingaporeandHongKong.Fromthere,he’dflytoShanghai,wherehehadconnections throughhisgrandfather’sChineseclan,beforeboardingaplane toAbuDhabi.Afteraquick trip toLondonandParis,perhapswithaday trip toZurichtoexplainaweirdtransfertoSwissbankers,he’dmoveontoNewYork,beforefinallylandinginLosAngeles,andmakingagamblingtriptoVegas.The

tourfinished,Lowwouldflyacross thePacific tostartalloveragain.Itwasafreneticschedulethatmostpeoplecouldnotendure.

Tired of leasing planes, Low plunked down $35 million to purchase aBombardierGlobal5000privateaircraft,drawingon thefundsatShearman&Sterling.Helivedonthejetmorethanthemanyhomeshewasintheprocessofacquiring.Outfittedwithabedandmini-office,completewithfaxmachineandWi-Fi, he didmuch of hiswork from theBombardier, or tapping away at allhoursonhisphoneswhileinhotelsandrestaurants,ratherthanputtinginregularofficehours.Duringbusyperiods,Lowworkeduntildawntocloseadeal,butthenmissedmeetingsthenextday.

It was an extraordinary life, but Low’s demure bearing gave a differentimpressiontothosepeoplewhomethimonlyfleetingly.

“He seemed like a pretty ordinary fellow,” said Joseph Cayre, thebillionairerealestateinvestorwhosoldhimtheBombardier.

Low’sschemewassucceedinginfoolingmanyintheUnitedStates.Backhome,though,thestewardsof1MDBwantedtoknowwhatwasgoingon.

Chapter13

Where’sOurMoney?

KualaLumpur,Malaysia,October2009

OnOctober3,2009,theatmospherewasfraughtataspeciallyconvenedmeetingof 1MDB’s board, just as Low and his entourage were drawing attention tothemselvesinVegas.Thefundhadbeensetupinsuchahurrythatitdidnotyethave its own permanent offices. So for this meeting, on a cloudy, humidSaturday,theboardgatheredintheRoyaleBintangHotel,afour-starhotelintheMutiaraDamansaraneighborhoodofKualaLumpur.Sittingaroundatableintheexecutive center, the members of the group supposed to be overseeing theoperationsofthefundwerenothappy.

MostdisconcertedamongthemwasMohammedBakkeSalleh,arespectedbusinessmanwhomPrimeMinisterNajibRazakhadchosenaschairmanoftheboard. Bakke was the epitome of a buttoned-up chartered accountant; he hadgottenhistrainingafteradegreeattheLondonSchoolofEconomics.Hedressedindarksuits,oftenwiththesameredtie,worewire-rimmedspectacles,hisbaldheadframedbygrayinghairat thesideandaneatlytrimmedbeard,alsogray.But his appearance belied a tenacious side, and he had fought hisway up therankstoheadMalaysia’slargeststate-ownedagribusinesscompany.Inalandofdeepcorruption,Bakkehadareputationfordoingthingsbythebook,andintheboardmeetinghewasfurious.

Why in the hell, he wanted to know, had 1MDB sent $700 million toanother company and not the joint venturewith PetroSaudi, as the board hadagreed?ShahrolHalmi, thefund’schiefexecutive, triedtoreassureBakkethatthemoneyhadgonetorepayaloantoPetroSaudi.Shahrolwasadown-to-earthleader,ageekwhoenjoyedtechgadgetsandcarsandwaslikedbycolleagues.Unlikemanytopexecutivesat1MDB,Shahrolwasn’taLowassociate,buthequickly became addicted to the jet-setting lifestyle. There is no indication he

receivedanypayoffbuthislifechangedinaninstantashewentfromtoilingonITprojectsatAccenturetorunningamulti-billion-dollarfund.ThankfulforsuchachangeofstationandbelievinghewascarryingoutNajib’swishes,hehewedcloselytothestoriestoldtohimbyLowandothers,inthiscasethatPetroSaudiwasowedthemoney.

Bakkewasn’tsoeasilyduped.Whyhadn’ttheboardbeeninformedofthisdebt in the first place? he demanded. There was no answer. The chairmanordered PetroSaudi to return the money, so it could be invested in the jointventureasagreed.

“The substantial investment ofUS$1 billion should havemerited amorethoroughthoughtandduediligenceprocess,”theboardrecordedblandlyintheofficialminutesfromthemeeting.

Unbeknownsttothegroup,themoneyinquestionwas,astheyspoke,beingpoured into nightclubs, gambling, mansions, and more; it just couldn’t bereturnedlikethat.

Weeks later,Bakke demanded an independent audit of the oil assets thatPetroSaudiwassupposedtohaveputintothejointventure.Keennottoopenacanofworms,LowpersuadedNajib, asheadof theboardof advisers, to rulethere would be no second valuation of the assets. Disgusted by how he hadbecome entangled in such a mess, Bakke resigned without fanfare from theboard a few days later.Another director alsowanted to step down, butNajiburgedhimtoholdoffforafewweeks,lestitappeartheboardwassufferinganexodus,andhefinallyleftinJanuary.

Low, who hadn’t expected such a pushback, scrambled to stop furtherdissension. After the board had raised concerns, 1MDB’s management wrotePatrick Mahony, PetroSaudi’s head of investment, to ask for more details.Mahony must have been nervous, because PetroSaudi had conducted scantbusinessbefore1MDBcamealong,andheemailedLowtoaskifheshouldsenddetails.

“NoIwouldn’tevenbothersending it.Keep it simple. Iwant togive theboardaslittleinformationaspossibleuntilPMclearstheair,”Lowresponded.

The prime minister knew 1MDB was secretly fueling his politicalmachinations and was not as legitimate as it appeared. He was allowing anuntestedtwenty-seven-year-oldtosecretlyrunoperations,luredintotheschemebyLow’spromises thefundwouldenhancerelationshipswiththeMiddleEastandbringininvestment.Foryears,Najib’sfamilyhadusedgovernmentservicetolinetheirownpockets,andLow’sinvolvementinbuyingjewelsforRosmah

and properties for RizaAzizwasmore of the same. For these reasons, NajibgaveLowawideberth and remainedwillfully ignorant aboutwhat theyoungMalaysianwasupto,evenasreportsabouthisspendinginNewYorkreachedMalaysiaandrespectedbusinessmenlikeBakkesoundedthealarm.

Tokeeptheprimeminister’strust,LowsetaboutorganizinganotherstatevisittoSaudiArabiainJanuary2010.Aheadofthevisit,hesentanemailtotheObaids to stage-manage the trip, asking that Saudi royals use words like“personal,” “trust,” “friendship,” and “bond” in discussions with Najib andRosmah. Saudi authorities did better than that, conferring the kingdom’s topcivilianawardonNajibduringhisvisit.Itwasthekindofhonorthatwentalongwaywiththeprimeminister,anditshowedthatLowhaddeepconnections.

ThevisithandedLowtheammunitionheneededtosilencethefew1MDBboardmemberswhowerecontinuingtocomplaininmeetingsaboutthemissingfunds.HetoldonememberthataskingtoomanyquestionsaboutthedealwithPetroSaudi, which he described as a state company, could upset bilateralrelationswithSaudiArabia.“Wecan’t insultSaudiArabia.ThePMjustgota21-gunsaluteonhisvisit,”Lowsaid.Theboardmemberbackedoff.

Lowmetboardmembersregularlyforcoffeeandletthemknowhewastheprimeminister’s representativedealingwith1MDBmatters. Itwasvague,andLow’slackofofficialtitlewasmysterious,butthoseontheboardunderstoodhispower came from the top.Tomany, theblurry contoursofhis rolemadehimseemevenmorepowerful, and thatwas somethingheexploited.Toensurenofurther scrutiny of his actions, Low solidified his control over the board. Toreplace one of the vacated seats, he persuaded Najib to appoint a MalaysianChinese from Penangwhowas a business partner of his father’s. LodinWokKamaruddin,aUMNOparty loyalistwhowasclose toNajib,became thenewchairman. Low had seen to it that the board was now dominated by Najibloyalists.Toputitanotherway,therewasbasicallynoindependentoversightoftheprimeminister,Low,andhisalliesin1MDB’smanagement.

With itsmanagement hiccups cleared up, 1MDB started to obtain a veneer ofrespectability. From its new offices on the eighth floor of Menara IMC, agleaming skyscraper near the Petronas Towers in Kuala Lumpur, the 1MDBfund’s management went about building a business. Chief Executive ShahroloversawthehiringofagroupofaroundtenyoungMalaysianswithIvyLeaguedegrees,whowereenticedintothejobbycompetitivesalariesandthepromiseofbillionsofdollarsinfinancing.Thepitchwasthat1MDBwouldbeamodern

kindoffund,likeMubadalaintheMiddleEast,andwouldtransformMalaysiabybuildingnew industries, especially green technology.An early planwas todevelop a renewable energy corridor in Sarawak,with investment fromChinaand the Middle East, and the young employees set about drawing uppresentationsandinvestmentplans.

“Wegenuinely thought that helping a sovereign fund in its start-up stagewasagreatwaytomakeadifferenceforthecountry,”saidoneearlyemployee.

Workingforabigsovereignwealthfundwasaprestigiousendeavor.Butitdidn’ttakelongfordisillusionmenttosetinamongmanyofthenewhires.Theplans for thegreen-energybusiness failed togain traction,and itbecameclearthatnoneoftheseniormanagementhadexperiencerunninganinvestmentfund.Itwasasifthebossesdidn’treallycareaboutthelonger-termprojects,insteadconvening in their offices on a mezzanine floor, rarely communicating withregularemployees.EveryoneknewthatJhoLowwasthechiefdecisionmakeratthe fund, but he was almost never around, and for some reasonmanagementaskedstafftorefertohimbyacodename,“UC.”Ajokestartedgoingaroundthatitstoodfor“unsavorycharacter.”

Low’sfocuswasonturningaprofitwiththemoneyhehadtakenoutofthefund,whetherthroughinvestmentsintheL’ErmitageHotelorotherprojectshewashoping todevelopwithMubadala.Thiswasn’t a simplebank robbery;hewaswageringthesebusinesseswouldtakeoff,andtheprofitswouldeasilyfilltheholeat1MDB.Thefund’soperationsproper,however,oftenseemedlikeanafterthought.

Atonepoint,NikFaisalAriffKamil,anassociateofLow’swhowasheadofinvestmentat1MDB,frettedinaboardmeetingthattherewasnocashflowtopayfordebtthefundhadassumed,notjustthe$1.4billioninIslamicbondsbuthundredsofmillionsofdollarsmoreinMalaysianbankloans.Theseexecutivesstartedtomakeridiculoussuggestions.NikFaisalevenproposedthat1MDBbuyaMalaysianislandtoturnintoavacationresort,buttheideawasknockeddownbytheboard.

Thefund’shallmarkdevelopment,dubbedProjectWallStreet,wasaplantoturnKualaLumpurintoafinancialhubtorivalSingaporeorHongKong.Theaimwas tohaveAbuDhabi’sMubadala fund investbillions into the financialcenter, and 1MDB spent $2 million on a launch party in mid-2010 for theinitiative.LowpulledstringstogetthecrownprinceofAbuDhabitoattend,butwhenhecanceledat thelastminute,mostof themoneyfor thepartywaslost,andthefinancial-centerplanmadelittleprogress.KualaLumpur’sstockmarket

and banking sector just weren’t important outside the country, and potentialinvestorswerehardtofind.Still,LowpersuadedNajibtograntthefundparcelsofvacantcity-centerlandatbargain-basementpricesfortheproject.

Amidthewastedspendingandthelackoffocus,manyof theIvyLeaguerecruitsquitafterlessthanayear.Moreworryinglytomany,itbecameclearthefund’s main reason to exist was as a pot of political money to boost Najib’spopularity.Evenwithoutsteadycashflowfromoperations,1MDBwasstartingtochannelmoneyas“corporatesocialresponsibility”tohelpencouragevoterstosupportUMNO,therulingparty.

“Weevenjokedthatmanyoftheprojectswewereassessingwerepretendprojectstogivethecompanyalegitimatefront,”the1MDBemployeesaid.

OnMarch1,2010,thenewboardofloyalistsmetat1MDB’snewofficestodiscusshowthefundcouldhelpNajib’spremiership.Eventhoughitstillhadnoviablebusinesses,ChiefExecutiveShahrolexplainedtotheboardhowanewcharityarmof1MDBwasplanningtopourmoneyintotheMalaysianregionofSarawaktocoincidewithanupcomingvisitbyNajib.Thejungle-coveredstate,thoughremoteandrelativelyunpopulated,wascrucialtotheUMNOparty’sgriponnationalpower.Lodin,Najib’sfriendandchairmanoftheboard,respondedthat getting the support of the “natives”—bywhichhemeantSarawak’s tribalpeoples,someofwhomstilllivedinlonghousesinthejungle—wascrucial.Theboard agreed without debate to provide more than half a million dollars forschoolscholarshipsandhousingforthepoor,whichNajibcouldpromotewhenhevisited.

Theprimeminister’sofficestaffweretaskedwithcomingupwithprojects,likefundingschoolsinimportantvotingdistricts,and1MDBwouldprovidethefinances.

“Ifwethoughtitcouldhelptheincumbentgovernmentpullinsomevotes,wecouldproposethat,”saidOhEiSun,Najib’spoliticalsecretaryatthetime.

From the start, Najib was obsessed with popularity. Like any old-schoolMalaysian politician, he saw money—not ideas—as the only way to achievepopularitywithvoters, andhe squeezed1MDB for funds.A fewmonths afterthe1MDBboardmeeting,NajibtoldvotersaheadofanupcominglocalelectioninSarawak thathewouldarrangefederal fundingfor localprojectsonly if theruling-partycandidatewon.

“Youhelpme, Ihelpyou,”asweatingNajibpromised inastumpspeechaheadofthevoting.ItwasapictureoftherotinMalaysianpolitics.

Chapter14

RollthePresses

KualaLumpur,Malaysia,December2009

Some among Malaysia’s elite, hearing whispers about Mohammed BakkeSalleh’sresignation,guessedsomethingwasnotrightat1MDB.Yetthefund’sproblems remained unknown to the general public, in part because Najib’sgovernmentcontrolled themainstreammedia.But therewasonemedia tycoontheprimeministercouldnotorderaroundsoeasily:TongKooiOng,owneroftheEdge, an English-language weekly business newspaper. The mass-marketpapers,mostlyprogovernment,wereinMalayorChinese.TheEdgecatered tothecountry’sbusinesselite.

Foryears,TonghadbeentherebelofMalaysia’sbusinesscommunity.Thefifty-year-old,withtuftsofblackhaironeithersideofhisheadandabaldskull,preferredopen-neckshirtstosuits.Heoncetoldhiswifehehadapremonitionhewoulddiebefore fifty, andheneeded to live fastbefore then.Hecouldbebad-tempered with people he considered dimwitted, but he was equallycharming,hisfaceoftenbreakingoutintoanimpishsmile.Itwasacombinationthatrileduptheentitledruling-partyelitesinKualaLumpur.

WhenTongheardtherumorsabout1MDB,thenewspapermandecidedtheEdgeneededtoinvestigate.

InMalaysia,mostmajor paperswere subservient to thegovernment.Theruling UMNO party directly owned some of the largest-circulation papers,whose editors slavishly put out puff pieces on politicians and policies.Newspapers had to renew their publishing licenses every year. Given thegovernment’s control, even editors at independent newspapers often self-censored.

The arrival of theEdge, in themid-1990s, shook up the industry.Unlikeotherpapers,theEdgedidnotshyawayfromwritingaboutcorruptionscandals,

which Tong viewed as harmful to Malaysia’s economic prospects. Tong hadbuilthisownfortuneandwasbeholdentonoone,andthatmadehimathreat.

ThesixthofninechildrenofaChinese-Malaysiancarmechanic,Tonghadgrownupinthe1960sand1970sinthegrittyMalaysianporttownofKlang,notfar fromKuala Lumpur.His family scrimped together enough to send him touniversity inCanada,wherehe eventually earnedamaster’sdegree in financeandtaughthimselfcomputerscience.ReturningtoMalaysiainthe1980s,Tongbecamea securitiesanalystataMalaysian firmbeforemoving toBritishbankMorganGrenfell,helpingtovaluecompanies.Buthewasambitiousandrestless,andbythe1990sheboughthisownsecuritiescompanyandsoonafteracquiredafullbankinglicense.

In the clubby world of Malaysian business, Tong was considered amaverick,andhequicklymadeenemies.BybringingonlinetradingtoMalaysia,he undercut other brokers, who came to view him as a dangerous upstart.ForeignfundmanagerslikedTong,however,andhequicklywonalargeshareof their business inMalaysia.His cocksuremanner, obvious intelligence, andcontemptformediocrityriledupfinancierswhoowedtheirsuccesstoyearsoftieswiththeestablishment.

Healsowaspolitical—butbetonthewronghorse.TongbefriendedAnwarIbrahim,acharismaticdeputyprimeminister,sensinghewouldsoonbecomethenation’s top leader. But in the late 1990sAnwar fell outwith PrimeMinisterMahathir Mohamad, who had ruled Malaysia since 1981. When Anwar fell,jailed on trumped-up charges of sodomizing a male aide (homosexuality isillegal in Malaysia), Tong was cast out in the wilderness. Amid rumors thatMahathir would seize his assets, the businessman returned to Canada,transforminghimselfintoasuccessfulpropertydeveloperinVancouver.Buthecouldnever remain inoneplace for long, andafterMahathir steppeddown in2003,TongreturnedtoMalaysia.

Mahathir had forced Tong to sell his bank, but Tong still controlled theEdge. The newspaper had built a loyal following. If the press wasn’t exactlyindependent,atleastMalaysiawasn’tadictatorship,andtheEdge’seditorshadlearnedtopushthelimitsoffreeexpression,writingstoriesoncorruption,whilemaintaining their license. Some topics were off-limits, say, corruption storiesaboutaprimeminister.By focusingmoreonbusiness thanpolitics, its editorshadstayedontherightsideofthegovernment.

Inlate2009,Tongstartedtohearrumorsabout1MDB.Fromthestart,eliteMalaysians gossiped about Najib’s administration. Malaysian diplomats

complained about having to organize Rosmah’s shopping trips when she wasabroad. More recently, Tong had started to hear more alarming complaints.Bankers toldhimtheTerengganufund, thepredecessorof1MDB,hadsold itsIslamicbonds toocheaply.Thatmeantwhoeverbought thebondscould resellthem in the market for a handsome proifit. Rumor had it that companiesconnectedtoLowhadbenefited.ThiskindoftrickwascommoninAsiacapitalmarkets. Now, at cocktail parties in Kuala Lumpur, the talk was of Bakke’sabruptresignationfromthefund’sboard.

Tong was a visionary, not a details man. He could be disorganized, hisoffices a mess of papers and odd objects including, for a time, a little-usedtreadmill. To implement the coverage of 1MDB he leaned onHoKay Tat, aveteran journalist who was publisher of the Edge. Ho’s mane of gray hair,glasses,andeagerness toplease inconversationmadehimseemgrandfatherly,even though hewas only in his fifties.But his avuncular appearance belied atenacitytodigforthetruth.

Ho had built his career as a well-paid senior editor at the Star, agovernment-aligned newspaper based in Low’s home state of Penang. But hehadbeenunabletodealwiththeconstantrequeststokillnegativestoriesaboutUMNO-linkedcompanies,andhehadjumpedatthechanceinthe1990stojointheEdge.

While government mouthpieces like the Star and theNew Straits TimespushedoutsoftballpiecesonNajib’sadministration,theEdgeunderHotookacritical stance. Backed by Tong, Ho tagged a small team of reporters to startdigging.InDecember2009,theEdgepublishedastoryraisingquestionsabout1MDB. Why had Bakke resigned from the board so soon after the fund’sinception? Why had the Terengganu Investment Authority sold its bonds socheaply, despite being a risk-free, state-owned entity? What exactly was thepurposeof1MDB,andwhatwasitdoingwiththemoney?

One name that appeared nowhere in the piece: Jho Low. He wasnonethelessdisturbedbyit,andbegantalkingofftherecordtojournalistsattheEdge,tryingtopersuadethemthat1MDBwasagenuineinvestmentvehicle.ItwouldbethreeyearsmorebeforetheEdgebegantouncoverthetruth.Fornow,Low’ssecretwassafe.Infact,hisstarwasontherise.

Chapter15

WelcometoNewYork

NewYork,April2010

Theguests,wearingtuxedosandballgowns,madetheirwayuptotheballroomoftheSt.RegisHotel,justoffFifthAvenueinmidtownManhattan.ItwasApril16,2010,arainyandwindsweptevening,butthemoodwasebullientatoneofthe city’smost stylish hotels.Najib and hiswife, Rosmah,were in especiallygood spirits.A fewdaysearlier,PresidentBarackObamahadgrantedNajibabilateral meeting on the sidelines of a nuclear-proliferation summit inWashington. Obama, the first black American elected to the U.S. presidency,wasaglobalicon,andNajibsensedanopportunityforanewdawninrelationsbetweenthecountries.

AftertheObamameeting,LowwaspullingonhisconnectionstoensuretheMalaysian first couplemadea splashduring their trip, and thenight at theSt.Regiswasthecenterpieceof thateffort.TheeventwashostedbytheBusinessCouncil for International Understanding, a little-known organization set upunder PresidentDwightEisenhower to foster ties betweenworld business andpoliticalleaders.ThenightattheSt.RegiswastohonorRosmah,onwhomthecouncil had decided to bestow its “International Peace andHarmonyAward.”Theaward,thecouncilsaid,wasinrecognitionforworkRosmahhaddonewithchildren’scharitiesbackinMalaysia.

Shehadsetupachildren’seducationorganization,butitwasfinancedbypublicmoneyandcriticsathomewonderedwhytheEducationMinistrydidn’tjustdistributethecash.Ifthecouncilclearlyhadn’tdoneitshomework,thatwasfine with Najib and Rosmah. Awards like this, while essentially meaninglesstokens,werecrucialtothelikesofRosmah,whodetestedthewhispersabouttheorigins of her money and craved legitimacy. To trumpet the award, theMalaysiangovernmentspenthundredsofthousandsofdollarsonadouble-page

advertisement in theNewYorkTimes tocoincidewithhervisit,congratulatingtheFirstLadywith a full-page photo ofRosmah and thewords “Welcome toNewYork.”

ToensuretheSt.Regisparty’ssuccess,LowcontactedSahleGhebreyesus,the Eritrean-American contact who had arranged the details of Prince Turki’smeetingwithNajibaboardtheAlfaNero.HeinvitedabevyofHollywoodstars,manyofwhomwouldseemunlikelyattendeesatanawarddinnerforanAsianpolitician’swife. The event started at 6.30 p.m.with cocktails and an Islamicfashion show before dinner. Jamie Foxx, the actor and comedian, emceed theproceedings.Anumberofstars,includingRobertDeNiroandCharlizeTheron,wereinattendance,givingtheeventabuzz.WearingatraditionalMalaysarongandloose-fittingembroideredtop,bothinadeepyellowcolor,withadiamond-encrustedbanglearoundherwristandsparklingearrings,Rosmahwasecstaticattheattention.

Whendinnerconcludedaround10p.m.,thepartyreallygotgoing.PopstarLeonaLewis sang.FoxxdraggedRosmahupon stage for a flirty renditionof“You’veGotaFriend,”andhedancedwithNajib.Later,DeNiro,Theron,andothers joined Foxx on stage to sing “We Are the World”—one of Low’sfavorites. “It was like a wedding, bar/bat mitzvah, Sweet 16, quinceanera allrolledupintoone,”wroteWendyBrandes,ajewelrydesigner,whowaspresent.“Iwasawestruck.”

Afewmonthslater,DeNiro,takingupaninvitefromRosmah,traveledtoMalaysiaonavacation.Rosmahtoldlocalmediathatshewantedhimtoseethecountry for himself, rather than believe any negative stories he had heard.ThroughJhoLow’sextravagantspending,andtheexpectation,perhaps,ofanewsourceof filmfinancing,Hollywoodstarswere takingnoticeofMalaysia.Yetagain Low hadmade himself indispensable. Najib and Rosmah felt like Lowcouldworkmagic,organizingstatevisitstotheMiddleEastand,now,attractingtheglamorofHollywood.

Low,however,hadanevenbiggertarget,confidinginAmbassadorOtaibathathehoped todeepenNajib’s relationshipwithPresidentObama.Foryears,tiesbetweenMalaysiaandtheUnitedStateshadbeenlukewarmatbest.Formerprime minister Mahathir Mohamad was confrontational toward the UnitedStates,bashing“Western imperialism”andblaming“Jewish”financiersfor theAsianfinancialcrisisinthelate1990s.Westerngovernmentsdecriedthejailingof Anwar Ibrahim for sodomy as a political vendetta. On an official visit toKualaLumpur,VicePresidentAlGoreurgedthe“bravepeopleofMalaysia”to

pushfordemocracy,infuriatingMahathir.BythetimeNajibcametopower,nositting U.S. president had visited Malaysia since Lyndon B. Johnson in the1960s,whentheUnitedStateswasentrenchedintheVietnamWar.

At their April 2010 meeting Najib presented himself to Obama as adifferent political animal. The primeministerwas a self-professedAnglophileandtalkedaboutdeepeningdemocraticreforms.Onthefaceofit,heappearedtobea leader theUnitedStatescould relyon in the region.Heappearedurbane,spokegoodEnglish,andmadetherightnoisesaboutIslam,recentlylaunchinga“GlobalMovementofModerates,”anefforttogetIslamiccountriesaroundtheworldtocondemnIslamistviolence.

PresidentObamawaskeentoextricatetheUnitedStatesfromcostlywarsin Iraq andAfghanistan andwanted to shift focus toEastAsia,wherehewasseekingtocounterbalanceChina’sinfluenceonthefast-growingeconomiczone.InaspeechinAustraliathefollowingyear,ObamawouldunderlinethispivottoAsia, andNajib, alongwith the leadersof Indonesia, Japan,SouthKorea, andAustralia,wereviewedbythepresidentandhisWhiteHouseadvisersaskeytotheeffort.

Itwasagoodstart, andLowwoulddoallhecould in theyearsahead toensureNajibandtheAmericanpresidentgotevencloser.

Chapter16

Shitty,JunkProducts

Washington,DC,April2010

AsNajibvisitedNewYork,theUnitedStateswasengulfedinpoliticalupheaval.The financial crisis, originating in America, had spread to Europe, throwingmillionsoutofworkandtheirhomes,causingadeeprecession,andinspiringthe“OccupyWallStreet”protests.TheangeratWallStreetbanks,manyofwhichhadprosperedduringthecrisis,waspalpable.

In lateApril,GoldmanchiefexecutiveLloydBlankfein tried tostaycalmasheansweredangryquestionsfromU.S.senatorsabouttheWallStreetbank’sroleinthefinancialmeltdown.SenatorCarlLevin,aDemocratfromMichiganwhoheadedaSenatesubcommitteethathadspenteighteenmonthslookingintoGoldman’sactions,wantedtoknowwhythebankhadsoldsecuritiesbackedbytoxic subprime mortgages to clients while, at the same time, betting againstthem.Levingaveexampleafterexampleofdeals thatGoldmansold toclientsthatitsbankersdescribedprivatelyinemailsas“shitty”and“junk.”

“It raises a real ethical issue,”Levin said,hisdemeanorhostile, ashe satopposite Blankfein. In the public gallery, protesters dressed in fake prisonjumpsuitshelduppinksignswiththeword“SHAME”andphotosofBlankfein’sheadmountedonsticks.

In themid-2000s,Wall Street’s profits soared due to a boom in theU.S.housingmarket,asAmericanstookoutloanstobuyhomeswithlittleorevennomoney down. Banks took these poor-quality mortgages—known as subprimeloans—and packaged them into securities, which they sold to big investmentfunds.

At Goldman, both Blankfein and Gary Cohn, the bank’s president whowould go on to serve as President Donald Trump’s chief economic adviser,pushedsubprimedebtproducts,whichthebankcontinuedtomarketintherun-

up to the crisis. But fearing a crash in home prices, with many homeownersunable tokeepupon theirmortgagepayments,Goldman itselfhadbetagainstthemarket—atradingstrategythatlatercametobeknownasthe“BigShort.”

When the U.S. housing bubble burst in 2007, these subprime securitiesblew up. Within a year, losses related to toxic subprime loans toppled BearStearns andLehmanBrothers, sparking a full-blown financial crisis. TheU.S.governmenthadtostepinwitha$700billionbailoutforthebanks.

TheGoldmanchiefexecutive,dressedinagraysuitwithamaroontie,triedtoparrytheangryquestioningfromSenatorLevin,arguingthatsomeclients—big banks and institutional funds—still believed theU.S. housingmarket wasrobustin2007.ItwasnofaultofGoldman’s,hesaid,ifthoseclientsdesiredtoacquiresecuritieslinkedtosubprimehomeloans.

“Theywanted to have a security that gave them exposure to the housingmarket,” Blankfein said. “The unfortunate thing is the housing market wentsouth.”

Goldman did not operate retail bank branches, and fewAmericans knewmuch about investment banks, whose clients are largely companies,governments, pension funds, high-net-worth individuals, and other banks. ButBlankfeinwasbecomingtheposterboyforfinancialsectorgreed.ThecollapseofthehousingmarkethadleftmanyAmericansdestitute.Goldman’sprofit,bycontrast, soared to a record $13.4 billion in 2009. Senator John McCain, aRepublican fromArizona, asked Blankfein to tell the room his bonus for theyear.Visiblyillatease,thechiefexecutivestuttered,beforeresponding:itwas$9million.

The 140-year-old bank was on the defensive. The U.S. Securities andExchange Commission, which enforces securities laws and regulates theindustry,wassuingGoldmanforwithholdinginformationfromaGermanbankto which it sold a subprime mortgage product. A young French trader atGoldmannamedFabriceTourre,whoreferredtohimselfinemailsas“FabulousFab,”had talkedabout selling theproduct, knownasAbacus, to “widowsandorphans.” Three months after Blankfein’s appearance in Congress, Goldmansettledwith the SEC for $550million, the largest-ever penalty paid in a civilcasebyaWallStreetfirm.Itapologizedforgiving“incompleteinformation”toitsclient,butdidnotadmitwrongdoing.

SenatorLevinlateraskedforacriminalinvestigationofGoldman,buttheU.S. JusticeDepartment decidednot to pursue charges, adding to a sense thatWall Street bankerswalked away scot-free from the crisis they created. Even

though no senior Goldman executives were sanctioned, however, banks wereunderscrutinylikeneverbefore.In2010,CongresspassedtheDodd-FrankAct,asweepingseriesoflawsbroughtinasaresponsetothefinancialcrisis.

The Volcker Rule, proposed by former Federal Reserve chairman PaulVolcker, restricted banks from speculative trading that did not benefit theircustomers. The ideawas this kind of activity—say, betting on risky subprimesecurities—destabilizedthefinancialsystemandhurtordinarysaversandhomeowners.BankswouldfightarearguardactioninCongress:Therulewaswatereddown, permitting certain investments, and took years to come into effect.ButWallStreetbankshadtostopacting likehedgefunds,whichmakeproprietaryinvestments using money from rich individuals, and look after their clients’interests,whetherasmallhomeowneroramultinationalcorporation.

Thesenewrestrictions,coupledwithananemicU.S.economy,lowinterestrates,andaweakstockmarket, ledBlankfeintodoubledownonhispushintoemerging markets. China continued to grow at double-digit rates, and theeconomiesofBrazil,Russia—evensmallMalaysia—werehummingalong.Inaspeechlaterin2010,asGoldmanlickeditswoundsfromthedamagethecrisishaddone to its reputation,Blankfein said thebiggestopportunity for thebankwastobe“GoldmanSachsinmoreplaces.”

In 2010, as Goldman looked to increase its business in emerging markets, athirty-seven-year-oldItalianbankernamedAndreaVellaarrivedinHongKong.A former engineering student,Vella had short-cropped, graying hair, a sturdybuild, and a pugnacious face.Hewas a persuasive and confident bankerwhocolleagues believed could convince anyone of his perspective on just aboutanything.Vellawasalsoaproduct-structuringwhiz—anexpertoncomplicatedderivatives—justthekindGoldmanwashopingtosellinplaceslikeMaylaysia.

Vellahaddevelopeda reputationamongsomecolleagues for focusingonunsophisticated clients who would, without question, pay huge fees for thebank’sexpertise.AyearafterVellajoinedGoldman’sLondonofficein2007,hebeganoverseeingthebank’srelationshipwiththeLibyanInvestmentAuthority,anewsovereignwealthfundsetupbyMoammarQaddafi’sgovernment.

Onasimplelevel,derivativesarefinancialproductswhosevalueislinkedtoanunderlyingsetofassets.Derivativescanhelpbusinessessmoothoutpricefluctuations.Forexample, ifacompanywants toprotect itself froma fall inacommodity price, it could buy a kind of derivative called a forward contract,which allows it to sell at a fixed price in the future. As the subprime crisis

exhibited, derivatives could also be dangerous by allowing investors to makebig,debt-fueledbetsonthedirectionpriceswereheaded,inthiscasemortgage-backed securities. That was fine when a wager paid off, but could cause acascadeoflossesifmarketsmovedinanunexpecteddirection.

Vella’s Libyan clients wanted to accumulate a stake in U.S. banks, asMiddle Eastern fundswere doing in the chaos of the financial crisis. But themanagersof thefunddidn’t reallyunderstandderivatives.Vellaurgeda juniorcolleague,who handled the Libya relationship on the ground, to go heavy onmarketing.“Oftentheydon’tknowwhattheywantorneed,weneedtointerprettheir confused words and show them the right things. Focus on that,” Vellaemailedthecolleague.

Goldmandesignedacomplexderivative,backedbysharesinCitigroupandothercompanies.ThederivativeswerestructuredsotheLibyanauthoritywouldprofit handsomely if Citigroup’s shares went up, but with significantly moredownside risk.As the financial crisisdeepened, the shares fell and theLibyanauthorityeventuallylostmorethan$1billion.TheauthoritylatersuedGoldman,unsuccessfully, in a London court, claiming its executives didn’t understandwhattheyhadbought.Goldmandidn’trevealhowmuchitmadetakingtheotherside of the trade, but the Libyan authority claimed it was more than $200million.

GeorgeJabbour,abanker forGoldmanon theLibyandealwhowasfiredduringthefinancialcrisis,wasamonganumberofformercolleagueswhosaidVellawasruthlessintheamountofmoneyhecharged“stupid”clients.

“Theonlywayyouhaveprofitisbyhavingamarkup.Withahedgefundthatknowswhat’sgoingon,howcanyoumakemoney?”Jabboursaid.

AftertheLibyandebacle,VellacameouttoHongKongin2010toheadupthe investment bank’s structured-financebusiness inAsia.He soon teamedupwith another one ofGoldman’smost ambitiousAsian-based bankers:Dr.TimLeissner.

Goldman’s emerging-markets focus had been a boon for Leissner. Suddenly,Malaysiawasn’tanobscuremarketintheeyesofthebank’sNewYorkbosses.Since advising the predecessor fund for 1MDB, theGerman banker had beenlookingforwaystogetGoldmanafatfeehelpingthefundraisemoneyorbuyassets.Therewasnoimmediatedealonthehorizon—theinitialfund-raisingwashandled by Malaysian banks—but Leissner was laying the groundwork forGoldmantobeinpolepositionamongitsWallStreetrivals.

Inthesummerof2010,heorganizedforAnisJamaludin,thetwenty-five-year-olddaughterofMalaysia’sambassadortotheUnitedStates,acloseallyofNajib, toundertakeashort internshipatGoldmanSachs inSingapore.Healsobegan a short-lived love affairwith her, a relationship thatwaswidely talkedabout inside the bank. The internship was risky because of the potential forrunning afoul of theU.S. Foreign Corrupt PracticesAct of 1977,which banscompaniesfrompayingbribesofanykindtooverseasofficialstowinbusiness,butAnis nevertheless completed her stint in theSingapore office of the bank.Fewpeopleoutsidethebankknewaboutit,and,iftherewasanythingimproperabouttheinternship,noactionwastakenagainstGoldman.

Onlyweekslater,1MDBagreedtopayGoldman$1milliontoadviseitonplans to purchase a hydroelectric dam inSarawak, the rainforest-covered statewhosechiefminister,TaibMahmud,hadbeen rippedoffbyLow.Themoneywaspeanuts,likethefeeLeissnerhadgeneratedforadvisingontheformationoftheTerengganu InvestmentAuthority. In the end,Goldmangotnothingas thedealneverhappened.Buttherewaspromiseofmore.

In the meantime, Leissner concentrated on deepening his connections inSarawak.TheGermanbanker,in2009,hadconductedashort-livedaffair,withTaib’s niece. Leissner even told colleagues he had taken the Muslim name“Salahuddin”aspartofhisconversiontoIslamaheadofaplannedmarriagethatnevermaterialized.Intheendthepairsplitup,butGoldman’sMalaysiabusinessrolledonuninterrupted.

Eventhoughthedamprojectfoundered,GoldmansawotheropportunitesinSarawak.Thestategovernmentwasseekingcash todeveloprenewableenergyprojects and a palm-oil exporting hub. It wanted to raise money through aninternational bond issuance, and Leissner took the potential business to HongKong,Goldman’sregionalheadquarters.There,AndreaVellabeganworkingouthowtoraisethecapital.

TheSarawakgovernmentsold$800million inbonds,but rather than lineup investors—typically big mutual funds or pension funds—Goldman boughttheentireissueitself,onlylaterlookingforwillingbuyers.VellahadGoldmanmake the purchases through a trading desk known as Principal Funding andInvestingGroup.ThePFIdesk,whichdesignscomplexfund-raisingsforclients,was involved insomeofGoldman’smostprofitabledeals, including insuranceswapswithAmericanInternationalGroupduringthesubprimecrisis.

Thesearcanetradeshadwageredonafallinhomeprices,helpingthePFIdesk to pocket about $2 billion. A Goldman banker named Toby Watson, a

derivativesspecialist,wassentouttoAsiaafterthecrisistoopenanoutpostofthe PFI desk in Hong Kong—part of Blankfein’s emerging-markets strategy.Thedeskhadborrowedaround$20billionfromotherbanksaheadofthecrisis,lockinginsuper-cheaprates,andwastrawlingforwaystodeploythishugecashpileinAsia.ThedeskwouldmakemoneyifitcouldfindinvestmentsthatpaidoutmorethanthePFIdesk’sinterestcostsonthemoney.

ThebankeffectivelycutachecktoSarawak,allowingthestategovernmenttogetitshandsonthecashimmediatelyandwithouthavingtogothrougharoadshow toattract investors. In return,Goldmangot thebonds forcheapandwaslaterabletosellthemtoinvestors.BythetimeGoldmanhadoffloadedtheentireissue to institutional investors—mutualandpension funds—itmadeaprofitof$50milliononthedeal.Thatwassignificantlyhigherthanthenormal$1millionfee that Asian, U.S., and European banks charged for selling bonds forgovernmentsintheregion—workthatwasconsideredeasyandriskfree,inpartbecausegovernmentsarelesslikelytodefaultthancompanies.

The huge profit was a coup for Goldman. But the deal also caught theattentionofGlobalWitness,aninternationalwatchdog,whichquestionedwhyamajorWall Street bankwas dealingwith a government known for corruptionand environmental crimes. In a report, Global Witness claimed some of thecontracts funded by the bonds were going to ChiefMinister Taib’s relatives,whichmighthaveexplainedwhythegovernmentwantedthemoneysoquicklyandwaswillingtooverpay.

The transaction in Sarawak was the first time Leissner, the relationshipbanker, had joined forceswithVella, the derivativeswhiz, to deliver amajoramount ofmoney to a client, quietly and fast, whilemaking large profits forGoldman. It was a formula that would be central to Goldman’s futurerelationshipwith1MDB.

As heworked on other projects, Leissner continued to keep upwith JhoLow,hopingGoldmancouldadviseonamajor1MDBacquisition.ButLow’smind was elsewhere. His Hollywood connections had impressed Najib andRosmah.Nowhemovedtoturnthemintoabusinessopportunity.

Chapter17

MyGoodFriend,Leo

Johannesburg,SouthAfrica,July2010

The deep house music was pulsating in the VIP area of Taboo, one ofJohannesburg’stopnightclubs.TheSouthAfricanfinancialcapital,inthemidstofhostingtheWorldCupfinals,wasthrongingwithvisitors,andthenightclubwas heaving. At the club’s gold-themed main bar, perched on a designertransparent plastic high stool, Aimee Sadie was enjoying the evening. A fewdrinksin,theblack-hairedtelevisionpersonalityandentrepreneurwassurprisedwhenafriendlyAmericaninasuitapproachedher.ItwasJoeyMcFarland,thetalentbookerandfriendofParisHilton.

“WouldyouliketojoinusintheVIP?LeonardoDiCaprioisthereandhe’sbeeneyeingyou,”McFarlandtoldSadie.

Thrilled to be asked, she accompanied McFarland, slipping behind thevelvetropeof theVIPsectionat thebackof theclub,whereDiCaprioandhiscrewwerehangingout.Theactorwasdresseddown,wearingtracksuitpantsanda baseball cap, and he was lounging on the sofa and smoking a huge cigar.McFarland,whosaidheworkedwithDiCaprio,introducedthestartoSadie,andtheyshookhands.Buttheactorseemedhalfdazed,sprawlingonthecouch,andhemadelittleconversation.Othersdancedandhelpedthemselvesfromadrinkstable,wheretherewasvodka,RedBull,cranberryjuiceandChivasRegal.

A fewdays earlier,Lowhadmade the arrangements for theVIP section,introducinghimself as a businessman fromMalaysia.To the club’s owner, heseemedeagertopartwithaspectacularamountofmoney.Duringtheevening,as the group sat around chatting and dancing,McFarland asked Sadie to jointhem on a three-day safari in the Kruger National Park, before watching theWorldCupfinalbackinJohannesburg.AroundmidnightMcFarland,Low,andtheothersheadedbacktotheirsuitesattheluxuryWestcliffHotel,asmattering

of buildings perched on awooded hillside.As the group departed,McFarlandaskedforSadie’snumberandhecalledherfromthehoteltoaskifshewantedtojoin the after-party.Shepolitelydeclined.Despite the attractionofDiCaprio’spresence,thisgroupandtheirmassivesecuritydetailseemedalittlestrange,justsittingthereinajoylesscorner,shethought.

InthefewmonthsMcFarlandhadknownLow—sincetheirfirstmeetinginWhistler—thepairhadbeomefastfriends.Butitwasahierarchicalrelationship.Lowbegan calling theKentuckian “McCookie,” a play onMcFarland’s sweettooth,andtreatedhimasayoungerbrother,eventhoughMcFarlandwasaboutadecade older. In hiswork as a talent booker, theAmerican had developed anextensive phone book, and he helped Low with favors, including throwing apartyfor“FatEric,”hisMalaysianassociate,featuringPlayboyPlaymates.

Low and McFarland also had started to talk seriously about building aHollywood movie production business, along with Riza Aziz, the stepson ofPrimeMinisterNajib,andforthattheyneededtogetclosertobig-nameactorsand directors. In early 2010,Aziz tappedLow’s connectionwith Jamie Foxx,whose manager began to introduce the Malaysian prime minister’s stepsonaroundLosAngeles, telling industrybigwigsaboutAsian investorswithawarchestof$400milliontomakemovies.

With thatkindofcash, andwithFoxxasa friend, itwasn’thard toopendoors, and Riza secured ameetingwithAvi Lerner, an independent producerwhose Millennium Films had just made Righteous Kill with Al Pacino andRobertDeNiro.They talkedabout financinga film together,possibly starringFoxxandBruceWillis.That projectwent nowhere, but a fewweeks later JoeGatta,anexecutiveatMillennium,metRizaandMcFarlandandpersuadedthemto build their own film company. As the trio—Riza, Low, andMcFarland—planned their next move, they knew they had one trump card: their buddingrelationshipwithDiCaprio,oneofthemostbankablestarsontheplanet.

DiCaprio didn’t really need the favors, the chartered plane ride to SouthAfrica,or aboxat the soccerWorldCup finals.He’dbeenahouseholdnamesincetheearly1990s,andlikemanycelebrities,hesawthosekindsoffreebiesasanentitlement.HowLowdifferedfromotherHollywoodhangers-on,though,wasthesheerscaleofhiswealthandhiswillingnesstospendit.Therearelotsofwannabeproducersoutthere,butnonethrewmoneyaroundlikeLow.

ForFoxx andHilton,whoalreadywerewealthyby anynormal standard,Low offered juicy fees to emcee or appear at events. In DiCaprio’s case, theMalaysiandangledthepossibilityofindependencefromthemarqueeHollywood

studios.AlthoughhewasHollywoodroyaltyandownedaproductioncompany,AppianWay,DiCapriostillhadtobowtothewillofpowerfulstudioexecutives,and thispowerdynamichadbeen laidbare inhis falteringplans tomakeTheWolfofWallStreet.

In2007,DiCapriowonabiddingwarwithBradPitt for the rights to thememoirofJordanBelfort,whosefirm,StrattonOakmont,hadmarketedpennystocks to mom-and-pop and institutional investors in the 1980s and 1990s,defrauding themof tens ofmillions of dollars. For awhile,Belfort succeededand hosted wild parties in his Long Island offices, featuring cocaine andprostitutes. At one party, his team famously played a game that involvedthrowing Velcro-suited midgets against a giant, sticky target (a story thatinspired Low to hire Oompa Loompas for his 2012 birthday celebration). In2004,Belfortwassentencedtofouryearsinjailforsecuritiesfraud,andorderedto repay investors, but hewent free after only twenty-twomonths, and beganpenningamemoir.

TheresultwasTheWolfofWallStreet,apartiallyfictionalizedtale,whichprosecutors said aggrandized Belfort’s role at the firm and diminished thedamage inflicted on his victims. Even the title was a stretch: Belfort’s firmwasn’t in the city limits, based miles fromManhattan, and he wasn’t widelyreferred to as “theWolf ofWall Street.”ButBelfort intriguedDiCaprio,whohadmadeCatchMeIfYouCan,aboutmasterimpersonatorFrankAbagnaleJr.,and, at this time in 2010, was about to sign on to play Jay Gatsby in BazLuhrmann’sTheGreatGatsby.

Hollywoodwasobsessedwithgreedymalefinanciers—fromWallStreetinthe1980stoAmericanPsychoandBoilerRoom—andaudienceshavelappedupsuch depictions of financiers run amok. But the script that TerenceWinter, awriterontheTheSopranos,carvedoutofBelfort’smemoirtooksuchdepictionsto a new level—itwas full of unadorneddebauchery, to the extent that studioexecutives atWarnerBros.,whichwas developing the film, got cold feet andpulledtheplugin2008.Theyfiguredaudienceswouldn’tgotoseeanR-ratedfilm in sufficient numbers to earn back the $100 million it would take toproduce.

Martin Scorsese, the legendary film director who had worked withDiCaprio on a number of projects,was frustrated. Even though hewas at theapexofhiscareer—recentlyclinchinghisfirstdirectingOscarforTheDeparted—hecouldnotcontrolthestudios.He’dspentfivemonthsannotatingWinter’sscript inpreparation for filmingandgrumbled topeople in the industry that it

waswasted time. In themidst of this stalemate, Jho Low entered DiCaprio’sorbit. The Malaysian’s money offered an alternative solution, one that couldprovide DiCaprio and Scorsese with the Hollywood holy grail: boundlessfinancingcoupledwithunfetteredartisticcontrol.

In September 2010, Riza Aziz and Joey McFarland set up Red GraniteProductions(itwouldlaterchangeitsnametoRedGranitePictures),operatingat first outof a suiteof rooms in theL’ErmitageHotel inBeverlyHills.Azizwas appointed chairman, and McFarland became vice chairman. As per hishabit,Low tooknoofficial title.He left theday-to-day runningof the firm toothers.Hewasthesecretmoney.ThefirmsoonannouncedithadhiredanumberofexecutivesfromMillenniumFilms, includingJoeGatta, toheadproduction.Fromdayone,therewasafurtivenessaboutfinances.McFarlandinformedstaffthatLowwasan investor,but that theMalaysian,Riza, andMcFarlandwouldstayinthebackground.

“That’swhywe’dhiresomeonelikeyou,”McFarlandtoldoneoftheRedGraniteexecutives.

Afewmonthslater,RedGranite’sofficeswereready,inthesamelow-risebuilding on the Sunset Strip where DiCaprio’s production company, AppianWay,waslocated.Itwasn’tacoincidence.“TheychosetobeinLeo’sbuildingbecause theywanted tobeclose tohimandbe inbusinesswithhim,” theRedGraniteexecutivesaid.

TheplanwastocoproduceTheWolfofWallStreet,andRedGraniteboughtthefilmrightstoJordanBelfort’smemoirfor$1million.Suddenly,Lowwasnolongerjustaguywhothrewflashyparties.ThroughMcFarlandandAziz,hewasaplayerinHollywood.

Chapter18

Two-Million-EuroBottleParade

Saint-Tropez,France,July2010

ItwasFleetWeekinSaint-Tropez,andtheworld’ssuperyachtsviedforberthingspaceatthetown’smarina.InJulyandAugust,theresortontheFrenchRiviera,centered around awarren-likemedieval old townof ochre-coloredhouses andoldchurches,isheavingwiththeworld’srichest0.1percent.Theyflocktothetownforpartiesonyachtsandinthetown’sbarsandthedaytimecarousingattheclubsonnearbyPampelonnebeach.

TouristswalkingalongtheQuaiJeanJaurèsgawpattheyachtsbackedupright next to a line of cafés. It’s an annual display of concentrated wealthunsurpassed anywhere, as crews of young deckhands run around polishingbalustrades,whileonlookers try toseewhoisonboard.Formany, theseboatsrepresentthepinnacleofsuccess.YettherealpartiesofSaint-Tropezhappenfarfromthetouristhordes.Whileregularfolkgetcaughtinhorrendoustrafficjamstryingtoreachtown,locatedontheendofthepeninsula, thepamperedsetareferriedtotownonmotorizedskiffs.Thehottestnightstakeplaceonyachtsoutatsea, or in the town’s exclusive clubs, where A-list celebrities mingle withbillionaires.

ThemostillustriousofallisLesCavesduRoy,afixtureontheworldpartyscene since the1960s.Every inchof the club, situated in thebasement of theHotelByblos,justafewhundredmetersbackfromtheport,iscoveredingold.There are golden columns, which end in waves of fluting, a parody of theCorinthian stylemeant to evoke champagnebursting fromabottle.Thedancefloorisgolden,asarethetablesonwhichareperchedgoldleaf-coveredcocktailbowls.Here,lateonJuly22,noteventwoweekssincetheWorldCupfinalinSouthAfrica,JhoLowwasengagedinabiddingwar.

He’dsailedintotownafewdaysearlier,withParisHiltonstill intow,on

theTatoosh, a 303-foot, ten-cabin superyacht, complete with swimming poolandhelicopterpad,ownedbyMicrosoftcofounderPaulAllen.Thesewere thedaysofbottleparades,aninventionbyclubstoget“whales”tospendevenmoremoneybyorderingmultiplemagnums—oreven jeroboams—ofchampagne. Ifthe order was big enough, bottle girls—usually models earning extra cash—wouldbringoutthechampagnewithsparklersattached,astheDJcutthemusicandlaudedthebuyer.BackinNewYork,Low’sspendinghadhelpedpopularizetheseparades.

Even by the usual standards, this bottle parade tonight was going to beunseemly.Dressedinablackpoloshirtwithacheckeredcollarandgreyslacks,aRolexonhisarm,LowhadbecomeentangledinabattlewithWinstonFisher,whosefamilywereinNewYorkrealestate,toseewhowaswillingtopaythemostforCristalchampagne.Ayearearlier,beforeLowgothishandsonseriousmoney,hehadlostout inthisexactvenueduringasimilarbiddingwarwithaBelgianbillionaireofPakistanidescent.Notthistime.

Astherevelerslookedoninawe,withanemceeoverseeingtheescalatingwarofaffluence,LowandFishermatchedeachotherasthebidsmounted.WithnosignstheMalaysianwouldbowout,Fishercaved.Asthebillwasannouncedoverthestereosystem,revelersintheclubcouldn’tbelievewhathadoccurred.Lowhad just spent2millioneurosonchampagne—anamountofalcohol thatthewholeclubcouldn’tpossiblyfinishoffinaweekofdrinking.

As the frantic staff produced bottle after bottle of champagne—includinggiantbottlescalledjeroboamsandmethusalehs—Low’scoterie,whichincludedwealthyRussians,Arabs,andKazakhstanis, roaredwithpleasure.ParisHilton,wearingashortbluedresswithpolkadots,bluependantearrings,andpinknailpolish, got up on a table near a gold column and began opening a bottle,spraying the contents over Low and others.A ruddy-faced and sweat-dampedLowwasphotographedwithhisheadlayingonHilton’sshoulder.

Dayslaterthepairwasinanotherclub,withyetanotherbottleparade.Asthechampagnecameoutwithsparklersattached, the thememusic fromRockyandStarWars blaring, Low took control. Handed a microphone, he directedwaiters to ensure everyone in the club got a bottle. “Saudi Arabia in thehoouuussse,”heyelled, asHiltondancedandembracedhim frombehind.Shewas so drunk that other partygoers had to support her. BothHilton and Low,who sported awhite fedora,weredrenched in champagne, as alarmed-lookingsecurityguardstriedtomakespacearoundthem.

AsoneKuwaitifriendputit,Lowexcelledatmakingpeoplefeellikethey

wereincludedinthemostexclusiveofcircles.Butamidalltherevelry,hewasalso hard to know, more like a compère. The friend came to believe he wastakingpartinacharadeofwealth,ratherthangenuinelyhavingfun.

“It felt fake and as if wewere just there to go through themotions andentertainandlookcoolasagroup,”hesaid.

ThespectacleinSaint-Tropezgarneredwidespreadpaparazzicoverage,andgossip writers speculated Low was Hilton’s latest boyfriend. Although heappeared intimate with Hilton at the parties, he told friends they were neverphysicallyinvolved.Instead,anotherwomanhadcapturedhisimagination.

The Rolls-Royce rolled up at Dubai’s Atlantis, the Palm, a towering hotellocatedononethecity’sislands,aseriesofman-madelandmassesthatfromtheair look like palm fronds in the sea. Themain buildingwas framed around agigantic Arabian-style arch, with multiple pools and 360-degree views of thePersian Gulf. It’s a decadent place, and Low, a few months after his Frenchvacation, had taken over part of the resort’s private beach for an elaborateceremony.AccompanyinghimintheRollswasElvaHsiao,athirty-one-year-oldTaiwanesepopstar.Wearingwhitepants,alightblueshirt,andslip-onleathershoeswithout socks,Low escortedHsiao, also dressed informally in a stripedskirt and sandals, from the car.They stoodhugging around thewaist, asLowpointedoutcandlesthathadbeensetuponthebeachintheshapeofagiganticheart.Alightdisplaybehindthecandlesspelledouttheirnames.

LowthenledHsiaotoalongdiningtable,bedeckedwithflowersandmorecandles,andplacedonaraisedplatform,behindwhichtheplannershaderectedan intricately carved screen. As they began to dine on a multicourse tastingmenu,ablondemusicianinablueeveningdressplayedaharpsetupnexttothetable, later switching to a jewel-encrusted violin. Hsiao looked nervous andbegantogiggle.Lowslippedhisarmaroundherinastiffembrace.Therewaslittleconversation.

Itwastimeforthegrandfinale.Suddenly,ahelicopterhoveredintoview.As itneared thebeach, twomenparachutedout, eachwearinga smart tuxedoandbow tie.Landingon thebeach, inside theheartmadeof candles, themenunhooked their parachutes and strode up to the table. Smiling, they presentedHsiaowithabox.InsidewasaChopardnecklaceholdingaroundpendantmadefrom diamonds and gold. After dinner, the pair watched a special fireworksdisplay,setofffromaboatanchoredofftheisland.

Itwasagaudy,laughablyclichedexhibitionoflove,andastheostentation

piledup,Hsiaowipedatearfromhereye.Theeventhadreportedlycostmorethan$1milliontostage,anditwasadate,notevenamarriageproposal.

As it turnedout,Lowalreadyhadagirlfriend, awomancalled JesselynnChuanTeikYing,whosefatherownedaseafoodrestaurantbackinPenang.Lowoften flew her out to the United States, but he told McFarland, who wasincreasinglyactingasakindofcatchallfixerforLow,tokeepherawayfromthepartying. Instead, she would be sequestered in a hotel or one of Low’sapartments, accompanied by the other females in his inner circle,women likeCatherine Tan, a former Vegas croupier who organized Low’s schedule, andJasmineLoo,1MDB’slegalcounsel.BackinMalaysia,visitorstoLow’sKualaLumpur apartmentnoticedChuan acteddeferentially, servingguests drinksonbendedknee.WhileLow treatedher respectfully inpublic, hewas also in thehabitofmakinggiftsofluxurycarsandjewelrytootherwomen,andpayingformodelstomillaroundatpartiesinhotelsuites,clubs,andonyachts.

ItwascleartoLow’sfriendsthathewascheatingonChuan,ashebegantorubupagainstmorefamousindividualslikeElvaHsiao.ChuanfoundoutaboutHsiao—she came across a book the Taiwanese singer had gifted Low—butdecidednottobreakthingsoff.Chuan,too,seemedtakenwiththeglitzychangeofstationLownowafforded.Atonepoint,sheshowedfriendsbackinPenanganewwatch,agiftfromLowshesaidoncehadbelongedtothesingerUsher.

Low told friends he was torn by the duplicity in his life, betweenmaintainingagirlfriendandtheotherwomen.HisrelationshipwithChuanhadbeenonandoffforyears.Buthewasn’tatypicalplayboy.SomeofthemodelswhomLowregaledwithCartier jewelryorgamblingchipswereastonishedheneverhitonthem.Farmorethansex,itseemed,hecravedrecognition,whetherfrom women or Hollywood stars, and he sought to create spectacles thatreinforcedhispowerandprestige.

Extreme by any standard measure, the Dubai episode was merely aforeshadowingofwhatwastocome.Lowalreadywasoneofthemostunhingedspendersanyonehadencountered,buthewasabouttoswitchitupagear.

IfhisspendingwaswinninghimfriendsinHollywood,otherswereperplexedbythewayLowdrewattentiontohimself.FormanyofLow’sbusinessassociates,his showy displays of wealth were hard to swallow. It was as if the samecompulsivenaturethatmadehisschemetakeoff—Low’sabilitytoprocurethebiggest and best of anything, be it a yacht or aHollywood star—was also hisAchilles’ heel. By 2010, Otaiba, the UAE ambassador to Washington, was

becomingunnervedbyLow’spublicantics.“He really needs to calm down and stop partying so much,” Otaiba

complainedinanAugust4,2010,emailtoafriend.Like many of Low’s contacts, Ambassador Otaiba wanted to keep his

dealings with the Malaysian discreet. When Low asked Otaiba to act as areference to help him open a private bank account with Goldman, theambassador wondered in an email to Shaher Awartani, his business partner,whethersuchaletterwouldbe“consideredliable.”LowhadtoldAwartanithatbanks were starting to question the hundreds of millions of dollars flowingthroughhisaccounts.

Ultimately, Goldman rejected Low’s request to open a private wealthaccountat thebank,whichrequiredat least$10million indeposits,because itwas unable to ascertain his source of funds. This was a private wealth-managementbusiness,farremovedfromLeissner.ButtheseactionsdidnotstopOtaibaorGoldman’sinvestmentbank,wheretheGermanbankerworked,frominteractingwithLowonlucrativedealsinthefuture.

Prime Minister Najib Razak, too, believed Low needed a more seriousimage.LowtoldAwartanihis“boss”—meaningNajib—hadsuggestedLowjoinseveralprominentgovernmentadvisoryboardstorebrandhimselfasacrediblebusinessman.

Back in Penang, where theNew York Post article about Low’s clubbinghabits had raised eyebrows, Larry Low was furious and ordered a damage-control strategy forhis son.AfterhisFrenchvacation in the summerof2010,LowflewbacktoPenang,and,dressinginaconservativeblacksuitwithalightblue tie, gave a lengthy interview to a local English-language newspaper, theStar.

Hespunaweboffiction,tellingthereportersthathehadstartedWynton,hisprivateinvestmentvehicle,with$25millionincapitalfromhisrichfriendsfromHarvardandWharton,andthatthefirm’sassetsnowstoodinexcessof$1billion. He attempted to pass off the nightclub spending covered by theNewYorkPostasreallythatofhisrichMiddleEasternfriends,describinghimselfasmerelya“conciergeservice”whocateredtotheirwhims.

“IcomefromafairlyokayfamilybutnowhereasclosetotheprominenceandwealthlevelsofthepeopleIusuallyspendtimewith,whoalsoaremyverygoodfriends,”hetoldtheStar.Hisbusinesssuccesswas“attributabletobeingatthe right place and right time and meeting the right people, coupled with atrustingrelationship.”

Athome,Lowknewhe couldn’t get awaywith the story he told abroad:thathecamefromabillionairefamily.Nowhisstorieswerestartingtocollideintooneanother.AnypotentialinvestoroverseaswhoheardLowboastthathewasfromoldmoneyinAsianeedonlyhaveperusedtheStar’sinterview,easilyavailableonline,toknowsomethingwaswrong.Butnoone,itseemed,botheredtodoeventhiscursoryresearch.AsforthespendingatLesCavesduRoy,Lowcontendeditwashisgroup,nothim,thathadpurchasedthechampagne.

“Weallworkveryhard,”hesaid.“Iamnotanexcessivepersonbut Idohavemybreaksforrelaxationwithfriends.”

In private, Low shrugged off themedia coverage of his parties, as if hisreckless behaviorwas of no import. “I am not stupid. I know the issueswithmedia and I am dealing with it,” he told PatrickMahony of PetroSaudi in aBlackBerrymessage.Withsomuchcashinhispocket,andabevyofcelebrityfriends,Lowwasstartingtobelievehewouldnevergetcaught.

Some of Low’s allies were not so easily placated. There was dissensionamongtheconspirators.

Chapter19

“KeepYourNonsensetoYourself”

Montreux,Switzerland,October2010

Perched on a hill on the shores of Lake Geneva, Clinique La Prairie isconsideredoneoftheworld’spreeminentmedicalcentersandspas.Locatedinthe Swiss town ofMontreux, the clinic’s originalmansion, constructed in theSwiss-chalet style with a widely projecting roof, is surrounded by a Frenchformal garden and a collection of elegantmodern buildings. From the rooms,guests have unobstructed views of Lake Geneva, framed by towering snow-topped Alpine peaks. Founded in 1931 by a professor named Paul Niehans,whose pioneering “cellular therapy” soon attracted the rich and famous,includingCharlieChaplin,theclinic’swebsitedescribeditselfas“theexpertinlongevity.”

InOctober 2010,Lowchecked into the clinic for a respite.Owing to hisunwholesomelifestyle—apredilectionforalcohol-fueledlatenights,bucketsofKFCchicken,andnonstoptravel—Lowknewhewasoutofshape.Hestoppedshort of regular exercise, but was happy to buy expensive juice cleanses thatcame with a glass straw, and was now seeking out the most cutting-edgetreatmentmoneycouldbuy—andthatmeantCliniqueLaPrairie.

Mortality and aging cast a shadow across everyone’s life, but theüberwealthy have a better chance of cheating death. For $30,000, the clinicoffered a weeklong revitalization program during which patients were fed anextractderivedfromtheliversoffetusesofblacksheep.Theprocesssupposedlyhelped to revitalizedormantcells.Thiswasn’t the first timeLowhadcheckedintoahigh-endmedicalspa,hoping,perhaps,forabriefescapefromthestressesofhisscheme.He’dbeenfeelingalittleundertheweatherandonthisoccasionwasundergoingsinussurgery tohelphisbreathing.Butevenhere,surroundedbytheworld’stopdoctors,businesswascalling.

A few days after Low checked into the clinic, Goldman banker TimLeissnerarrived todiscusspossible investments.TheGermanbankersawhowmuchmoney1MDBsupposedlyhadput intothejointventurewithPetroSaudiandwaslookingforwaysforGoldmantogetapieceoftheaction.Untilnow,the fund hadmainly raisedmoney fromMalaysian bank loans and local debtsales, but Leissnerwas taking steps to positionGoldman towin the lucrativebusinessofhelping1MDBtapvastlylargerinternationalcapitalmarkets.

HavingevidentlybrushedasidehisearliermisgivingsaboutLow,Leissnerwasnowcozyingup to theMalaysian, hoping to get his bank involved in thebillion-dollarflowsemanatingfromthisfund.Leissnerhadaproblem, though.Goldman’sprivatebankinSwitzerlandhadturneddownLow’srequesttoopenanaccountduetoconcernsovertheoriginofhisfunds.Yet theGermanknewLowwasfrontandcenterat1MDB,eventhoughheplayedastrangebehind-the-scenesrole,includinghostingmeetingsatlocationssuchasCliniqueLaPrairieratherthanthe1MDBfund’sofficesinKualaLumpur.Leissnerwouldhavetofind away to navigate these issues and keepGoldman involved in the fund’sbusiness.

So far, Low had diverted most of the money meant for the 1MDB-PetroSaudi joint venture. He’d paid off the family of Najib Razak with realestateandpromisesoffundingforRedGranite.Theprimeministerwouldsoonstart receiving hundreds ofmillions of dollars in political funds.Mahony andObaid, aswell as Prince Turki, also had received their cuts. But some of the1MDBmoneydidgo tobuy twoagingoil-drill ships,which the joint ventureleasedtoVenezuela’sstateoilcompany.Thisbusinesswasn’tgoingtogenerateenoughprofitstofilltheholeofthedivertedfunds,andsotheprincipalssoughtoutabiggerinvestment.

PatrickMahony, the investment director of PetroSaudi, also was visitingLow in the clinic. In the Malaysian’s private room, Mahony discussed withLeissner andLow thepossibilityof investing in aU.S. oil refinery.Todo so,however,wouldrequireanotherinfusionofcashintothefund.MahonywantedLowtogetNajibtoagreefor1MDBtoinvestevenmorestatemoneyintothejointventure.LeissnersuggestedbringingTPG,alargeCalifornia-basedprivate-equityfirm,intothedeal.TheheadofTPGinAsia,TimDattels,wasaformerGoldmanbankerandclosefriendofLeissner.

The refinery acquisition did not happen, neither did theTPG investment,butLowandMahonycontinuedtostrategizeaboutotherpossible investments.Evenintheabsenceofafirmplanfortheirnextmoves,LowpersuadedNajibto

investmoremoneyinthejointventure,arguingitwasnecessarytokeepPrinceTurkihappyandensurefriendlytieswithSaudiArabia.Evidentlypleasedwiththebenefitshis familyderivedfrom1MDB, theprimeministergave thegreenlighttosendevenmoregovernmentcashtothePetroSaudijointventure.

In 1MDB documents pertaining to the new lending, Najib argued it wasvalid“inconsiderationofthegovernmentrelationshipbetweentheKingdomofSaudiArabiaandMalaysia.”OnJuly24,2010,inameetingof1MDB’sboard,one member questioned whether the prime minister was backing this furtherinvestment. Chief Executive Shahrol Halmi replied that Najib was fully onboard.Intheend,1MDBsentoverafurther$800million,almostdoublingtheamountthefundhadpumpedintothejointventure.

The 1MDB fund, like most schemes, needed to be continually fed withfreshfunds.Itwasn’tjustthatLowwasspendingsomuchmoney;healsohadtofind cash to pay off an ever-increasing group of people involved in or withknowledgeofthefund’sdoings,amongthemTaibMahmud,theSarawakchiefminister.TaibfeltdupedbyLowintheearlydealsinvolvingtheIskandarlandandwas demanding a payback.To pacifyTaib, LowpersuadedPetroSaudi touse some of the fresh 1MDB cash to buy out one of the Chief Minister’scompaniesatarichprice.

With the new cash infusion into the joint venture, the perpetrators wentlookingforinvestmentstogenerateprofitthatwouldpay1MDBback.Buttheyseemedtounderstimatethatregeneratingnearly$2billionwasnoeasytask.ThegroupagreedLowwouldpersuadePrimeMinisterNajibtowriteoffhundredsofmillions of dollars of 1MDB’s investment as a loss. Low acted as if thiswasmake-believemoney, debt thatNajib could erasewith amagicwand,withoutanycosttotaxpayersorsociety.TheMalaysianhadpromisedMahonythattheyonlyneededtopayback$1billion.

“Jhoagreedthatwhenwerepaythe$1b,wedissolvetheventureandwalkaway,”Mahonywrote,perhapsinamomentofwishfulthinking,toTarekObaidinanemailonAugust7,2010.

Buttheplanfortheoilrefinerywasalongshot,andunlikely,evenifitdidcomeoff, tomakeenoughprofit to fill a$1billionhole.Mahonyhadanotherstrategyready:tothrowLowunderthebus.

Intheemail,Mahonysuggestedaplan.ObaidshouldtelltheprimeministerthatPetroSaudihadabunchofdealsinthepipeline,butlostouttorivalsbecauseLowhadbeendistractedbypartying.“Ithinksayingdelayshavecostushelpsusbecausewecanthenblamethemforthelosseslater,”hewrote.

Theprimeministerknew1MDBwasbeingusedpartlyasapoliticalslushfundandthatLowwasmakinghisfamilyverycomfortable.ButNajibdidnotrealizethesizeofthefinancialholeatthecenterofthefund,andMahonyurgedObaidtohidetheproblemfromhim.

“IthinkthePMthinkswearemakinggoodinvestments,”hewrote.WhenLowgotwindofthefactthatObaidhadbeenincontactdirectlywith

theprimeminister,hewasapoplectic.“Weallknowbesthowtomanageourends.Ifanyonestartstothinkthey

can‘openly’expressordealdirectwithmyend,thatiswhenissueswillstart,”LowsnappedtoMahonyinaBlackBerrymessageonAugust8,2010.

TheMalaysiansaid thathewouldneverdirectlycontactPrinceTurki, theco-ownerofPetroSaudi,andhadevenstoppedRosmahfromdoingso.

“We will never go around you,” Mahony promised in his reply, but headmonishedLow.

“Dowork on the party thing as it can hurt us all. Last thingwe need ispublicitygivenwhatwearedoing…Justkeepyournonsensetoyourselfandoutof thenews.Doesn’thelp that Iseeyoupartyingagain lastnightanddjkeepsyelling‘malaysia’…”

PetroSaudiandLowwerecaughtinanincreasinglyunhappymarriage.

Troublescontinuedtopileup.BackinKualaLumpur,manyofthefund’sbrightemployees had left, disconcerted by the lack of progress on deals. ThePetroSaudijointventurehadachievedlittle,andplansforanewfinancialcenterwere going nowhere. Those who remained, led by Chief Executive Shahrol,wondered why 1MDB had so little to show for the billions of dollars ininvestment. But they questioned little, taking comfort from Prime MinisterNajib’sinvolvement.

Thefund’smanagementinKualaLumpurwaslookingtopostitsfirst-everfinancial results, for the year to March 31, 2010, but late into the year theaccounts still hadn’t been released. Ernst&Young, 1MDB’s accountants, didnotagreewithhowthefund’smanagementwasattemptingtobookprofits.Thefund’sinterestcosts,coupledwithalackofsignificantinvestments,meantitwasheadingforanetloss.

To avoid this, the fund’s management wanted to undertake some trickyaccounting.Theideawastoturn1MDB’sinvestmentsinthejointventurewithPetroSaudiintoloansduein2020,effectivelykickingthecandowntheroad.Ifit worked, the fund could promise future profits—and gain years before it

actuallyhadtoproducethem.Perhapsfearfulof thewholeschemeunraveling,LowandPetroSaudihadagreed to turn the initial$1billion investment intoaloanof$1.2billion,and1MDBwantedtobookthedifferenceasprofit.

Ernst & Young didn’t like it one bit. Its auditors were skeptical of theloan’svalue,and they told the fund theyhadconcernsaboutwhether the jointventurewouldeverbeabletopaybackthemoney.Ernst&Youngwasn’tgoingto risk its reputationbysigningoffon theseaccounts.Time tickedonwithoutanyfinancialstatementscomingout.The1MDBboardbegantofret,notinginitsminutes that the fundwas“perceivedasa secretivecloak-and-dagger setupwith sinister motives to benefit cronies and not the Malaysian people.” Itrecommendedspendingmoremoneyoncharity,andadvertisingthefactwidely—alongwithanotherdrasticstep.

Togetaroundtheauditorproblem,whynotjustgetridofErnst&Youngandfindanotherauditor?Tokeepinvestorsandmarketshappy,accountsofbigcompanies need to be audited by one of the “Big Four”—Ernst & Young,KPMG, Deloitte Touche, and PricewaterhouseCoopers. The problemwith thesystem is that clients pay for the auditing services, andwhenErnst&Youngmadetrouble,thefundcouldgolookingforareplacement.

So 1MDB’s management turned to KPMG. The firm also had concernsaboutwhatwasgoingonatthefund,buttheywerewillingtotakeonthejobaslongas1MDBcouldguaranteethatthebusinesswithPetroSaudiwassanctionedby governments in both countries. PetroSaudi was a private company, with aSaudiprinceholdingonlyahalfshare,while1MDBwascontrolledbyayoungMalaysianwhoheldnoofficialpositions.Butwithofficialsanction,KPMGwaswillingtomoveaheadwithitsaudit.

“At the very least, KPMG requires a document to confirm that PSI isrelated to the Saudi royal family,” 1MDB’s board noted in September 2010,referringtoPetroSaudi.

Theparticipantsprovidedadocument,playingupPrinceTurki’sroleinthecompany, and, on September 16, Prime Minister Najib signed a directive toremoveErnst&Youngasthefund’sauditors.TheboardnotedErnst&Young’s“unprofessional conduct” even though the firm simplyhadbeendoing its job.The fund promptly hiredKPMG,whose auditors allowed 1MDB to book thevalueoftheloantoPetroSaudiandkeepthecashspigotsopen.

Eventually, KPMG signed off on the accounts for the financial year toMarch31,2010,butwasworriedenough tocover itselfwithan“emphasisofmatter”paragraph,asectionofanauditedaccountmeanttounderlineapotential

future problem to investors. The auditor noted that 1MDB’s management“believes”thatPetroSaudiwasingoodfinancialstanding.Foranyonefollowingclosely,thiswasaverylukewarmapprovalofthefund’sfinancialstability.

Therewasoneperson,though,whodidn’tneedtocombthrough1MDB’sfinancialstosenseafraud.AndthatpersonwasJordanBelfort.

Chapter20

BelfortSmellsaScam

Cannes,France,May2011

OnthebeachjustoffLaCroisette,Cannes’smosticonicstreet,KanyeWestandJamieFoxxwereperformingarenditionof theirhit“GoldDigger.”“Whad’upFrance,”yelledWest,whowasdressedinawhitesuit,asacrowdofcelebritiesand film-industry executives watched from a cordoned-off part of the FrenchRivieratown’smainbeach.Earlier,PharrellWilliamshadopenedthenightwitha twenty-minute set under an opulent display of fireworks. In the crowd,LeonardoDiCaprio,swimwearmodelKateUptonandBradleyCooperdanced.Among the guests was disgraced investor turned best-selling author JordanBelfort,and theonetime“WolfofWallStreet”couldnotbelievewhathewasseeing.

Thiswas thebiggest partyof theweek-longCannesFilmFestival, and itwasamulti-million-dollarcoming-outeventforRedGranite.Afewdaysearlier,thefledglingfirmhadmadeabigannouncement.IthadreachedanagreementtoadaptBelfort’smemoirintoamovie.LeonardoDiCapriowouldstarasBelfort,withMartinScorsesedirecting—quiteacoupforanewoutfitintheindustrylikeRed Granite. To celebrate, the company had flown Belfort out with hisgirlfriend,Anne,fortheparty.

As with 1MDB, Low never took a formal position at Red Granite andstayedout of day-to-dayoperations, but hewas a behind-the-scenes force.Heorganized a first batch of funding for the film company inApril 2011, awiretransferof$1.17millionfromGoodStar,theSeychellescompanyhecontrolled,toRedGranite’saccountatCityNationalBankinLosAngeles.Thenotationonthewiretransferreferredto“INVESTORADVANCES.”Ithadthenembarkedon its first modest production, the $10 million comedy Friends with Kidsstarringanensemblecast includingKristenWiigandJonHamm, the rights to

whichRedGranitehadacquiredfromanotherstudio.SomeinHollywoodwerealreadyaskingquestionsaboutRedGranite.Sure,

peoplecomeoutofnowhereinHollywood.ButwhothehellareRizaAzizandJoeyMcFarland?Thestaggeringamountofmoneyanunknownfirmhadpaidforthislaunchpartystirreddisbelief.TherumorwasthatWestaloneearned$1million toperform.Therapperpepperedhisstagebanterwithweirdlypositivestatementsincluding:“RedGranitewillchangethewayfilmsaremadeforever.”

“Peoplethoughtthecompanywasarealengima,”saidScottRoxborough,areporterfortheHollywoodReporterwhoattended.“Ahugeparty,withsomuchmoneyandnorealfilmsundertheirbelt,seemedverysuspicious.”

Himselfnostrangertofraud,JordanBelfortthoughtsomethingwasn’trightabout this set up. The event must have cost at least $3 million, Belfortcalculated,ashenibbledoncanapésandwatchedtheA-listentertainment.Andthemoviehadn’tevengoneintoproduction!

“This is a fucking scam—anybody who does this has stolen money,”Belfort told Anne, as the music thumped. “You wouldn’t spend money youworkedforlikethat.”

Afewmonthslater,LowwouldofferBelfort$500,000toattendaneventinLasVegaswithDiCaprio.RedGranitehadpaidhimhandsomelyfortherightstohismemoir.ButBelfortwasstartingtodistrustthisgroup.Eagertostayoutoftrouble,focusinginsteadonhisnewcareerasawriterandmotivationalspeaker,Belfort turned them down, but DiCaprio and his costar Margot Robbie wentalong.

“Leo got sucked in,” Belfort later told Swiss journalist Katharina Bart. .“Leo’sanhonestguy.ButImettheseguys,andsaidtoAnne,‘Theseguysarefuckingcriminals.’

“I was like, ‘I don’t need these fucking people.’ I knew it, it was soobvious.”

Foraweekduringthefilmfestival,LowandRedGraniteeachhadasuperyachtmoored in the Mediterranean waters just off Cannes, Low’s slightly moreimpressive than that occupied by Riza Aziz, the Malaysian prime minister’sstepson.Aswellasthefilmcompany’slaunch,LowhadarrangedforPharrelltorecord a number of songs in a makeshift recording studio on his yacht. NotcontentwithsettingupamajorHollywoodfilmcompany,Lowalsowanted tolaunchhimselfintomusicventures.

A few months earlier, Low had arranged for legendary music producer

JimmyIovine,cofounderofInterscope,tothrowaGrammysafter-partyontheroof of L’Ermitage. Interscope wasn’t hosting its own party, and so LowapproachedIovinewithanoffertoorganizeoneforhim.

The creamof themusicworld cameout for it.LadyGaga,SnoopDogg,andDr.DreperformedtoacrowdthatincludedBeyoncéandJay-Z,aswellasBustaRhymes,NicoleScherzinger,Eminem,andothers.Low’susualgroupwasthere,too:JamieFoxxandParisHiltonamongthem.UnderArabian-styletents,DiCaprio,wearingan Irishcapandsmokingacigar,chattedwithBarRefaeli,hismodelgirlfriend.LowbroughtalongElvaHsiao,theTaiwanesepopstarhehad feted in Dubai. The New York Post, referring to Low as a billionaire,speculated the event must have cost him $500,000. To Low, it was aninvestment,ashecontinuedtobuildhisnamearoundtown.

Lowwastedno timeafter theparty to leveragehisnewcontacts.He tooksteps to form a music-production company called Red Spring and set abouthiring the bestmusical talent in theworld to help produce an album forElvaHsiao.ShewasbigintheChinese-speakingworld,butLowwantedtomakeherastar intheUnitedStates.Heagreedtopay$3milliontoPharrell tocomeupwiththreesongsforHsiao,andtoappearinthemusicvideoswithher.HealsoreachedtermswithAliciaKeysandherhip-hopproducerhusband,SwizzBeatz,payingthem$4milliontooverseethealbumandthelaunchofHsiao’scareerinthe United States. Despite Low setting aside a $12million budget, she nevermadeit.

SwizzBeatz,whose realnamewasKasseemDean,becameoneofLow’sclosestalliesandwouldremainwithhimevenwhenthingsstartedgoingawry.Bornandraised in theBronx toanEritrean fatherandaPuertoRicanmother,Dean had worked on tracks for DMX, Jay-Z, Drake, and Beyoncé, amongothers.Hewasintenselyambitious,withagoalofbecomingabusinessmogul,not just a record producer, and he saw potential in his connection with Low.(“Thesky’snotthelimit,it’sjustaview,”helikedtosay.)Reebokhiredhimasacreativeexecutive,anattempttogaincredibilityinthehip-hopworld.BeforehemetLow,however,SwizzBeatz’sbusinessendeavorshadprettymuchbeenlimitedtocelebrityendorsements;Lowrepresentedasourceoffundingtotakehis career to the next level. What’s more, Swizz Beatz owed hundreds ofthousandsofdollarstotheInternalRevenueServiceforunpaidtaxes.TheIRSputliensonhisaccounts.

TheproducerbecameLow’sconduit into themusicworld.Aspartof theproduction deal, Swizz Beatz, rapper Lil Jon, and Jho Low recorded a song

entitled “V” in Palm Studios Las Vegas. A kind of party anthem, Low’scontributionwastorepeatthewords“veryhot”overandoverinthebackground.Itwasnevercommerciallyreleased.

Swizz Beatz and Alicia Keys entered Low’s trusted circle, attending hisend-of-year ski holidayswith JoeyMcFarland andRizaAziz, JasmineLoo of1MDB,andothercloseassociates.Theproducerwasacollectorofmodernart,including paintings by Jean-Michel Basquiat, and he acted as Low’s culturaltutor,schoolinghimongalleriesandauctions.TheMalaysianbegan towearacap with “Basquiat” written on the front, and talked of building his owncollection.

TomakeTheWolfofWallStreet,Lowknewhewasgoingtoneedaccesstoabigger pot of money. Red Granite had agreed to pay DiCaprio and Scorsesemultiplemillionseachfor themovie,andaddedto thecostsofproduction, theoverallbudgetwassettotop$100million.Bythispoint, thesummerof2011,Lowandhisallieshadtakencontrolofalmost$2billlionfrom1MDB,butmuchofthathadbeenspentonmansions,hotels,gambling,andpartying,aswellastopayoffconspirators.Lowneedednewdeals,bothtoplugtheholeat1MDBandtogivehimthefinancialmuscletodominateinHollywood.

His relations with PetroSaudi fraying, the Malaysian looked around forotherpartners.Distractedandalwaysonthemove,hedidn’tseemwillingtoputinthelegworktopulloffacomplicatedacquisition,suchastheplantobuytheU.S.oilrefinerythatPatrickMahonyhadpushed.HelackedMahony’sbankingskills and had no ability to value companies in the oil-and-gas sector. Lowwanted toquickly flip assets and forgeallianceswithpartnerswhocouldhelphimmakeafastdollar.

AroundthistimeLowreadanewsstoryaboutabattletotakeoveragroupofhotels that includedLondon’s famedClaridge’s.Oneof thebiddinggroupsincludedawealthyBritishpropertymagnatecalledRobertTchenguiz.Thefifty-year-oldhad salt-and-pepper hair,whichdescended inwaves to his shoulders,andhewasoftentobeseeninwhiteshirtswithafewbuttonsundone.Talkinginadeep, gravelly voice,Tchenguiz hailed froman Iraqi Jewish family that hadmoved to Iran and later settled in London after being driven out during theIslamicRevolution.Hewasalwaysinvolvedinsomeorotherpropertydeal,andhis latest was a heated contest with the Barclays brothers, among Britain’swealthiest individuals, forcontrolofCoroinLimited,whichownedClaridge’s.Forhisbid,TchenguizhadteamedupwithaMiddleEasternfundcalledAabar

Investments.ItwasjustthekindofacquisitionthatappealedtoLow:aswankyhotelat

thecenterofLondon’sMayfairdistrict.TheinvolvementofAabarwasalsoanattraction. The fund was controlled by the International PetroleumInvestmentCompany,orIPIC,a$70billionsovereignwealthfundownedbythegovernment of Abu Dhabi. Low had done business with Mubadala of AbuDhabi, but he had yet to make contacts at IPIC or Aabar. The IPIC fund’smanagingdirector,awealthyArabbusinessmannamedKhademAlQubaisi,hada reputation among financiers who did business with him for demandingkickbacksfromdeals.Inthewakeofthefinancialcrisis,IPIChadbeensnappingup stakes in Western companies—Barclays Bank, Daimler-Benz, VirginGalactic—andAlQubaisihadbecomeapowerfulfigureintheemirate.

Lowwanted inon thedeal,andhegotknowTchenguiz throughawealthadviser they both knew. At first Tchenguiz did not consider Low a seriousinvestor.WhohadheardofWynton,afterall?Butthen,duringdiscussionsoverthe deal for Claridge’s, Low provided a letter from 1MDB stating it wouldprovideupto1billionpoundsinfinancingfortheacquisition.

“Wedidn’tknow1MDBwasabullshitthing,”Tchenguiztoldfriendslater.Itappearedtobeagovernmentsubsidiary,justlikeAabar.“That’swhywewentpartnerswithhim.”

To show his seriousness, Low signed a check on the spot for 50millionpounds,whichhesaidcouldbeusedtostartbuildingastakeinCoroin.In theend,theshareholdersofCoroindecidedagainsttheWynton-Aabaroffer.Still,itwasn’t a wasted exercise; through the deal making, Low had made a newconnectionwithAabar’schiefexecutive,MohamedAlHusseiny,aU.S.citizenofKenyanorigin.

Aformeraccountantwhowentby“Mo”tofriends,AlHusseinyworesharpsuitsandexpensivewatches.Hewasshortandbaldingbutfit,withapenchantfor the “Insanity” workout routine, an interval training set that burned onethousand calories an hour.HewasAlQubaisi’s right handman inAabar andwas known mostly for his obedience to the “boss.” Low began to invite AlHusseiny to his star-studded parties, and the Aabar chief executive took toLow’sexclusive socialmilieu,boasting to friendsabout thecelebritieshewasmeeting.

If Low had started cultivating famous friends to quell some kind oflingeringinsecurity—orevenforthesheerhellofit—healsocametorealizeitwas good business. Many of his prospective partners were wowed by Low’s

familiaritywithDiCaprio,Hilton,andothers.HisHollywoodfriendsgavehiman edge over other investors looking for Middle East tie-ups. It wasn’t longbeforeLowandAlHusseinyworkedoutawayfortheentitiestheycontrolledtoworktogether.InJune2011,LowbrokeredadealforAabartoacquireastakeinaMalaysianbank,RHB, forwhich it paid$2.7billion.Soon after, thebank’sstockprice fell sharply,andAabarwasstuckwithpaper lossesofhundredsofmillionsofdollars.

Undettered,1MDBandAabar thensetupa jointventureof theirown—afundintendedtoinvestincommoditymarkets,andthefirstdealwasforastakein a Mongolian coal mine. That investment also performed badly when coalprices crashed asChina’s economy slowed.Nomatter: Low andAlHusseinypersonallyprosperedfromthedealbyarrangingamulti-million-dollarfeefromthesellerasarewardforbringinginAabarand1MDB.

Whenhefoundoutaboutthelosses,AlQubaisi, theIPICchief,waslividand,onceagain,Lowneededanotherdealtoplacateanangrypartner.Tomakeit up, Low was hoping to involve his new Abu Dhabi friends in his biggestschemeyet,onethatwouldleechevenmorecashoutof1MDB,helpingtopayforDiCaprio,Scorsese,andtheproductionbudgetofTheWolfofWallStreet.

Withhisambitiousnewcollaborators,Lowwasmovingonfrom1MDB’sorignalpartner,PetroSaudi.But therewasadangerousdivideat thecompany,onethatthreatenedtobringthewholehouseofcardscrashingdown.

Chapter21

BitterSeverance

London,April2011

ThebarintheConnaught,afive-starhotelinLondon’sMayfairdistrict,wasanapt place for Xavier Justo, an employee of PetroSaudi, to be discussing hisseverancedealwithPatrickMahony.Theplacereekedofmoney,fromthedarkleather sofas, to the Cubist-inspired wood paneling, and a Wedgewood-likemoldedplasterceiling.Justo,amuscledandextensivelytattooedMediterranean-lookingmaninhismidforties,whoatsixfeetsixinchestalltoweredovermostpeople,repeatedhisdemandfor6.5millionSwissfrancs.

As head of PetroSaudi’s London office, Justo had worked on dealsinvolving theoil drill ships that thePetroSaudi–1MDB joint venture acquired.TarekObaid,thefirm’schiefexecutive,wasanoldfriend,andhehadpromisedJustomillionsofdollarsforopeningtheLondonoffice.Butthemoneyhadnevermaterialized, and Justo had even been left to personally cover some companyexpenses.HewasthereattheConnaughttotrytogethismoney.

Fearing a problem,Mahony was keen to settle but he haggled. The pairtalkedforsometime,withTarekObaidonthephonewithMahonyatonepoint,andlefttheConnaughtagreeingon5millionSwissfrancs.

ButObaidlatersoughttolowertheamountfurther.AsObaidsawit,hehadbeengood to Justo, andnowhis friendwasbeingdisloyal. Justowas aSwisscitizen,borntoSpanishimmigrants,whohadgottentoknowObaidinthe1990s.AfterworkingforaSwissprivatebank,ObaidhadsetupbusinesseswithPrinceTurki,lookingtopavethewayforforeigninvestorsinSaudiArabia.HetookadeskatafinancialservicescompanyinGenevapartlyownedbyJusto.Thepairbecameclosedespitethedecadedifferenceintheirages.

JustoownedashareinaGenevanightclubcalledthePlatinumClub,butitmade littlemoney.WhenObaid set upPetroSaudi, he persuaded his friend to

becomedirectorofanumberofthenewfirm’saffiliates.Initially,Justohadlittleto do—PetroSaudi’s operations were more or less nonexistent—and he wentgoneoff travelinginAsia.Obaidcalledhimin2010withanoffer:PetroSaudihad come into a lot ofmoney, andhewanted Justo to becomedirector of thefirm’sLondonoffice.

Offered a starting salary of 400,000 pounds per year,with the chance tomakemillions,JustomovedtoLondonandranPetroSaudi’ssleeknewofficesinCurzonStreet,onlya five-minutewalkfromtheConnaught.Justohelpedwiththeonlyrealbusinessthe1MDB-PetroSaudijointventureeverconducted—twodrillships,acquiredbythecompanyandthenleasedtoVenezuela’snationaloilcompany—andwasoftenontheplanetoCaracas.ButhisrelationswithObaidsoon deteriorated, as his young friend seemed paranoid and arrogant after the1MDBdeal,whileatthesametimefailingtodelivertheproposedmillions.

Seeminglyintoxicatedbytheextentofhisnewfoundwealth,ObaidbegantoflytoSaudiArabiaandelsewhereintheMiddleEastonprivatejetsand,likeLow, rentingyachts in the southofFrance.Hisbrother suggested settingupafamilyofficetomanageallthemoney.Tosomeobservers,Obaidstartedtoacterratically. He always had been a hypochondriac, complaining of ill-definedillnesses,andafterthemoneystartedflowinghewrotetotheMayoClinicintheUnitedStatestogetafullmedicalcheck-up,despitebeinginhismidthirties.Hebegantopartyincessantlyandputonweight.Peoplewhoknewhimsaidheflewintofrequentrages.

PatrickMahonyalsobegantospend.Hiswifewaspregnantwiththeirfirstchild,andinNovember2009Mahonysignedadealtobuya6.2millionpoundtownhouseoverlookingaprivateparkinLondon’sLadbrokeSquare.Hetalkedwithhisprivatebanker at J.P.Morganaboutgetting anAmexBlackcard, thekindusedbycelebritiesandbillionaires.Only thirty-twoyearsold,heworriedaboutoneofhissistersbeingjealousoverhisgrowingsuccessandthelifestylethatcamewithit.

Observingallthis,Justo,thoughhedidn’tknowthefulldetailsofwhathadhappened at PetroSaudi, sensed hewas not getting treated fairly.He believedObaid was stiffing him by not fully paying his salary, as well as failing toreimburse travel andothercosts.Adding insult to injury, Justohad toperformwhatheconsideredmenialwork,includingorganizingforObaidandJhoLowtogetexclusivecreditcardsfromaDubaibank.Fedup,inthespringof2011,hedecidedtoquit.Buthewasn’tjustgoingtowalkaway.

“Duetoourhistory,andalltheprojectsI’vetakenpartinovertheyears,I

thinkanamicableseparationisthebestwayformetoleavePetroSaudiandtheothercompanies,”hewroteObaidinanemail.“I’llwaitforyourconfirmationthatourcollaboration isover from today,and that I’m to leave theoffice,andalsothatyouwillletmeknowhowtogetmyseverancepay.”

“You’reasmartass.It’sonethingtobeabigmouthbutnowyou’veblowneverything up. Another word from you on that, and we’re finished,” Obaidreplied.

TheConnaughtmeetingwasalast-ditchattempttoreachterms.ButObaidinsistedtheamountagreedoninthebarbereducedagain,thistimeto4millionfrancs. Itwasa fatefuldecision. Justo received the4millionSwiss francs inaseveranceagreementwithPetroSaudi,buthe felt short-changedby2.5millionSwissfrancs.

Intheensuingweeks,ObaidwentaroundtellingmutualfriendsthatJustowas a loser who owed everything to PetroSaudi. Justo was furious when heheardthetalk,sohecameupwithanotherplan.Heguessedsomethingwasnotright about PetroSaudi’s relationship with 1MDB, so he set about obtainingproof.Togainleverageinhisdispute,JustoarrangedtogetaholdofacopyofPetroSaudi’s computer servers from a contact who was still at the company.Amid the more than 140 gigabytes of data, including some 448,000 emails,documents, and other official papers, were details of the fraud that hadtranspired.

He wouldn’t do anything with the servers for more than two years, butwhenhedid, itwouldcostObaidandMahonymore thana fewmillionSwissfrancs.ItalsowouldlandJustoinaSoutheastAsianjail.

AsthedramaunfoldedinEurope,Low,unaware,wasacontinentaway—busyshoppingforaNewYorkpenthousefitforabillionaire.Andhewastryingoutanewstorytoexplainhisriches:familywealth.

Chapter22

PenthousewithaView

NewYork,March2011

Surroundedby an entourageof security,models, and friends,Low took in theviewsfrompenthouse76BintheTimeWarnerCenteronthesouthwestcornerofCentral Park.With trees and lawns filling the floor-to-wallwindows to theeast, and the Hudson River stretching out to the west, the apartment boastedunfetteredviewsofvirtually theentire islandofManhattan.The4,825-square-footunit,withthreebedrooms,alibrary,andafishtankhangingfromtheceilinginthe“GreatRoom,”hadoncebeenthehomeofJay-ZandBeyoncé,whorenteditfor$40,000permonth.

AsLowtouredtheapartmentinthespringof2011heclaimedtorealtorstobe picking up the place for a group of investors. To a member of thecondominiumboard,however,LowpurportedtorepresenttheprimeministerofMalaysia.Butitwasreallyforhim.Thenextyear,hewouldtransferownershipof theParkLaurelapartmentandhismansions inLosAngelesandLondon toRiza Aziz, Najib’s stepson. But the Time Warner penthouse was his crownjewel, the residence that matched his aspirations to build a reputation in theUnitedStatesasamoviemogulandseriousinvestor.

Theacquisitionofpenthouse76BwassecuredinJunefor$30.5millionincash, one of the highest prices for the building and a price tag that made itamong the most expensive apartments in the United States. With questionsbubbling in the media about the source of his funds, Low took even greaterprecautionsthaninthepast tomaskhisinvolvement.Overtheyears,Lowhadcome up with creative reasons to justify his expenditures. Either rich Arabfriendswerepaying,orhemerelyrepresentedagroupofinvestorsorMalaysia’sprimeminister.Asitbecamedifficulttodenyhisinvolvement,Lowcametorelymore on another explanation that he first had tried out on his Wharton and

Harrow friends: themoney issued from his grandfather, and Low simplywasinvestingthefamily’sbillions.

Tomake the story seem true, he needed towashhundreds ofmillions ofdollarsthroughthebankaccountsoffamilymembers,notablyhisfather,Larry.Thin,withanarrowmustacheandneatlypartedhair,LarryLowwasseenasalikablepartyguybackinPenang—thoughtallegationshehadcheatedaformerbusinesspartner trailedhim.Tosendhugeamountsofcash tohis father,Lowhadtofindabankthatwouldn’tdigtoodeeply.

Untilthispoint,Lowhadmanagedtoskirtbanks’compliancedepartments,butitwashardwork.WithDeutscheBankandCoutts,hewasconstantlyforcedtoinventfakeinvestmentagreementstojustifyweightymovementsofcash,andevenhadtoflytoZurichtoexplaindeals.Low’sabilitytogetthisfarwasinparta result of the failings of compliance efforts at major financial institutions.Banks made money through letting transactions happen—not putting uproadblocks—andcomplianceofficerswereoftenpressured to turnablindeye.Butoperatingonthisscale,Lowwasfindingitharderandhardertohoodwinkcompliance.

TheprimaryU.S.lawagainstmoneylaunderingistheBankSecrecyActof1970,which required institutions to keep records of financial transactions andreportsuspiciousactivity.A1986lawmadeitillegalforbankstotakepartin,orcoverup,moneylaundering.ThePATRIOTActof2001,aimedatsnuffingoutterrorism financing after the September 11 attacks, forced banks to set upcomplianceprogramsandenhanceduediligenceoncustomers.And itallowedharsher financialpenaltiesagainstbanks that failed tostopshady transfers.Bythe late 2000s, though, banks were making too much money in the housingbubbletolosesleepovercompliance.Fewpunishmentsweremetedoutand,asaresult,banksandregulatorsdidn’tenforcetheseregulationsall thatstringently.More often than not, compliance departments were a weak appendage of abank’secosystem,isolatedunderlegalaffairs.

Thesubprimecrisis,starting in2007,changedthepicture.U.S.regulatorshadbeencaughtnapping,andthecollapseofLehmanBrothersandBearStearns,undertheweightofbadmortgageloans,ledtotighterscrutinyofbanks’actions.Thatextendedtoanti–moneylaundering,asTreasuryandtheJusticeDepartmentbegantohandoutmoreheftypunishmentstotransgressors.WachoviaBank,inearly2010,agreedtopay$160millioninpenaltiesforfailingtoreport$8billionin dodgy transfers. Around this time, the Justice Department was building itscase against J.P.Morgan, where BernieMadoff held his accounts, eventually

leading to a record$2billion fine under theBankSecrecyAct.These actionswereforcingWallStreetandmajorglobalbanksinEuropeandJapantogettheiracttogetheroncompliance.

WhatLowneededwasasmallerbank,onethatwouldbedependentonhisbusiness and tookcompliance even less seriously thanWallStreet behemoths.HefounditinastrugglingSwissbankcalledBSI,whichwasownedbyItalianinsurance group Assicurazioni Generali. Ironically, the bank had refused tohandle the original PetroSaudi deal because of concerns over Low’s role.Butfromlate2010,hestartedopeningdozensofindividualandcorporateaccountsatBSI’ssmallSingaporebranch.Oneof them,onJune28,2011,wascreditedwith$55million fromtheSwissaccountofGoodStaratCoutts.On thesameday, Low sent $54.75 million from that account to one that Larry Low hadrecentlyopened,alsowithBSI inSingapore.Fromthere,onlyhours later,$30millionwassenttoSwitzerland,digitallymovingtoAsiaandbackonthesameday, landing in the account of another Low-controlled company atRothschildBankinZurich.

Thiswaslayering,theprocessofhidingmoney’soriginsthroughacomplexmazeoftransactions—acrucialinstrumentinthemoneylaunderer’stoolkit.Inthis case, Rothschild’s compliance department could only see money comingfromLarryLowtoJhoLow.Bythissimpleprocess,Lowcreatedtheimpressionofinheritedmoney,flowingdownthroughthegenerations.

ButBSIbankerscouldinvestigateunderthehood,andshouldhavealertedauthorities to the needless back-and-forth transactions between Low and hisfather.ThelikesofCouttsandRothschildhadfailedtocatchLow,buttheyhadaskedquestions.NowLowwastestingBSI’swillingnesstolooktheotherway,atryoutthebankpassedwithflyingcolors,openingthedoorstomorelucrativebusiness. The bank would become a crucial element in the plumbing of the1MDBschemeasitsscaleescalatedintheyearsahead.

FromRothschild,Lowsent$27million tooneofhis IOLTAaccounts atShearman,theU.S.lawfirm.Since2009,Lowhadreliedontheselawyertrustaccounts for his myriad of purchases, drawing on them to pay for gambling,parties,andyachtrentals,aswellastopurchasemultipleproperites.Backthen,LowhadsentmoneydirecttotheIOLTAaccountsfromGoodStar.NowLowwas takinggreater precautions, sendingmoney in a circuitous fashion into hislawyeraccounts.

These accounts were used to fund the purchase of the Time Warnerpenthouse,finalizedinJune2011,aswellastopayDouglasEllimanabrokerage

feeof$1.2million.ASeychellescompany,with1MDBemployeeSeetLiLinasa signatory, was the initial purchaser of the Time Warner penthouse, but itassigneditsrightstoyetanothershellfirmcontrolledbyLow.

AnoticetotheTimeWarnercondominiumboardidentifiedLarryLowastheoccupantof theapartment,anattempt tobuttress the imageofabillionairefamily.ButitwasLowwhowouldlivethere,asuitablygrandiosebaseinNewYorkforoneoftheworld’snewestbillionaires.

Chapter23

SwitzerlandoftheEast

Singapore,December2009

HowBSI came to be Low’s bank of choice startedwith a fight. Back in late2009,HanspeterBrunnerwasangrywithhisemployer,CouttsInternational,theZurch-based foreign arm of the three-hundred-year-old British private bank,whichhasofficeson theStrandandcountsQueenElizabethamong itsclients.Brunner, a private banker in his fifties with short-cropped hair and a ruddycomplexion,theconsequenceofalifelongappreciationforvintageredwine,hadtaken a banking internship at age fifteen in his native Switzerland rather thanfinishing high school and attending university. He spent a quarter century atCredit Suisse, where he learned the ropes of private banking, the industry ofinvestingmoneyforindividualswithmorethan$1millioninliquidassets.

Bythe1990s,privatebankswerelookingtoexpandinAsia,anareaoffasteconomicgrowth,andBrunnermoved toheadCoutts’sbusiness inSingapore.TheSoutheastAsiancitystateof5millionpeople, locatedona tropical islandnear the equator, was positioning itself as the “Switzerland of the East,”completewithbankingsecrecylawsmodeledonSwitzerland’s.

For a while, business flourished as Asia’s economies powered ahead,generatingscoresofnewmillionaires.AftertheAsianfinancialcrisistookholdin the late 1990s, slashing the stock holdings of rich Asians, Brunner wasrecalled to Switzerland to head the bank’s international business. But he haddevelopedatastefor thelifestyleinAsia,withitsservantsanddrivers,andhewasbackinSingaporeby2006,residinginamodernapartmentwithapoolandoutdoorwhirlpoolbathwithinwalkingdistanceof thecity’sbotanicalgardens.IntheotherdirectionwasOrchardRoad,ashopping-and-entertainmenthubwithrestaurants andbars.The remunerationwas another attraction:Brunner earnedmorethan1millionSwissfrancsayear,withmoreinbonuses,receivedstipends

foradriverandmultiplefreebusiness-classflightshome,andenjoyedtaxratesofonly15percent.

Buthealsohadaproblem.Theglobalfinancialcrisisthatyearhadforcedthe British government to bail out the Royal Bank of Scotland, CouttsInternational’s parent company. Now state controlled, RBS set about cuttingbonuses at Coutts and offering deferred payments in bonds instead of cash.Brunnerwasincensed.SeniormanagementdemandedhisreturntoSwitzerland.Hookedontheperksof livinginAsia,andwithanothercarduphissleeve,hedeclinedtodoso.

Forayear,Brunnerhadbeenholding talkswithseniorexecutivesatBSI.Founded in the nineteenth century in the Italian-speaking part of Switzerland,BSIhad thrived forgenerations ina similar fashion toallSwissbanks:aidingwealthy Europeans and Americans who wanted to hide their cash in privateaccountsandevadethepaymentoftaxesathome.Fordecades,richAmericans,Germans,French,andItalianswouldcometoseetheirbankers inSwitzerland,sometimesluggingsuitcasesofcashonthetraintoGeneva,Zurich,or,inBSI’scase,thebank’sheadquartersina1700scolonnadedmansioninthepicturesqueAlpinetownofLugano.Switzerland’sstringentbanksecrecylaws,whichmadeit illegal for banks to divulge information about their clients, protected thebusiness.

By themid-2000s, however, European nations and theUnited States hadlost patiencewithSwitzerlandandbegan topressure the country tohandoverinformationontaxcheats.TheEuropeanUnionandSwitzerlandsignedatreatythatforcedSwissbanks todivulge informationonaccountsheldbycitizensofotherEuropeannationsorwithhold a taxon customerswhowished to remainanonymous. Surrounded by EU nations on all sides, and dependent on open-bordertradewithitsneighbors,Swisspoliticianshadnochoicebut toagreetothiscompromise.Europeanclientsbeganto lookforotherplaces tostash theirmoney. Under this regulatory onslaught, the business model of small SwissbankslikeBSIwasimperiled.

BSI had opened a Singapore office in 2005, but it had failed to makeheadway in Asia against better-known rivals like UBS and Credit Suisse.Brunnerknew thisandhehatchedanaudaciousplan thatwouldchangeBSI’sfortunesovernight.Inlate2009hereachedanagreementwithAlfredoGysi,thebank’sLugano-basedchiefexecutive,tojumpshipwithmorethanonehundredCouttsemployees,whowereenticedbypromisesofsalariesthatwere20to40percenthigherandguaranteedbonuses for threeyears.Thebanksuddenlyhad

over $2 billion in new customer money, more than tripling its assets undermanagementinAsia,withBrunnerasthenewregionalchief.“Itwasamarriageof convenience,” saidKevinSwampillai, aMalaysianbankerwhowas amongthosewholeftCouttsforBSI.

Aheadoftheexodus,someCouttsbankersfearedtheymightloseaccountholderswhodidn’twant to shift their assets toBSI.Among themost nervouswas Yak Yew Chee, a Singaporean banker in his fifties, who had a veryimportantclient:JhoLow.YakwastheprivatebankeratCouttsforLarryLow,helpingtoinvest thePenangresident’smodestfortune.In2006,justafterLowhadgraduatedfromWharton,LarryaskedYaktoopenanaccountforhissonatCouttsinSingapore.

Yak, who had spiky, thinning hair, graying at the sides, and often woresunglasses, was a domineering personality who cowed coworkers. Oftendismissive of others’ views, he would complain to subordinates that womenweren’t cut out to become bankers, as they demanded time off for maternityleave.Buthewas toleratedbyhisbossesbecauseheaced theonlymetric thatcounts inprivatebanking:Hebrought inclients.Thekey tohissuccesswasaburgeoningrelationshipwithLarry’sson,JhoLow.

Inmid-2009, Low told Yak he would be helping aMalaysian sovereignwealthfundcalled1MDBinvestmoney.Theideawaspreposterous—whywouldastatefundneedtoworkthroughsomeonesoyoung,andforwhatendswoulditrequiretheservicesofabankspecializinginprivatewealthofindividuals?—butYakagreedtohelp.HeopenedanaccountforGoodStaratCoutts,andhekeptthe firm’s records. It was this account that ultimately received more than $1billionin1MDBmoney,forcingLowtomakeupastorytocompliancestaffatCoutts thatGood Star had an investment agreementwith theMalaysian fund.Yak knew Good Star was controlled by Low, who explained that he wasengaged in super-secretive “government-to-government” business—a line thebankerswallowedwithoutquery.

Low had found his perfect banker—tough but unquestioning—and whenYak told himof his decision tomove toBSI, amore obscure institution thanCoutts,hedecided tomovehis accountsover.Ecstatic athis accomplishment,BrunnerboastedtoaBloombergjournalistabouthisplanstotripleBSI’sassetsundermanagementinAsiainjustfiveyears.

Yak already had proven pliable, and Low sensed BSI would not createtrouble forhim, especially if hehelped turnBrunner’sdream into a realitybychanneling billions of dollars to the bank. It was part of a system Low was

developing to identify institutions with weak governance, and use that to hisadvantage.Afewyearslater,hewouldaskaNewYorkartdealerinanemailtorecommend him a lender with a “quick and relaxed (know-your-customer)process.”BSIwould prove to be the ultimate example of this—a bankwhosemanagement,inthesearchforprofit,askedfewprobingquestions.

Fromlate2010,LowrelayedinstructionstoYak,nowamanagingdirectorat BSI, to open a series of accounts in his name and those of scores of shellcompanies.Therewasan“onboarding”procedure—achecklistofsimpleknow-your-customer bullet points that included items such as passport details, legalconvictions,andthesourceofacustomer’smoney.Lowcameupclean.Itwasatthispointthathebeganlayingthegroundworkforhistaleoffamilywealth.TheJune 2011 transfer of $55 million—some of which was used for the TimeWarnerpurchase—wasatesttoseeifBSIcompliancestaffwouldbuythestorythat thiswasfamilymoney. ItworkedandLowbegan tosendgushersofcashintohisBSIaccounts.

The1MDBfundalsoopenedaslewofaccountswithBSI—accountswhichwould receive billions of dollars in funds in the years ahead. The bank’scompliancequeriedwhyaMalaysiansovereignfundwouldneedaSwissbankaccount. So, to ensure the buy-in of senior management at BSI, Low tookprecautions.HearrangedforYaktosetupameetinginLuganobetweensenior1MDB officials, including Chief Executive Shahrol Halmi, and BSI’s topmanagement.

ItwasyetanothersignofLow’stotalcontroloverthefund.TheMalaysianexecutivesflewtoSwitzerland,tellingBrunner,BSI’schiefexecutiveGysi,andothers toexpectbillionsofdollars inbusinessfromthesovereignwealthfund.Low’sabilitytoarrangesuchgatheringsgavehimanauraofrespectability,and,despite his lack of a formal role at the fund, senior bankers like Gysi andBrunnerstoppedaskingquestions.

YakwasfetedasBSI’sstarbanker.“Iwantedtopersonallythankforyourimmensecontributionnotonlytoour

newAsia business, but to BSI Group as a whole,” Gysi, the chief executive,wroteYak.

HisconnectiontoLowmadehimexceedinglyrich;Yakbegantotakehomearound $5 million a year in salary and bonuses, more than five times hispreviousearnings,bindinghimtoLow,themoneyandadulationtooalluringtoturndown.Thebosses,too,begantoreapthebenefitsoftherelationship,asBSIbecameaforcetobereckonedwithinSingaporeandglobally.Brunneracquired

a$7million, 2,500-square-foot colonial-era townhouse inSingapore, close tohis old apartment. The two-storywhitewashed building had been restored andfurnished in the opulent style of a Chinese mandarin, with terra-cotta horses,statuesofChinesegods,anddeepPersiancarpets.

According to Kevin Swampillai, who became BSI’s head of wealthmanagement in Singapore, itwas a “lame duck”management team that caredonlyaboutsalaries,allowinglower-rankingbankerstoacthowevertheypleased.OneofthosegivenfreereinwasYeoJiawei.

Chapter24

BrazenSky

Singapore,December2011

With pointed eyebrows, pronounced cheeks, and spiky hair, Yeo Jiawei, atwenty-eight-year-oldChineseSingaporeanbankeratBSI,gaveoffaboyishair.ButYeohadbecomeanexpertinadarkcorneroftheglobalfinancialsystem.AtBSI he was a “wealth manager,” but his real expertise lay in an intricateknowledge ofways to help elite customers reduce tax bills. The bank’s breadandbutter—likemanyprivatebanksinSingapore—wasdevisingsuchstrategies,largelyforrichIndianandSoutheastAsianclients.OnemethodYeoemployedwastowashclients’moneythroughinvestmentfundsinfarawayplaces.

Yeo’s skills were perfectly suited to one of BSI’s star clients: Jho Low.Lowwantedawaytosendmoneythroughmultipleaccountstokeepitsoriginssecret,andYeohadpromisedtodeliver.

Insteadofdealingwithmundanetaxevasion,LowtoldYeohewouldhaveanewassignment:secretgovernmentwork.LikemanypeoplewhobrushedupagainsttheMalaysian,Yeowasintriguedandflattered.HesetaboutdoingwhatLowwanted. InDecember2011,Yeosetupameeting inSingaporewithJoséRenatoCarvalhoPinto, aBrazilian relationshipmanager atAmicorpGroup, asmallfinancialfirm.YeodescribedtoPintohowBSIwasdoingworkinvolvingMalaysianandMiddleEasterninvestmentfundsandneededAmicorptosetupaseriesoffundstructures.Pintowasinterested.

AmicorpwascofoundedbyaDutchfinanciernamedToineKnipping,whohadworked for years as a financier inCuraçao, a sun-sweptCaribbean islandthat is part of the Kingdom of the Netherlands, before settling in Singapore.Knippinghadaneclecticcurriculumvitae:He’dworkedforaVenezuelanbank,held an interest in a SouthAfrican aloe vera drinks company, and authored abook on ethical investing. One of his main areas of expertise was Curaçao,

whichinthe1970sand1980semergedasamajoroffshorecenter.ItalsogotanameasatransshipmentpointfordrugsfromSouthAmericatoentertheUnitedStates and a haven to stash dirty cash, regularly landingCuraçao on theU.S.StateDepartment’slistof“MajorMoneyLaunderingCountries.”

Knipping’scompanyhelpedhedgefundsandotherfinancialfirmsruntheirday-to-day business—calculating the value of investments, for instance, orclearing trades. But like many smaller trust companies, Amicorp did a bit ofeverything,and this includedadministering small investment funds inCuraçaothatwereoftenusedbyrichAsianstodiscretelymovemoneyaround.

Inthemeeting,YeoexplainedhowBSIneededAmicorp’shelptosetupaninvestment-fundstructureforMalaysianfund1MDBandPintogottowork.Thefirsttransaction,for$100million,wentfromaBSIaccountcontrolledby1MDBinto an Amicorp-administered mutual fund in Curaçao. But it wasn’t a usualmutual fund, the kind in which a manager pools cash from mom-and-popinvestors, using it to buy stocks and bonds. Sure, this entity, EnterpriseEmerging Market Fund, took cash from multiple investors. But the structuremaskedonemajordifference to aplain-vanillamutual fund: It also comprisedsegregatedportfolios that tookcashfromonlyoneclient,before“investing”inanotherasset.

Itwassimplyawaytowashaclient’smoneythroughwhat lookedlikeamutual fund. In otherwords, cash coming out the other side appeared to be atransfer from a mutual fund. This was exactly what happened with the $100million, which Enterprise Emerging Market Fund promptly sent to a shellcompanycontrolledbyFatEric,Low’sassociateand,increasingly,animportantnomineeforhismanycompanies.Yeonevermadeclearthebusinessreasonforthe transfer. It was unclear why a state fund such as 1MDBwould use suchsecretive financial structures, but Pinto didn’t pry, as BSI had vouched for1MDB.AsKevinSwampillai,Yeo’sboss,putit:“Therewasonlyasemblanceofcomplianceatthesefunds.”Inthenextcoupleofyears,Amicorpwouldsetup$1.5billionofsuchstructuresfor1MDB,Low,andhisfamily.

Herewasa legal, ifhighlyquestionable,waytodisguisemoneyflows. Intheearlierstages,LowhadbeencontenttosendcashstraightfromGoodStartohisU.S.law-trustaccountswithShearman&Sterlingor,morerecently,intohisaccounts at BSI. But themedia spotlight on his partying, and the compliancehassles,weremakinghimmoreparanoid.ByusinganintermediarystepliketheCuraçaofund,Lowhopedtocoveroveranyfootprints.

YeohaddeliveredandLowbegan to trusthim.Ashemoveddeeper into

Low’sorbit,Yeo’sself-regardforhisownskillsgrew,andheexpresseddisdainforbankersatBSIwhodidn’tdealdirectlywithsuchpowerfulclients.LikeBSIitself, Yeo had proven himself an amenable fit for Jho Low, and Lowwouldsoonturntotheyoungbankeragain.

The1MDBfundstillhadtoaccountforthe$1.8billionitclaimedtohavelenttoPetroSaudi. Of this, Low and his conspirators had taken the lion’s share, andnowheneededYeotohelpmakethedebtgoaway.Earlier,Lowhadattemptedto get TimLeissner ofGoldman to find a bank thatwould value the oil drillships—about theonlyassetPetroSaudihadacquiredwith1MDB’smoney—ataninflatedpriceof$1billion.Theideawasfor1MDBtotakeoverthoseassetsand, in return,write down the debt.Although he likely did not know the fullpicture,LeissnergotLazard,theU.S.investmentbank,totakealookatthedrillships, but it couldn’t comeupwith avaluation anywherenearhighenough tomakethisplanwork.

Instead,Yeogottoworkonaconvolutedsetoftransactionsthatwaspurefinancialtrickery.Essentially,1MDBwouldswapalargeportionofitsdebtforastake inaPetroSaudisubsidiary thatownedthedrillships,even thoughtheywere worth nothing like the $1.8 billion that 1MDB was owed. Yeo thenarrangedfor1MDBtosellthatstaketoBridgePartnersInternational,whichwascontrolledbyaHongKongfinanciernamedLoboLee.

Along-distancetriathlete,whowasmiddle-agedbutkeptfitcyclingHongKong’smountainous terrain,Leewas just anotheroneof themanysmall-timefund managers in the Caribbean, Hong Kong, Bangkok, and Singapore whocreated arcane structures for a fee, without querying the need for suchcomplexity. By remaining ignorant of the full terms, they were the cogs thatallowedthemoney-launderingmachinetokeephummingalong.

Instead of paying in cash, Bridge Partners set up a Cayman Islandsinvestment fund, effectively giving 1MDB units in the fund in return for thestake.Thefund,calledBridgeGlobal,hadonlyoneclient—1MDB—andhadn’teven registeredwithauthorities in theCayman Islands forpermission tomakeinvestments. Magically, 1MDB now claimed in its financial statements theBridgeGlobal investmentwasworth$2.3billion—aprofitof$500milliononthemoney it had lent toPetroSaudi.The1MDBfund setupanewsubsidiarycalledBrazenSky,whichopenedabankaccountwithBSItoholdtheunits.Itwasnothingbutafacade:Therewasnocashthere,onlyfundunits,supposedlytheprofitsfromsellingastakeintwoalmost-worthlessoildrillships.

On paper, however, 1MDB could claim it had made a profit, and Lowconspiredtogetitpastauditors.PressedbyaccountantsatKPMG,YeogavetheimpressiontheBridgeGlobalfundunitswerebackedbycashratherthanunitsinadubiousCaymanIslandsfund.Thefinancialengineeringhadhelpeddisguisethe truth, and KPMG carried on with its audit. But the problem hadn’t goneaway,andthefirm’saccountantswouldnotprovethateasytoconthefollowingyear.

YeomusthaveknownwhatBSIwasdoingwas ropy, and sohe setupaschemewithhisboss,KevinSwampillai,toprofithimself.The1MDBfundhadagreedtopay$4millionannuallytoBridgeGlobaland$12milliontoBSIforhelping set up the Cayman Islands arrangement. But Yeo was managing theprocessandLoboLeedidn’tknowthefulldetails,soYeopersuadedtheHongKongfundmanagertosettlefor$500,000,andYeoandSwampillaifunneledoffmillionsofdollarstotheirpersonalaccounts.

Theseeminglymassiveamountnowin1MDB’sBrazenSkyaccountatBSIworried Hanspeter Brunner, the bank’s chief executive in the region. BSI’sSingaporebranchsuddenlyappearedtohavebillionsofdollarsinnewdeposits,and Brunner feared theMonetaryAuthority of Singapore, Singapore’s centralbank,wouldwant an explanation. After a period of fast growth in its privatebankingindustry,thecity-statewasfacingpressuretodomoretoimpedemoneylaundering.

Singapore’sprivatebankingindustrywasbooming,managing$1trillioninassets, a third of Switzerland’s total, but still making it one of the largestoffshorecentersontheplanet.Thecity-statealreadyhadareputationasaplacefor corrupt Indonesians,Chinese, andMalaysians to hidemoney.Now, itwasattractingmoreEuropeanandU.S.clientstryingtoescapetheincreasedscrutinyfromWesternregulators,whowerefedupwithtaxcheats.TheFinancialActionTaskForce, theParis-basedgroupwhichsetsanti-money-launderingstandards,recently had singled Singapore out for failing to prosecute more dirty-moneycases.

SoBrunnersetupameetingwithSingapore’scentralbank,duringwhichhe gave a presentation on Brazen Sky and the bank’s other 1MDB-relatedbusiness. But he did not go into detail, instead giving a simple overview andstressingthiswasthebusinessofanofficialMalaysiangovernmentfund.

Brunner’sstewardshipofBSIwouldcosthimandimperilthebank’sveryexistence.ButLow,at least fornow,hadovercomeanothercomplication, andwas readying for the next phase of his scheme. This time, Tim Leissner of

Goldmanwouldn’tmissout.

Chapter25

GoldmanandtheSheikh(TheSecondHeist)

AbuDhabi,March2012

In early March, Tim Leissner flew into Abu Dhabi, the humid Persian Gulfemirate, for a rare meeting with one of the world’s richest people: SheikhMansourBinZayed.AsoneofnineteenchildrenofthefounderoftheUAE,thesheikh was worth an estimated $40 billion, and perhaps best known for hisownershipofManchesterCityFootballClub.Hisgrandparents’generationhadbeenbornpenniless,livingasdatefarmers,camelrearers,andpearlfishermen,butthediscoveryofoilinthelate1950shadchangedtheirfortunes.

Obtainingasit-downmeetingwithSheikhMansourwasalmostunheardof,evenfor themostheavyweight investors.Thesheikh’spowerderivednotonlyfrom his personal fortune, but also his role as chairman of the InternationalPetroleum InvestmentCompany, a $70 billion sovereign wealth fund. IPIC,financed by huge amounts of debt, recently had become a global investmentforce—ithadeventakenastakeinBarclaysBankoftheUKduringthefinancialcrisis.

WallStreetbankerswereoftenseensniffingfordealsatIPIC,whichwasintheprocessofbuildingafuturisticmodernheadquarters,aseriesofdomino-thinskyscrapers, one shorter than the next,whichwould offer panoramic viewsofAbuDhabi’smainislandandtheexpanseofthePersianGulf.ButfewhadmetSheikhMansour.

Leissnerwasamongthechosen,thankstoLow’snewfoundclosenesswithKhademAlQubaisi,anaidetotheSheikh.Inafewdays,theGoldmanbankerwould be boasting to colleagues in Asia about his unparalleled access in theMiddleEast,althoughhewascarefulnot toplayupLow’sroleinmakingthishappen.Butrightnow,heneededtogetthesheikhtoagreetoadealthatcouldchangehisfortunes.Hewasonthecuspofwinningthemega-1MDBbusiness,forwhichhehadspentyearslayingthegroundwork.

In hismeetingwith the sheikh, Leissnerwas accompanied by Low,whoalso had traveled to the emirate. After pleasantries, the group got down todiscussingtheoutlinesofthedeal.TheWallStreetbankwaspreparingtosellatotal$3.5billion inbondsfor the1MDBfundtofinance thepurchaseofcoal-firedpowerplantsinMalaysiaandoverseas.Theplanwasfor1MDBtopackagethesefacilities,aswellassomenewplants,intoonecompanyandIPOthesharesonMalaysia’sstockexchange.Thelistingcouldearn1MDBaround$5billion,asthepowerplantsputunderoneentitywouldbeworthalotmore.

The problem was that 1MDB had never issued a U.S. dollar bond tointernationalinvestors,andithadnocreditrating.So,Goldmanwassuggestingit ask IPIC—a sovereign entity with a strong credit rating—to guarantee theissue. That would put investors at ease, giving them confidence that 1MDBwould be able to repay the debt whatever the circumstances. In return for itsguarantee, IPIC would acquire the rights to buy a stake in the listed powercompanyatafavorableprice.

ThiswasLow’slatestblueprintfor1MDB,awayforthefundtoenterthepower-generation business, make some money, and, hopefully, paper overlosses.Butthereweremanyodditiesintheplan.WhywouldaMalaysianstatefund seek a guarantee from a similar fund of another country? Why didn’tMalaysia’s government just offer a sovereign guarantee for the debt? Indeed,Leissner’scolleaguesatGoldman’sMiddleEasternheadquartersinDubai,whodidregularbusinesswithIPIC,foundtheideapreposterousanddeclinedtogetinvolved. Even IPIC’s own finance director raised questions about why IPICwouldputitselfatriskoveranotherfund’sbusiness—onewithnotrackrecord,atthat—butwasoutranked.

Thesheikh,ayouthfulforty-one-year-oldwithatoothygrin,hadthefinalsayatIPIC.AfterLeissnerandLowmadetheirpresentations,SheikhMansourgave the go-ahead. The proposal for IPIC to guarantee the Malaysian fund’sbondsmayhavelookedstrange,butitwasanartificialconstruct,purelyaimedatcreatinganexcusetodivertmorethanabilliondollarsfrom1MDB.

Low had put the scheme together with Al Qubaisi, who was also themanaging director of IPIC. They had gotten to know each other on the failedClaridge’sbid,andLowhadbrokeredadeal forAabar,an IPICsubsidiary, tobuyaMalaysianbank.ThatdealhadlostmoneyforAlQubaisi,butnowLowwasabouttorepayhimmanytimesover.

AndIPIC’sguaranteewasthelinchpinoftheplan.

Withgelled-backhair and a bodybuilder’s physique, the result of twohours adaypumping iron, the forty-year-oldAlQubaisiwas a striking figure.TheAlQubaisi family hadmarried into the rulingAlNahyans a generation earlier, afamily tie that had helped his career. After working for the Abu DhabiInvestment Authority, the emirate’s most well-known and largest sovereignwealth fund, he had becomemanaging director of IPIC in 2007, but his realpowerlayasSheikhMansour’strusteddealmaker.

TherewasanotherattractiontoAlQubaisi:Hehadareputationfortakingkickbacks on deals, making him incredibly rich. Low had spent hundreds ofmillionsonparties,mansions,andtrophyinvestmentsliketheL’Ermitagehotel,not to mention secret payments to his coconspirators. Yet he craved greaterriches:Hewasn’thappywithasmatteringoflow-profiledealsinrealestate.Hewantedtobecomeagenuinemogul.TheWolfofWallStreetwasslatedtokickoff filming in the second half of 2012, andLow still didn’t have financing inplace.Heneededmorecash,andhesensedAlQubaisicoulddeliverit—-foraprice.

ThroughhisrelationshipwithSheikhMansour,AlQubaisiwasoneofthemost powerful men in the emirate. Even in the brash and showy UAE, AlQubaisi struck bankers as an unparalleled egoist, traveling with a retinue ofEgyptian security guards and embossing his initials—KAQ—on cigars, drinkcoasters,boxesoftissues,andevenhiscollectionofhigh-endcarsworthtensofmillionsofeuros,whichhekeptinastoragefacilityinGenevaandathisvillasinthesouthofFrance.

In Abu Dhabi, Al Qubaisi wore the traditional emirati cloak and headcovering,andhadafamilyhome,asprawlingvilla,wherehishiswifeandfourchildren lived. But like many rich emiratis, he conducted a different lifeoverseas. At his villa on the Cote D’Azur, with Bugattis and Ferraris parkedoutside,hepartiedwithmodels,andhehadayoungerMoroccanwifeinParis.When abroad, he traded in traditional Emirati dress for tight-fitting T-shirts,includingonewithamontageofimagesofAlPacino’sTonyMontanafromthe1983 film Scarface. Once, when an executive showed up to Al Qubaisi’smansioninFrancetodiscussbusiness,heansweredthedoorwearingaskimpyswimsuit,whilewomeninbikinislingeredinthebackground.

ThesheikhoversawIPIC,andhelikedtohavethefinalsayonmajordeals,like this burgeoning business with 1MDB. But he also delegated incrediblepowers to Al Qubaisi, who had the ability to green-light acquisitions withoutboardapproval.Witha singleexecutionofhiswide, sharpsignature,hecould

signamulti-billion-dollardealonbehalfofthefund.“Khademwas the onlyman in theworldwho you could callwith a $10

billiondealandhe’djustsay‘yay’or‘nay.’HethoughthewasGod,”saidonefinancier.

In return, Al Qubaisi ensured that Sheikh Mansour remained flush withfundstopayforalifestylethatrequiredvastexpenditures:salariesfordozensofstaff, thecostofmaintaininghouses,boats, cars, andplanesaround theglobe.IPIChadbeenfounded in1984 to invest inoil-relatedcompanies,butwithAlQubaisiatitshelm,thefundanditssubsidiary,AabarInvestments,hadengagedin a spending spree,most famously its bailout alongsideQatar ofBarclays in2008, which saved the bank from a government takeover, but also theacquisitionsofminoritystakesinDaimler-Benz,UniCredit,VirginGalactic,andothercompanies—allofthemmulti-billion-dollardeals.

The boundaries between IPIC, a state fund, and the sheikh’s personalbusiness empire were not always sharply drawn. In the case of the Barclaysacquisition,forinstance,BritishregulatorsbelievedSheikhMansourwasputtingin the money, when in fact the funds came from IPIC. Although he had notinvestedanypersonalcash,Barclaysissuedwarrantstothesheikhaspartofthedeal,allowinghimtobuysharesinthebankatalowprice.Heeventuallymademorethan$1billioninprofit—atnorisktohisownfunds.

Aabar’s books contained a tangle of transactions with companies tied toSheikhMansour,involvinglandandloansinthebillionsofdollars.Inadditiontohisday job,AlQubaisioversaw theseprivatebusinesses andhisprivilegedposition,closetotheAlNahyans,gaveAlQubaisifreereintofeatherhisownnest. Ina2009lawsuit filed in theUnitedStates, twobusinessmenclaimedAlQubaisihadaskedfor$300millioninkickbacksduringafailedbidtotakeovertheFourSeasonshotelchain.(Theplaintiffslaterwithdrewthesuit.)

Behind his brash demeanor, Al Qubaisi had a problem. Unlike ADIA,which could rely on payments from the state’s oil profits, IPIC was fueledmainly by debt.By 2012, it had $19 billion in borrowings, and only theAbuDhabi government’s 100 percent ownership ensured its debt was awardedinvestment-grade credit ratings.The fund’s image as amajor investor, in fact,waspartlyamirage.Afterthecrisis,whenAlQubaisisawanopportunitytobuystakes in big Western companies and banks, he turned to Wall Street forfinancing.

GoldmanSachs,MorganStanley, andothersmadehugeprofits arrangingderivatives financing for IPIC—just another naive emerging-market sovereign

wealth fund—helping to make up for subdued markets and economies in theWest.

ButitwasbecomingharderforAlQubaisitoraisemoneyfromWallStreet.In2011,thedefactoruleroftheUAE,SheikhMansour’sbrother,MohammedBinZayed, hadordered all debt issuances togo through a central authority toavoidarepeatoftheDubaidebtcrisis,inwhichstateentitiesoverborrowedandhad tobebailedoutby theUAEgovernment to the tuneof$20billion.Ashewas searching for newways to keep the cash flowing, Al Qubaisi came intocontact with Jho Low, who boasted he could sign multi-billion-dollar dealsinvolvingthe1MDBfund.

Like Al Qubaisi, Low was a young, unaccountable figure who, throughrelations with the truly powerful, controlled billions of dollars. Low hadbrokered Aabar’s investment in RHB, the Malaysian bank, which had lostmoney,buthislatestproposalwouldmorethanmakeupforthatdebacle.IPICagreed to guarantee the 1MDB bonds, and Goldman set about arranging theissue.

Chapter26

BilkingtheState

NewYork,March2012

AtGoldman’sglobalheadquartersat200WestStreetindowntownManhattan,aforty-four-story skyscraper on the Hudson, completed just after the financialcrisis, senior bankers were growing concerned over this business in farawayMalaysia.But theunorthodoxdealmakinghad apowerful supporter:PresidentGaryCohn.

Baldwithapointedskull,andfurrowsacrosshisbrow,thefifty-one-year-old banker was a formidable presence. He was aggressive and blunt, apersonality forged on Goldman’s trading floors, where he had launched hiscareeralongsideLloydBlankfein.Whenhisfriendrosetochiefexecutive,Cohnhad taken the number two job and had remained a loyal lieutenant, helpingdefend the company’s precrisis bet against the housing market. Now, withWesterneconomicactivitysubdued,Cohnwasspearheadingadrivetodomorebusinesswithsovereignwealthfundsinemergingmarkets.AndthatledhimtothrowhissupportbehindapotentiallylucrativelineofbusinessthatLeissnerandAndreaVellaweredevelopinginMalaysia.

Cohn had set up a special cross-divisional unit to make money fromsovereignwealthfunds—coinvestingwiththeminprivate-equitydeals,devisinghedgingstrategies,orsimplyraisingcapital.Thisbusinesslinewascolloquiallytermed“monetizingthestate”insideGoldmanandwasamajorfocusinsidethebank.CohnstartedtotravelregularlytoSoutheastAsia,wherehehadhigh-levelmeetings about coinvesting with Singapore’s powerful Temasek investmentfund.Heviewed1MDBverymuchinthisvein,althoughthefundsharedalmostnosimilaritieswithTemasek,aprofessionallyrunentity.

ThebackingofadomineeringandpowerfulpersonalitylikeCohnaffordedsignificantcovertothoseinvolvedinthe1MDBbusinessanddrownedoutthe

voicesthosewhowereuncomfortablewiththeplanstoraisebillionsofdollarsfor the fund. David Ryan, president of Goldman in Asia, was among thoseurgingcaution.Hehadvisited1MDB’sstaff inMalaysiaandcameawaywithconcerns over its plans to take on so much debt, and the inexperience of itsmanagement, none of whom seemed to have overseen multi-billion-dollarinvestmentsbefore.

The potential dealwound itsway through fiveGoldman committees thatlookatfinancialandlegalrisk.OneofthemainpointsofdebatewastheroleofJhoLow,whoseexactpositionbaffledsomeGoldmanexecutives.ThebankhadturneddownLowforaprivatebankingaccountinSwitzerland,soitcouldnotformallyenterintoamajordealthatinvolvedhim.OneGoldmanexecutive,inanemailtocolleaguesonMarch27,acknowledgedLowwasa“1MDBOperatoror intermediary inMalaysia.”But inconversationswithGoldmanstaff aroundthesametime,LeissnerdeniedLowwasinvolvedinthedeal.SuchmiddlemenwereconsideredhighlyriskyatAmericanbanksbecauseofthelikelihoodtheywerereceivingbribes,aviolationoftheForeignCorruptPracticesActthatcouldleadtoabigfine.

Yet Leissner, who had traveled with Low tomeet SheikhMansour, wasfully aware theMalaysianwas directing the show. In this period, theGermanbankerwouldtravelallovertheworldtomeetLow,whetherinKualaLumpur,HongKong,orSwitzerland.Low’splanwasfor1MDBtosellthebondsquicklyand secretively via a private placement. Typically, most companies issuingbondsprefertodosothroughapublicissuance,inwhichthebankarrangingthedeal canvasses a wide range of investors. Through this process, called bookbuilding, banks with access to a wide network of investors can reduce acompany’scostoffunds.Investorsinaprivateplacement,bycontrast—typicallybig institutions like large pension funds or hedge funds—demand higher fees.The advantage is that companies can raisemoneyquickly andwithout gettingcredit ratings from big agencies like Moody’s and Standard & Poor’s. Theprocessalsoinvolvedmuchlessscrutiny,justhowLowlikedit.

The1MDBfundhadagreedtopay$2.7billionforpowerplantsownedbyMalaysianbillionaireAnandaKrishnan’sTanjongEnergyHoldings,thefirstofaseriesofacquisitionsitplannedtomakeinthesector.Togivethedealaveneerof authenticity, Low needed an independent valuation of the plants. Leissnersteppedin,askingLazardifitcouldoblige.TheU.S.bankagreedtotakealook,but itsbankerscrunched thenumbersandcouldn’t figureoutwhy1MDBwaswilling to pay $2.7 billion for the suite of plants, which were located in

Malaysia,aswellasEgypt,Bangladesh,Pakistan,andtheUAE.The deal seemed favorable to Tanjong, especially given its power-sale

agreementwiththeMalaysianstatewouldsoonrunout,handingthegovernmentleverage toachieveabargainprice.Lazardbelieved thewholedealsmelledofpolitical corruption. Itwas common inMalaysia for the government to awardsweetheart deals to companies in return for kickbacks and political financing;thatwaswhatLazardthoughtwasgoingon,andsoitpulledout.

Withnoother choice,Leissnerorganized forGoldman instead tobecomean adviser to 1MDB on the purchase, as well as helping the fund raise thecapital.Thebankprovided avaluation range that justified1MDBpaying$2.7billionfortheplants.

Leissnerwas at hismost charming as he tried to cajolemembers of 1MDB’sboard of directors to accept Goldman’s terms for selling the bonds. SittingoppositetheGoldmanbankerinaroomatthefund’sdowntownKualaLumpuroffices, just a fewweeks after Leissner’smeeting inAbuDhabi, some of theboard members looked skeptical. Goldman was preparing to launch what itinternallydubbedProjectMagnolia,aplantosell$1.75billioninten-yearbondsfor the1MDBfund.ButsomeboardmemberswerealarmedbywhatLeissnerhad informed them:Goldmanwould likelymake$190million from itspart inthedeal,or11percentof thebond’svalue.Thiswasanoutrageoussum,evenmore thanGoldmanhadmadeon theSarawaktransaction theyearbefore,andwayabovethenormalfeeof$1millionforsuchwork.

ThebankerdefendedGoldman’sprofitbypointingout that1MDBwouldmakebigreturns inafutureIPOof thepowerassets,allwithoutputtingdownanymoneyofitsown.

“Lookatyournumber,notatournumber,”hesaidcajolingly.Working togetherwithAndreaVella, theGoldmanexecutivewhoheaded

upthedebtandstructuredfinancebusinessintheregion,Leissnerhadarrangedforarerunof theSarawakbond.Aslast time, thePFI tradingdeskwouldbuythe entire issue, using itsmassive capital, and later find investors.ThatmeantGoldman would be taking on all the risk and 1MDB would get the moneyquickly.Despite some questions, the board, filledmainlywithNajib loyalists,wasultimatelyarubberstamp,anditwasn’tgoingtomountaseriousattempttostopthisplaninitstracks.

Even at Goldman, some bankers, including David Ryan, considered thebank’s likely profit excessive. Alex Turnbull, a Hong Kong–based Goldman

bankerwhosefather,MalcolmTurnbull,would laterbecomeAustralia’sprimeminister, also raised concerns internally.Turnbullwasn’t involved in thedeal,but he knew how bond markets worked, and he sent an email to colleaguesexpressingdisbeliefaboutGoldman’sprofits.TheemailledtoareprimandfromGoldman’scompliancedepartment,whileTurnbull’sboss toldhimtokeephismouthshutifheeverwantedtogetpromoted.Heleftthebankalmosttwoyearslaterforreasonsunrelatedto1MDB.

Internally, Leissner, backed by Vella, defended the returns ascommensurate with the risk Goldman was taking by buying the entire $1.75billion in bonds. The 1MDB fundwas payingmost of its fee toGoldman bysellingthebondsatadiscount,andthebankwouldmakeitsmoneyiftheycouldfind investors willing to pay a higher price. But the face value—that is, theundiscounted price—was still high enough to yield 6 percent annually to aninvestor, a high return given the guarantee from IPIC, and an invitingpropositionatatimewhenratesinWesterneconomiesandJapanwerehoveringclose to zero. In fact, Goldman already had lined up mutual funds in SouthKorea, China, and the Philippines to buy the bonds. The sale was handledquietly,andoneGoldmanemployeewastoldtokeepallcorrespondenceaboutthebondoffemail.IfwordgotoutGoldmanalreadyhadbuyers,itsfeeswouldnotseemjustified.

There was another reason Goldman didn’t need to worry. Tanjong, thesellerofthepowerplants,haditselfagreedtosubscribetoa“significant”portionof theoffering,according to theprospectus,adocumentGoldmanbankershaddrawnuptodetailthebondforinvestors.The1MDBfundhadpaidTanjongafavorablepriceforitsassets,andnowthecompanyitselfwasgettingbondswithan attractive yield. In return, companies linked to Ananda Krishnan secretlymade donations of $170 million to 1MDB’s charity arm. Soon after, in itsfinancialaccounts,thefundwasforcedto“impair”—orwriteoff—$400millionofthevalueoftheplantsonitsbooks,anadmissionithadoverpaid.Lazardhadbeen right to mistrust the high valuation of Tanjong’s assets, but Goldmanmissedwhatwasgoingon.

Goldman’sinternalcommittees,setuptocatchfraud,hadfailedinitsjob.Those arguing in favor of the deal cited the imprimatur of Malaysia’sgovernment and the role of Prime Minister Najib in 1MDB. But there wasanother—unspoken—reason tomake thishappen.Theprofitswouldmake thisoneofGoldman’sbiggestpaydaysoftheyear.

ThestewardsofGoldman,onlya fewyearsafter themortgagemeltdown

and promises of more upright behavior, were once again failing to upholdstandards.Thewholenotionof“monetizingthestate”—incountrieswithoutruleof lawandsophisticated investors—riskedcosting taxpayers inpoorplaces forthe benefit of Wall Street. Goldman already had gotten entangled in a badsituationwith theLibyan InvestmentAuthority.Now the bank appeared to beoverchargingaclientinMalaysiawhosewillingnesstopayabovetheoddswasillogical.

A series of red flags—from the involvement of Jho Low, to the unusualdecision to obtain a guarantee from the fund of another country, to 1MDB’swillingnesstooverpayforthepowerplants—werealloverlooked.

OnMay22,2012,justadayafterGoldmanhaddepositedtheproceedsfromthe$1.75 billion bond into the bank account of 1MDB’s energy subsidiary, $576millionofthatamountflowedtotheaccountofaBritishVirginIslandscompanycalled Aabar Investments Ltd. This company was meant to look like AabarInvestmentsPJS, a subsidiary of IPIC.1MDBwould later claim, in its auditedfinancialstatements,thatthiswasapaymenttocompensatetheAbuDhabifundforitsguaranteeofthebond.

Butthiswasanimitationfirm,setuptwomonthsearlier,andthedirectorsof the look-alike Aabar were Al Qubaisi and Al Husseiny, the chairman andchief executive of the real fund. It was as if the chief executive of GeneralElectric,oranotherblue-chipAmericanfirm,hadsetupafakecompanytolooklikeGeneralElectrictoengageinoff-the-booksfraudulentbehavior,whilestillenjoyingthecoverofawell-knownname.

It was a move straight out of Jho Low’s playbook. When he was juststartingout,Lowhadsetuplook-alikecompaniestomakeitappearhehadthebackingofMiddleEastern sovereignwealth funds.This time, the stakesweremuchhigher. Itwasa ruse,devisedbyJhoLowandAlQubaisi, to takemoremoneyfrom1MDB.

Asafurtherlevelofsecurity,thepairhadarrangedforthemoneytoflowvia Switzerland-based Falcon Private Bank, which Aabar had bought fromAmericaninsuranceconglomerateAIG.AlQubaisihadsnappeditupwhenAIGwasintroubleduringthefinancialcrisisandrenameditFalconBank,aftertheGulf’s famous hunting bird. Switzerland was under pressure from the UnitedStates to clampdownonmoney laundering,butAlQubaisihadcontrolofhisown Swiss bank. Consequently, Falcon’s bankers raised no red alerts, despitehugeflowsofmoneythatwouldnormallyhavetrippedcompliancealarms.

Fivemonthslater,onthesuccessofthecoal-plantdeal,GoldmanlaunchedProject Maximus, buying another $1.75 billion in bonds to finance 1MDB’sacquisition of power plants from the Malaysian casino-and-plantationsconglomerate Genting Group. Again, the fund paid a high price, and, likeTanjong,Gentingmade payments to aNajib-linked charity. This time, $790.3milliondisappearedintothelook-alikeAabar.

DavidRyan,presidentofGoldman’sAsiaoperations,argued to lower thefeeonthesecondbond,givenhoweasyithadbeentosellthefirstround.Buthewasoverruledbyseniorexecutives,includingGaryCohn.WhileGoldmanwasworking on the deal, Ryan was effectively sidelined; the bank brought in aveteranbanker,MarkSchwartz,aproponentofthe1MDBbusiness,aschairmaninAsia,apostseniortoRyan’s.Goldmanearnedalittlelessthanthefirstdeal,charging$114million—stillanenormouswindfall.

For bringing in the business, Leissner was paid a salary and bonuses in2012ofmorethan$10million,makinghimoneofthebank’stop-remuneratedemployees.Forthreeyearsnow,thebankerhadorbitedaroundLow,hopingfora major payoff. He’d gone out of his way to help Low find bankers forvaluations,andevenvisitedhiminaSwissclinic.ButLeissnerknewbetterthantoacknowledgeLow’ssecretroleatthefund.WhatexactlytheGermanbankerknew about the fraud remains unclear. Did Leissner suspect Low was takingfrom the till? With such huge money at stake, perhaps Leissner convincedhimselfthissituationwasnormal.Weren’ttherealwaysunsavoryfixersinAsianbusinessdeals?Wasn’tAsiajustamorassofcorruptionanyway?

In October, Toby Watson, head of Goldman’s PFI desk in Asia, madepartner.ItwasagoodyearalsoforBlankfein,Goldman’sCEO,whowaspaid$21million,stillwelloffhisprecrisisrecordof$68million,in2007,butamajorpayday nonetheless. Blankfein had developed other lines of business forGoldman, delivering a $7.5 billion profit that year. But the developments inMalaysia signified a big strategicwin for the chief executive. Leissner didn’twanttoshoutfromtherooftopsaboutit, though,insteadactingasif thebondswere a secret.When a senior Goldman colleague in the region circulated theprofitsinternally,hetestilyaskedfortheinformationtobekepttight.

As the colleagueput it: “Therewasa real senseyoudidn’twant todrawattentiontothis.”

JhoLowhad executed his secondmajor heist.Unlike the first phase in 2009,withPetroSaudi as his partner, theMalaysianhad laid out this plan inminute

detail.Fouryearsearlier,Lowhadsoughttodoabigsovereign-wealthdeal,puthimselfinthemiddleofthemoneyflows,perhapsearningabrokerfee.Eventsmovedquickly,andtheconspiratorssawtheirchancetotakemoney.

This time around, Low carefully laid the groundwork. Instead of anunknownSaudicompanyasapartner,hehadropedinIPIC,oneofthelargestsovereign wealth funds on the planet. Al Qubaisi was an infinitely morepowerful figure than Prince Turki, a layabout seventh son of the Saudi king.Back in 2009, Low’s excuses about the money flows varied, as if he weremaking themupon the fly.TheMalaysian also took a huge risk, sending thecashtoaSeychellescompanyhehadsetup.Thistime,LowandAlQubaisitookmuchgreaterprecautions, sendingcash to a company that looked like anAbuDhabisovereignwealthfundandwascontrolledbyAlQubaisi.

Knowntoonlyahandfulofinsidersatthetime,themoneyfannedoutfromthelook-alikeAabartoasmallsetofbeneficiariesconnectedtothedeal.Intotal$1.4billionwasdiverted.HerewasthecapitalneededtomakeTheWolfofWallStreet, topayoffMalaysianvoters,andtofinanceever-more-exuberantpartiesandgambling.

AlQubaisiwasrewardedhandsomelyforhisrole.Soonafter1MDBraiseditssecondbondandfundsflowedtothelook-alikeAabar,astreamofmoney—eventuallytotalingmorethan$400million—movedtoanaccountcontrolledbyAl Qubaisi’s company, Vasco Investment Services, at Edmond de RothschildbankinLuxembourg.Fromhere,AlQubaisiwouldbuymansionsintheUnitedStates, on both coasts, but he also was careful to ensure his patron, SheikhMansour,wastakencareof.

AstheGoldmanbondscametogether,engineersfromtheshipbuildingfirmLürssen inBremen,Germany,wereputting the final touches toTopaz,SheikhMansour’s482-footyacht,whichcostmorethan$500millionandwasaslargeasafloatinghotel,withtwohelicopterpadsandeightdecks.AlQubaisihandledthe financing for the Topaz, raising a large loan from Deutsche Bank thatrequiredpaymentsof6.4millioneurosamonth—aconsiderableoutlay.Oneofthe first payments Al Qubaisi made from Vasco, after receiving money from1MDB,wasa6.4millioneurotransfertoDeutscheBank—aninstallmentontheTopaz loan.He’d laterpaya totalof$166millionof thepaymentswith fundsfromVasco.

InlateApril,asGoldmanprepared1MDB’sfirstbondissue,someonehundredthousandanticorruptionprotesterspouredoutintothestreetsofKualaLumpur.

From the sky, the city center was awash in yellow—the color of thedemonstrator’sT-shirts.Forsome time,angeramongregularmiddle-class folk—teachers, office workers, lawyers, students—about everyday corruption hadbeenrising.

The demonstrators brandished antigraft signboards; some called forelectoral reform. Others held up caricatures of Rosmah, who had become thesymbolofPrimeMinisterNajib’skleptocraticregime.Howhadshepaidforherjewels? peoplewanted to know.As the swell of protesters tried tomake theirway to IndependenceSquare, a grassy area at theheart of the city, riot policeblocked their way. Late in the afternoon, as the marchers pushed forward,securityforcesmetthemwithteargasandwatercannons.

Suddenly, a police officer drove a vehicle into a group of demonstrators,injuring two people. The crowd reacted violenty, dragging the officer out andturning the car upside down, before smashing in its windows. Scores ofprotesterswereinjured,someseverely,overthenextfewhours.Thebattlelineshadbeendrawnforelections,duethefollowingyear.

Theprotesters knewnothingofwhatLowhad carriedout at 1MDB.Butcorruption inMalaysia already was eating away at the nation’s social fabric,from vote buying byUMNO, the ruling party, at election time to the regularbackhanded payments by businesses to win government contracts. Whilemiddle-class Malaysians dealt with stagnating wages, Malaysia’s elite wasaccruinggreaterwealth,anditwasfuelingdiscontent.

In 2006, a group of opposition politicians, lawyers, and anticorruptionactivists had started a movement called “Bersih”—the Malay word meant“clean”—seeking reforms to ensure fair elections. In 2007 and 2011 Bersihprotesters,wearingtrademarkyellowT-shirts,hadtakentothestreets,clashingwithpolice.Butnothinghadchanged,andtheBersihorganizershadcalledthisprotest as a last-ditch attempt to ensure clean elections,whichwere due to beheldinmid-2013.

They hoped this demonstation, the largest democratic protest in theMalaysia’shistory,would force thegovernement to listen. Instead, it ended inrancoranddivision.

Yetitwassomuchworsethanthepublicknew.Lowhadtakengrafttonewlevels, riskingMalaysia’s financialstability.The1MDBfund’sdebtstoodatawhopping $7 billion, and it had few assets to show for the huge borrowings.Mostofthemoneyhadbeendiverted,andthefundhadcrashedtoa$30millionnetlossinitslatestfinancialyear.Butmostofthesedetailswerekeptsecret.It

wasevenhardtogetacopyofthefund’sfinancialreport.PrimeMinisterNajibhadenvisioned1MDBasawaytocreatejobs,andas

aslushfundtobuildhispopularitywithallMalaysians.Instead,ithadbecomeacesspitofgraft.Withhispopularitysinking,NajibsoonwoulddoubledownonhisbetonLow,backingthe1MDBfund’spushtotakeonevenmoredebtinabidtowintheupcomingelections.Hisactionswouldsend1MDBevendeeperintoadeathspiral.

Lowhoped theplanned IPOof1MDB’spowerassetswould stabilize thefund, and hide the growing thefts—a risky strategy, to say the least. But theMalaysiandidn’tdwellmuchonthefuture.Thiswasonlygovernmentmoney,afterall,andhestillhadtheconfidenceofNajib,whohadthepowertowriteoffdebt.

From another perspective, Low had replenished his stock of capital andnowhadthefirepowertopushaheadwithconstructingaHollywoodempire.Hewasonthecuspofenteringthemostrecklessperiodofhisyounglife.

PARTIII

EMPIRE

Chapter27

MakingBustaHisBitch

AboardtheSerene,FrenchRiviera,July2012

Asthehelicopterapproachedthelandingpad,nestledinthebowofthe440-footsuperyacht Serene, Jho Low was in high spirits. He was about to fly off toMonaco with an entourage of women for a shopping excursion to settle hisnerves, before coming back to host hismost significant party to date.He hadreason to celebrate: The thirty-year-old’s new company, a Hong Kong outfitcalledJynwelCapital,hadjustacquiredastakeinEMIMusicPublishing,whosehit-making writers included Kanye West, Beyoncé, Usher, Alicia Keys, andPharrell Williams. On top of the EMI acquisition, Red Granite, the filmcompany started by Low, Riz Aziz, and Joey McFarland, was set to beginfilmingworkonTheWolfofWallStreet.Low,whohadoncebeenrejectedforapersonalbankaccountatGoldmaninSwitzerland,couldnowlayclaimtobeinganentertainmentmogul,andhewantedtomakeasplash.

TheSerene,with fifteenguest cabins anddozenof crewmembers,was afloatingpleasurepalace,whosecenterpiecewasahugewhirlpoolbathandbaronthetopdeck.Featuresincludedasauna,apartiallycoveredswimmingpool,alounge with a grand piano, and a twisting marble staircase connecting themultiplelevelsoftheboat.Whenanchored,decksonhydraulicarmsopenedoutoverthewater,permittinggueststodinealfresco.

Lowrequiredthemostsumptuousbackdropforthenight’sparty,andNoahTepperbergandJasonStrausswereonhandasalwaystooblige.TheownersoftheMarqueenightclubhadtakencareofthedetails.The$330millionyacht,theninthlargestintheworldwhenitwascompletedin2011,belongedtoRussianbillionaireYuriShefler,whosebusinessesincludedStolivodka.TepperbergandStrauss also flew outmodels from theUnited States, the glamorous nightclubhostswhomLowdemandedateveryparty.DannyAbeckaser,theclubpromoter

and actor, brought along a group that included Leonardo DiCaprio, who waspreparingtostartfilmingTheWolfofWallStreetthefollowingmonth.DiCapriowasknownasamethodactor,said to inhabithischaracters’mindsevenwhenoffset.Theactor’shard-partyingwayshadbeena tabloidfixture foryears,sopresumablyitwasnotdifficultforhimtochannelJordanBelfortashepreparedforhisnextbigrole.AndwithJhoLowpayingfortheexcesses,ashehaddoneforyearsnow,lifeandartbegantofuse,evenbeforethefilmingbegan.

WhileLowandhisentourageshoppedinMonaco,TepperbergandStraussensuredeverythingwasinplace.Workerswereputtingthefinishingtouchestoastageontheboatforthenight’sperformances.Theguestlist includedsomeofthe world’s best-known pop stars—Kanye West, Rihanna, Chris Brown,Ludacris—aswellasactorsandmembersofMiddleEasternroyalfamilies.

The$2.2billionacquisitionofEMI,finalizedamonthearlier,wasledbySonyMusic Holdings, the Estate ofMichael Jackson and U.S. private equity giantBlackstoneGroup.Low’sJynwelCapitalhadinvestedalongsideMubadala,theAbuDhabifundrunbyKhaldoonAlMubarak.Hisshare,justover$100million,wasbyfarhismostlegitimate-lookingdealtodate.LowhadsetupJynwelwithhis brother, Szen, and told financiers it was his “family office,” investing hisgrandfather’sbillions.HispartnersintheEMIdealhadfallenforit.

Low’sshare,intruth,wasfinancedbythe1MDBbondsthatGoldmanhadsoldforthefund.Tohidetheoriginofthemoney,Lowusedanoldtrick,gettinghisassociateFatErictosetupanoffshoreshellcompanycalledBlackstoneAsiaRealEstatePartners.Thisfirmwasdesignedtolooklikeabonafidesubsidiaryof theBlackstoneGroupbutwascontrolledbyTan,whoworkedforLow.Onofficial documents, itwould appear thatTanowned scoresof shell companiesandassets,permittingLowtokeephisinvolvementsecret.

BynowLowhadsiphonedoffmore than$1billionof the1MDBmoneygenerated by the bonds sold by by Goldman Sachs. With the help of IPICmanaging directorKhademAlQubaisi, Low had secured control of the cash,whichwassittinginashellcompanythatlookedlikeasubsidiaryofIPIC.ThemoneywassupposedlytocompensateIPICforguaranteeing1MDB’sbonds,butitwasnowLow’stodowithashepleased.LookingforawaytofundhisEMIstake,Lowarrangedforhundredsofmillionsofdollars tomove toaStandardCharteredbankaccountofthelook-alikeBlackstone.Tohideitstraces,muchofthemoney flowed throughAmicorp-administered funds in Curaçao. From themoneyinthefakeBlackstoneaccount,LowfinancedJynwel’sstakeinEMI,as

well as paying off Al Qubaisi, Jasmine Loo, the 1MDB legal counsel, andothers.

Soon after, Low became nonexecutive chairman, Asia, for EMI MusicPublishing and joined the firm’s advisory board. In an instant, the position atEMIgavehimseriouscredentialsinthemusicindustry,elevatinghimfromthestatusofasimplerichpartyboyandgambler.Thiswashisbigplay.Amediaempire would generate profits to paymoney back to 1MDB. In the first twostagesoftheheist,Lowhadsimplytakenabout$3billion—andspentwildly.

Now,hewasaimingtobuildarealbusiness,withactualprofits.Lowhadstarted Red Granite in 2010, but The Wolf of Wall Street would put theproductioncompanyon themap.Thefilm,coupledwith theEMIdeal,would,Low hoped, put to rest some of the questions that dogged him regarding hisbusinessinterestsandthesourceofhiswealth.

AsLowarrivedbackon theboatwithhis shoppingbags, theatmospherewasbuzzing.Lowwasworriedthegossipcolumnists,outinforcearoundSaint-Tropezinthesummer,wouldcatchwindofwhatwasgoingon.

“Noah—need tomanage press carefully,” hewrote toTepperberg. “Sonyboss sentmeanemail andknowabt all theperformances!Haha. I hopepressdoesn’tknowyet.”

ThestarsbegantoarriveontheSerene.KateUpton,theAmericanmodel,made a dramatic entrance on a helicopter. Amid a shower of sparklers, LowpresentedherwithHermèsBirkinbagsworthtensofthousandsofdollars.Lowtold friends he craved to be around beautifulwomen, especiallymodels, as ifthey validated his importance. In an intimate settng, he remained a reservedcharcter,oftenatalossofwhattosay—hewasnotevenespeciallycharming—buthereveledinbeingthecenteroffemaleattention.

Buttherewasamorepracticalelementtotheshowmanship.Aswellasthestars,anumberofMiddleEasternroyals,includingaDubaiprince,hadcomeonboardfortheparty.Theseroyalshadallthemoneyintheworld,buteventheycould not access the kind of crowd Low could muster—and the Malaysianunderstood that this was his edge. By delivering Hollywood to them, he wasgainingprestige for himselfwith thesepowerfulMiddleEastern figures—and,hehoped,openingthedoortofuturedeals.

PunctuatedbyKanyeWest’sperformance, theparty rageduntildeep intothemorning.TherapstarwastherewithKimKardashian,hisgirlfriend,whoseeverymovewasnotedbythepresscorps.Somegossipcolumnistsdidgetwindoftheparty,focusingonthepresenceofWestandKardashian,aswellasthatof

ChrisBrownandRihanna,whospenthoursinconversationthateveningdespitehis physical abuse of her three years earlier. Some newspapers evenwronglyreported that Brown had rented the Serene. Low stayed out of the press. Hecould no longer afford the scrutiny of his dealings that press coveragewouldentail.Nomatter:EverythingaboutthepartywasmeanttoindicatethatLowhadarrived.Hecouldbecontentwiththesecretlifeofapowerfulbillionaire.

Asthepartyratcheteddown,mostoftherevelerslefttheboat,butacoupleofdozen,includingLow,hisbrother,Szen,DiCaprio,thenightclubowners,andthe“bottlegirls”stayedon.At6a.m.,asthepartyfinallyfizzled,thesuperyachtpulled anchor and began to sail toward Portofino, the exclusive resort on theItalianislandofSardinia.

Whilehewaspayingfortheirservices,Lowhadalwaysbeenpolitewithmovieandmusicstars,butnowthepowerbalancebegan toshift. InApril2013, lessthanayearaftertheEMIdeal,LowwashangingoutinJungleCityStudios,inManhattan’sChelseaneighborhood,aplacewhereJay-Z,Rihanna,NickiMinaj,andcountlessotherstarshadcuttracks.Lowwastheretorecordhisownsongforfun,hisversionofthesoulfulballad“VoidofaLegend.”

ThesonghadbeenwrittenbyAntonietteCosta,asingerwhorecentlyhadbegun to date Joey McFarland. Low loved singing but had a tuneless, high-pitchedvoice,andittookeighthours,andjudicioususeofAuto-Tune,forCosta,workingwithastudioproducer,togetanacceptableversioninthecan.

AsLowsang,friends,includingMcFarlandandSwizzBeatz,cameinandoutoftherecordingbooth.ItwaswellintotheeveningwhenBustaRhymesandPharrellWilliams,longtimeclientsofJungleCity,droppedbythestudiowhereLowwasnowrelaxing,alittleinebriated.

“Yo!”Lowcalledout toBustaRhymes, ecstatic to seehim. “I ownyou.You’remybitch!”

Thecomment,meanttobetakenlightly—ajokeyreferencetoLow’sEMIpurchase—wentoverlikealeadballoon.BustaRhymes,athicksetrapper,actor,andrecordproducer,lookedputoutbutstifledanyremark,whilePharrelltriedto cover up the embarrassment with small talk. Lowwas trying to act like amogul,buthewasawkward,animposterwhoforallhismoneydidn’tquitefitthebill.

Chapter28

AlltheWealthintheWorld

NewYork,August2012

OnaSaturdayinlateAugust,JoeyMcFarlandwassittinginhisproducer’schairinManhattan’s financial district. The neighborhood, quiet on a Saturday, hadbeentakenoverbytheproductionofTheWolfofWallStreet.MartinScorsesewas directing a scenewith LeonardoDiCaprio, as JordanBelfort, andCristinMilioti, playing the roleofBelfort’s firstwife.Sitting ablock from the actualWallStreet, itwashard forMcFarland to fathomhowhegot there.Less thanthree years after meeting Low in Whistler, and with basically zero filmexperience,herehewasproducingamoviewiththebiggestdirectorandactorontheplanet.

Ofallthepeoplesweptintohisorbit,JhoLowhelpedchangeMcFarland’ssituationmore than anyone’s.At forty years old,McFarland had gone from aminortalentbookertoatop-flightfilmproducer.McFarlandandhisRedGranitepartnerRizaAziz,thestepsonofMalaysianPrimeMinisterNajibRazak,hadnotundertakenanyapprenticeshipinfilmmaking—andhadreleasedonlyonefilm,Friends with Kids—but they were now rubbing shoulders with professionalswhohad served for decades in the industry.ForScorsese andDiCaprio, theseinterloperswereagodsend;notonlydid theycontrolseemingly limitlesscash,but they also permitted the pair boundless artistic freedom. When ScorsesewantedtocrasharealwhiteLamborghiniintheopeningscenesofthemovie—aneventfromJordanBelfort’slife—hewasabletogetRedGranitetofootthebill, even though most producers would have insisted on a replica for suchpurposes. As the money men, McFarland and Aziz’s presence on set wastolerated.

Back in Los Angeles, McFarland lived in a one-bedroom place inWestHollywood.Embarrassedbysuchamodestabode,heavoidedinvitinghismovie

starfriendsover.NowMcFarlandwasresidingintheTimeWarnerpenthouseinNewYorkwithJhoLow.Moreover,McFarlandhadestablishedhimselfas theMalaysian’s closest friend. The pair became inseparable, traveling to the spatogether, to Las Vegas to gamble, and on ski trips in the United States andEurope.

McFarlandbegantorewritehislifestory,airbrushingouthistalentbookingpast. Hung up about his lack of experience,McFarland told interviewers thathe’dbeeninandoutofthefilmworldforyearsand,priortothat,hadworkedinprivateequity.HemadenomentionoftheGyrosrestaurantinCincinnati.Film-industryprofessionals,includingthoseworkingforRedGranite,consideredhimaparvenu.

Depsite his humble origins, McFarland had become the face of RedGranite. Riza was shy, and was not in the officemuch, preferring to play orwatchtennis,whiletheAmericanenjoyedthelimelight.Lowstayedofftheset,worried about attracting press coverage. After earlier telling Red GraniteemployeesthatLowwasthefinancier,McFarlandnowtooktosayingthemoneycamefromtheMiddleEast.

Lowhadtakenpainstoensurethisfictionmightstanduptosomescrutiny.RedGraniteCapital, a companyownedbyRizaAziz,had receivedmore than$200million from the bonds arranged byGoldman. Thismoney had initiallymovedintoashellcompanycontrolledbyAlQubaisiofIPICandhisemployee,MohamedAlHusseiny.As filmingbegan,AlHusseinybegan to hang aroundtheRedGranite offices and attend screenings, as if he represented themoneybehind the production. The money received by Red Granite Capital went tofinance The Wolf of Wall Street, as well as to pay for Riza’s acquisition ofproperties inLosAngeles,NewYork,andLondonfromLow—thebulkof thehomesLowhadacquiredtwoyearsearlier.Inpublic,theRedGraniteexecutiveswere coy about financing. McFarland refused to tell a reporter from theHollywood Reporter about funding, while Riza vaguely explained thatmoneycamefrominvestorsintheMiddleEastandAsia.

Although he kept his name out of the press and avoided the set, LowcontinuedtodeepenhisrelationshipwithDiCaprioasfilmingprogressed.Atonepointduringproduction,theMalaysianspentmorethanaweekattheVenetianinLasVegas,accompaniedattimesbyDiCaprio,Riza,andMcFarland.Hetoldfriends he liked the quietness of the gambling floor, where cell phones areprohibited,as itallowedhim toescape.Thepaid-forgamblingexcursionsalsohelpedreelintheactor.

TheRedGraniteexecutiveswerehopingforalong-runningcollaboration.In the fall of 2012, McFarland had dinner at Le Bernardin, a top Frenchrestaurant inManhattan,withDiCaprioandSouthKoreandirectorParkChan-wook todiscussanotherpossible filmproject.Low,Riza, andMcFarlandalsobegan to mimic aspects of DiCaprio’s lifestyle. An avid collector of movieposters,theactorintroducedRizatoRalphDeLuca,aNewJersey–baseddealerinfilmmemorabilia,andtheRedGraniteprincipalsbegantousemoneytakenfromthe1MDBfundstoacquiremillionsofdollarsinmemorabiliafromhim.InOctober 2012, Riza paid DeLuca the staggering sum of $1.2 million for anoriginalfilmposterforFritzLang’s1927silentfilmMetropolis,whichhehunginhisprivateofficeatRedGranite.

McFarlandwantedtogoonebetter.“Whatisthegreatestposterin[the]worldthatisobtainable?”McFarlandaskedDeLucainanemail.Overthenexteighteenmonths,McFarlandandAzizwouldarrangetobuymorethanseventyitemsfromDeLucaatacostofover$4million,plasteringthewallsof theRedGraniteoffices andRiza’sParkLaurel condominium inNewYorkwith posters. McFarland sent DeLuca and Riza lists of posters he wanted tocollect.

“I havedecided—Ihave to own these. Its [sic] amust.Not tomention a1000others…Can’tsleep—obsessing,”hewrote.

“Hahahanowyoufeelmypain!!Mwahahahaha—$$$$,”Rizareplied.“I’mobsessingoverposters…wearesuchneuroticobsessivecreatures…

WEHAVETOOWNTHEMALL,”McFarlandretorted.AsDiCaprio got closer to Low andMcFarland, the friends evenwent to

view mansions together. On September 20, 2012, the actor forwarded aconfidentiality agreement from his broker at Sotheby’s to McFarland. Theagreement gave the signer the right to viewa property situatedon658NimesRoadinBel-Airthatwasonthemarketforastaggering$150million.TheownerwasaSaudisheikh.Notwantingthepublicity,LowusedMcFarlandasafront,andtheAmericansignedastheprospectivebuyer.

LowandMcFarlandtouredtheproperty,oneofthemostexpensiveintheUnitedStates, comprisingmultiplehouses clusteredarounda centraldrivewayon40,000squarefeetofland,withmorethantwenty-eightbedroomsandmorethan thirty bathrooms, in addition to an infinity pool with views over LosAngeles,agym,aspa,andacinema.

Despite almost three years of incessant acquisitions, Lowwas not sated.He’doffloadedhisHollywoodmansiontoRizaAzizandnowwaslookingfora

palacefit forabillionaire.LikeWilliamRandolphHearst,whosecastleatSanSimeon in California remains a symbol of the excess of the early twentiethcentury,Lowyearnedforthemostopulentpropertyconceivable.

In theend,Lowdidnotmake theacquisition.Hebid$80million for theproperty, but the Saudi sheikh rejected the offer. There were some things—althoughnotmany—thatevenLowcouldnotafford.

OnNovember 17, 2012, Low andRiza entered theMonkeyBar in theHotelElysée in midtown Manhattan, an establishment with red-leather sofas andbooths that created an old-vibe Hollywood feel. The place, owned byVanityFaireditorGraydonCarter,waspopularwithmidtownlawyersandbankers,aswellasmovieandmediatypes.Asglassesofchampagnewerehandedaround,the Red Granite principals mingled with Hollywood A-listers, from DiCaprioandDanielDayLewistoHarveyKeitelandStevenSpielberg.

Theguestshadassembled forMartinScorsese,whowas turning seventy.HewasdeepinthefilmingofTheWolfofWallStreet,whichhadbeenpushedoff schedule by Hurricane Sandy in late October. He’d been told only a fewclose friendswereattendinghisbirthdaycelebration,but therewere some120people in the bar,which had been rented out for the evening.The celebrationincludedamontageofblooperclipsfromScorsesemovies,afour-coursemeal,andachampagnetoasttothedirector.

Asabirthdaygift,LowhadsentScorseseaPolish-languageversionofthemovieposter forCabaret. In an old-fashioned typewritten note, Scorsese laterthanked Low “for the amazing gifts!” The “very rare” Polish-language poster“mademy70thallthemorespecial.”

This period was the high-water mark of Low’s influence in Hollywood.Only two weeks earlier, Low had hosted his own birthday party, the circus-themed extravaganza that would go down in Las Vegas lore as the mostexpensiveprivatepartyeverheld (thedetailsofwhichopened thisbook).TheeveningfeaturedanindoorFerriswheel,circusperformers,andawho’swhoofHollywood—nottomentionBritneySpearsemergingfromafakebirthdaycake.All of Low’s contacts attended, not just the stars likeDiCaprio, but alsoTimLeissner,AlHusseiny,andotherLowbusinessassociates.Almosteveryonewhohadplayed a role in facilitatingLow’s triumphwas onhand to celebratewithhim. Low arranged for every aspect of the event to be paid from the 1MDBbonds,and theamountswere staggering.Foranevening’swork,SwizzBeatz,Low’sproducer friend andhusbandofAliciaKeys, received$800,000 froma

shellcompanyfundedfromthestolenmoney.ThiswaspeakJhoLow.ThefilmingofTheWolfofWallStreetwasnearly

over,hewasattheheightofhispowers,andthecelebrationsweresofrequenttheypracticallyblurredtogether.AfewdaysaftertheVegasparty,Low,Aziz,andMcFarlandpresentedDiCapriowithanunforgettablepresentforhisthirty-eighthbirthdayonNovember11.TherewasbuzzaroundTheWolfofWallStreet—DiCaprio had been delivering some electrifying scenes, and photos wereleakingonline.TheproducerstalkedaboutthepossibilityofhimfinallywinninganOscar.

Asagift,theymanagedtosecureMarlonBrando’sbestactorstatuettefromthe1954filmOntheWaterfront—anodtoDiCapriothathewasoverdueforonehimself.Yearsearlier,thestatuettehadgonemissingfromBrando’sHollywoodhome, anddespite anAcademybylaw that prohibits the sale ofOscars, it hadendedupwithDeLuca,whocharged$600,000forit.DiCapriowasintriguedbyBrando,whoseprogressivepolitics ledhim to reject anotherOscar in 1973 inprotestatthedepictionofNativeAmericansinfilm.DiCaprio,too,hadbecomepolitically outspoken, campaigning for the land rights of indigenous people inNorthAmerica over corporate interests, and drawing attention to how climatechangewasendangeringtheirwayoflife.

Over Christmas that year, McFarland had a hamper of caviar fromPetrossian, a favorite of Scorsese’s, sent to the director and his wife’s townhouseon theUpperEastSideofManhattan, andhe spent$2,245of companymoneyonabottleofCristalRosechampagneforScorseseat theWolfofWallStreet wrap party held at Marquee, the New York nightclub owned byTepperberg and Strauss of the Strategic Group. Despite the producer’s lavishgift,whenScorcesepassedMcFarlandinthelobbyoftheTimeWarnerbuilding,thedirectordidn’tseemtorecognizehimdespiteallthosedaysspentonset.Ashedidforallhisfilms,Scorsesesentkeychainstoeveryoneashiswrapgift.

Whatever themen’s personal dynamic, even before filmingwas finished,RizaandMcFarlandwereattendingreadingswithScorseseforTheIrishman,afilmprojectinvolvingRobertDeNirothatwasnextonthedirector’sslate,andRed Granite was attempting to line up DiCaprio to headline a remake ofPapillon,the1970sSteveMcQueenhitmovie.

Still,afterthisseasonofcelebration,asfilmingwrappeduptowardtheendofDecember,LowandDiCapriohadn’thadtheirfillofpartying.TheMalaysianhadonemoretreatforthecastandotherfriends.

A Boeing 747-400 can hold around six hundred passengers, but the VIP-configured model Low had chartered, with plush reclining seats, was a morespaciousalternativeforthefortyorsopeoplewhoboardedinLosAngelesattheendofDecember.AtlasAir rented thesekindsofplanes toprofessional sportsteamsorSaudiprinces.Thecostofcharteringsuchanaircraftwasinthetensofthousands of dollars—per hour. The guests included Jamie Foxx, KevinConnolly, Jonah Hill, Leonardo DiCaprio, and a handful of models. On theplane,LowandMcFarlandwereasinseparableasever.

ThegroupwasheadingtoSydney,Australia,wheretheyspentacoupleofdayspartyingonyachts,gambling,andeating.Ononeyacht,DiCaprio,ablackbaseball cap turned backward, took a shot atDJing,while Foxx, dressed in abuttoned-up white shirt and black jacket, danced. Beautiful women in shortblack dresses milled around the dance floor. One rich Thai friend of Low’s,ChavayosRattakul,postedapictureonhisInstagramofgamblingchipsontheflooroftheStar,acasinooverlookingSydney’sDarlingharbor.“Agoodwaytowaste a million dollar,” he wrote in the caption. In the casino complex aMarqueenightclubrecentlyhadopened,ownedbyTepperbergandStrauss.Forthegroup’sNewYear’sEvecelebrationintheclub,Lowhadorderedicebathstobe filledwith scoresofbottlesofCristal champagne. “Showtime!!!!!!!!!!!!”SwizzBeatzwroteonInstagram.

Afterthestrokeofmidnight,thegroupgotbackontheBoeing747-400forafifteen-hourflight toLasVegas.Aftercrossing the internationaldatelineandbeing picked up by stretch limousines, the partygoers made for LAVO, anightclubalsoco-ownedbyTepperbergandStrauss—readyforyetanotherNewYear’scountdown.Perhapsinanefforttosustainthegroupforafewmorehoursofpartying,LoworderedbucketsofKFCchicken.Dressed ina red shirtwithblack pants and sports sneakers, Low at one point took a swig of champagnedirect from the bottle. Someone put on a fake panda head. As midnightapproached for the second time that day, models danced on the bar, holdingchampagnebottleslitwithsparklers.

TheKFCwaspopular,butnobodyreallydrankthechampagne,preferringtosprayitaroundtheroom,asiftheyhadfinallyhadtheirfillafteryears.“OnlyJLcanmanagethisfordoublecountdowns2013,”Chavayosboasted.

JamieFoxx,whobynowhadknownLowforthreeyears,wasnostrangertooutrageousparties.He’dbeenthereforLow’sbirthdayinLasVegasonlytwomonthsearlier.Butevenhewasexcitedbytheself-gratificationofthepastfewdays. He told British talk show host Jonathan Ross about the party, but like

almosteveryonewhoknewLowwell,hekepttheMalaysian’snameoutofthestory,sensinghedidn’tneedthepublicity.

“Igotafriend,youknowhegotsomemoney,andheflewme,LeonardoDiCaprio,JonahHillandsomeothercats,andweflewtoAustraliaright.AndwedidthecountdowninAustralia,thenjumpedbackonaplaneandthendidthecountdowninVegas.That’scrazy!Thatwasnuts!”

Chapter29

MystiqueoftheOrient

Singapore,November2012

Low’sfocusonpartyingmighthavemadehimappearcarefree,buthisattitudebeliedturmoilbehindthescenes.JustdaysafterhisbirthdayextravaganzainLasVegas,JhoLowfacedaroadblock.Hewastryingtosend$110millionfromhisBSIaccountinSingaporetoatrusthecontrolledatanotherbank,RothschildinZurich,tofinancethepurchaseofamansiononOrioleDriveintheBirdStreetsareaoftheHollywoodHills.AftertheSaudisheikhrejectedLow’sofferfortheNimesproperty,Lowhadagreedtopay$39millionforaMexican-stylehome,doublethepreviousrecordforahouseintheHollywoodHills,atrendyenclavenear Red Granite’s Sunset Strip offices and close to DiCaprio’s house. Lowplanned to spendmillionsmore to tear down the older home and construct awhite-themedmodernisticmansion,witheighteenthousandsquarefeetoflivingspace,twoswimmingpools,andago-carttrackinthebasement.

Butcomplianceexecutivesat theSwissbankBSI—finally—werecausingproblems. Before the intended transfer, Low’s BSI account had received themoneyfromGoodStar,hisSeychellescompany,beforehesentittohisfather,Larry, who then routed it back to Low, all within the same day. Aswith hispurchase of the Time Warner penthouse, the purpose of these circuitoustransactions was to make Rothschild bankers believe Low had received themoney fromhis father.By then putting it into a trust atRothschild,LowwasattemptingtomakeitappearasiftheBirdStreetsmansionwaspartoftheLowfamily’sestate,heldintrustforfuturegenerations.Hedidthesamewithmanyassets.

BSI’s compliancedepartment could seebehind the scenes. In an email, abankerchargedwithrootingoutfraudatBSIwrotetoYakYewCheeandotherseniormanagersthatthefreneticmovementofcash—fromGoodStar, toLow,

to his father, and back to Low—was “nebulous to say the least and notacceptable inCompliance’sview.”Finally, the familywealth storywas facingsomescrutiny.

Lowwasdeterminedtofindawayaroundthecomplianceofficers,whoseconcernshadbeenrelayedtohimbyYak.Inthepredawnhoursofthenight,hebegantotypefuriously.InanemailtoBSImanagement,LowexplainedthatthemoneyhewantedtotransfertoSwitzerlandoriginallyhadbeenagifthesenttohis father.Themoney,Lowexplained,wasamarkof respect tohis elders—acornerstone of Confucianism. “When good wealth creation is generated, as amatterofcultural respectandgoodfortune thatarisesfromrespect,wealwaysgive our parents the proceeds. This is part of our custom and culture.” In theemail, Low explained that, per custom, it was up to the elders in question todecidewhattodowiththegift.

“In this case, my father receives it as a token of gesture, respect andappreciation and decides to give it back to me for me to then subsequentlyprovideaportionforthebenefitofmyfamilytrust.”

He then chided the Swiss bankers for their cultural naïveté: “I hope thisclarifies as this is culturally sensitive and it would be taboo and bad luckotherwiseandourfamilyisveryparticularaboutrespectoftheelderlyandbeingappreciativetofamily.”

ThisbastardizedpictureofChinesecultureinnowayadequatelyexplainedtheneedforsuchshadytransfers.ButLowhadanothercardtoplay—heknewBSI had become dependent on his business and, faced with the prospect oflosingit,wouldgotolengthstokeepthemoneyflowing.“IhopeIdonotneedto keep explaining the samematter over and over again as our time is betterspent generatingwealth so that theAUM [AssetsUnderManagement] inBSIBank can be increased as opposed to providing answers for questions whichhave already been provided for previously. I fully understand and respect therequirement of compliance, but one should not be over burdening yourcustomers[especially]whentheyhavebeenaddressedinthepast.”At2.10a.m.onNovember7,Lowclickedsend,firingofftheemailtoanumberoftopBSImanagersinSingapore.

Ordinary folk often get questioned by their banks for small transfers ofmoney.Butbillionairesarenotordinary.Bythispoint,LowalreadywasbyfarthebiggestclientthatBSIhadanywhereintheworld,andhewasmakingalotofpeopleinthebankricherthantheyevercouldhavehoped.Hewasreferredtoas“BigBoss”inthebank’sSingaporeoffices,andseniorBSIexecutiveswould

joinhim forparties inLasVegasandonyachts.Thebank’s seniorexecutiveswoulddoalltheycouldtokeepLow’sbusiness.

Within days of Low’s email, BSI’s top executives approved the $110-million transfer. “Intra family transfers are not always going to be logical,” aseniorBSIbankerwroteinresponsetothecomplianceofficer’sconcerns.

Days later, though, bankers at Rothschild, where the money ended up,wanted more details about the origins of so much money. Low realized theywouldnotbeaseasy tohoodwinkasBSI, and so,onNovember20,hewroteYakrequestinghesenda letter toaseniorRothschildbankervouchingfor thesourceoffunds.Lowhimselfdrewuptheletter,whichstressedBSIhadknownthe Low family for years and had “extensive compliance procedures.” Thecontents made it appear the money came from Larry Low, even though theoriginalsourceoffundswasGoodStarand1MDB.

Bythistime,YakwasentirelyinLow’spocket.Hehadbeguntoletotherclientsdrop,andspent90percentofhistimeonLow’saccount,followinghimaround theworld on private jets and attending his yacht parties.MarriedwithchildreninSingapore,hebegantokeepamistressinChina.AsYakseeminglybecameaddictedtothemoneyandjet-setlifestyle,Lowwasabletogethimtodoalmost anythingheasked.Alarmed,a female subordinateofYak’sadvisedhimtoensurepropercomplianceproceduresweremet.

“Ifyouguysaresoscared, thendon’tbeprivatebankers.Privatebankersmusttakesomerisks.Ifnot,gobackandbreast-feedyourchildren,”heretortedangrily.

Yak secretly signed and sent the letter to Rothschild on BSI’s officialletterhead,withoutgettingapprovalfromhismanagersandlegaldepartment,asdictatedbythebank’scomplianceprocedures.TheletterassuagedanyconcernsRothschild’sbankershadharbored.Low,itappeared,wassucceedinginblottingoutthepastand,withYak’shelp,embellishingthestorythathehadgrownupwith billions. But Yak had stepped over the gray line that in private bankingdivides themerely unseemly from the illegal. Itwas amisstep forwhichYakwouldpay,andasignoftherisksLowwasrunning.

Asthefearofdetectionconsumedhim,Low’sattemptsatsubterfugecouldappearalmostcomical.HesetupaGmailaccountunderthenameofEricTan,his associate known as “Fat Eric,” and began to use it, trying to hide hisinvolvement in deals. When he wanted to open an account with the Aabar-controlled Falcon Bank, Low used the “Eric Tan” Gmail to set up anappointment with a Swiss banker in Kuala Lumpur. The banker, the head of

Falcon’sSingaporeoffice, flewtoKualaLumpur tomeetTan,butwaspickedupatnightfromthelobbyofhishotelbyLow.TheMalaysiantookthebankertoaresidence,whereherevealedhistrueidentity,butaskedhimtocontinuetorefer tohimasEricTan inpublicandemailexchanges.Lowbegan touse the“Eric Tan” Gmail address for most correspondence, and many of the shellcompanies and bank accounts from this point on—likeBlackstone—would beopenedbytherealEricTan,whohungaroundmainlyfor thepartyingandthepayoffs,likelyunawareoftheriskshewastakingonLow’sbehalf.

WhatwasLowthinking?LikeYak,heseemedtohavecrossedanotherline.Beyond shady transfers and misrepresentation of business deals, he had nowtakentoconductingbusinessbehindafalsenameandevenmisrepresentinghisidentityinperson.Low’sbehaviormightseemlikeevidenceofdesperation,buthe had proven himself a survivor. He’d overcome the early challenges to hisschemefrom1MDBboardmembers,andthefightingwithPetroSaudi,aswellas questions from auditors and the media attention on his partying. He wasacquiringcompanies,financingfilms,andbuildingontheimageofasuccessfulbusinessman.Buttherewasneveranyrest;justgettingthemoneymovingwasaconstant battle. And now he had another debt to pay: He had to get Najibreelected.

Chapter30

“681AmericanPies”(TheThirdHeist)

Penang,Malaysia,April2013

On a sweltering day in Georgetown, the capital of Penang, an island off thenorthwestcoastofMalaysia,onlookers in thehistoricdistrictwouldhavebeentreatedtoacurioussight.BackhometohelpcampaignforMalaysia’supcomingnational elections, Jho Lowwas building up a sweat peddling Busta Rhymesaround in a rickshaw. In another rickshaw, a friendwas taking care of SwizzBeatz.Dressedinbaggycargopantsanddesertboots,withagoldchain,BustaRhymes took in the attractions of Low’s hometown, including the EdwardianBaroque arcades of the early twentieth-centuryCityHall, before heading to alocalcanteenwithhisentouragefora lunchofPenangkway teownoodlesandsodas—thekindofdown-to-earthfoodLowliked.Bythetimehegottolunch,the Malaysian was tired and his blue “1Malaysia” polo shirt was covered indampsweatpatches.

Thenextday,BustaRhymesperformedinconcert,alongsideSwizzBeatzandRedfooofthemusicduoLMFAO,atalocalChinese-languageschool.Thecrowdofeightythousandpeople,allwearingfree1malaysiaT-shirts,hadgottentheticketstotheshowforanominaldonation.Lowhadorganizedandfinancedthe concert, occuring just two weeks before Malaysia’s general election. Itwasn’t a coincidence. The “1Malaysia” concept was Najib’s banner initiativemeanttoattractMalaysiansofallethnicities.

“Therewerenopoliticalspeeches,”Lowlamelytoldatelevisioninterview.“There was obviously the push by both the organizers and some of theentertainers,ofcourse,forunity,peace,andprosperity.”

Thesewerethelast-gaspeffortsbyLowtoswingtheelectionsinPenang,astatewhichhad turned to theopposition in thepreviouspollsandwasaprimefocusofNajib’scampaigning.Towinbackthestatewouldbetheultimatecoupfortheprime,inister.Lowmadearrangementsforlocalrestaurants,festoonedin

1malaysia banners, to hand out free food for weeks. The 1Malaysia PenangWelfareClub,setupbyLow,paidforSouthKoreanpopstarPsy,whosesong“GangnamStyle”was a surprise global hit, to give another concert. The clubalso took over a ballroom and gave out checks for hundreds of thousands ofdollarseachtolocalcharities.The1MDBfund,meanwhile,spent$400millionbuyinguplandinPenang,andvowedtobuildtenthousandaffordablehomes.

Butdespitethehugeexpenditures,NajibremainedstubbornyunpopularinPenang.AtthePsyconcert,PrimeMinisterNajibwentonstageasawarm-up,askingtheconcertgoerswhethertheywerereadyfortheSouthKoreansinger.

“Yes,”theyscreamedback.Thenheaskedwhetherthecrowdwasreadyforhiscoalitiontotakebackpowerinthestate.

“No,”theyroared.Low’sgambithadbackfired.Theprimeministerwaspanicking, andhewasmaking a fool of himself.

Anwar Ibrahim, the former deputy primeministerwho had just been releasedfrom jail after serving several years in prison for sodomy,was on the rise.Agifted speaker,Anwarwas leading a coalition of opposition parties, and pollsshowedhemightwintheelectiononMay5.Najibwasdesperatenottogodownin the history books as the first UMNO leader to be cast from office, so heturnedtoLowformoney.

Forover threeyears,Najibandhiswife,Rosmah,gaveLowcover torun1MDB,without askingquestions.Hiswife enjoyedher jewelry andmansions,and her stepson had become a movie mogul. Now Najib demanded his owngusher of cash to avoid catastrophe. Low knew he have to deliver money toNajib,but theproblemwasthatmuchof itwastiedupinotherendeavors.Ontop of that, Anwar in February had published his election manifesto. Onecampaign pledge was particularly distressing to Low. The opposition leaderwantedtoknowthepurposeof1MDB,whichhadlittletoshowfor$7billionindebt.Ifelected,Anwarpromised,hewouldclosedownthefund.

To ensure that didn’t happen, Low set about raising even more money.Oncemore,hereliedonGoldmanSachs.

TheWorldEconomicForum,heldeachyearintheSwissskivillageofDavos,isamicrocosmofelitenetworksthatspantheglobe,attractingworldleaders,WallStreet titans, and chief executives of Fortune 500 companies. The events, inwhich panels of experts debate high-minded topics like radical Islam or the“democraticdeficit” in frontofaudiences, isonly thepublic faceofDavos. In

roomsopenonlytothechosenfewwithspecialwhiteVIPpasses—thehighestinacolor-gradedhierarchy—therealdealmakingoccurs.

In late January,Michael Evans, a Goldman vice chairman in NewYorkoverseeing“growthmarkets,”hadanimportantpersontoseeonthesidelinesofDavos: the prime minister of Malaysia. Evans’s meeting was with PrimeMinisterNajib,brokeredbyTimLeissner—just thekindofmeetingbetweenaWall Street banker and a world leader that was typical at the meeting in theSwissAlps.InpublicappearancesatDavos,Najibwasinhiselement,deepeningtheimpressionofMalaysiaasabeaconofdemocracyintheIslamicworld,andhimselfasanurbanetechnocrat.

“Wehavetotakecareoftheyoungpeople,wehavetogivethemjobs,”hetoldFareedZakariaofCNNduringaninterviewonthesidelinesofDavos.

Buthere,withEvansandLeissner,Najibhadastrikinglydifferentagenda.Afterpleasantrieswiththetwobankers,NajibbroughtuptheroleGoldmanhadplayedsellingbondsfor1MDBin2012,andaskedifthebankwaswillingtodoso again, getting themoney to the fund quickly and quietly, just like before.Goldman’s top management, advised by Leissner, had been expecting more1MDBbusiness.ButNajib’sdemand,lessthanthreemonthssincethefundlasttappedthemarketforalmost$1.75billion,wasalmosttoogoodtobetrue.

Theprimeministersaidthefundwantedtoraiseafurther$3billion.SuchastaggeringsumwouldmeananothermajorpaydayforGoldman.

Toexplaintheneedforspeed,Najibsaidhehadanopportunitytopartnerwith Aabar, the Abu Dhabi fund, to build a new financial center in KualaLumpur,tobenamedtheTunRazakExchange,afterNajib’sfather.Thehope,hesaid,wastomakeKualaLumpuroneoftheforemostbankingcentersinAsia.TheAbuDhabi fundwas toput inanother$3billion, theprimeministerwenton.

Ofcourse,Goldmanwouldbemorethanwillingtohelpout,Evansreplied.Normally,WallStreetbankssendinbankersarmedwithproposals—documentslayingoutstructuring,yields,potentialinvestors—buthereGoldmanappearedtohavewon themandate through a casual conversation.WhenDavid Ryan, thebank’sAsiapresident,heardaboutthis,hewassuspicious.Butagain,GaryCohnandMarkSchwartz, thenewAsiachairmanaboveRyan,weresupportive.ThewheelsofProjectCatalyzeweresetinmotion.

In March, Tim Leissner was late for a dinner at a Chinese restaurant inSingapore’s IONOrchard, a futuristic shopping center that looked as if it had

beendesignedbyanunderstudyofFrankGehry.Asheentered,Leissnersawtheotherguests sataroundacircularbanquet table.Thegroup includedYakYewChee of BSI and compliance executives from the Swiss bank. Leissner wasannoyedtobethereandtoldtheparticipantshecouldnotstayforlong.Thiswasnotanofficialgathering,andLeissnerrealizedheshouldnothavecome.

Lowhadputtheattendeestogetherinanattempttoovercomeanobstacle.Goldmanwasreadytobuytheentire$3billionbondfrom1MDB,buttherewasahiccup.ThefundwantedtodepositthemoneyinaSwissbankaccountatBSI.The Swiss bank’s own compliance department wanted to know why. EvenGoldman’slawyeronthedeal,aSingapore-basedemployeeofLinklatersnamedKevinWong, pointed out in an email that itwas unusual to use such a smallprivatebankfora$3billiondeposit.

Leissner was there to smooth things over with BSI compliance, but heseemed nervous. After some general talk about the bond, the German bankerexcusedhimselfandleft.BSI’sseniormanagement,includingYak,nonethelessusedhispresenceatthemeeting,andtheinvolvementofGoldman,toovercomethecompliancedepartment’sconcerns.ThiswasaseniorrepresentativeofWallStreet’sbest-knownbank,afterall.

In the end,Goldman shrugged offWong’s concerns. Itwasn’t as thoughBSIwasonanyblacklistformoneylaundering.Inapresentationfor1MDBandAabar,Goldmansetforthwhatitunderstooditsclient’skeyobjectivestobeinthe deal making. They included “maintenance of confidentiality duringexecution”and“speed.”Inotherwords,thiswastobeafastandsecretdeal—althoughnooneat1MDBeverbothered toexplainwhy theseconditionswerenecessary.Indeed,Goldman’sprospectusforthebondevenstressedtowould-beinvestors that the 1MDB-Aabar joint venture company didn’t even yet have awell-definedbusinessplan.

By now, Goldman had established a track record for this kind oftransaction,andonMarch19,theHongKongPFIdesk,aswiththeearliertwoissuances,bought the$3billionbond in itsentirety.This time,PrimeMinisterNajib,whoalsoheadedtheFinanceMinistry,signeda letterofsupportfor thebond,meaningMalaysia’sgovernmentpromisedtorepaythedebt in theeventofadefault.For the firm’swork,Goldmanmade just shortof$300million infees.Intotal,overjusttwelvemonths,thebankhadearnednearly$600millionfromsellingthreebondsforthe1MDBfund—twohundredtimesthetypicalfee.Thisamountofprofitwastooimplausibletogounnoticed.

AsGoldmanwasfinalizingthebondinMarch2013,JhoLowsentaBlackBerrymessagetoJoannaYu,anemployeeatAmBankinKualaLumpur,warningher“681 American pies” would soon be arriving from overseas into an accountknownas“AMPRIVATEBANKING—MR.”Theaccount,beneficiallyownedbyNajibRazak,wasasecretwhoseexistencewasknownonlytoLowandafewkey executives inAmBank, aMalaysianbank.LoworderedYu to informhercolleaguesthat“PM”didnotwanthisname,address,oridentitycardnumbertoappear on the transaction. Low knew his actions at this juncture, so close toelections,involvedaheightenedlevelofrisk.

Accesstotheaccount“shldberestrictedntrackedsoifsomeonetookpicnaccessthea/cwewillknow,”Lowwrote.

Theworst outcome, he added,wasMalaysia’s opposition getting hold ofthis information and leaking it. To hide the impact of a transaction this large,LowandYudiscussedwaystobreakitupintotranchessotolessentheimpactontheringgit,Malaysia’scurrency.

Onlydayslater,Goldmandepositedtheproceedsfromthe$3billionbondwith BSI, and $1.2 billion immediately was purloined, moving through theCuraçao funds into a British Virgin Islands company. The shell firm, TanoreFinanceCorporation,wascontrolledbyFatEric.Then,intwoseparatetransfers,$681millionmoved from Tanore to the primeminister’s secret account. Thecorrespondent bank for both wires wasWells Fargo, which Low used, alongwith J.P. Morgan, for most of his large transactions involving U.S. dollars.Seeminglyunperturbedbythelackofabeneficialowner’snameonsuchalargetransfer—aglaringredflag—WellsFargolet it through, justa tinydropin thepooloftrillionsofdollarsthatU.S.correspondentbanksprocesseveryday.

Lowhad set up theAmBank account forNajib in 2011with the help ofCheahTekKuang,thebank’schiefexecutive.LowhadgottentoknowCheah,whowasinhissixties,afterhereturnedfromWharton,almostadecadeearlier.He had borrowed fromAmBank to financeWynton’s early deals.WhenLowexplainedtheneedtosetupasecretaccountforNajib,Cheahhadbeenwillingto oblige, drawn in by Low’s promises of business opportunities, including achancetoadviseon1MDB’splanstoIPOitspowerassets.

Thefollowingyear,Lowhadarrangedfor$170millionfromtheGoldman-preparedpower-plantbonds to fillNajib’saccount.Toavoidquestions,CheahandLowhad seen to it the accountwasmarkedasoneused for internalbanktransfers,meaning itwould not be visible to compliance staff. TheAustralianandNewZealandBankingGroup, knownasANZ,owned aminority stake in

AmBank, giving it the right to appoint executives and board members. ButANZ’smanagement had no idea about this secret account’s existence. JoannaYu, a middle-level executive, was tasked with taking instructions from Lowabout incomingwires andoutgoing checks.Najib hadusedmost of the initialinfusion to pay off crony politicians, as well as on jewelry and a $56,000expenseatSignatureExoticCars, ahigh-endcardealership inKualaLumpur.Now,aheadoftheelections,theaccountwasabouttobecomealotmoreactive.

With such a largemovement of cash, Lowwanted a “friendly” bank onboth sidesof the transfer.Tobe safe,TanoreFinanceopenedanaccountwithSwiss-based Falcon Bank, which was owned by Aabar and controlled by AlHusseiny,Low’sassociate.Healsodrewupfakeloanagreementsthatpurportedto show the $681 million was a loan from Tanore to the “AMPRIVATEBANKING—MR” account,which the loan documents falselymade out to beownedby a companyunder theFinanceMinistry, not the primeminister.ButLow’sriskymaneuversandslapdashcreationofsupportingdocumentation,wasgettingdifficultforeventhemostpliablebankertopermit.

At Falcon’s headquarters in Zurich, Eduardo Leemann, the bank’s chiefexecutive,couldn’tbelievetheamateurishnessoftheloandocuments.AlthoughLowwastryingtobecareful,hewasalsorushing,andhefoundithardtostayon top of all his varied schemes. On March 25, the day of the second wiretransfer, Leemann patched Al Husseiny into a conference call to discuss theworryingtransaction.

Inhisfifties,LeemannwasaSwissnationalandformerheadofGoldmanSachs’s private-banking business. He had joined Falcon in the 1990swhen itwas still calledAIGPrivateBank.Leemannwasno stranger tohuge flowsofdubiousmoney,butwhatLowwas trying todo risked landinghim in trouble,andhewasscared.

“Mohammed, therestof thedocumentation,whichourfriendinMalaysiahasdelivered is absolutely ridiculous,betweenyouandme…This is…gonnageteverybodyintrouble,”Leemannsaid,hisvoiceshakingwithemotion.“Thisis done not professionally, unprepared, amateurish at best. The documentationthey’resendingmeisajoke,betweenyouandme,Mohammed,it’sajoke!Thisis something, how can you send hundreds of millions of dollars withdocumentation,youknow,ninemillionhere,twentymillionthere,nosignatureson the bill, it’s kind of cut and paste… Imean it’s ridiculous!…You’re nowtalking to Jho, and tell him, look, you either, within the next, you know, sixhoursproducedocumentation,whichmycompliancepeoplecanlivewith,orwe

haveahugeproblem.”Falcon’s chief executivenext calledLowhimself to convey themessage:

“Thedocumentationwhichwehavereceived,Jho,it’sajoke.Itisnotgood,”hesaid. Leemann was particularly worried that other banks, especially U.S.correspondentbanks,wouldraisearedflagoverthetransfer,alertingauthoritiesthat somethingwas not right.He said Falcon had hired an outside counsel tolookatthetransferfromalegalperspective.“Ifanyotherbankjustmake‘peep!’andthisgetsreported…wearegonnahaveahugeproblem.”

Lowmovedquickly,tappingAlHusseinytofindasolution.Hewashavingtorelymoreandmoreonhishigh-placedfriendsinbankslikeBSIandFalcontokeep the money moving, threatening to make this scheme unmanageable. Bynowhewas dealingwith toomany flows to keep it all straight in his head—money to the primeminister, to his business deals, formansions, parties, andmore.

JasmineLoo,hisfriendand1MDBchiefcounsel,noticedhewasputtingonmoreweight,asuresignofstresswithLow,andhehimselfnotedtoothershewashavingproblemssleepingatnight.Butheplowedon,toodeeptostop.Anddespite Leemann’s concern, Falcon Bank processed the money after AlHusseiny,thebank’schairman,vouchedforthelegitimacyofthetransfer.

Armedwithdirty1MDBcash,theprimeministerhadapowerfulweapontowinthe2013election.Asthevoteapproached,Lowmanagedtheaccount,divertinghundredsofmillionsofdollarstotheprimeminister’salliesacrossthecountry.HebarragedJoannaYuwithBlackBerrymessages,orderinghertomovechunksof money from Najib’s account to ruling-party politicians. Frustrated withhaving to arrange hundreds of checks, she started to refer to Low as “Fats”behindhisback.Someofthemoneymovedtopoliticiansviatheprivateaccountof Nazir Razak, another of the prime minister’s brothers and head of CIMBbank. The deluge of cash was an enormous advantage for Najib over anoppositionwithoutaccesstothatkindoffinancialbacking.

OnElectionDay,May5,Najib averteddisaster, clinging topower in theelectionswiththemostslenderofmargins.Lowhaddeliveredyetagain,andtheprime minister was grateful. But it was a Pyrrhic victory. Not only did thegovernment’scoalitionfailtowinbackPenang,italsolostthepopularnationalvote.NajibremainedinpoweronlybecauseofelectoralrulesthatreservemoreparliamentaryseatsforMalay-dominatedruralareas.Sophisticatedurbanvoters,manyofthemChinese-Malaysians,hadturnedoutindrovesfortheopposition,

sickofthemoneypolitics.AnwarIbrahimclaimedelectionfraud,butthesystemwasskewedagainsthim.

Low’spatronwasstill inpower.But therewasanewproblemonthehorizon.WithNajib still inoffice,Lowwas able to avoid a full dissectionof1MDB’sbusiness by a hostile new government. But the unbridled spending on theelections, and Goldman’s outlandish profits, were starting to attract attentionfromjournalists.TheEdge,Malaysia’sweeklyEnglish-languagenewspaper,hadraised questions about 1MDB’s investments in PetroSaudi, including theunexplained, abrupt resignation in December 2009 of its chairman. But theEdge’sjournalistshadfailedbackthentouncoversolidevidenceofwrongdoing,andhadturnedtootherstories.

Now, the paper’s owner, Tong Kooi Ong, the multimillionaire who hadmade enemies due to his closenesswith opposition candidateAnwar Ibrahim,orderedafreshreportingeffort.Overthesummer, theEdgepublished itsmostdetailed investigation yet on 1MDB. In a two-thousand-word story, the paperlaid out how 1MDB had raised over $10 billion but invested only in powerplants. It gave a skeptical account of how the fund claimed its $1.8 billioninvestment in PetroSaudi had miraculously been turned into a deposit in aCaymanIslandsfundworth$2.3billion.ThepiecenotedLow’srole insettingup1MDB’spredecessorfund,butmadenoothermentionofhim.

International journalists also had started to hear about Goldman’s hugeprofits,mainlyfromotherinvestmentbankersinSoutheastAsia,manyofwhomweregettingheatfromtheirbossesinLondonandNewYorkforlosingoutonthe business of the century. Even Gary Cohn, Goldman’s president, boastedaboutthefeesduringmeetingswithjournalistsinNewYork.

Around theelections, theWallStreetJournal publisheda storyunder theheadlinegoldmanseespayoffinmalaysiabet,inwhichreportersAlexFrangosandMattWirzdetailedhowGoldmanhadmade$200millionraisingbondsforSarawak’sgovernmentand1MDB.Theamountwas,infact,threetimeshigher,but the story broke into the open the highly unusual Goldman windfall. AGoldmanspokesmandefendeditsrole,sayingclientssoughtoutthebankforitsability to “deliver complex financing solutions” not available on “publicmarkets.”

Then, in August, a business weekly called Focus Malaysia published acover story titled “JustWho Is JhoLow?” ItmentionedLow’s influencewithAbuDhabifundsandraisedquestionsabouthisdeals,includingthepurchaseof

EMI,suggestinghisfundsmighthaveoriginatedwith1MDB,althoughthepieceoffered no proof.Thosewhoworked at the fund did all they could to put themediaoff track. “The roleof JhoLowas far as 1MDB is concerned is zero,”ShahrolHalmi,thechiefexecutive,wasquotedbyFocusMalaysiaassaying.

Reporterswerenippingaroundtheedges.WasLowalarmed?Farfromit.The latest $3 billion hadn’t gone only to Najib and politicians. Hundreds ofmillions of dollars flowed to Low, and he went out to celebrate his patron’selectionvictorybyamassinganartcollectionfitforaHollywoodbillionaire.

Chapter31

ArtNoOneCanSee

NewYork,May2013

Lowwas tinglingwithnerves,hisheartbeating fast asheclutchedhisphone.“Thirty-sevenpointfive,”hebreathed.

AttheotherendwasLoïcGouzer,aSwissspecialistincontemporaryartatChristie’s, the 250-year-oldBritish auction house.Gouzerwas standing at theedge of the auction hall at Christie’s New York headquarters, a grand, high-ceilinged roomatRockefellerPlaza.Betweenhimand theauctioneer, affluentcollectors and onlookers, who had come for this sale of postwar andcontemporaryart,satintightrowsofseats,watchingthebiddingunfold.

Gouzer signaled to the auctioneer a bid of $37.5million. The auctioneerchuckled.

“Willitworkthistime?”hesaid.Low had just upped his offer by a million dollars, more than previous

incrementsof$500,000—what’sknownintheauctiontradeasa“jumpbid,”oranattempttoscareoffyourrival.

Onethesidewalloftheauctionroom,hungtheworkthatwasthetargetofthe bidding war:Dustheads by Jean-Michel Basquiat. A 1982masterpiece oftwofigureswithwideeyes,evokingAfricantribalmasks,constructedincolorfulred and greens with acrylics, oil sticks, spray enamel, and metallic paint oncanvas, the nearly seven-feet-high piece was among Basquiat’s most sought-afterpieces.The formerBrooklyngraffitiartisthaddiedaged twenty-seven in1988, limiting the supply of his work. Prices for Basquiats had been steadilyclimbing.

Another anonymous bidder on the phone went up by $500,000; Low’saggressivejumpbidhadfailedtoseetherivaloff.Theamountskeptrising—$38million, $38.5, $40, $41.5, $42, $42.5—as the bidders matched each other.

Takingabreath,Lowlaunchedanother jumpbid—$43.5million—andGouzersigned to the auctioneer. Therewas a pause.No response on the other phoneline.

“Itworked. I think,” theauctioneersaid.“Soldfor$43.5million,”andhebroughtdownhisgavelwithathud.

Withthebuyer’spremium—acommissionchargebyChristie’s—thepricetagcameto$48.8million,arecordforaBasquiatpainting.

The private room at Christie’s, from where Low was bidding, erupted.LeonardoDiCaprio,SwizzBeatz,JoeyMcFarland,andotherscongratulatedtheMalaysianforclinchingthebiddingwar.

OnlytendaysaftertheMalaysianelections,LowmarkedNajib’svictorybypurchasing one of the world’smost expensive paintings. It was amoment ofvictoryandsupremehubris.HehadarrangedafterthevotetoopenanaccountatChristie’s in the name of Tanore, the shell companywhich by this point hadreceived$1.2billionfromthelatestGoldmanbond.Andhewassetonbuildingaworld-classartcollection.

NooneexceptLowknewhowmuchhehadtakenoverthepastfouryears,andeven he was stretched to stay on top of it: more than $1.5 billion from thePetroSaudi phase in 2009; $1.4 billion from the first two Goldman bonds in2012;andnowover$1.2billionmore.On topof this,over$1billion in loansfromthepensionfundforMalaysia’scivilservantstoa1MDBunitcalledSRCInternationalhadgonemissing.Morethan$5billioninfunds,oneofthelargest-ever financial frauds, and it wasn’t over yet. More than a billion had beenfritteredaway,morethanabillionwentintopropertyandbusinesses,andmorethanabillionwasusedtopayofftheprimeministerandotherconspirators.

Toresolvethiscrazedtheft,LowwageredanIPOof1MDB’spowerplantswould bring in billions of dollars. Yet he never spent long cogitating theendgame.BernieMadoffbethecouldalwaysfindnewinvestorsinhispyramidscheme,whichranmorethanfourdecades.ButMadoff’sfraud,likemanyotherexamples before, collapsed when he could no longer lure new dupes, whosemoneyheneededtopay“profits”tootherinvestors.

Lowbelievedgovernment fundswere limitlessandhecould justkeeponspending. State leaders were able, unlike individuals, to forgive their ownadministration’s debt; Low had promised Patrick Mahony, the director ofinvestments for PetroSaudi, that Najib would eventually agree to write offhundreds of millions of dollars. When corrupt organizations take over a

country’s apparatus, whether in Russia, China, orMalaysia, its members feelemboldened.Theyarenotcommoncriminalsbutanelite,shieldedbyprivilegefromthenormalreachesofjustice.

Prime Minister Najib’s father, himself a leader, but of another era, hadenvisioned Malaysia as a proud democracy. The success of Low’s schemehighlightedjusthowfar thenationhadstrayedfromthatdream.Thecountry’sbestmindsincreasinglywereleaving,preferringalifeinNewYorkorLondonoverthestrugglesinMalaysia.ItwasthekindofbraindrainthathadstuntedthegrowthofnationsfromIndiatoIndonesia,whosemostambitiouscitizensgaveupontheirtroubledhomelandandsoughtabetterlifeelsewhere.

Westernfinancialinstitutions,fromGoldmantoauditorsandprivatebanks,hadhelpedLowgetawaywithit,impoverishingMalaysia.AsLowamassedhisartcollection,hepaidnoheed to the60percentofMalaysianhouseholdswholivedonlessthan$1,600amonth.The1MDBfundhadamassed$10billionindebt,whichwouldweigh on future generations. PrimeMinisterNajib boastedthe country would attain developed-world living standards by 2020. But thestewards of the country, as they enriched themselves, were failing to achievethis.Withnational incomeof$10,000perperson,a fifthof theUnitedStates’level,Malaysiawasstuckinthemiddle-incometrap,nolongerpoorbutnotyetrich.Inanearlierera,Japan,SouthKorea,Singapore,andTaiwanhadreacheddeveloped-world status. Now, rampant corruption was condemning Malaysia,but alsoBrazil,Russia, and a number of other nations, tomediocrity.But theelite—andthoseservingthem—continuedtothrive.

Lowdidn’tscoopuponlytheBasquiatthatevening.Healsoboughttwoworksby Alexander Calder for over $8 million. It was a record-breaking night forChristie’s,with$495million in sales, the largest haul in auctionhistory.Thatyear,globalartmarketsalestopped47billioneuros,ajumpof150percentfromadecadeearlier,according to theEuropeanFineArtFoundation.Thegrowingcostoffineart,likethatofrealestateontheUpperEastSideofManhattanorinLondon’sKnightsbridge,waspartlydue to the innateworthof thepaintingorthe residence, coupledwith limited supply.But itwas also a reflection of theamountofdirtymoneyinthemarket,andthatnightatChristie’swasaglaringexampleoftheproblem,eveniftheauctionhousewasnotawareofit.

Lowcravedarttoboosthisculturalprestige—sohecouldtellSwizzBeatz,alsoanavidcollector,abouthislatestBasquiat.Buthedidnotdisplaytheworksorappreciatethem.Arthadanadvantageoverotherassets:Itwashardtotrace

andcouldbeturnedintocashinaninstant.Lowneededsomewheresecret—andsafe—tohousehisnewcollection.

InGeneva,sevenlow-slung,white-coloredwarehousessitjustsouthofthecitycenter.Thisisnottheoldtown,whereprivatebankslikePictetandJuliusBaerhave offices overlooking the lake, but an industrial estate a short drive away.The warehouses look just like any nondescript building, with storage vansparked outside, and to a passerby they could be a depot for amajor logisticscompany, except the complex is secured more tightly than any normalwarehouse, with iris scanners on the doors. This is the Geneva Freeport, awarehousefortheüberelitetostashtheirpossessions—goldbars,bottlesofrarewine,and,mostrecently,art.

Freeportshavealonghistoryinglobalcommerceasaplacefortraderstotemporarily deposit commodities or other goodswithout incurring local taxes.Authoritieswerewillingtoforgotherevenuesifitledtomoreeconomicactivityand investment.TheGenevaFreeport,majority-ownedby the stateofGeneva,startedoutinthenineteenthcenturyasatax-freewaypointforgrain,timber,andothercommodities.Overtime,wealthyindividualsbegantousetheFreeporttomove gold or other possessions into or out of Switzerland, and, eventually,depositedgoodsthereforlongerperiodsoftime.Withoutlegallimitsonstorageperiods,therichcouldusetheFreeporttokeeptheirpossessionsindefinitelyoutofthehandsoftaxauthoritiesbackhome.

By 2013, Switzerland’s Finance Ministry estimated the value of goodsinsidecametomorethan100billionSwissfrancs,including1.2millionpiecesofartand3millionbottlesoffinewine.Ifopenedtothepublic,thewarehouseswouldhavebeenthefinestmuseumanywhere,withmoreworksthantheLouvreorthePrado.Notonlyweretheretaxbenefits,butthiswasadiscreetplace,andauthoritiesaskednoquestionsabouttheprovenanceoftheitemsinside.Itwasamoney launderer’s paradise. Perhaps Low learned about the Geneva FreeportfromAlQubaisi,whohadcarsthere, includingaBugattiVeyronandaPaganiHuayra.

Intheearlyphaseofhisscheme,Lowconcentratedonmansionsandhotels,aswellasgamblingandparties.IntheUnitedStates,propertyagentsdidn’thavetodeclare thenamesofbuyerswhousedcash,andLowhadbeenable tohidebehind a wall of shell companies. But there was still the physical property,whichwasimmovableintimesofcrisis,andLowwasbesetbyanaggingworrysomeone would find out he owned the Time Warner penthouse or the Bird

Streetsmansion inWestHollywood.Recently,U.S. real estate news sites hadreportedonRizaAziz’spurchaseof theParkLaurelbutmistakenlynamedthesellersasRothschildbankersinvolvedinthetransaction,andLowhadkepthisname out of themedia.He also had bought companies likeEMI andViceroyHotels; he’d even acquired a British lingerie brand called Myla—apparentlyRosmah’sfavorite—withproceedsfromthe2013bond.Again,thesewereassetsthatcouldnotbeeasilyliquidated.

Even Swiss private banks weren’t the redoubt of secrecy they once hadbeen. In2013, theU.S. JusticeDepartment launchedaprogram thatpermittedSwiss banks to avoid criminal prosecution if they agreed to come clean aboutabettingU.S.citizenstoevadetax.Lowcouldsenseitwasgettinghardertousebanks; even BSI, which soon would start cooperating with the JusticeDepartmentoveritsU.S.clients,hadstartedtoqueryhistransfers,anditwouldbedifficult torelyanymoreonFalcon’sLeemann.As thefocuson1MDBgotmoreintense,Lowwaslookingfortheperfectmovableanduntraceableasset.

Theartmarketfitthebill.TheFinancialActionTaskForceviewedtheartworld,muchlikethejewelrytrade,asoneofthelastgreat,unregulatedfinancialmarkets in the world. Its dealers, from small-time auctioneers in New York,HongKong,orGenevatoglobalbehemothslikeSotheby’sandChristie’s,wereunder no legal obligation to disclose the identity of their customers, and eventhey sometimes didn’t know the beneficial owner behind anonymous shellcompaniesthatboughtMonetsorRothkos.WhileSwissbanksecrecyhadbeeneroded, the Geneva Freeport did not have to list its clients. A Swiss artwarehouse owner called Yves Bouvier, who was involved in the GenevaFreeport,in2010openedasimilarfortressfortherichinSingapore,nearChangiairport.TheNewYorkTimesdubbedtheseentrepôtthe“CaymanIslandsoftheartworld.”

Occasionallytherewasachinkinthearmorofsecrecy,likein2013,whenSwiss customs officers on a routine inspection of the Geneva Freeportimpounded nine artifacts looted from Libya, Syria, andYemen, ranging fromRoman-era bas-reliefs toGreek statues.But forLow, the artworld, and thesedepotsshroudedinsecrecy,offeredasanctuary.

Low andMcFarland often attended auctions in New York, renting skyboxes,secludedroomsoverlookingthemainauctionfloorfromwheretheycouldwatchunobserved and make telephone bids in anonymity. Low’s group had areputationasparvenusatsnobbishChristie’s,whichwasfoundedinLondonin

the1700s,andwhoseemployeeslookeddownonthenouveaurichesevenastheauctionhouse took theirmoney.McFarland sometimesbid forTanore, andheacquiredaMarkRydenfor$714,000andanEdRuschafor$367,000.Christie’sexecutives saw Low and Tanore as interchangeable and believed the youngMalaysianwasbuildingacorporatecollection.ButLowattemptedtodissociatehimself from these acquisitions—at least on paper—by using Fat Eric andMcFarland.Foroneauction,LowusedtheEricTanGmailaccounttoreserveaskyboxatChristie’sfortwelveguests.

“Itbetter looklikeCaesarPalace[sic] in there,”oneemployeewrote toacolleague about the skybox. “The box is almostmore important for the clientthantheart.”

Thatnight,LowboughtavanGogh—LaMaisondeVincentàArles—for$5.5millionviaTanore.Thecompany’searlierpaymentstoChristie’s,fromitsaccountatFalconBank,hadgone through.But this time,Falcon’scompliancekickedupa fussover thehugeamountsofartpurchases thatTanorehadbeenmaking,andLow—againusingtheEricTanemailaddress—hadtoapologizetoChristie’sforadelayinpayingforthevanGogh.

In all, betweenMayandSeptember2013,Low,viaTanore, bought $137millioninart.ButLowhadpickedupmoreviaotherchannels,suchasthevanGogh,aswellasworksbyLichtenstein,Picasso,andWarhol,andbytheendoftheyearhepossessedartworthanestimated$330million.Hestashed itall intheGenevaFreeportandthensetaboutcoveringuptheevidenceofhowithadbeenfinanced.Todothat,Lowwroteaseriesofletters—supposedlyfromEricTan—offeringhimtheartworksboughtbyTanoreasagift.

In the letters, “Tan” said he was giving Low the art because of the“generosity, supportand trustyouhavesharedwithmeover thecourseofourfriendship,especiallyduring thedifficultperiodsofmy life.”Allof the lettersended, absurdly,with a rider stating that the gift “should not in any event beconstrued as an act of corruption.”Lowwas exhibiting signs of sloppiness: Itwas risible that someone would hand over $100 million in art for noconsideration. McFarland also got a painting from “Tan”—the cheaper MarkRydenwork—butnoonecouldenjoythesetestamentstohumancreativity;theywerelockedawayinthehumidity-controlledvaultsoftheGenevaFreeport.

Now, Low had hundreds ofmillions of dollars in a very safe place. Buttherewasoneassetevenmoretransportablethanart:jewelry.TokeepRosmahhappy,andperhapsevenattractafamouswoman,inkeepingwithhisnewfoundstatus,Lowembarkedonajewelry-buyingspree.

Chapter32

JewelersandBankers

AboardtheM/STopaz,FrenchRiviera,July2013

ThemoodamongthoseaboardtheTopaz,SheikhMansour’ssuperyacht,berthedjust off theFrenchRiviera,was celebratory.The boat had taken four years tobuild,atacostofover$500million—thevalueoffiveF-35fighterjets—anditwasanaptbackdropforNajibtocelebratehisrecentelectionvictory.Sittinginahorseshoeofchairs,laidoutinoneoftheyacht’sstaterooms,theprimeministerwastalkingbusinesswithSheikhMohammed,thecrownprinceofAbuDhabi,whoalsowasSheikhMansour’sbrother.

Low helped arrange the meeting in early July 2013. The group alsoincludedMichaelEvans, theGoldmanvicepresidentwhometNajibatDavos,andTimLeissner.Asheheldforth,Najibwasinanebullientmood.ThemoneyLow had put at his disposal had kept him securely in power. And now AbuDhabiwaspreparingtopourmoneyintoafinancialcenterthatwouldcarrytheRazak familyname,withGoldman standingby tohelp.Turning toEvans andLeissner, the primeminister heapedpraise on the bankers for their role so farandpromiseditwasjustthetipoftheiceberg.

“Doyouseeanyotherbankersonthisboat?”Najibjoked.After the meeting, Najib and Rosmah hosted a private dinner in Saint-

Tropezforaroundeightypeople,withmostoftheattendeesfromMalaysiaandtheMiddleEast.Asalways,JamieFoxx,bynowagoodfriendofLow’s,wasonhandtoplaythepianoandsing.

OneGoldman banker not therewasDavidRyan, theAsia chairmanwhohadraisedaseriesofquestionsaboutthe1MDBbondbusiness,andhadretiredthe same month aged only forty-three, abruptly ending a stellar career at thebank.Hehadbeenright toquestion the1MDBbusiness,buthiswarningshadgoneunheeded.

The Topaz, the very boat on which the bankers stood, had been partlyfinancedbythefirstsetofbondsGoldmanhadsold,andnowLowhadspent3.5million euros to rent it for aweek, drawing on 1MDB’s latest bonds.He hadpaidoffhisdebttoNajibthroughhisroleintheelections,andtheprimeministerwas content as Low continued to deliver a stream of Arab royalty to hisdoorstep. But he also had to think of Rosmah. He’d turned her son into aHollywood producer and procured for her a dream mansion in London’sBelgravia, but there was one possession Rosmah craved above all others:diamonds.

Thatsummer,whiletheTopazwasidlingoffthecoastofFrance,LorraineSchwartz,thefamousU.S.jeweler,flewintoMonaco,andLowwhiskedhertotheyacht.HehadboughtjewelryfromSchwartzovertheyears,gettingtoknowherwell—hetoldfriendshewasgoingtosee“Lorraine”—butthisorderwasofadifferentmagnitude.

LowhadtalkedupSchwartztoRosmah,impressingtheFirstLadybythedepth of his connections. Schwartz’s career had blossomed in the 2000s afterHalleBerryworeoneofherpiecesontheredcarpet,andherloyalcustomersranthegamutofHollywoodstars.InJune2013,Lowhadtextedthejewelerwithaveryspecificrequest:Hesaidheneededaneighteen-carat“pinkheartdiamondvivid or slightly short of vivid. On diamond necklace urgent.” By early July,Schwartzhadfoundtheperfectspecimen.LowthoughtofsendingAlHusseinyto pick it up for a viewing, but in the end Schwartz traveled out to France,withoutknowingtheidentityofthecustomer.

AsSchwartzboardedtheyacht,Lowusheredherintoaroom,introducingthe jeweler to theassembledgroup. It includedAlHusseiny,RosmahMansor,andoneofherMalaysian friends,andsoon theywerepassing theshimmeringdiamond around between them, gasping over its beauty. In the diamond trade“vivid”isthetopofahierarchyofcolorintensity,andthediamondappearedtoconceal a light shining fromwithin.Thegroupdiscusseddifferent designs forthe necklace to hold the diamond,which at twenty-two caratswas evenmoreexquisitethanLowhadrequested.Thegroupconcurred:MakingthechainoutofinterlinkedsmallerdiamondswouldbeaperfectfitforRosmah.

Twomonthslater,inlateSeptember,Low’sBombardierjetcircledaboveNewJersey’s Teterboro Airport, a favorite landing spot for billionaires looking toquicklygettoManhattan.Theplanetoucheddown,andLowdisembarkedwithRizaAziz,FatEric,andJoeyMcFarland.Theyhadbeengamblingandpartying

in LasVegas, but Low had to get toNewYork for ameetingwith Rosmah,whose husbandwas in town for theUnitedNationsGeneralAssembly.Najiblovedrubbingshoulderswithworldleaders,andherarelymissedthechancetoattendasummit,orgiveaspeechabouthis“GlobalMovementofModerates.”Onthistrip,theprimeministerhadpushedforameetingwithLloydBlankfein,Goldman’schiefexecutive.Thebankwashappytoobligeoneofitstopclients.

Rosmahwasmore concernedwith jewels.A fewweeks earlier,Lowhadfired off an email to Lorraine Schwartz, using the Eric Tan Gmail account,requestingsheshowthenecklacetotheFirstLadywhileshewasinNewYork.He asked Schwartz to invoiceBlackrockCommodities (Global), another shellcompanynominallyownedbyTan,andmade to look likeBlackrock, theU.S.investmentcompany.(Lowalsotoldpeoplethecompanyrepresented“Black”—for Rosmah’s heart—and “rock”—because she loved diamonds.) It wasimportant,LowinformedSchwartz,thatallthiswaskeptunderwraps.

“Pleaseasmentionedonmanyoccasions,donotstateMr.Low’snameonemailasheisjusttheintroducerandnotthebuyer!Vsensitive!”LowwrotetoSchwartz’sassistant.

Aftertheelections,Najibwiredback$620milliontoTanore,andsomeofthat money ended up in an account held by Blackrock at DBS Bank ofSingapore. Using the Tan email address, Low told DBS compliance thatBlackrockwasawholesalebuyerofjewelry,tojustifytensofmillionsofdollarsininflows.QueriesfromDBS’scompliancedepartmentdelayedthepaymenttoSchwartz,buteventuallyLow,asusual,wasabletourgebankersalong,andthewire went through. The price was $27.3 million, making it one of the mostexpensivepiecesofjewelryintheworld.

The necklacewasn’t ready yet, butRosmahwas keen to see the designs.ThecouplehadtakentostayingintheMandarinOriental,onColumbusCircle,justoffCentralPark.Low’sTimeWarnerpenthousewasbasicallypartof thehotel—itwas located above theguest rooms—allowinghim tomove easily totheir suite without rousing media attention. On September 28, Low joinedRosmahandSchwartzintheroom,wherethejewelershowedherclientvarioussketchesofhowitwouldlook.TheymetwithRosmah’sapproval.ThiswasthelargestofaseriesofdiamondsthatLowboughtforRosmah,butitwasnotthelast.

While Rosmah concerned herself with jewelry, the prime minister waslookingformoreinvestments,andhelentagainonGoldman.Inameetingroomin the Mandarin Oriental he gave a pitch about Malaysia to a high-powered

client meeting put together by Blankfein. Malaysia was so important forGoldmanthatBlankfeinhadropedinsomeofthebiggestnamesinU.S.financetoattend.Stillonapostelectionhigh,NajibextolledMalaysia’seconomy.TheattendeesincludedJohnPaulson,thehedge-fundownerwhopocketed$4billiontradingcredit-defaultswapsduringthecrisis;andDavidBonderman,founderofTPGCapital, the private equity firm. Najib’s daughter, Nooryana, had joinedTPG in London after Georgetown, and was now working for them in HongKong.

Leissner had been working hard to keep a lockdown on the Malaysiabusiness,followingNajibandRosmaharoundtheworld.Goldman’sprofitshadawakenedotherWallStreet andEuropeanbankswhonowwere attempting toget in on the action. As his prestige within Goldman grew and he becamewealthier, Leissner’s lifestyle also changed. After dating a range of ordinarywoman,theGermanbankernowwaswithastar.

BackinMarch2013,flushwithtriumphfromGoldman’slatestbond,LeissnerhadboardedaCathayPacificflightfromHongKongtoKualaLumpurtoattendthecity’sFormula1race.ThemodernSepangcircuit,openedinthelate1990snearPutrajaya,wasasymbolofMalaysia’semergenceasamoderncountryandhadwontherighttohostaGrandPrix.LikeSingapore’srace,theeventwasanexcuseforthemoniedclassesfromaroundSoutheastAsiatogettogether,makedeals,andparty.

On the plane, Leissner was seated in business class next to a beautifulwomanafewyearshisjunior,andhewasstruckbyherappearance.Thewomanwassixfeettall,withlongblackhair,pronouncedcheekbones,andfulllips.Sheseemed familiar. Soon after takeoff, the woman, Kimora Lee Simmons, atelevisionpersonalityandformerU.S.fashionmodel,begantopileherbagandclothes into the spare middle seat that separated her from Leissner. Bothpassengerswerefrequentfliers,andCathayPacifichadpromisedeachofthemuseoftheextraspace.WhenLeissnercomplainedtoher,aheateddisagreementensued.

Simmons was well-known in the United States for her reality-televisionshow,Kimora:LifeintheFabLane,whichchartedhereffortstobuildafashionbusiness while looking after her two daughters with former husband, RussellSimmons,thefounderofDefJamRecordings.Ifthealtercationstartedfiery,itturnedsmoldering,asLeissnerandSimmonsbegantohititoff.Theybothwereextreme extroverts who liked to talk. By the end of the four-hour flight, the

Goldmanbankerproposedtoher—thekindofgrandgesturehelikedtomaketowomen.

They didn’t marry immediately. But Leissner started to bring Simmonswithhimonbusinesstrips,andshetoogotclosetoNajibandRosmah.InAsia,facetimeiscrucialtobusinesssuccess,andLeissnerwasshadowingNajibaftertheelections,fromthesouthofFrancetotheUnitedStates.BeforeNewYork,hehadaccompaniedNajibandRosmahonavisittoSanFranciscoforaneventtoopentheofficeofKhazanah,Malaysia’smainsovereignwealthfund.Itwasnothing special—just a regular corporate public relations exercise—but wasspicedupbythepresenceofSimmons.

Discretionwasnotherstrongsuit.Withhundredofthousandsoffollowerson socialmedia, Simmons lived in the public eye. InMalaysia, she tweeted apicturefromtheKhazanahlaunch,showingherinaredoff-the-shoulderdress,accompaniedbyRosmahinagreen-coloredMalay-styletop.

“In #SanFranciscowithmy friendDatin Sri Rosmah,” she posted to herfollowers,usingaMalayhonorific.

It clearly wasn’t the first time they had hung out together. She postedanotherphotoofherselfwithLeissnerandNajib.Themenwereboth inopen-collaredwhiteshirtsandjackets,andLeissner,hisheadnowshavedandhisfacethinner, looked piercingly into the camera, while Najib smiled. It was a raresnapshotoftheGoldmanbankerwiththeprimeminister.

Leissnermarried Simmons at the end of 2013, around ninemonths aftertheymet.ManyatGoldman,whoseexecutivesliketostayoutofthespotlight,eveneschewingsocialmedia,wereaghastastheGermanbankerandSimmons’sromancebegantolandtheminPeoplemagazine.ThebankwashookedontheprofitsfromMalaysia,butitdidnotneedtheattention.

SomebankersatGoldman, ledbyLeissner,weredependentonLow.TheMalaysian’sdesiretokeepdoingdeals—buildinghisempire—hadthemexcitedfor thepotential forevenmorebusiness.Low’scompany,Jynwel,had takenaminority stake in EMIMusic Publishing, but now hewanted to lead amajoracquisition, to become a genuinely famous investor. Better still, a sizzlingbusinessdealcouldgenerateprofitstoputhisschemeonasolidfooting.

Chapter33

BonaFideBusiness

NewYork,July2013

TheviewfromtheParkLaneHotel,whereJhoLowandStevenWitkoff,aNewYork property developer, were holding a celebratory dinner looked out overCentral Park South. In the foreground, the diners could see the famous PlazaHotel,and justbehind it, the tired-lookingHelmsleyParkLaneHotel, a forty-seven-story building from the early 1970s. The estate ofHarryHelmsley, thelegendaryNewYorkrealestatebaron,hadbeenauctioningoffpropertiessincehisdeathin1997,followedbythatofhiswifeadecadelater,andtheParkLanewasthecrownjewel.

WithsweepingviewsofCentralPark,thehotelwasaprimecandidateforredevelopment.After a heatedbiddingwar for theproperty,Witkoff andLowemerged victorious, with an offer in July 2013 to pay $654 million. TheMalaysian had clinched the deal by agreeing to finance a $100million downpayment—morethandoubletheusualamountforatransactionlikethis.Asthepairtuckedintodinner,theydiscussedplanstoteardownthebuilding,replacingitwitha“billionairetower,”thekindthatweresproutingupacrossNewYork,acityawashinforeignmoney.

After the financial crisis,NewYork developers likeWitkoff increasinglywere taking minority stakes in projects, relying on deep-pocketed foreignpartnerstostumpupthemajorityoffinancingcosts.AfterJynwel’sroleintheacquisitionofEMIMusicPublishing,Lowwasscoutingforadealinwhichhiscompanycould take the leadand furtherembellish the storyof familymoney.The Malaysian heard about Witkoff’s interest in the Park Lane from MartyEdelman,oneoftheUnitedStates’toprealestatelawyers,andheaskedforanintroduction.

With a shock of curly white hair, Edelman had studied at Princeton and

Columbia,beforespendingmorethanthirtyyearspracticinglawinNewYork,latelywithPaulHastings,awhite-shoeU.S. lawfirm.Hewasfast-talkingandlikable,knownforworkingallhoursanddevelopingpersonalrelationshipswithclients.Overtheyears,hehadbuiltupcontactsintheMiddleEastviamultiplebusiness deals. Edelman became an adviser to Mubadala, and Abu Dhabi’scrown prince Mohammed often sought his advice on cross-border real estatedetails; he even weighed in sometimes on affairs of state. Executives atMubadalahadintroducedLowtoEdelman,andthelawyersetupameetingwithWitkoff.

Yetagain,Lowhad leveragedhispowerfulconnections,andWitkoffsawhimas the realdeal.Thatheseemed tohavebottomless financingdidn’thurt.Lowagreedtofund85percentofthedeal,withWitkoff’sinvestorgrouptakinga 15 percent stake. In response to an emailed request for details about hisfunding fromaWitkoff executive,Low responded: “LowFamilyCapital builtfrom our Grandparents, down to the third generation now.” Another WitkoffexecutivetoldWellsFargo,whichwaslendingmoneyfortheproject,thatLow’scapital“derivesfromafamilytrust.”

Inthemonthsahead,theWitkoffgroupdiscussedhowtodeveloptheParkLane.Due toNewYork’szoning laws,partof theoriginalhotelneeded tobeincorporated into thenewstructure.The investorshiredHerzog&deMeuron,theSwissarchitects,whoenvisagedanalmostone-thousand-foottowerwithanundulating facade and a raised podium. Set for completion by 2020, thearchitect’s sketches showed the sleek building towering over its neighbors onCentralParkSouth.Lowwasexcited.Hesuggestedputtingoutdoorswimmingpools on the exterior decks of the five penthouses, which the partners hopedwouldsellformorethan$100millionapiece.

The deal for the ParkLane closed inNovember 2013, andLow paid hisinitial$200millioninvestmentwithmoneytakenfromthelatestGoldmanbondandsentonadizzyingjourneythroughshellcompanies,bankaccountsoffamilymembers,andU.S.lawfirmtrustaccounts.Lowwasonhiswaytodevelopingahigh-profile property that could make his name. At the same time, he wasplayinganotherangle.

Until now he’d seen corporate deals as a way to add credibility to hisfamily-wealthstory,butperhapshe’dbeenlookingat it fromthewrongangle;insteadofanendpointforstolencash,maybehecouldusecorporateacquisitionsasawayofmovingmoneyelsewhere.Onceheboughtamajorasset,andthensoldit, themoneywouldbegold-plated—therespectableearningsfromadeal.

TheParkLaneofferedhimawayofmovinghundredsofmillionsofdollarsinonefellswoop.

In December, Low agreed to sell a minority interest in the project toMubadalafor$135million.Mostoftheproceedsfromthissaleendedupintheprivate accounts of Low, his brother, Szen, and his father, Larry, at BSI inSingapore.HereweretheproceedsfromthesaleofastakeinoneofNewYork’smost ambitious real estate developments, hopefully rubbing out all traces oflinkstothe$3billionGoldmanbond.

LowstillneededtorewardAmbassadorOtaibaforthelatestdealinvolvingAbuDhabi. This was the least the ambassador expected formaking all theseconnections for Low. In a meeting in December with Awartani, Otaiba’sbusinesspartner,Lowpromisedtosendthepairmoneybytheendoftheyear.Then,hesetaboutlaunderingtheproceedsofhisstakesaletoMubadalathroughyetanothercorporateacquisition,andGoldman,ofcourse,wouldbeinvolved.

LowhadbeendeepeninghisconnectionsatGoldman,andhadgotten toknowHazemShawki,thebank’sDubai-basedheadofinvestmentbanking,whoheardpitchesfromtheMalaysian.OneoftheminvolvedaplanforLowtotakeoverCoastal Energy, a Houston firm controlled by legendary Texas oilman OscarWyattJr.

Low,informallyadvisedbyGoldman,approachedCoastalin2012aboutatakeover,butthefirmdidn’tbelievehecouldcomeupwithcashandtoldhimtofind a bigger partner. Now armed with cash from the Park Lane sale, LowreturnedwithnoneotherthanIPIC,theAbuDhabifundcontrolledbyKhademAlQubaisi,whohadhelpedfunnelmoneyoutfromthefirst1MDBbondssoldby Goldman. IPIC’s Spanish energy unit, Compañía Española de Petróleos,SAU,orCepsa,agreedtopartnerwithaLow-controlledshellcompanytomakea$2.2billionofferforCoastal.

Before an agreement with the U.S. energy company could be reached,Goldman’scompliancedepartmenttolditsbankerstostopworkingwithLoworhis entity on the deal, again citing concerns over hiswealth. It was the samereasonGoldman’s private bank had given to reject Low for an account a fewyears earlier.As a result,Goldman switched to advisingCepsa, the IPICunit,even though its bankers were aware that Low was still involved. Eventually,WyattJr.agreed tosell,andLowinvested$50million in thedeal,withCepsafundingtheremainderofthepurchaseprice.Oneweeklater,Cepsatransferred$350millionintoLow’sshellcompany,ostensiblytobuyoutLow’sshareinthe

partnership.Hehadmade600percentonhismoneyinamatterofdays.Shawki,theGoldmanbanker,whowasnowrepresentingIPIConthedeal,

toldexecutivesattheAbuDhabifundthatthepayouttoLowwastorewardhimforscoutingouttheCoastaldeal.UnknowntoShawki,inrealityitwasnothingless thancorruption, thespoilssharedbetweenLowandAlQubaisi. Inpublic,GoldmandeniedknowledgeofanyagreementbetweenCepsaandLow’s shellcompany.

TheMalaysian used some of the proceeds to buy an office in London’sMayfairdistrict,whichbecametheheadquartersofMyla,his lingeriebrand. Ifanyone inquired, Low could say themoney came from a sale of his stake inCoastalEnergy,whichheacquiredafteroffloadingashareinNewYork’sParkLanehotel.

Hisplans tobuilda corporate empirewereon track.Noone, frommajorNewYork realestatedevelopers tobankersand lawyers,knewthe truthabouthim. Low andAl Qubaisi continued to act as if themoney in the firms theyoversawwas theirprivateproperty.But asLowclosed theParkLanedeal, anunexpecteddevelopmentriskedbringinghisschemecrashingdown.

Chapter34

140Gigabytes

Bangkok,Thailand,October2013

SinceleavingPetroSaudiin2011,XavierJustohadtriedtoputtheserveroutofhismind.He touredSoutheastAsiawith his girlfriend,Laura, aSwiss-Frenchwoman whom he later married on a secluded beach, and the pair were nowdeveloping a luxurious villa on the Thai resort island of Koh Samui, a shortflightfromBangkok.Thespaciousmainhouseandguestvillaswerenestledintoa terraced hillside, with a lap pool and tennis court down below. Palm treessurroundedtheproperty.ItwasJusto’sdreamisland,aplacetostartanewlife.Butplansforafinancialconsultingbusinesshadfailedtobearfruit.

As the villa’s construction costs mounted, Justo remembered the moneyPetroSaudipromisedbutneverpaid.Heplayedhiscard.

Forovertwoyears,Justohadnursedhisgrievances.TheformerPetroSaudiemployeewasbitteroverhowhisformerfriend,TarekObaid,hadthrownhimoutofthecompanywithoutthepayouthedesired.What’smore,Justohadheardfrom friends that Obaid was bad-mouthing him around their hometown ofGeneva.

In the fallof2013, JustohadcontactedMahonybyemail, informinghimthat he had damaging information. In fact, he had a copy of PetroSaudi’scomputerserver.A140-gigabytetreasuretroveofalmostfivehundredthousandemailsanddocumentsfromPetroSaudi,theserver’scontentspaintedapictureofhow Low, Mahony, and Obaid had worked to take money from 1MDB,includingemails inwhich thePetroSaudiprincipals talkedabouthow tocoverthehole.Fortwoyears,Justohadsatontheserver,fearingtheconsequencesofmakingitscontentspublic.Now,hewaslosinghispatienceandsetupameetingwith Patrick Mahony, PetroSaudi’s director of investments, in Bangkok tonegotiate.

Ashesat inBangkok’sShangri-LaHotel,waitingforMahonytoturnup,Justoknewhewasabouttomakeaverydangerousmove.Thehotel,setonthebanksofthechurningChaoPhrayaRiver,hadaresort-likefeel,withpalmtreesandalaguna-styleswimmingpool,offeringrespitefromthebustleofthechaoticThaicapital.WhenMahonyfinallyappeared,Justo’sheartjumped.

Justo began by recounting how he felt duped by PetroSaudi, which hadagreedtopayhimmillionsofSwissfrancsinseverancebutthenhadscaledbacktheamountdramatically.Nowhewanted2.5millionSwiss francs—moneyhebelievedwasdue tohim.Mahonywascool to Justo’sdemands.Therewasnoevidence tosuggestwrongdoing,hesaid.PetroSaudiwouldabsolutelynotpayhimanycash.Theypartedwithoutanagreement.

Justo barraged Mahony with emails, trying to get him to agree to thepayment.

“The official side paints a nice picture but the reality is commissions,commissions,commissions,”hewroteinoneemail.

For four years now, Mahony had avoided any blowback on the deal,believingtheinvolvementofPrimeMinisterNajibandaSaudiprinceprotectedhim.Hemust have been rattled by developments but still felt untouchable. Inoneemail,heissuedadarkthreattohisformerfriendandcolleague.

“WhattroublesmesomuchisthewayIseethissituationending—withthedestructionofyou.”

Rather than cow Justo, the dark threat emboldened him to look for asuitablebuyerforhisdatatrove.Nocandidateimmediatelysprangtomind.Ashethoughtoverwhattodo,aformerBritishjournalistwithtiestoMalaysiawasjustgettinginterestedinJhoLow.Soon,theirpathswouldcross.

InDecember2013,ClareRewcastle-Brownsatatthekitchentableinherfourth-floor central London apartment, tapping away on herMacBook Pro. Shewaspreparingapieceforherblog,SarawakReport.Bornin theMalaysianstateofSarawakin1959toayoungBritishpoliceofficerandnurse,Rewcastle-Brownspentherchildhoodyearsplayinginthejungleandswimminginthewarmsea,sometimes tagging along as hermother visited villages towork as amidwife.After returning to the United Kingdom for boarding school in the late1960s,Rewcastle-Brown eventually got a job as a reporter with the BBC WorldService,butshehadneverforgottenSarawak.She’dstartedSarawakReport in2010asanattempttoholdTaibMahmud,Sarawak’schiefminister,toaccountfortheenvironmentaldestructionandcorruptioninhisstate.

Now fifty-four years old, with long brown hair and bangs, Rewcastle-Brown was married to the brother of former British prime minister GordonBrown.ThoughconnectedtoBritain’spoliticalestablishment,Rewcastle-Brownbelieved strongly that politicians must answer for their actions. When TaibclaimedSarawakReportwaspartofaplottorecolonizethestate,shereveledintauntingthepowerfulfigureonherblog,withlittlefearaboutmakingenemiesinhighplaces.ButthislateststorywasnotaboutSarawak.

Weeksearlier,Rewcastle-BrownhadstartedtohearrumorsfromsourcesinMalaysia about Red Granite, the film company run by Najib’s stepson, RizaAziz.FewamongMalaysia’seliteboughtintoRiza’sclaimsofMiddleEasternfunding, and Rewcastle-Brown picked up on gossip in Kuala Lumpur thatMalaysian state-owned companies might have financed the film company.Intrigued, she traveled to Los Angeles to gather more information about thecompany.Duringherreporting,shecameacrossalawsuit,filedinLosAngelesover the summer by the producers ofDumb and Dumber, the 1994 comedystarringJimCarreyandJeffDaniels.

RedGranitehadboughttherightstoasequel—DumbandDumberTo—butithadshutouttheproducersoftheoriginalfilm.InJuly2013,RedGranitefiledalawsuitseekingtoexcludetheproducers,SteveStablerandBradKrevoy,frominvolvement in the movie. Stabler and Krevoy countersued, claiming acontractualrighttoinvolvementinanysequel.RedGranitehadonlyjustsettledwithAlexandraMilchan,aproducerwhohadsuedafterthefirmbootedherfromTheWolfofWallStreet,andnowitwasinvolvedinanotherlegaltussle.

McFarland andAziz’s “misconduct and hubriswill causeRedGranite tocrash and burn,” Stabler and Krevoy claimed in the lawsuit. The pair lackedexperience to successfully produce motion pictures themselves, the suitcontinued,andalthoughRedGraniteapparentlyhad“familymoney”fromAziz,the venturewould not succeedwith cash alone.Then the producers hit home,summarizing what many in Hollywood were whispering about these upstartsbehindtheirbacks.

TheRedGraniteexecutives’“experienceproducingmotionpicturesduringtheir short tenure in the industry consistsof cavorting at nightclubswithParisHiltonandmakingdinnerreservationsatposhrestaurantsinNewYorkandLosAngeles.” (The following year, both sides withdrew their suits after anagreement that includedexecutiveproducercreditson the film forStabler andKrevoy.)

To Rewcastle-Brown, something wasn’t right—it seemed greater than a

squabble between a bunch of movie producers. She began to comb throughinterviewsthatRizaandJoeyMcFarlandhadgiventotheHollywoodReporterandLos Angeles Times. As Red Granite had attracted notice—at the CannesFilmFestivalin2011andnowaheadoftheU.S.theatricalreleaseofTheWolfofWallStreetonChristmasDay,2013—thepairhadbeencoyabouttheirfinances.TheytalkedvaguelyaboutmoneyfromtheMiddleEastandAsiabutdeclinedtogivemorespecifics.Inoneinterview,Rizasaidhowhehad“skininthegame.”

This made no sense to Rewcastle-Brown. How could a former juniorbanker,withNajibasaparent,haveenoughcapitaltolaunchafilmcompany?Itwasamysteryshewantedtosolve.

Chapter35

Leo’sWallStreetIndictment

NewYork,December2013

OnDecember 17, awindy, subzerowinter’s night,with a flurry of snow, theguests milled around outside the Ziegfeld Theater on Fifty-Fourth Street inMidtownManhattan for the premiere of TheWolf ofWall Street. On the redcarpet,McFarland and Aziz posed with DiCaprio,Margot Robbie, and JonahHill.McFarlandwas inhiselement,boastingabouthisgrayBrioni suitonhisInstagramaccount.Wearingadarkbluesuitandmaroontie,Lowcouldn’thelpbutattend,despitehisearlierefforts tokeepoutof the limelight.Hehadtobetheretocelebratethisextraordinaryachievement.

In just a fewshortyears,Lowhadgone frombeinga low-tierMalaysianfinanciertoeffectivelybankrollingoneofthesplashiestHollywoodfilmsoftheyear—andoneaboutafraudster.JustasBelfortforatimehadenjoyedthefruitsofhis scheme,Lowcouldn’tmissouton thisevening.Hewanted tosharehissuccess with those closest to him, and the business partners he yearned toimpress. Low’s guest list included family members, his girlfriend JesselynnChuan Teik Ying (seated next to his mother), Jasmine Loo of 1MDB, SwizzBeatz,KhademAlQubaisiofIPIC,SteveWitkoff,andMartinEdelman.

LowposedwiththeRedGranitefoundersontheredcarpet,buthedidn’ttake part in the photos with the main cast. He was snapped with DiCaprio,though,millingaroundbeforetheperformance.Thepairhadremainedclose.Amonth earlier Low had attended the star’s thirty-ninth birthday party in TAODowntown in New York’s Chelsea district. That night,McFarland had madePage Six of theNew York Post for ordering bottle after bottle of champagne.Low’s parties, andDiCaprio’s attendance at them,were by now embedded inHollywoodlore,evengettingamentioninasongonthesoundtrackforthefilm22JumpStreet.Thepartyanthem,“CheckMySteezo,”featuredthelyrics:

JhoLow!IseeyouJhoLow!/GotLeoatmypartytakingshotsneversolo/Grade-Achorizofollowedbysea-bassMisoMiso,/Mesoloco.…

TheRedGraniteprincipalsandLowhadassiduouslycultivatedDiCaprio,whomtheyhopedwouldstarinPapillon,orifnotthat,thenanotheroneoftheirupcomingmovies.A fewweeks after theWolf ofWall Street premiere, Low,posingasEricTan,sentDiCaprioa$3.3millionpaintingbyPabloPicassoasalatebirthdaypresent.Theoilpainting—NatureMorteauCrânedeTaureau—was accompanied with a handwritten note. “Dear Leonardo DiCaprio, HappybelatedBirthday!Thisgift isforyou,” it read.Then,LowtoldaSwissgallerythatwas storing a $9.2millionBasquiat—a collage entitledRedmanOne—totransfer ownership to DiCaprio. The order, made in a letter also signed byDiCaprio,indemnifiedtheactorfrom“anyliabilitywhatsoeverresultingdirectlyor indirectly from these art-work.” The actor also got a photograph byDianeArbus—cost$750,000—fromLow.

Inprivate,DiCapriowashappytoacceptthesegifts.Ontheredcarpet,hewas inamorephilosophicalmood.Somecriticsof the film—includingvotingmembersoftheAcademywhoheckledScorseseatanofficialscreeningaheadofthe Oscars—complained it glamorized Jordan Belfort’s fraud and was morelikelytospawnfinancialmalfeasancethanserveasacautionarytale.DiCapriohadcarefullypreparedhisretort.

“This is an indictment of all ofWall Street.But it’s an indictment aboutsomethingthat’sinourculture,thisincessantneedtoconsumeandthisincessantneedtoobtainmoreandmorewealthwithcompletedisregardforanyoneexceptyourself,”hetoldoneinterviewer.

TwodaysafterthepremiereofTheWolfofWallStreet,Rewcastle-Brownletripin a post titled “Wall Street Greed / Malaysian Money—EXPOSE!” It wastypical Rewcastle-Brown, a mix of speculation and reporting, spiced up withacerbicasidesandtabloidesqueheadlines.Thepieceboileddowntoaskingoneenormous question: Who had paid for the film? Skilled at rounding upinterviews and photos available on the web, pointing out inconsistencies,Rewcastle-Brown noted howRiza andMcFarland had suspiciously refused todetailRedGranite’sfinancing.HerpiecelinkedtoastoryonaU.S.realestatewebsite about Riza’s $33.5 million purchase of the Park Laurel apartment.Wherewasthemoneycomingfrom?

PerhapsJhoLow—whomRewcastle-Browndescribedasaclosefriendof

RosmahandRiza—couldhaveputup themoneyhimself, she speculated.Thelittle-knownMalaysian financier was on the red carpet for the premiere, andseemed to be close to DiCaprio, attending his recent birthday event at TAODowntown.Rewcastle-Brown’spiece,pepperedwithphotosofLow—alongsideParisHilton inSaint-Tropez,holdingchampagne inanightclub,at theWolfofWallStreet premiere—was themost intense scrutiny yet of his activities. ShehadasizeablefollowinginMalaysiaandwasedgingtowardthetruth.Thepostendedwithanacuteobservation:

Manymaywonder if the link to the toppoliticalplayers inMalaysiaandfriendshipwiththePM’sstep-sonmightaccountforJhoLow’seasyaccesstoinvestmentincomeorindeedifheisthefrontmanforothers.

ThiswastoomuchforRedGranite,whoselawyersquicklyfiredoffaletterdemandingaretractionandanapology,whichRewcastle-Brownignored.Therewas noMalaysianmoney in the film, the letter said. Talents of the caliber ofScorsese and DiCaprio, it went on, never would have gotten involved if thefinancingwastainted.

Chapter36

TheOvalOffice

NewYork,December2013

Leonardo DiCaprio ducked into the Four Seasons restaurant on Fifty-SecondStreetinMidtownManhattanandmadehiswaytoaprivateroom.Sincethelate1950s,therestauranthadcateredtothecity’sbusinesselitetothepointthat,inthe 1970s, Esquire magazine coined the term “power lunch” to refer to themeetings held between lawyers, bankers, and ad executives over steaks in theGrillRoom,withitsleathersofasandwood-paneledwalls.JordanBelfort,too,dined there, and DiCaprio and Margot Robbie, who played Belfort’s secondwife,filmedasceneforTheWolfofWallStreetinthePoolRoom,diningundertheindoortreesnearthewaterfeature.

Thenightbefore, after the film’spremiere at theZiegfield,DiCapriohadmovedontotheafter-partyattheRoselandBallroom,aconvertedicerink,alsoonFifty-SecondStreet,withhis“WolfPack”intow,friendslikeOrlandoBloomandTobeyMaguire.DiCaprio’sschedulewaspacked,andthenextmorninghewas at the Four Seasons tomeetmembers of theAcademy, the six-thousand-member body of former actors, directors, and other movie professionals whovoteontheyear’sOscarwinners.

Hewas running late to catch a plane and didn’t really have time for thelunchevent,putonbyParamountPictures, thefilm’sdistributor.Scorsesewasalreadyonhiswaytotheairportandwouldn’tmakethelunch.ButDiCaprio’spresencewascrucial,andhemadehiswayaroundtheroom,greetingAcademymembers.Theglad-handingwas importantpublic relations.TheAcademywasdominatedbyold,whitemales,andseveralof themhadshownhostility to thefilm,with its gleeful depiction of sex and drugs.After tenminutes,DiCapriomade his excuses and exited quietly, befuddling some in the room, leavingMargotRobbie to animate theeventwith jokesabout theawkward sex scenes

betweenherandDiCaprio.Afteryearsinthebusiness,DiCapriohadgottenusedtotheusualflurryof

eventsthatfollowamajorfilmrelease,butthenextmeetingonhisschedulewasmoreenticing.OutsidetheFourSeasons,acarwaswaitingtotaketheactortotheairport,wherehewouldflyontoWashington,DC.TherehewoulddeliveraDVDofthefilmtoPresidentBarackObama.

Asusual,WashingtonwasafewdegreeswarmerthanNewYork,andtherewasnosnow,butDiCapriowaswrappedinadarkcoatandcapashewentthroughWhite House security. Accompanying him was a small group that includedScorsese, Riza Aziz, and Norashman Najib, the son of Malaysia’s primeminister. Escorting them to see the president was Frank White Jr., one ofObama’sforemostindividualfund-raisers.Withpronouncedcheeksandaneasysmile,Whitewasanentrepreneurwhomadehis fortuneproviding informationtechnology support to theU.S. government, including theCentral IntelligenceAgency.

In the2008elections, he raisedmore than$10million as a “bundler”—asupporter who collects small individual contributions and delivers them to acampaign.By2012,Whitewasnationalvicechairofthepresident’sreelectioncampaign.BornandraisedinChicago,wherehe’dstudiedat theUniversityofIllinois,healsohad family ties to theWhiteHouse—his sisterwasmarried toMichelleObama’scousin—andwasaregularattendeeofstatedinners.HewasalsodeeplyentwinedwithJhoLow.

Duringthe2008campaign,WhitegottoknowPrakazrelSamuelMichel—betterknownasPras,aformermemberof the1990ship-hopbandtheFugees,andShomikDutta,whohadworkedasaninvestmentbankeratMorganStanley.AftertheFugeesandashort-livedsolocareer—“GhettoSuperstar(ThatIsWhatYouAre)”—Praswaslookingtoreinventhimselfasabusinessman.Alongtimefixture on the Hollywood party scene, he’d heard from a nightclub promoterabouttheseshowyeventsayoungMalaysianwasthrowing,andby2012wasaregularattendeeatLow’sparties.LikeDiCaprioandScorsese,PrassawLow’sbillionsasabusinessopportunity,andthepairbecameclose.Hestartedto tellhis new friend about Frank White, a political operative he’d met on thecampaigntrail,andLowwasentranced.

Lowmoved quickly, trying to figure out a way he could benefit from aconnectiontoWhite.CouldheleveragethenewcontacttoacquireinfluenceintheUnitedStates,ashehaddonewithOtaibainAbuDhabiandPrinceTurkiin

SaudiArabia?On the face of it, Low’s ambition seemed laughably lofty.ButMalaysian connections were enticing to some inWashington at that moment.Since taking office, Obama had been keen to befriend Najib to deepen U.S.influenceinAsia,partofthepresident’smuch-vauntedpivottoEastAsia.SomeintheWhiteHouseandStateDepartment,aswellasretireddiplomats,includingold hands like JohnMalott, a formerU.S. ambassador toKuala Lumpur, hadurged caution about Najib, pointing out the prime minister was showingincreasinglyantidemocratictendencies.

In2013,afterlosingthevoteofethnicChineseandIndianMalaysians,theprimeminister turned to solidify hisMalay base.Despite initially pledging torepeal it, Najib and his government had used a colonial-era sedition law toprosecuteoppositionleaders,students,andcriticalacademics.

But the White House, especially Deputy National Security Adviser BenRhodes,clungtoitsvisionofNajibasatransformativeprimeminister,notleastbecause of constant lobbying from Jamaludin Jarjis, a former MalaysianambassadortoWashingtonwhonowwasspecialenvoytotheUnitedStates.AseniorUMNOpolitician and one ofNajib’s closest friends, Jamaludinwas anarchitect of efforts for closer U.S.-Malaysia ties, and he was agitating forObama’sstaff toorganizeanofficialpresidentialvisit toMalaysia. (Itwashisdaughter,Anis,whointernedatGoldmanSachsinSingaporeandhadanaffairwithTimLeissner.)

TobuildhisconnectiontotheWhiteHouse,LowgotinvolvedwitheffortstoreelectObamatoasecondfour-yearterm.PrasMichelwouldbehisconduit.In2012,Lowsent$20millionfromanoffshorecompanyhecontrolledtotwocompaniesownedbyPras.Themoneywasostensiblya“gift,”butthemusicianusedoneofthesefirmstomakea$1.2milliondonationtoasuperPACcalledBlackMenVote,whichsupportedObama’scampaign.ItwasariskymoveforPras,asdonatingmoneytoacandidateonbehalfofanotherpersonisaviolationoffederalcampaign-financelaws.AlawyerforPraslatersaidthemusicianwasthevictimofa“falsenarrative.”

Lowalsoreachedanagreement forFrankWhite toscout forprojectsandactasacheerleaderforMalaysiawiththeObamaadministration.Forthat,Whitewaspaidhandsomely;Lowin2012arrangedfor$10millionin1MDBmoneytomovetoWhiteviaMBConsulting,afirmcontrolledbyAabar’sMohammedAlHusseiny.

In return, White went to work. In October 2012, he set up a meetingbetweenObamaandtheRedGranitecrew.JoeyMcFarlandpostedapictureon

Instagram of himself shaking hands with President Obama at White’s home.WhenthepresidentwonreelectioninNovember,LowwantedtocelebratewithavisittotheWhiteHouse.Laterthatmonth,WhitearrangedforLowtoattendthe president’s holiday party. But not evenWhite, with his close contacts toObama, could make this happen. For some reason, White House securitypersonnel turned Low away at the door. It seemed the U.S. government hadreasontobewaryofthisyoungMalaysianwithamysteriouspast.

Undeterred,LowdoubleddownonhisinvestmentinWhite,anassociationhe hoped could influence White House policy. In May 2013, White set upDuSableCapitalManagement inWashingtonwith Pras andDutta, the bankerwhoalsohadworkedasaspecialassistantintheWhiteHouse.Soonafter,thefundtoldtheSecuritiesandExchangeCommissionthatitwasplanningtoraise$500milliontoinvestinrenewableenergyandinfrastructureprojects.TheplanwasforAabartoputinthemajorityofthecapital,withWhiteinvestingasmallamounthimself.DuSableregisteredasalobbyistfor1MDB,andbytheendofthe year, White was arranging for another White House tour—this time forDiCaprio’sgroup.

DiCaprioandScorsesedid in facthandoveraDVDcopyofTheWolf ofWallStreet toPresidentObama,but therewas littlepublicity for thevisit.Theadministration didn’twant to be seen unduly influencing the upcomingOscarrace.TheWolf ofWall Street was viewed as an outside challenger toDallasBuyersClub,12YearsaSlave,andGravity.Thefamousdirectorandactorwerespotted later in thedayhaving tea at theWHotel, just acrossFifteenthStreetfromtheWhiteHouse,butneitherofthemmentionedthemeetingwithObamain thebarrageof interviews that followed the film’spublic release a fewdayslater,onChristmasDay.

BetweenthereleaseandtheOscarsinearlyMarch,Lowheadedoffonhistraditional end-of-year ski tripwith friends and family.Thisyear’sdestinationwasAspen, Colorado. Low’s guests includedAlicia Keys, Swizz Beatz, JoeyMcFarland, and his girlfriend, Antoniette Costa. The town was awash withcelebrities,andLeonardoDiCaprio,TobeyMaguire,NicoleScherzinger,andherboyfriend, Formula 1 World Champion Lewis Hamilton, attended some ofLow’sdinners.

Atonedinner, theactorDakotaJohnson,thedaughterofMelanieGriffithand Don Johnson, was sitting next to Low, who thought she was a randomstranger. Now used to fraternizing with bigger stars, Low had no time forJohnson.

“Sheatefoodanddidn’tevensaythankyouafterward,”Lowcomplainedtofriends.

Atonepoint,Lowbumped intoParisHilton,whoalsowas inAspen.HehadremainedfriendlywithHilton,eventhoughhesawherlessnowthanbackin2010.Thepairwenttogetpizza.

Thechatthatweek,attheSt.RegisAspenResort,centeredonTheWolfofWall Street and whether DiCaprio would finally win an Oscar. As hesnowboarded,Lowhadgoodreasontobecontent.

Thefilmwouldbeextremelylucrativeattheboxoffice,earningmorethan$400 million globally, almost four times the cost of production. Despite hisconstant scheming, Low was exhibiting skill as an investor. Viceroy HotelGroup,inwhichhenowownedahalfshare,hadexpanded,gaininganameasafive-starboutiquechain.His13percentstakeinEMIMusicPublishingalsowasa winner, as the global music business recovered due to digital sales viastreamingservices.TheWolfofWallStreetwashismostsuccessfulinvestmenttodate,andRedGranitehadapromisingpipelineofnewfilmsindevelopment.If the company became one of the biggest producers in Hollywood, Lowwagered,therewouldbeoodlesofcashtoputbackinto1MDB.

Astheawardseasoncamearound,TheWolfofWallStreetwasexpectedtodowell.InJanuary,DiCapriowonaGoldenGlobeforhisroleasJordanBelfort,usinghisacceptancespeechtothank“Joey,Riz,andJho”fortakingariskontheproject. (JhoLowwas also thanked in the film’s closing credits.)But the bigprize remained just out ofDiCaprio’s grasp yet again:At theOscars, in earlyMarch, the Best Actor statuette was handed to Matthew McConaughey forDallasBuyersClub. Itwasa terriblenight forTheWolfofWallStreet,whichdespitefivenominations,failedtopickupanyawards.ForLowandRiza,sittingbehindBonoandtheEdgefromU2intheKodakTheater,theeveningfellalittleflat.

TotopofftheirOscarbuzzkill, themoviewasn’tevengoingtoplaybackhome inMalaysia. To complywith localmorality laws,Malaysian authoritiesdemandedmorethanninetycuts,andParamountPictures,thefilm’sdistributor,togetherwithScorseseandRedGranite,haddecideditwasn’tworththetrouble.

But, nomatter:An evenbiggerAmerican importwas soon set to land inMalaysia.

OnApril27,2014,ObamabecamethefirstU.S.president tovisitMalaysia infivedecades.TheiconicimageofthevisitwasaselfiethatNajibtookofhimself

and Obama. The president lent in, beaming broadly, while Najib didn’t quiteknowwheretolookasthecamerasnapped.“MyselfiewithPresidentObama,”the prime minister tweeted moments later. The world had gone selfie madmonthsearlierwhenEllenDeGenereshadtakenoneattheOscarswithBradleyCooper,MerylStreep,BradPitt,andotherstars.

ItwasNajib’smomenttoshineonaworldstage.TheleadershadspentthemorningattheNationalMosque,whereNajib’sfatherwasburied,andtheprimeminister used the visit to underline his special relationship with Obama. Foryears,U.S.presidentshadavoidedMalaysia,putoffby formerprimeministerMahathir’s strident anti-Western rhetoric and the nation’s authoritarian bent.Now,Obamawasfinally inMalaysiaaspartofa tour thatalso includedcloseallieslikeJapan,SouthKorea,andthePhilippines.

Hisdeputynationalsecurityadviser,BenRhodes,whowasalsoonthetrip,calledMalaysia a “pivotal state” in the region—a code for a bulwark againstChina. In recentmonths,Beijinghadbeen taking amilitarist approach towardenforcingitsterritorialclaimstotheentireSouthChinaSea.

President Obama, keen to balance this aggression, promised in a jointstatementwithNajibtohelptrainandequipMalaysia’snavy.Thestatementalsostressed the two leaders’ support for a vibrant civil society. For some StateDepartment officials who had counseled against the visit—given Najib’sgovernment was busy locking up opposition politicians—this last pledge wasderisory.

AsObamatouredMalaysia,Lowbraggedtocontactsthathehadplayedarole in the rapprochement with the United States. Just days before Obamaarrived,1MDBsignedamulti-million-dollardealwithFrankWhite’scompany,DuSable Capital, to develop a solar-electricity plant in Malaysia. The fund’smanagement falsely described the deal to the board as a “government-to-government”endeavor,eventhoughDuSablewasaprivateentity.

LowwashopingObamaandNajibwouldhighlight the joint-ventureplanduring the president’s visit. But he was learning it wasn’t as easy to stage-manageeventswiththeUnitedStatesasintheMiddleEast.Forone,hedidn’thaveanambassador-levelfigurelikeOtaibaathisdisposal,onlyFrankWhite—whoalthough close toObama,was amerebusinessmanand fund-raiser.Onlymonths later, the solar deal was scrapped, and 1MDB eventually paid $69million to buy outDuSable’s share in the joint venture.White had plucked afortunefromthinair.He’dlatersaythedealwas“intendedtoproviderenewableenergy in Malaysia, create jobs in the United States and earn support for

MalaysiaintheUnitedStates,”andatthetimehehadnoknowledge1MDBwasthe“victimoftheft.”

Thepresident’svisit turnedout tobeamajordisappointment. IfObama’sMalaysia trip hadn’tworked out as planned, he could take comfort in anotherdevelopment.Inrecentweeks,Lowhadstartedtodateoneoftheworld’smoststrikingwomen.

Chapter37

SizeMatters

NewYork,January2014

The New Wonjo Restaurant, on Thirty-Second Street in Manhattan’sKoreatown, sitsunder the shadowof theEmpireStateBuilding. Itwasa24/7establishment, with plastic menus in the windows and authentic Asian fare—exaclythesortofplaceJhoLowlikedtoheadafteralatenightofpartying.Onthis night, he was ensconced at a table with JoeyMcFarland and some otherfriends. It was still cold outside—the “polar vortex” had sent temperaturesplummeting at the turn of the New Year—and the group was eating Koreanbarbecueandsoupafteranightofkaraoke,whenMirandaKerr,theAustraliansupermodel,walkedin.

Shehadcomefromaformaleventandwaswearingaballgown,atoddswith the atmosphere in the down-to-earth eatery. With her soft brown curls,iridescent blue eyes, and trademark dimples, the thirty-year-old was instantlyrecognizable, and her elegant attire stood out in such a simple restaurant. Shehadcome to see a friendwhowaspartofLow’sgroupand tooka seat at thetable.Beforelong, themodelwasengrossedinaconversationwithLowaboutherskin-careline,KORAOrganics.

AsitbecameclearthatLowwasamajorinvestor,abillionaire,even—withinterests in EMI and the Park Lane, and ties to a Hollywood studio—KerrpepperedhimwithquestionsabouthowtodevelopKORA,therunningofwhichshehadrecentlytakenoverfromhermother.AsLowhadaccumulatedpower,and perhaps because of the built-up stress, some of his earlier charm andsolicitousnesshadwornoff,andhebegantoexhibitaroughedgeofarrogance.AtarecentgamblingsessioninVegas,hehadtoldaBritishmodelcalledRoxyHornerthatsheneededtoloseweight,pointingtoherwaist.Shewasoffended,butLowhadlearnedthat,becausehewaspaying,hedidn’treallyneedtocare.

Kerr, though,was a different prospect, andwhen shementioned her desire toexpandKORA,Lowwascarefultopraiseherfinancialacumen.

KerrhadgrownupontheedgeoftheAustralianOutback,inastultifyingfarming town called Gunnedah, but she had left that world far behind. Afterwinning an Australian modeling competition, aged only fourteen, she hadeventuallymoved to theUnited States, where she became aVictoria’s Secretmodel.In2013,sheearned$7million,makingherthesecond-best-paidfemalemodel in the world after Gisele Bündchen, and offers kept piling up—fromH&M,Swarovski,Unilever—topromoteproducts.

Butasupermodel’searningsaren’tenoughtolaunchamajorbusiness,andKerrwasinterestedinwhatLowhadtooffer.Shehadtiredofmodelingandwaslooking transform herself into an entrepreneur. The next morning, she had apackage of KORA products couriered over to Low’s apartment in the TimeWarnerbuilding.

BackinOctober,KerrhaddivorcedactorOrlandoBloom,withwhomshehada three-year-oldson,andher tumultuouspersonal lifewasconstant fodderforthetabloids.HerparentsbackinGunnedahgaveaninterviewtoAustraliantelevision, bemoaning how their daughter had forgotten them and needed tocomehome to learn how tomilk cows and ride horses. In the firstmonths of2014,Kerrwouldspendachunkof time inNewYork,andalmostevery timeshesteppedout,apaparazzowouldclickherimage.Butdespitethescrutiny,shemanagedtoconcealablossoming,andunexpected,romancewithLow.

OnFebruary2,theMalaysianinvitedhertowatchSuperBowlXLVIIIattheMetLifeStadium inNew Jersey—itwasher first—and she attended alongwithRizaAziz,McFarland.ModelKateUptonandKatieHolmes,whowereinanother box, stopped by. Gossip columns noted Kerr was there to watch theSeattleSeahawkspulloffthebiggestupsetinmodernfootballhistory,defeatingtheDenverBroncos,butLow’spresencewentunnoticed.

In the ensuingdays,Low set aboutwooingher in theonlywayheknewhow.HetextedLorraineSchwartz,tellingherhewantedanecklacewithaheart-shapeddiamond,costingbetween$1and$2million,notingthat“[s]izematters.”Thediamondnecklace,inscribedwith“MK,”cost$1.3million,andLowgaveittothemodelasapresentforValentine’sDay,financingitwithmoneywashedthroughboththeParkLaneandCoastalEnergydeals.

Eventoclosefriends,Lowwouldsayhewasonly“helpingMirandaout,”andtokeeptherelationshipsecret,thepairwouldgooutaccompaniedbyKerr’sagent,KrystalFox.Afewweekslater,however—atapartyforKerr’sthirty-first

birthday—itwould have been difficult to overlookLow’s romantic intentions.LowhiredoutavenueonChelseaPiersinNewYorkforanineties-themedpartyandflewinSalt-N-Pepa,MarkMorrison,andVanillaIcetoperform.Asusual,JamieFoxxwasonhandtoemcee,andDiCaprio,Bloom,andSwizzBeatzwereamongthehundredorsoinvitees.

For the weekend of festivities, Low had the Topaz, Sheikh Mansour’syacht,mooredintheHudsonRiver,andbedeckedwithcustomizedMiami-styleglamourlightingandhundredsofballoons.Afterthepartying,ahelicopterflewLow,Kerr,andherAustralianfriendstoAtlanticCityformoregamblingatthebaccarat tables. It was like the old times, back during Low’s Wharton days,althoughnowhe traveledbyhelicopter,not limousine,andheno longercaredwhetherIvankaTrumpwouldaccepthisinvitation.

As hewaswooingKerr, Low also had to keepRosmahMansor sated, and inJanuary2014hetextedLorraineSchwartztoseeifshewasinLosAngeles.ThejewelerwasintownandmadehastetotheHotelBel-Air,ladenwithluminescentdiamond bangles and necklaces. Schwartz drove into the hotel, an exclusiveSpanishmission-styleretreatfavoredbyHollywoodstars,setintwelveacresofgardens in the heart ofBeverlyHills. Rosmah had checked into a plush suitewithdeepcarpetsand,afterdinnerwithSchwartzandLow,sheinvitedthemup.

Schwartz unfurled herwares onto a table andRosmah began to pick outitems. She pointed at one eighteen-carat white gold diamond-studded bangle,andSchwartzsetitaside.Itcost$52,000,butRosmahwasonlygettingstarted.With the ease of a professional shopper, the First Lady quickly picked outtwenty-sevenbraceletsandnecklaces.Noonetalksmoneyintheseelitecircles,andittookafewmonthsforthebilltoarriveatBlackrock,Low’scompany.Thetotalwas$1.3million—quiteamoderatespendingspreebyRosmah’sstandards.Low took care of the invoice, and he also picked up the $300,000 tab thatRosmahranupattheBel-Airhotelduringherweek’sstay.

BetweenApril2013andSeptember2014,LowusedtheBlackrockaccountto purchase $200 million in jewelry from across the globe: Las Vegas, NewYork,HongKong,Dubai.Evenmoreportablethanart,diamondsareextremelyhard to track.TheFinancialActionTaskForce, in a 2013 report,warned thatmoneylaunderersandterroristsusedthediamondindustryasaconduitforillicitcash.IntheUnitedStates,retailerslikeLorraineSchwartz,ordealersinrawandcut stones,wereunderno legalobligation to conductduediligenceonclients.Evenbetter,jewelscouldbetransportedwithouthavingtosendmoneythrough

financialinstitutions.Not all the jewelry went to important figures like Rosmah. On one

occasion, Lowwas in LasVegaswhen he found out itwas the birthday of ayoungAsian-Canadianmodel,ahanger-oninhisgroup.Onthewaytodinner,LowspontaneouslyduckedintoaCartierstoreandcamebackoutwithawatch,passing it to her without any fanfare as a last-minute gift. The watch cost$80,000. But it was Rosmah on whom Low showered the biggest diamonds.ImeldaMarcoshadhershoecollection,atleast1,220pairsleftbehindwhensheand her husband were driven out of the Philippines in 1986 by the “PeoplePowerRevolution.”RosmahwouldbeknownforherBirkinbagsand jewelry,hundreds of millions of dollars of rings, necklaces and pendants, ranged inspeciallymadedrawersatherresidenceinKualaLumpur.

From the outside, Low appeared to be accumulating prestige, and he nolonger had to situate himself between formidable people—theoneswhoknewthe secretsofhow theworld reallyworks.Hehadbecomeoneof them inhisown right. Dating a supermodel, he was pursuing deals and drawing theMalaysianprimeministerandhiswifeevercloser.Thosewhohungaroundhim,at the Super Bowl or over a dinner, still gossiped about his money. It wasvaguelyknownhehad links toMalaysia’sprimeminister, and itwas takenasnormalthatsucharelationshipinafarawayAsiancountrycouldentailriches.

AnyonewhowaspayingcloseattentionmighthavenoticedanextradegreeofrestslessnessamidLow’sfrenzied,globe-trottingschedule.Ashewhippedouthis phone, excusing himself from a dinner or party, only he could see theobstaclesthatwerepilingupinhisinbox,threateningtoupendhisscheme.

Chapter38

LosingControl

KualaLumpur,Malaysia,March2014

The1MDB’sboardofdirectorsstartedtheirafternoonmeetingwitharecitationofthefirstsevenversesfromtheQur’an,knownastheAl-Fatiha,forthecrewand passengers ofMH370, theMalaysiaAirlinesBoeing 777-200 jet that hadgonemissing in earlyMarch over the South China Sea. The plane, with 239crewandpassengers onboard,was flying fromKualaLumpur toBeijing, butjustanhouraftertakeoffthepilotstoppedmakingcontactwithairtrafficcontroland,momentslater,theplanedisappearedfromcivilaviationradarscreens.

In the weeks since, Beijing’s official media had slammed Malaysia forleading a chaotic search effort, first focusing efforts on the South China Sea,north ofMalaysia, beforemilitary radar showed the aircraft had gonemissingover theAndamanSea, to thewest of the country. Failure to locate the planedebris, added to chaotic daily briefings, spotlighted the incompetence ofMalaysia’sgovernmentandwasanembarrassmentforNajib.

The board of directors intoned the Islamic verses but talk soon turned toanother pressing matter at hand. Tan Theng Hooi, the managing partner inMalaysiaforDeloitteTouche,hadbeen invited tospeak,andhebroughtsomedistressingnews.Onlyweeksearlier,Deloittehadbecome1MDB’sthirdauditorandthefund’smanagementwasexertinghugepressureforaquicksign-offontheaccountsfortheyeartoMarch31,2013,whichhadbeendelayedbymonths.

JustasDeloittewasporingovertheaccounts,though,thefirm’sSoutheastAsiaregionalheadquarters inSingaporebegantoreceivenumerousemailsandlettersallegingfinancialreportingfraudat1MDB.Thecomplaints,Tansaid,hadtouched on a number of issues, from 1MDB’s claims to have $2.3 billioninvested in an unknown fund in the Cayman Islands, to its overpayment forpower plants, and a mismatch between its huge debt and minimal assets. An

accountantwith thirtyyears’ experience,Tanappearedverykeen toget ridoftheproblem.

“These allegations are not new and no evidence had been provided tosubstantiate them.Deloitte thereforehasbeenunable topursue thematter,”hetoldtheboard.

One of the letters came from Tony Pua, a forty-one-year-old oppositionpolitician, who quietly had been following the 1MDB issue for a few years.Unlikemanypoliticians,Puahadadeepgraspofbusiness;inapreviouslifehefounded a technology company, before selling out to enter politics in 2008,winning a parliamentary seat the following year in a satellite town of KualaLumpur.Whip-smart,withadegreeinpolitics,philosophyandeconomicsfromOxfordUniversity,Puaunsettledtime-servingUMNOpoliticians,whowerenotused to his piercing questions and mastery of financial concepts. Unable tosuffer fools, Pua, an ethnic ChineseMalaysian with spiky graying hair and aquick-firedelivery,wasuniversallydislikedintherulingparty.

He became intrigued by 1MDB in 2010, when KPMG had written an“emphasis ofmatter” about the fund’s investment in PetroSaudi. Such arcanetermsmeantnothingtomostfolks,butPuaknewitsignaledtheaccountantshadconcerns about 1MDB. He sat on the Public Accounts Committee of theParliament,whichwaschargedwithoverseeingstatespending,andsoagitatedfor the committee to investigate, but the chairman, an UMNO politician, haddraggedhisheels.By2014, though,with articles in theEdge pointingout thefishyCaymanIslandsfundinvestment,Puahadmorefirepower.

KPMG had resigned in January because it couldn’t be certain the $2.3billion theMalaysian fund claimed to have in the Cayman Islandswas reallyworththatmuch—orwhetheritactuallyexisted.Backin2012,the1MDBfundhadsolditsinterestinaPetroSaudisubsidiarythatownedthetwooildrillshipsto a company controlled by HongKong financier Lobo Lee. Instead of cash,1MDBhadreceivedpaymentof$2.3billion in the formof“units” inanewlyformedCaymanIslandsfund.ItwasafictionaltransactionaimedatcoveringupthemoneythatLowandothershadtakenfrom1MDBin2009.

YeoJiaweiofBSIhadmisledKPMGthattheCaymanIslandsinvestmentwasbackedbycash—nottheshady“units.”Butthetransactionjustdidn’tseemright to theU.S.auditingfirm.Worriedabout its reputation,even if thiswasastate-owned fund,KPMGpulled out, just asErnst&Younghaddone before.EagertobuilditsbusinessinMalaysia,Deloittesignedon.

TheresignationofKPMGwasaroadblockforLow,whoneededanauditor

to quickly rubber-stamp 1MDB’s accounts.With $10 billion in debt and only$20millionincash,thefundwasindirestraits,hemorrhagingtensofmillionsofdollarsamonth,butLowhadagameplan.The1MDBenergyunitwasplanningto list its shares on Malaysia’s stock exchange. Hopefully big, globalinstitutionalinvestorswouldsnapupthesharesgivenAsia’seconomicoutlookwasstillbrighterthantheWest’s,andtheIPOwouldnet$5billionormore.

It was an optimistic assessment, but one that was crucial to keeping theschemegoing,providingLowwiththemoneyhedesperatelyneededtohidethefund’s losses. Major banks, including Goldman Sachs and Deutsche, werefeedingtheoptimism,telling1MDBtherewouldbeampleappetitefromglobalinvestors, keen themselves towin themandate to advise on the IPO.Even anamountlowerthan$5billionwouldbeenoughtofillfinancialholesandstopthescrutiny of 1MDB, Low anticipated, but first Deloitte needed to okay thedelayedaccounts.

LikeKPMG,Deloitte’sTanhadissueswiththeaccountingoftheCaymanIslandsinvestment.Togetaroundtheproblem,LowturnedagaintoMohammedAlHusseiny,askingforAabartoguaranteetheoffshoremoney.ThismeantthattheAbuDhabifundwouldcovertheamountnomatterwhat.ItshouldhavebeenaredflagforDeloitte,giventhelettersithadreceivedallegingfinancialfraudat1MDB,not tomention the fact1MDBalreadyhadended its relationshipwithtwomajorauditors.ButapieceofpaperfromAabarappearedtobegoodenoughforTantogetcomfortablewiththeinvestment.

Auditorsaremeanttobeindependent,butTanofferedforDeloittetohelp1MDBwith itsmedia relations.Withbarelyanybusiness,andencumberedbyhugeborrowings,theonlywayfor1MDBtoavoidafinanciallosswastoagainrevalue its land portfolio and book the profits, as it had done in 2010. In thisway,1MDBwashopingtoshowa$260millionprofit.

Tanwasnotonlysupportiveofthisaccounting,healsoofferedtoexplainitpubliclytohelpdeflectanynegativemediastories.Deloittehadbeensohelpful,in fact, thatTanwas expecting something in return, andhe askedwhether hisfirmwouldbeselectedtoaudit1MDB’smanysubsidiaries,includingtheenergyunit that was gearing up for an IPO. The board confirmed Tan’s requestimmediately, and its chairman,LodinKamaruddin,Najib’s close aide, saidhewantedDeloitte’s“professionalismandobjectivity”putonrecord.

Still, theboardwasadamant1MDB’smanagement repatriate theCaymanIslandsmoney, tohelp slash the fund’sdebt and to show theEdge newspaperandothercriticstheywerewrong.OnlyLow,andperhapsafewassociateslike

Al Husseiny and Yeo, knew the truth: There was no money in the CaymanIslands.

AsdawnapproachedonenightinMay,LowmadeanunusualrequestofstaffinaprivategamingroomatthePalazzoontheLasVegasStrip.Drunkandinhiselement,Lowcalledoutforawatermelon.Someofthosecrowdingaroundthebaccarattable,manyofthemmodels,didn’tknowthisshort,pudgyfigurewhowasputtingdown$200,000betsata time.Thewhisperwentaround thathe’dfinancedTheWolf ofWall Street, a film that everyonewas talking about, buttherewassomethingunhingedabouthim.Hewasonalosingstreak,andwhenthePalazzostaffturnedupwithawatermelonfromthekitchens,Lowseizeditandrolled itdownthe table—supposedlyforgood luck—sendingcards flying.Still, the lossesmounted, andguzzling JohnnieWalkerBlueLabelwhisky,hestartedbellowingtostaffagain.

“RedT-shirts,”hetoldastaffmemberwaitingonhim.“EveryoneneedsredT-shirts.”

The staff hurried to comply, bringing in redPalazzo tourist shirts for theroomofabouttwentypeople,includingJoeyMcFarlandandRizaAziz.

“My friend couldn’t even watch,” said one young woman who was inattendancethatnight.“Hesawonthattableallthemoneyhewouldevermakeinhislife,hiscollegetuition,car,home,everything.Wonandlost.”

ItwastypicalLow,whoonanotherdrunkoccassionhaddropped$50,000worthofcasinochipsonthefloor,onlyrecoveringthemwhenashockedfriendnoticedtheloss.

AsthenightofgamblingatthePalazzowoundupatsunrise,Lowhandedthecasinostaffatipof$1million,oneofthelargesteverattheestablishment.

HoKayTat inAprilwroteastridentcolumn in theEdge callingon1MDB tonamethefundmanagerlookingafterits$2.3billionintheCaymanIslandsandtobring themoneyhome.Then, inMay,aSingaporenewspaper, citing insidesources, namedHongKong–basedBridgeGlobal as the fundmanager.WhenLoboLeelatereraseddetails,includinghisname,fromBridgeGlobal’swebsite,the newspaper noted the suspicious behavior. Low was furious—he believedtherewasaleakatBSI—andheorderedthebanktohuntdowntheleaker.Thesuspicion fell firstonKevinSwampillai,Yeo’sboss,andLowmadeefforts togethimoffthe1MDB-relatedaccounts.Swampillaideniedanyinvolvementandrefusedtobudge.

Over the summer, Low lurched from party to party, spending his daysrailingagainstunnamed“leakers.”Thefacadeofcarefreepartyingwasstartingtocrumble,asLowbecameparanoidaboutaJudasinhisranks.

Around this time, he persuaded Yeo Jiawei, the funds expert at BSI, tocomeworkforhim.Yeoaccepted.Fromthispointon,Lowdidn’tevenwanttospeakonthephoneoruseemailforimportanttransactions,andheplannedtotapYeo’s financial expertise, aswell as having him courier top secret documentsaroundtheworld.

The previous fall, Low had invited Yeo to watch FloydMayweather Jr.fight Marcos Maidana II at the MGM Grand in Vegas, and the youngSingaporeanbecamehookedon the jet-set lifestyle.Hisproximity toLowhadswelled Yeo’s self-regard, and he sneered at those at BSI who didn’t traveleverywhere by private jet. He already had made millions of dollars, secretlyfunneling off fees paid by 1MDB to BSI and Bridge Global to manage theCaymanIslandsmoneyandotherinvestments.HebegantobuymultiplehomesinSingapore andone inAustralia.NowLowenticedhim intohis inner circlewithpromisesofevenmorebountifulriches.

Yeowouldpockettensofmillionsofdollarsmore,butitcameataprice,asLow morphed into a tyrannical—and insecure—boss. The banker stayed incontact with former colleagues at BSI, telling them stories about how Lowwould take calls on his private jet and start screaming. He was especiallyperturbedbydetailscomingoutabouttheCaymanIslandsinvestment.ScaredbythewayLowwasacting,soatoddswiththemildmannersheknew,Yeobegantobelievehisnewbosswaslosingcontrol.

Addressing1MDB’sboardinJuly,TimLeissnerwasdoingthebesthecouldtokeep Goldman in the game to win the IPO business. The fund was in gravedanger.Injusttwomonths,ithadlost$140millionundertheweightofhundredsofmillions of dollars in interest costs. The fund needed an IPO of its energyassets, and quickly, to restore it to health. For two years, Leissner hadchampionedtheIPO,butnowhefacedaproblem.

As part of the deal in 2012 to acquire Ananda Krishnan’s power plants,1MDB had given the billionaire the right to subscribe to the IPO at a cheapprice.Now,Leissnerwas explaining to 1MDB’s board how itwould cost thefundhundredsofmillionsofdollarstobuybacktheserightsaheadofthelisting.Some board members were outraged. The original deal seemed way toofavorable to Krishnan, who already had received above-market prices for his

powerassets.Someboardmembersknewabout secretcharitypaymentsofhundredsof

millionsofdollarsbyKrishnan-controlledcompaniesto1MDB.Thatwashowrun-of-the-millgraftworkedinMalaysia:Thegovernmentoverpaidforanasset,and the sellermade backhand contributions toUMNO,while politicians linedtheirpockets.Still,thetermsseemedverygoodforKrishnanandhiscompany,Tanjong.

“IsGoldmanactingfor1MDBorTanjong?”AshvinValiram,aMalaysiantextileentrepreneurandboardmember,askedLeissner.

“Ofcourse,we’rerepresenting1MDB,”thebankerreplied, tryingtokeeptheatmospherelight.“WithoutthisdealwithTanjong,thefundwon’tbeabletoundertaketheIPO.”

Finally,tiesbetweenGoldmanand1MDBwerestartingtofray.Earlierintheyear, 1MDBhadenticedbanks to lend evenmorebyoffering thema roleleading the IPO.The fundhadsecureda$250million loan fromaconsortiumled by Deutsche Bank, whose new country head, Yusof Yaacob, had been atGoldman.Finally,anotherbankwasgettingalookin.

Goldmanitself,worriedbythenegativearticlesandfocusintheWallStreetJournalonitshugeprofits,begantodistanceitselffromthefund,andwasnotkeen to get entangled in fresh lending. Leissner was furious when 1MDBselectedDeutscheandMaybanktoruntheIPO,alucrativeassignmentforbothbanks, and he turned to Jho Low to ensure a role for Goldman. In the end,1MDBappointedthebankasanadviserfortheIPO.

At this juncture, Leissner was unsupervised, traveling the world, andspending largechunksof time in theUnitedStateswithhisnewwife,KimoraLeeSimmons.Thebanker, througha limited liabilitycompany,putdown$19millionover the summer for a base inNewYork’sUpperEastSide, a 4,600-square-foot, five-bedroom apartment in the Marquand, a 1913 Beaux Artsbuilding just a stone’s throw fromCentralPark, but he spent asmuch time inLos Angeles, at Simmons’s Beverly Hills mansion and flying to Asia. Thefollowing year, a British Virgin Islands company that Leissner controlledacquiredtheSaiRam,a$20million,170-footyachtwithsixcabins.

For years, Leissner had resented that Goldman never promoted him to aregional role, a consequence of his reputation as a cowboy who wouldn’thesitatetobypassinternalpermissionstogetdealsdone.ButinJune,GoldmanappointedhimchairmanofSoutheastAsia;hewasmakingtoomuchmoneyforthe firm, and there were fears he might walk to another bank, taking his

SoutheastAsianrelationshipswithhim.Laterintheyear,LloydBlankfein,eagerfor Goldman to continue building its presence in emerging markets, heldLeissnerandAndreaVellaupasmodelstofollow.

“LookatwhatTimandAndreadidinMalaysia,”Blankfeintoldameetingin New York on how to build business in growth markets, rather than theincreasinglyheavilyregulatedU.S.“Wehavetodomoreofthat.”

Blankfein, Cohn, and other Goldman leaders, in the aftermath of themortgage crisis, had pledged to put clients first and regularly preached goodgovernance.YetGoldmanhadmadehundredsofmillionsofdollarsand1MDBwasindisarray,atahighcosttoMalaysia’speople.Thebankhadturnedablindeyetoirregularities,enablingthekindofindustrial-scalecorruptioncarriedoutin thepastbySaniAbachaofNigeriaorFerdinandMarcosof thePhilippines.Thosedictatorshadbeencrude—Abachahadsent trucks to lootcashfromthecentral bank—but thiswas simply amore sophisticatedwayof takingmoney,oneconductedunderthenosesofGoldmanSachs.

Leissnerwasn’ttheonlyoneinterestedinboats.Evenashisschemewasstartingtounravel,Lowwasmakinghisbiggestpurchaseyet.Therewasoneassethedidn’t yet possess: a megayacht. Since the previous year, Oceanco, a Dutchbuilderofcustomyachts,hadbeenconstructingathree-hundred-footvesselforLow, completewith a helicopter landing pad, gymnasium, cinema, sauna, andsteamroom.Thiswasn’tgoingtobetheTopaz,butitwouldstillbeoneofthemostluxuriousyachtsintheworld,andLowwouldbesparedtheignominyofrentingagainfromSheikhMansour.

As the shipbuilderswere putting the finishing touches to the yacht at theAlblasserdamshipyardnearRotterdamoverthespring,LowpepperedOceancoexecutiveswithdemandstoensureeveryelementwasjustso.Inthesamewayhecuratedhisparties,withperformances,food,anddrinkorganizeddowntothemostminutedetail,Lowwantedthisboattobeperfect.

“For owner’s cabin, perhaps if you can get expert advice from Tempurspecialistswhichismost topof the lineandexpensivewithmostfunctionsformattress,”Lowwroteinoneemail.

AllthoseyearsagoinPenang,Lowhadborrowedaboatandpretendeditwashisfamily’s.Now,thisyachtwoulddeepenthemystiqueofalittle-knownAsian billionaire—and keep hold ofMirandaKerr. Perhaps therewas anotherreason:Theyachtcouldbemovedanywhereinanemergency.

Now,Lowneeded$250milliontopayOceanco,andhehadsomanyother

financing requirements that he was starting to get reckless. Deutsche Bank’srecentloanto1MDBwasmeanttopavethewayfortheIPOof1MDB’spowerassets.In2012,thefund’smanagement,withouttheboard’sknowledge,grantedAabar, the Abu Dhabi fund, options to buy cheap shares in the IPO. It wassupposedlyarewardforitsparentIPIC’sguaranteeof1MDBbonds—thepayoffthatSheikhMansourhadbeenpromisedtwoyearsearlier.

Ahead of the listing, 1MDB’s management claimed it needed to buyAabar’soptionsbackatacostofhundredsofmillionsofdollars,andDeutscheprovidedthemoney.Ofcourse,Aabar’schiefexecutive,MohamedAlHusseiny,and chairman, Khadem Al Qubaisi, were conspirators; the options were justanotherrusebyLowtomovemoneyaround.Assoonas1MDBgotitshandsontheDeutsche Bank loan, the fund’smanagement sent themoney to the look-alikeAabar, the samevehicleLow andAlQubaisi had used to divert cash in2012.

Atthiscriticalstage,Lowcouldhavedeployedthesefundstofillfinancialholes, especially the nonexistent cash in theCayman Islands. Instead, he usedthe bulk of themoney to pay for the superyacht, which was delivered in thesummer. At this late stage, with politicians and journalists clamoring for theCayman Islands money to be returned to Malaysia, it was irrational to beexacerbatingthefinancialdamageatthefund.

Afteryearsofgettingawaywiththescheme,Lowwasblindedtotheperilhe faced. The first party on the yacht, complete with a dragon-shaped cakeorganized by Oceanco, was a birthday celebration that summer forMay Lin,Low’s sister.He christened his newyachtEquanimity,meaning calmness andcomposure,especiallyinadifficultsituation.

PARTIV

BONFIREOFSECRETS

Chapter39

“NoCash.NoDeal.”

Bangkok,Thailand,June2014

ClareRewcastle-Brown looked across the lobbyof thePlazaAthénéehotel incentralBangkokforhercontact.ShewasscanningforaSwissmaninhisforties,andapartfromthosemeagerdetails,knewonlythenameandtitle:XavierJusto,a former employee of PetroSaudi. When a bronzed and muscular figureapproached, and introduced himself as Justo, she was taken aback. ThisencountermadeevenamuckrakerlikeRewcastle-Brownnervous.Themeeting,in June2014, hadbeen arrangedby an intermediary, and shewas expecting ashort,bald,bespectacledman.But then, itquicklybecameapparent that Justo,too, was deeply anxious, and that wasn’t the demeanor of someone about toinflictharm.

“Thepeoplewe’redealingwithareruthlessandpowerful,”Justosaid.Justowasworkingonanalternativewaytoget themoneyhebelievedhe

deserved:findsomeoneelsewillingtopayforthePetroSaudidocumentshehadtaken.

His connection to Rewcastle-Brown had been a fortuitous one. AfterleavingPetroSaudi in2011,Justohad traveled toSingaporefor thecitystate’sFormula 1 night race. He was supposed to have met Tarek Obaid, the chiefexecutiveofPetroSaudi, there foranegotationover the files,buthiserstwhilefriendhadnotshownup.Thetrip,however,turnedoutfruitfulinotherways.Bychance,hemetpeopleclosetoMahathir,theformerMalaysianprimeminister,andhadgiventhemhisbusinesscard.

Nothinghappenedformorethantwoyears.Then,inthesummerof2014,thosepeoplehadconnectedJustotoRewcastle-Brown,whowasdiggingaround,trying to find more about 1MDB. She was eager to have a source withinformationaboutPetroSaudi,whoshehopedwouldhelpherunravelwhathad

transpiredatthefund.Beforemeetinginperson,JustohadsuppliedRewcastle-Brownwithasamplingofhismaterial,asinglepieceofpaperwiththeheading,“Thousandsofdocumentsrelatedtothedeal(emails,faxesandtranscripts)”anddetails of what the server contained. Rewcastle-Brown was eager for theinformation.Thiswas just thebreak sheneeded toproveher suspicionsabout1MDBandJhoLow.Afewweekslater,shetraveledtoBangkoktomeetJusto.

Theserverdatawasreadyonaportableharddrive,detailingthePetroSaudiphaseofthescheme.Buttherewasacondition:Rewcastle-Brownhadtopay$2millionifshewantedtheinformation.Justodefendedtherequestbyexplainingthiswas simplymoneyPetroSaudi owed him.Shewas amember ofBritain’sestablishment, with a brother-in-lawwho had been primeminister, but unlikeMalaysia,thatdidn’tgrantheraccesstomillionsofdollars.

Justowasadamant.“Nocash.Nodeal.”Keen to get her hands on the documents, Rewcastle-Brown set about

finding someone who could pay. It would take her eight months to secure abenefactor.

Low must have heard from the PetroSaudi executives about Justo’sdemandsformoney.ButhehadnoideaaboutthisdangerousmeetingbetweenJustoandRewcastle-Brown.Whatwouldhehavedoneifhedidknow?ItwasasifLowdidn’ttakeJustoseriously.HecouldeasilyhavearrangedforapayoffofameaselyfewmilliontotheformerPetroSaudiexecutive.ButLowdidn’tseeminterestedinattendingtothenutsandboltsofhisscheme.Hewastootakenwithhis new love interest to focus on the mundane business of ensuring crucialinformationdidn’tleakout.

Wearing a green skirt and shirt, with purple floral patterns, Miranda KerrsteppedfromthecarinMunichand,asasmallgroupofphotographerssnappedherpicture,madeherwayintothebranchofEscada.ItwasJuly29,2014,ahotBavariansummer’sday,andshewastheretolaunchJoyful,anewperfumelinefortheluxuryGermanfashionbrand.Thescentwasmeanttoevokesimplicity,andKerr’smakeupwaslight,herbrownhairfallingnaturallyoverhershoulders.AsGermanmodels and television personalities drank champagne and chatted,therewasa flurryofactivityaroundKerr, thekind thatattendedherwherevershetraveled.

“Simplethings,like,youknow,afreshbouquetofflowersmakesmereallyhappy,watchingthesunriseorthesunset,”shetoldoneinterviewer.

In thepast fewweeksKerr’s lifehadbeenanythingbut simple.Britain’s

DailyMail,HELLO!magazine, andmany other publicationswere speculatingabout a burgeoning romance between the model and James Packer, theAustraliangamblingbillionaire.InJune,AustraliannewspapersnotedKerrhadbeen aboard Packer’s superyacht,Arctic P, off the coast of Cyprus, and cited“insidesources”saying that, rather thanaromance,shewas looking toget themogultoinvestinKORAOrganics.HercurrentinvestorswerethetwinsonsofReneRivkin,anAustralianstockbrokerwhowas jailed for insider tradingandlater took his own life, who had taken a 25 percent stake in KORA. But themodel had grander ambitions for her company, which specialized in organiccosmetics,andsheneededabigcapitalinjection.

The speculation, however,was focusedon thewrongbillionaire.AsKerrfinishedupherworkinMunich,JhoLowhadarrangedforaprivatejettopickherupandwhiskhertoNaplesinItaly.Hehadbeenplanningthistripforoveramonth,evenhiringahigh-endconciergeservicetochoreographeveryelement.Low ordered his new yacht Equanimity, piloted by British and Americancaptains, to sail to the waters around Italy. With its Asian-inspired interior,constructedoutofwood,bamboo,marble, andgold leaf, theboathelpedLowstandoutfromthemerelywealthy.Itcouldaccommodatetwenty-sixguests,buthadevenmoreberthsfortwenty-eightcrewmembers,ensuringasufficientstaff-to-guest ratio. Itwouldcostmillionsofdollarsayear just tooperate.This tripwastobemuchmoreintimate,althoughKerr,asever,wasaccompaniedbyherpublicist,KristalFox.

Billionaires are today’s royalty, and like a modern-day Louis XIV, Lowthrived at being the center of orchestrated formality, each of his whims metimmediately,whetherbyboatstaff,privatebankers,orartdealers.Afewdaysearlier, Low had taken delivery from Lorraine Schwartz of amatching set ofjewelry,comprisingdiamondearrings,anecklace,abracelet,andaring.Afewweeksearlier,he’dsentSchwartzapictureofKerrwearingTiffany jewelry togiveheran ideaof themodel’s taste.Over thenext tendayson theboat,as itsailed around Italy and to the Greek island of Corfu, Low gave the variouspiecesofjewelrytoKerroverelaboratesetdinners.

Yet Low was straining to pay for all this opulence. Although some $5billion had come out of 1MDB, the scheme had so many tendrils—so manypayments to conspirators and business partners, and to keep up a billionaire’slifestyle—he was often hustling for cash. Recently, he had hired U.S. publicrelations firmEdelman to help counter the growing number of negative pressstories about him, and would later employ Schillings, the British reputation

consultancy.Edelman’s serviceswere costing him asmuch as $100,000 somemonths.

As bills piled up,Lowbegan tomiss payments, including legal bills andsalariesforthecrewofEquanimity,forcinghimtousehisvastartcollectionascollateralforaloanfromSotheby’sFinancial.

Topaythe$2millioninvoiceonKerr’slatestjewelry,Lowagainraidedthefund.Ashewassuchanimportantcustomer,Schwartzpermittedhimtopayafewmonthsafter theCorfu trip,butbySeptemberheneededtosendthecash.Givenhowmuchhehadtakenfrom1MDB,Lowseeminglycouldhavefinancedthisrelativelysmallamountfromsomepotofmoneysomewhereintheworld.

Instead,hewasseizedbytheneedtogetasmuchoutof1MDBashecould,perhapsbelievingtheupcomingIPOwouldkeeptheedificefromcollapsing.HehadalreadytakenmoneyfromaDeutscheBankloanto1MDBinMay—alate-stage flowofmoney thatcouldhavegone toshoreup1MDB’s finances—andspentitontheEquanimity.Now,hesetabouttryingtogetafurther$725millionin loans from Deutsche, ostensibly for the same reason: Ahead of the IPO,1MDBneededtopayoffAabar tocancelevenmoreoptions thatallowedit totakeastakeinthelisting.

Given the profits Goldman had made from 1MDB, Deutsche Bank waskeen, but it couldn’t muster this money alone. To rally otherMiddle Easternbankstotakepart,LowwroteAmbassadorOtaibaonSeptember10,2014,usingtheEricTanGmailaccount,requestinghimtousehisswayinAbuDhabitogetother lendersonboard.The ambassadordulyobliged andwrote themanagingdirector of FirstGulfBank,which, alongwithAbuDhabiCommercial Bank,and a Kuwaiti lender, joined a consortium led by Deutsche Bank. Goldmanlookedattakingpart,butfinally—afteranumberofyearsofobliviousness—thebankhadquestionsaboutthefund’sbehaviorandbackedout.Ascollateralfortheloan,1MDBhadpostedits$2.3billionCaymanIslandsinvestment,butthefund’sexecutives,whenpushedbyGoldmanbankers,hadbeenunabletoshowproofitexisted,justaguaranteefromtheAbuDhabifundAabar.

MohamedAlHusseiny,Aabar’schiefexecutive,helpedtheprocessalong,urging Deutsche Bank employees to disburse the new loan quickly. AnotherLow associate, Terence Geh, a finance executive at 1MDB, also pushedDeutscheBank tohurryup,citingPrimeMinisterNajib’sdesire to receive themoneyexpeditiously.

Then, 1MDB requestedDeutscheBank send the first trancheof the$725millionloandirectlytoAabar.Itwasanoddarrangement.Normallyabank,for

compliance reasons, would send such large amounts of cash directly to theborrower.ButDeutschewas satisfiedby the apparent involvementof theAbuDhabi fund. The perpetrators had tricked the bank: The recipientwas anotherlook-alike Aabar, set up by Al Husseiny with an account at UBS Bank inSingapore. Two days later, more than $100 million was diverted to a shellcompanycontrolledbyFatEric.

ItbecameclearfromwhatoccurrednextwhyLowneededtokeeppilferingthe till: Therewere just somany people to repay for their services. The shellcompanysent$13million toDensmore, aBritishVirgin Islands firmpartiallycontrolled byOtaiba, which had an account at BSI in Singapore, an apparentrewardforusinghisambassadorialpositiontohelpgettheMiddleEasternbanksonboard.KhademAlQubaisi,whowasAlHusseiny’sboss,got$15million.

AndLow,ofcourse,tookhiscut,sendingsomeofthemoneytoLorraineSchwartz. A few months later, he would buy Kerr yet more jewelry, a $3.8milliondiamondpendant,makingagrandtotalofover$8milliontoacquirethesupermodel’saffections.

InSeptember2014,MahathirMohamad,theeighty-nine-year-oldformerprimeminister of Malaysia, who remained a powerful figure in the ruling UMNOparty, received a dossier of leaked information, including emails from 1MDBthat showed Jho Low was involved in investment decisions. After years ofspeculation about his role at the fund, here was proof.Mahathir still wieldedpoweratUMNO,andhebegantoengageinbackroomdealingintendedtoforcePrime Minister Najib to resign over this mess. The fund’s huge debt riskedtopplingMalaysiaintoacrisislikeArgentina,Mahathirwroteonhisblog.ThiswasnottheEdge,ascrappynewspaper,butoneof thenation’smostpowerfulfiguresraisingconcernsabout1MDB.

Untilnow, journalistshadonlybeenable to speculateaboutLowand thesourceofhiswealth.Tocounterthestories,Edelman,thepublicrelationsfirm,put out a statement denying their client had received “patronage” fromMalaysia’sgovernment.Butnowsolidinformationwasstartingtoleakoutfromthetroubledsovereignwealthfund.ClareRewcastle-BrownatSarawakReport,whoalsogotholdof theemails,publishedapiece titled“JhoLow’sSpendingandMalaysia’sDevelopmentMoney,” inwhich she questionedwhy the fundhadliedaboutLow’ssecretrole.

“Malaysiansareentitled toconclude thatLow’srecord levelsofspendinginvariousbillionairehotspots,”shewrote,“haslargelybeenpaidforbythem.”

AtDeloitte’sofficesinKualaLumpur,thedevelopmentssparkedpanic.ItsauditorswererushingtosignoffontheaccountsforthefinancialyeartoMarch2014,whichunderMalaysianlawweresupposedtobesubmittedbytheendofSeptember. The fund had never managed this in the past, but now a timelysubmissionwascrucialtogettingtheIPOawaybytheyear-end.

Concerned about its reputation, Deloitte was demanding a quickrepatriationof the$2.3billion in theCayman Islands fund.The1MDBboard,apparently under the illusion there was money there, upped the entreaties onmanagementtocomply.Sincefirsttakingcashfrom1MDB,Lowhadreliedonaccountingtrickerytomakethisproblemdisappear,butthroughthreedifferentaccountingfirmsthereitremained,likeapebbleinhisshoe.Before,he’dgoneontakingmore,andspendingwildly,seeminglyundertheassumptionhecouldcoveritupwithnewtrickerydowntheroad.Now,ashisdesperationmounted,Lowwas coming to a stark realization: Hewould have to give up some realfunds.Thetroublewas,hedidn’thave$2.3billionathisdisposal.Hehadtofindanothermanuever—anditwouldbehismostrecklessyet.

Turning toYeo Jiawei, the formerBSI fund specialist,Low looked for awayout.Howcouldtheyturnafewhundredmilliondollars—theremainderoftheDeutscheBankmoneynotused for jewelryandotherpurchases—into$2.3billion?ThiskindofalchemywasbeyondevenLow,butaccountingtrickshadworked for years to hide his thefts from 1MDB, so why not one last,monumentalsleightofhandtofoolDeloitteandtheboard?Yeohadanidea,andhelookedtoAmicorp,theSingapore-basedfinancialcompanythatadministeredfunds in Curaçao, to put it into practice. To make it look like 1MDB wasbringing the money home, Yeo devised a complex and circuitous flow ofpayments.

Itwasthecraziestplantodate,sooutlandishitappearedtohavenochanceofsuccess.The ideawas to transferaportionofcashfromthe latestDeutscheBank loan into the Cayman Islands fund. From there, 1MDB would then“redeem”thismoney,butimmediatelysenditintoaseriesofoffshorevehiclesset upbyAmicorp, until the cash endedupback at theCayman Islands fund.Fromhere,1MDBcouldagain“redeem”themoney.Itwasthesamecashgoingincircles.Theperpetratorssentachunkofafewhundredmilliondollarsthroughthis cycle, and then repeated theprocess fivemore times,making it lookas if1MDBhadredeemed$1.5billionofitsnonexistentCaymanIslandsinvestment.

Satisfiedby themoney cominghome,Deloitte in earlyNovember signedoff on 1MDB’s accounts. The auditor hadmissed the circuitousmovement of

cash.Thefundhadmadeovera$200millionloss,whichwasunlikelytoenticeinvestorstotakepartintheIPO,butitappearedtohavequieteditscritics.Inastatement, 1MDB announced it had redeemed over half of the money in theCaymanIslands.Lowlookedtohaveperformedamiracle,andperhapstheIPOwouldproceed,buttherewasstillaproblem.

DeutscheBank had noticed somethingwasn’t right, pushingLow furtherinto a corner. Some bankers at Deutsche were suspicious about the CaymanIslands investment, thecollateral for its loan. If theGermanbankaskedfor itsmoneyback,theinvestmentfundwouldhavebeenunabletocomeupwiththecash.The1MDBhouseofcardswouldcomecrashingdown.

The Malaysian needed some good publicity, and like many disreputablebusinessmen,helookedtophilanthropyforaquick-fixboosttohisimage.Itwasasignofgrowingdesperation.

Chapter40

GenerousJho

NewYork,October2014

AsAliciaKeysandherhusband,SwizzBeatz, introducedhim,LowrosefromhisseatandmadeforthelecternatCiprianiWallStreet.FerventapplauserangoutfortheMalaysian,whowasbeinghonoredatoneofthehighlightsofNewYork’s social calendar, theAngel Ball. A yearly event—organized byDeniseRich,asocialiteandsongwriterwhosedaughter,Gabrielle,haddiedofcancer—itattractedHollywoodstars,musicians,andbusinesstitans,andraisedmillionstofight thedisease.Afewmonthsearlier,RichhadtelephonedLowtoinformhimhewouldbehonoredasthatyear’s“AngelGabrielle”ataballonOctober19.

Dressedinblacktie,Lowtooktothestageontheeveningofthegala,andas the applause died out, he took amoment to look out across the room.Thebanquet hall had once been home to the New York Stock Exchange, and itsGreekpillarsandhighceilings,centeredaroundanimposingWedgwooddome,exuded power and status. Low could see many people he knew well, andcountedasfriends.

There was Rich herself, whose former husband, Marc Rich, had fled toSwitzerland after being indicted on federal charges of tax evasion, eventuallybeing granted a pardon by President Bill Clinton. Nearby was AmbassadorOtaibaandhiswife,whoalsowerebeinghonoredas“AngelsofInspiration”fortheircharitywork.SittingacrossfromthepairwasJamieFoxx,wholater thateveningwouldperform,aswouldAliciaKeysandLudacris.LorraineSchwartz,too,wasonhand,aswereParisHiltonandRichieAkiva,ownerof1Oak,aNewYorknightclubfrequentedbyLow.

Hebeganbytellingthestoryofhow,inFebruary2012,he’dundertakenhisfirsteverfull-bodymedicalcheckupinSwitzerland,onlyforadoctortotellhim

hemayhavehadstage2lungcancer.“I feltmyworld fall apart,”Lowsaid, soundingabit stiff, as if trying to

makesurehegotthestoryright.“ThiswasoneofthechangingmomentsofmylifeandIdidn’tknowwhattodo.”

He related how he called Al Husseiny—gesturing to his friend in theaudience—who had connected himwith a doctor at theUniversity ofTexas’sMDAndersonCancerCenter, oneof theworld’s tophospitals for treating thedisease.Aftersixmonthsoftests,thedoctorstoldhimitwasonlyaninfection.Thereprievefromcancerchangedhisoutlookon life,Lowsaid,and later thatyearhesetup theJynwelFoundation tomakecharityabiggerpartofhis life.Thefollowingyear,inOctober2013,Lowpledged$50milliontoMDAndersonto fund an effort to better diagnose cancer by feeding patient data into IBM’sWatsonsupercomputer.

HerewasLow,caughtoncamera,carryingonashehadforhisentirelife,the master storyteller mixing reality with half truths, all in the service ofdistracting anyone from looking deeper. What you claimed to be, you were,plainandsimple.PerhapsLowhadbeenworriedaboutdyingofcancer,butheusedthespeechtodevelopanotherfiction,oneabouthisorigins.

“I’d like to take this opportunity to tell New York a bit about mybackground,”hesaid.

Some in the audience groaned as the speech went on and on. But Lowneeded tomake hismoment count. He spun, once again, the old story of hisgrandfather, who had come toMalaysia from China in the 1940s and built afortune in the1960s—onlynowhe told thisstory toanaudience that includedluminariesofNewYorkbusinessandentertainment.Hisgrandfather,Lowsaid,had started the Low tradition of philanthropy, giving to communities acrossAsia, including to“orphans.”Herecentlyhaddied,alsoofcancer,whichLowsaidhadinspiredhimtodonatetoMDAnderson.

“Everythinghestoodforinspiresmeeveryday,”Lowsaid.Thegrandfatherhaddied,Lowundoubtedly lovedhim,buthewasnotas

wealthy,or suchaphilanthropist, ashisgrandsonmadeout.NeitherwasLowhimselfsocharitable;theJynwelFoundationhaddonelittlethrough2012,whileLowwasbusyraidingthe1MDBfund,evenduringhisowncancerscare.ItwastruethattheJynwelFoundationhadpledgedmorethan$100milliontocharities,althoughithadactuallypaidoutonlyafractionofthatamount.Itsactivitybeganto pick up only in late 2013, just as negative media stories about Low weresnowballing,andmoresoin2014.

Inorder tochange thenarrative,EdelmancounseledLowtopublicizehischaritableendeavors,includingpledgesoftensofmillionsofdollarstoNationalGeographic’sPristineSeasendeavorandtotheUnitedNationstosaveitsnewsservicefromclosure.Lowwasevenplanningtodonatetohisalmamater.Athisrequest,anarchitectdrewupplansforanewbuildingatWharton tobecalledtheJynwelInstituteforSustainableBusiness.Lowwasplanningtomakea$150million commitment to build and operate the institute over thirty years, amunificentgesture,redolentofaRockefelleroraCarnegie.

Lowlookedtohaveahandleonthesituation,withDeloittesigningoffon1MDB’saccounts,anIPOinthecards,andtherosyglowofabigphilanthropicaward.HearrangedforJynweltomakeasnazzycorporatevideo.Inthevideo,ThomasKaplan,aU.S.businessmaninwhoseNewYorkfinancialfirmJynwelhad invested $150 million, extolls Low for always standing by his promises.TherearealsocameosbySzenLow,AliciaKeys,andatopMubadalaexecutive.

“How do you quantify luxury and inspire synergies that create value foreveryone whilst building trust and loyalty for a lifetime?,” a narrator saysbreathlessly during the video, filmed in Abu Dhabi, New York, and theCaribbean.“ForJynwel,dynamicquality,excitingvaluecreation,andloyaltrustarethefoundation.Nothingslipsbeneath.”

Lowevenwasintalksforwhatwouldhavebeenhisbiggestcorporatedealyet, a billion euro bid alongside Mubadala to buy Reebok, the Boston-basedsports-apparel company, fromAdidas.CalledProjectTurbocharged at Jynwel,Low’sfirm,theacquisitionwouldsealhisnameasagold-platedinvestor.SwizzBeatz, who had a creative role at Reebok, was involved in the deal. TheMalaysiantraveledtoBostonfornegotiations,stayingforweeksinasuiteattheFourSeasons.

HealsobegantalkswithTomFord,theU.S.fashiondesignerwhomakessuits for JamesBond, to take a 25% stake in his company. Thesewere high-profile deals aimed at drowning out the increasingly loud noise about Low’spast.

But he would not have time to finalize the negotiations. Back home inMalaysia, PrimeMinisterNajib’s secret accountswere finally attracting somescrutiny, and Low was forced to hustle to stop a nosy Australian bank fromgettinginhisway.

Chapter41

SacksofMoney

KualaLumpur,Malaysia,December2014

InearlyDecember,JoannaYu,theAmBankemployeewhoranPrimeMinisterNajib’ssecretaccounts,wasinapanic.

“Verystressfulthesedays.ANZrunningthebank,”shetextedtoJhoLow,referingtotheAustralianbankthatheldastakeinAmBank.“Weneedtoclosetheaccountssoonestplease,”shesaid.

Lowtextedback“okay”butseemeddistracted,andasthemonthworeon,and the accounts remained open, Yu got increasingly worried. In a series ofmessages,sheexplainedtoLowhowthesituationwasperilous.

Cheah Tek Kuang, the chief executive who had given cover to theenterprise,hadsteppeddowntotakeonanadvisoryrole.Thenewchief,AshokRamamurthy,was an appointee fromANZ, and he’d found out aboutNajib’ssecretbusiness.

By now, the prime minister had a number of accounts at AmBank, andRamamurthy was watching. Late in 2014, the new chief executive becamefretful about a series of huge cash payments intoNajib’s accounts. In the lastfewmonths,theprimeministerhadbeenrunningshortonfunds,ashepaidoffpoliticians.Desperate to stop the accounts becoming overdrawn,whichwouldattractattention fromcompliance,Lowarranged foranassociate tomake last-minutecashdeposits,literallytakingsacksofcashintoanAmBankbranch.

Itwas a hugemiscalculation and alarmedYu,who pleadedwith Low tostop.Heedlessoftheadvice,hekeptsendingtheassociatewithsacksofcash—literally bundles of notes in bags—toAmBank branches. The deposits totaledonly$1.4million,buthandingmoneyoverthecounterlikethishadsetoffanti-money-laundering alerts atAmBank, andRamamurthywas forced to act. Thechief executive alerted the AmBank board and Bank Negara Malaysia, the

centralbank.Lowwasfurious.“Thisisconfidential,”hereplied,orderingYutotellCheahTekKuangto

stopRamamurthyfromfurtherdisclosures.Itwas too late, she replied,ANZboardmembersknewabout theaccount

now,andCheah,whosawthewritingonthewall,wasretiringfromthebankattheendofDecember.

At ANZ headquarters in Melbourne, Australia, overlooking the city’sformerdocks,executivesweredisturbedbywhattheywerefindingout.Itwasapotential public relations disaster for ANZ, which was the largest singleshareholder in the bank. Ramamurthy had been with the Australian bank formorethantwodecades,andShayneElliott,ANZ’sfinancedirectorandoneofAustralia’smostseniorbankers,evensatonAmBank’sboard.

The bank had wanted to tap intoMalaysia’s growth—like many foreignretail banks that expanded in emerging markets during this period. But ANZclearly had no idea about what had transpired at a bank it was supposed tocontrol. Itwasn’t just a question ofNajib’s accounts:AmBank also had beenlending to 1MDB, and the news stories about the fund were making ANZexecutivesnervous.Tolimitthepotentialdamage,theboardorderedAmBanktoimmediatelydropoutofanyworkon theIPO,which itwasco-arrangingwithDeutscheandMaybank.

The revelations were also a dilemma for Bank Negara Malaysia. Thecentralbankoversawthecountry’sfinancialsystem,andithadfailedtouncoveroneof theworld’sbiggestfinancialswindles.CheahhadinformedZetiAkhtarAziz, the sixty-seven-year-old governor of Bank Negara, about the primeminister’saccountin2011.HetoldherNajibwasexpectinginflowsofhundredsof millions of dollars in political donations from Saudi Arabia—a storyconcoctedbyLowtoexplainthetorrentofcash.

That was the last Zeti heard of the secret accounts. It was a delicatesituation, as it involved the prime minister, but Zeti now ordered an internalreview of his accounts. Formore than a decade, she had been at the helm ofBankNegaraMalaysiaandwasregardedasoneofAsia’smostskillfulcentralbankers. This issue threatened her reputation, and she wanted to get to thebottomofit.

As the stress mounted, Yu was looking to change banks herself, scaredabout this scrutiny from ANZ and the central bank. Protected in his bubble,served by sycophants, Low foremost among them, Najib was among the fewwhodidn’tknowthenoosewastightening,andheorderedhisaccountsremain

open.Theprimeministerneededtokeephiswifehappy.

JustbeforeChristmas,Najib,accompaniedbyRosmah,andtheirusualretinueofhangers-onandsecurity,flewintoHonolulu,thestatecapitalofHawaii,aboardaMalaysiangovernmentjet.Dayslater, thepairbreezedintoaChanelstoreinHonolulu’supscaleAlaMoanaCenter.TheFirstLadyperusedthejewelryandbagsondisplay.LikeherfriendJhoLow,herlusttoacquirecouldnotbesated.LowhadprovidedRosmahwitha$27.3millionjewelfromLorraineSchwartz.But formoremundane purchases, those costing only a few hundred thousanddollars,shereliedonNajib’screditcards.

In theChanel store, her items selected,Rosmah turned to her husband topay.Theprimeministerwhippedouthisplatinumcreditcard,witha$1millionlimit,andhandedittothecashier.Amomentlater,anervousChanelemployeeinformedNajibthatthetransactionwasnotgoingthrough.Annoyed,hetappedoutamessagetoLowonhiscellphone.ThecreditcarddrewfromhisAmBankaccounts,whichwerefundedby1MDBmoney.

“Myplatinumcards arenotgoing through Jho.Canu callAmBankVisaandMastercardrightaway?”hewrote.

Lowmessaged JoannaYu,who reassured him the primeminister’s limitwasstill$1million.Afteranawkwardwait in theChanelstore,eventually thecredit card machine burst into action, charging theMalaysian people another$130,625forRosmah’sfrivolity.Itwasjustadropintheoceanofherspending.Months earlier, on the Italian island of Sardinia, Najib had used his card toacquire750,000eurosinjewelryforhiswife.

Since2008,Rosmahhadspentat least$6millionusingcreditcards—herhusband’s, but also others in her own name—in a nonstop round of shoppingstretching fromRodeoDrive inBeverlyHills, toHarrods inKnightsbridge, toSaksonFifthAvenue.Inprivate,shethoughtnothingofusinggovernmentjetsforhershoppingtrips.ButaftertheBersihantigraftprotestsin2012hadtargetedRosmah’s spending, she went on a public relations campaign to improve herimage.Herwealth,shesaid,wasduetoalifelonghabitofsaving.

“I have bought some jewelry and dresses withmy ownmoney.What iswrongwiththat?”shewroteinanautobiography.

ButMalaysiansweren’tsoeasilyfooled.“Shesaidshesaved thatmoneysinceshewassmall.That is impossible,”

said Anis Syafiqah Mohd Yusof, a twenty-four-year-old student from theUniversityofMalaya,whoorganizedasmallprotestagainstcorruption,oneof

themanyaroundthisperiod.Inonlineblogposts, averageMalaysiansderided the first family for their

extravagantlifestyle.OnesitecollectedpicturesofRosmahwithmultipleBirkinbags.Thosewhoprotesteddidsoatgreatpersonalrisk—evenofjailtime—buttheegregiouscorruptionofthisregimewasbecomingtoomuchformanypeopletobearsilently.

AsRosmahshopped,Najibhadotherbusiness to transact inHawaii.Twodays later, on Christmas Eve, the prime minister met President Obama for aroundofgolf.UnawareofthetroublefacingLow,Najibsawthechancetoplaythepresidentasa triumph,anothersignofhisgrowingpowerandstatureonaworld stage. It was a rare honor: Obama golfed with British prime ministerDavidCameron but preferred to head outwithVice President JoeBiden, andfewforeignleadershadbeengiventhechance.

To underscore his support ofNajib,Obama had agreed to a round at theKaneoheKlipper golf course, just a short drive fromwhere the presidentwasvacationingwithhisfamily.DespitetheprotestsagainstNajib,ObamacontinuedtoviewhimasamongtheUnitedStates’bestalliesinAsia.Buttheroundendedonananticlimax.

On the eighteenth green,Obamamadehis first putt.Ashe struck, itwascleartheballwasmovingtotheleftofthehole.Thepresidentmovedtotaptheball in, but picked it up before it missed again. Prime Minister Najib thensteppedup,buthealsomissedasecondputt.Obamaconsoledhimwithapatontheshoulder,andthetwoleadersmovedtowardtheclubhouse.

By December, Deutsche Bank was perturbed. The bank had dreamed ofreplicatingGoldman’sprofits,butinsteaditwasnowdawningonexecutivesthat1MDBhadsomethingtohide.Deutschehadlenthundredsofmillionsofdollarsto the fund,whichwasobligated,aspartof the loanagreements, tohandoverfinancial information to the bank. But Terence Geh, the fund’s financeexecutive,wasrefusingtocooperate.ThebankparticularlywanteddetailsontheCaymanIslandinvestments,whichwascollateralfortheloans.

ThemoneywassupposedlyheldbyBrazenSky,the1MDBaffiliate,atanaccount at BSI in Singapore, but Geh declined to hand any data over, citinggovernmentsecrecy.IfDeutschefoundouttherewasnomoneythere,itwouldrecall its loans,plunging1MDBintofurtherfinancialdistressandscuttlingtheIPO,whichDeutschewashelpingarrange.The1MDBboardalsowasanxious.InDecember,thefund’sofficeshadreceivedavisitfrompoliceafteranUMNO

politician close toMahathir hadmade a complaint about possible fraud at thefund.Theyhadgoneawaywithout takingdocumentsbut theraidspookedoneboard member, who worried aloud whether they could all be prosecuted forcriminalbreachoftrust.

DeutscheBankwasnotbuyingGeh’sexcuses,and, justbeforeChristmasDayin2014,Lowtookadrasticstep,orderingseniorexecutivesatthefundtodestroy all documents at 1MDB’s headquarters inKuala Lumpur. Lowwas aphantompresenceat1MDB,rarelyintheofficesbutexertinghispowerthroughexecutiveswhowouldcarryouthiswisheswithoutquestion.MostofthesmartIvy leaguers had left amid concerns about Low; those who remained wereloyalists.

Thisdemand,however,toerasethedataofamulti-billion-dollarsovereignwealth fund reeked of desperation. Lower-level employees were told to bringtheirlaptopsandcellphonestotheITdepartment,wherestaffwipedthemclearofalldata.Eveninformationonthefund’smainframecomputerwasobliterated.Asanexcuse,executivestoldstafftherehadbeenahackingof1MDB—thatwashow Sarawak Report had obtained the emails—and this was the only way toensuresecurity.

Theactionwasnotrational.Acompanythat’sfacingahackingthreatcansimplytakeitsserversoffline.Notlongafter,thephysicalserverswentmissing,too.Thiswasanattempttoerasehistory,anditwasasignLowwasrunningoutofoptions.Foryears,hehadthrived,leveraginghisproximitytoPrimeMinisterNajibtorun1MDBinsecret.Overtheyears,heexhibitedaninhumantolerancefor risk. The flipside was that Low rarely looked to the future: he had nocontingency plan, no idea of how to get out of this mess, and now he waspanicked.

Buthishaplessmaneuveringdidn’twork.Therewerecopiesofdocumentsinmultiplelocations—Justohadaccesstosomekeyones—makingitimpossiblefor Low to smother all traces of the fund’s existence. Deutsche Bank keptpushing for documents, and Geh eventually was forced to doctor 1MDB’saccounts andBrazenSky’sbank statements atBSI tomake it appear the cashwasstillthere.

The 1MDB fund’s chairman, LodinWokKamaruddin,whowas in closecontactwithNajib,informedtheboard,inameetingonNovember25,2014,thatthere was no choice but to sell assets and wind down operations as soon aspossible.Interestcostsaloneweremorethan$800millionperyearandthefundwasclose todefault.The IPO lookedevermore likeapipedream.Before the

fundcouldbewoundup,however,XavierJustopulledthetrigger.

Chapter42

TheExposé

Singapore,January2015

HoKay Tat strode into the sunlit atrium of the FullertonHotel in Singapore,accompaniedbyhisboss,ChairmanoftheEdgeMediaGroup,TongKooiOng.Thefive-starhotel,animposinggray,granite,neoclassicalbuilding,hadservedas the scrappycolony’sCentralPostOffice in the1900sbutwasnowawell-knownhotelatthemouthoftheSingaporeRiver,toweredoverbytheglass-and-steelskyscrapersofthefinancialdistrict.

As the pair entered the Fullerton,ClareRewcastle-Brown came over andinformedthemhercontactwaswaitingintheloungearea.Shehadbriefedthemon a source with information on 1MDB, but they had been expecting aMalaysian,andtheygotashockwhenRewcastle-BrownledthemtoJusto,atall,charming Swiss man sitting in a comfy chair. It was late morning, and overcoffees, Justo showeda samplingof theemails fromPetroSaudi, repeatinghisdemandforpaymentof$2million.

“Weneedtoverifytheauthenticityoftheemailsfirst,”Horeplied.Although she refused to pay him herself, sincemeeting JustoRewcastle-

Brown had been searching for someone to supply the money. The Edge’spublisher,Tong,wasanobviouschoice.Sincefounding theEdge twodecadesearlier,Tonghadbuiltupastaffof350andareputationasMalaysia’sonlytrueindependent newspaper proprietor. He’d agreed to come and meet Justo, andbroughtalongtwoindependentITexpertstoverifytheinformation.

That afternoon, the group reconvened in one of the Fullerton’s meetingrooms,wheretheITexpertspouredoverJusto’sharddisk,takingafewhourstosift through the reams of emails and documents. The experts scoured forevidenceof tampering, lookingat thehiddenmetadatawithinfiles toascertainwhetheranyonehadmadealterationsafterthedateofcreation.

Computerusersleavea“digitalfingerprint,”and,thoughtheycouldnotbe100percentsure,theITexpertsconcludedthat,intheiropinion,thefileshadnotbeentamperedwith.ThegroupthendiscussedhowtopayJusto.Hedidn’twantcash, and he was worried a large transfer into his accounts might lead tocomplicationswithbankcomplianceexecutives.Heleftagreeingtofindawaytoreceivethemoneyatalaterdate,buthandingovertheharddisk.

“Itrustyou,”Justosaidtothegroup.Rewcastle-Brown and Ho Kay Tat had their hands on the journalistic

scoopsoftheircareers.Before they had time to sift through the hundreds of thousands of

documentsprovidedbyJusto,theNewYorkTimespublishedafront-pagestoryon Low on February 8, 2015. The Times piece, part of a series about dodgyforeignmoney in theTimeWarnerbuilding,detailedhisaccumulationofU.S.propertiesandpaintedhimasabagmanfortheprimeminister’sfamily,buyingapartmentsandmansionsandpassingthemontoRizaAziz.ItnotedhowLow’sstory had changed, from being a “concierge” for rich friends to being abillionaireclaimingthathewasinvestingfamilymoney.TheTimesalsopointedouthowRedGranite’sprincipalshadonceputforwardLowasaninvestor,butoflatehadstartedmentioningAlHusseiny.AndthenewspapernotedRosmah’spenchantforexpensivejewelry.

“Neither any money spent on travel, nor any jewelry purchases, nor thealleged contents of any safes are unusual for a person of the primeminister’sposition, responsibility and legacy family assets,” Najib’s office said in astatementtotheTimes.

TheTimespiecerippledthroughMalaysia,pickedupbythosenewsoutletsthatNajibcouldn’tcontrol.Thestatementfromtheprimeminister’sofficewasthelaststrawforNajib’sfourbrothers,whoforyearshadcomplainedinsidethefamilyaboutRosmah’sspending.TheFirstLadywasincreasinglyoutoftouch,a Marie Antoinette–like figure who recently had complained to a publicgathering about the $400 it cost to dye her hair, a monthly wage for someMalaysians. The brothers decided to put out a rare statement to counter theinferencethattheirfather,PrimeMinisterAbdulRazak,hadtakenmoneywhileinoffice.

“Wetakeissuewithanyonewhotaintshismemory,whateverthemotive,”thebrotherswrote.ItwasathinlyveileddigatNajibandRosmah.

Butitwastoolatetosalvagethefamilyname.

In early March, Rewcastle-Brown was ready to publish. After years ofsuspicions about 1MDB and Low, her story, posted on February 28, washeadlined“HeistoftheCentury,”anditdrewbackthecurtainontheearlydaysof the fund’soperations.Thepiece showedwithdocumentaryproofhowLowhad siphoned money from 1MDB via Good Star, the first time anyone haddetailedhowLowtookmoneyfromthefundin2009.Sheembeddeddocumentsintoherstorytogiveitaddedheft:oneemailshowedShahrolHalmi,thechiefexecutive, pushing Deutsche Bank to send money to Good Star; anotherdocumentnamedSeetLiLinastheinvestmentofficerforGoodStar,theshadySeychellescompany,linkingittoLow;andtherewereagreementsforGoodStartopaytensofmillionsofdollarstoTarekObaid.Rewcastle-Brownhadhitthemotherlode,anddayslatertheEdgewouldfollowupwithitsowninvestigativescoop.

The news of Low’s apparent theft caused a civil war within UMNO. Afaction led by Mahathir called openly for Najib to resign. Some seniorpoliticians even arranged to tap the prime minister’s phone and heard himdiscussingwithJhoLowaplantoputtheblameforanycorruptionon1MDB’sMiddleEasternpartners.Until thedustsettled,NajiborderedLowtoleavethecountry and keep a low profile. In public, the prime minister denied anywrongdoing at 1MDB but nevertheless ordered an official governmentinvestigationofthefund,ledbytheNationalAuditDepartment,abodytaskedwith checking state finances. The Public Accounts Committee of Parliament,headed by anUMNOpolitician, began to clamor for answers. The committeeorderedLowtoappearbeforeit,butnooneknewhislocation.

Foryears,Lowmusthavebeenexpectingthisdaytocome.Howcouldhebelieve it possible to take somuchmoney, revealing parts of the scheme to aprime minister, a Saudi prince, Malaysian bankers, and the head of an AbuDhabisovereignwealthfund,whilekeepingthefullcontoursofitsaudacitytohimself?

In thedays after theSarawakReport scoop,Lowacted as if he’d steeledhimselfforthissituationallalong.Manypeople,caughtintheactofsomethingmuch less felonious, would crumble and admit all. Najibwas even talking tofamily members about stepping down. But Low was ready to fight. It was asurvivalinstinct,forsure,butperhapsafteryearsoffabrication,hefoundithardtoperceivethehardlinethatdividedtruthfromfalsehood.MaybehereallydidbelievehewasbenefitingMalaysia,buildingtieswithforeigngovernmentsandraisingthenation’sprofile.

Asthenewsbroke,theMalaysianwastravelingtheworldonhisjet,andhesentoffabarrageofmessagestohisassociates.HetoldKhaldoonAlMubarak,the chief executive of Mubadala, that Malaysia’s government had found noevidence ofwrongdoing. The reports were based on “fabricated” emails fromPetroSaudi. “We expected these fewmonths to be filledwith noise, innuendoandmisinformationfromcertainpoliticalquarters,”LowwroteAlMubarak.Heblind-copiedAmbassadorOtaiba, showing his ally howhewas trying to keepthesituationundercontrol.

“Please note the ‘Sarawak Report’ exposé is sensationalized, filled withinnuendoandbaselessaccusations,”hemessagedJoannaYuatAmBank.Yudidnotrespond;shewastoobusyclosingNajib’saccounts.Finally,underpressurefromAmBank’sboardandamidaconstantshortageoffunds,theprimeministerhadtoacquiesce.ForYu,thescopeofwhatshewasinvolvedinwasrevealingitself. Of course, she knew itwas illegal to keep an account secret, even onecontrolled by the prime minister, and to hoodwink the central bank and theboard.ButthescaleofLow’sschemewasprobablyfarfromherimagination.

A few days after Low’s last messages to Yu, Malaysian police raidedAmBank. Theymoved through the bank’s headquarters, a skyscraper close tothePetronasTowersinKualaLumpur,askingtobedirectedtoYu’sdesk,wherethey demanded she hand over her computer and phones. She compliedimmediately. There were no other senior executives left at the bank for thepolicetoquestion.Herformerboss,CheahTekKuang,hadgoneintoretirementmonthsearlier.AshokRamamurthyhadresignedasAmBank’schiefexecutivein ahurry in earlyMarch, to return to a jobwithANZ inAustralia, and soonafterhewouldleavethebankentirely.

In the wake of the Sarawak Report story, Malaysian law-enforcementagenciesfeltemboldenedtotakeaction,settingupataskforcetoinvestigatethe1MDB affair. The group included Bank Negara, the National Police, theMalaysianAnti-CorruptionCommission,andtheattorneygeneral,thecountry’stoppublicprosecutor.

TheevidencetakenbypoliceaboutNajib’saccounts,includingYu’sphonemessages with Low, painted an extraordinary picture. In the ensuing weeks,officials atBankNegaraMalaysia, underGovernorZetiAkhtarAziz, combedthrough the documents from the raid, revealing a stunning fact: the primeministerhadreceivedmore than$1billion intohispersonalaccounts between2011 and 2014. The biggest payments, totaling $681 million, were from anunknown company called Tanore, which had an account at Falcon Bank in

Singapore.Giventheexplosivenatureofitsdiscovery,thetaskforcedecidednottorevealtheinformationtothepublicfornow.

TheSarawakReport storymadenomentionofNajib’saccounts.And,asyet, the central bank had no evidence the primeminister had receivedmoneyfrom the1MDB fund,but it began to cast its investigatorynet in awider arc.BankNegara reached out to Singapore’s police for information on JhoLow’saccounts.TheSuspiciousTransactionReportingOfficewrotebackonMarch13thatacompanyaccountatBSIBankinSingaporeownedbyLowhadreceived$500million between2011 and2013 fromGoodStar.Thiswas the companySarawak Report hadmentioned, and it appeared to reveal another step in themoneyflows,butitdidn’tconnect1MDBtothePrimeMinister.

Still,theprobehadmomentum,andSingapore,normallykeennottoupsettheequipoiseofitslucrativeprivatebankingworld,begantodigin.

“IfproceedsofcrimehavebeentransferredtoSingapore,wewouldliketoconsiderwhetheranoffensehasbeencommitted,”Chua JiaLeng,headof thesuspiciousreportingoffice,wroteBankNegara.

Authorities inMalaysia and overseaswere closing in.AsLow andNajibweretryingtocontainthefallout,anothermajorfigurewasinperil:KhademAlQubaisiofIPIC.

Chapter43

ButtocksinaG-String

ButtocksinaG-stringTelAviv,Israel,April2015

Behind an office building in Tel Aviv, the flames of an impromptu bonfiremeltedtheplasticofseveralUSBsticks.Twomenstoodwatchingoverthefire.One,MohamedAhmed BadawyAl Husseiny, the chief executive of the AbuDhabi fund Aabar, was there to ensure its contents were incinerated. AlHusseiny,whohadhelpedLowtakemoneyfromthe1MDBbondsarrangedbyGoldman,watched as singedbits of paper froma stackof burningdocumentsfloated into the sky.They includeddocumentsandphotos that riskedbringingthecareerofhisboss,KhademAlQubaisi,crashingdown.ThedocumentshadbeenremovedfromAlQubaisi’shomeandofficeinFrancebyRacemHaoues,aFrench-Algerian man with slicked-back hair. Over years of corrupt deals, AlQubaisihadmadearaftofenemies,andHaoueswasamongthem.

Foryears,HaouesactedasaglorifiedbutlerforAlQubaisi,arrangingcars,jets,andreservationswhilealsooccasionallypassingmessagesbetweenhisbossand people making discreet payments. Haoues was handsomely paid, but hemusthavebecomeincreasinglyenviousashesawAlQubaisiandsubordinateslike Al Husseiny line their pockets with hundreds of millions of dollars inkickbacks. Inamagnanimousmoment,AlQubaisi saidhewould throwhimamorsel—astakeinabigrealestateplayinSpain—butthedealfellapart.Soonafter,inearly2015,AlQubaisifiredhim.ButHaouesalreadyhadaninsurancepolicy:Over time he had amassed a raft of compromising information on hisformerboss.

The documents included Al Qubaisi’s bank statements, details of hismultiple French properties and payments on Sheikh Mansour’s yacht, Topaz.Haoues leaked a small selection of the documents toClareRewcastle-Brown,whopublisheda story in lateMarch2015, justweeks afterher exposéon Jho

Low.ThepieceoutlinedhowaLuxembourgcompanyownedbyAlQubaisihadreceived$20millionfromGoodStar,Low’sshellfirm,inFebruary2013.Itwasaccompaniedbyphotos,alsosuppliedbyHaoues,oftheIPICmanagingdirectorpartyingaroundtheworld.Inoneshot,hewasdancinginaclubwhileatoplessmodel cavorted in an oversized cocktail glass. In another, hewasmaking outwithawomanonasofa,behindsomeshishapipes.Yetmorephotosshowedhiminclubs,wearingT-shirtswithlewdimages,includingonethatfeaturedaclose-up of female buttocks wearing a G-string. It was common for wealthy GulfresidentstoshedmodestArabdressintheWest,butthesebawdypartyphotoswerebeyondthepale—especiallyaftertheywerepubliclydisclosed.

HaoueshadonlygivenadripofhistotalinformationtoRewcastle-Brown.According to a later complaint, filed and thenwithdrawn,Haoues, through anintermediary,setabouttryingtoextractmoneyfromAlQubaisi,warningthat—if he did not pay—more material would come out. The material touching onSheikh Mansour’s business was extremely sensitive. Acting for his boss, AlHusseinyhelpedarrangea transferof30millioneuros toHaoues in return forthe destruction of the documents. After the payment was made, Al Husseinytraveled to Tel Aviv, where he and an intermediary for Haoues built theirbonfire.

Al Qubaisi hoped further trouble had been averted. With the continuedbackingofSheikhMansour,hemighthavebelievedhimself tobeuntouchableandmoredominantthanever.Withinthepastyear,AlQubaisihadputhishalfabillionin1MDBmoneytowork,purchasingapenthouseinNewYork’sWalkerTower for$51million, and twomansions inLosAngeles for a combined$46million.AschairmanofHakkasanGroup,anightclubempireownedbySheikhMansour,hehadbecomeoneofLasVegas’smostpowerfulbusinessmen.

Around the time of Haoues’ blackmail threat, Al Qubaisi launched theOmnianightclubinCaesarsPalace.Itsnamemeaning“thesumofallthings”inLatin,Omniawasthemostexpensivenightclubeverbuilt,atover$100million,andcouldhostmorethan3,500revelers.AlQubaisi’sdomainfeatureda22,000-pound light-emitting, kinetic chandelier, hovering like a UFO over the maindancefloor,alongwithstateof-the-artliquid-crystaldisplays,“operaboxes”thatlookeddownonthemainclub,andanoutdoorterracewithviewsoftheStrip.TheopeningnightinMarch2015featuredsuperstarDJCalvinHarris(whowaspaid hundreds of thousands of dollars a night to perform), and Justin Biebercelebrated his twenty-first birthday at the club over the star-studded openingweekend.

But Al Qubaisi’s optimism was misplaced. Crown Prince SheikhMohammedBinZayedAlNahyan,therulerofAbuDhabi,haddecidedtotakeaction.ThedealingsofhisbrotherSheikhMansour,overseenbyAlQubaisi,hadgonetoofar.ThecrownprinceorderedadiscreetinvestigationintoAlQubaisi.With his brother completely in the dark, investigators piled up evidence offinancialwrongdoing,paintingapictureofAlQubaisiasamanwhohadgrowntoopowerful,failingtorespecttheroyalsforwhomheworked.

On April 22, 2015, a presidential decree ousted Al Qubaisi from IPIC,without explanation. A few months later, his subordinate, Al Husseiny, waskickedoutofAabar,theIPICsubsidiary.AlQubaisiwasinSpainatthetimeforbusiness,andinitiallybrushedoffthechangeasatemporaryissueandattendedafootball game between Real Madrid and Atlético Madrid in the evening. Hedidn’t realize the seriousness of his predicament: Sheikh Mohammed wascleaninghouse. In theGulf, the rulingfamilieswereprotected;butAlQubaisiwasindanger.

ForLow,AlQubaisi’sdownfallmeantoneofhisclosestconspiratorshadgonedown.ItwasunclearhowdeeplyAbuDhabi’srulerswouldprobe—surelytheydidn’twanttoembarrassSheikhMansour—butLowrecognizedtheousterwasdangerousforhim,andhetookimmediateaction.

LessthanaweekaftertheaxhadfallenonAlQubaisi,LowflewbyprivatejettoAbuDhabionadamage-controlexercise.WithAlQubaisioutofthepicture,Lowwas laying thegroundwork toput theblameonhis formerpartner; if thefullstoryaboutthemoneystolenviaIPICevercameout,AlQubaisi,alreadyafallen man, could take the responsibility. Low had ensured his name wasn’tattached todocuments,but thesignaturesofAlHusseinyandAlQubaisiwereallovertheplace.

“There’s rumorsgoing round that I’mabuddyofAlQubaisi, andmoneyhasgonemissing.But it’san internal IPIC issue if someof themoney1MDBsent is not showing up in IPIC’s accounts,” Low told Shaher Awartani,AmbassadorOtaiba’sbusinesspartner,inonemeeting.

In anothermeetingwith the newhead of IPIC—SuhailAlMazroui,AbuDhabi’senergyminister—LowportrayedhimselfasasaviorwhocouldchartacourseoutofthewreckageleftbyAlQubaisi.BynowIPIC’snewmanagementhadgonethroughthefinancialstatementsandwerebeginningtoseethatbillionsofdollarsitshouldhavereceivedascollateralforguaranteeing1MDB’sbondswasmissing.Alarmingly,theAbuDhabifundwasonthehookfor$3.5billion

inbondsthat1MDBhadsoldanddidn’tseemabletopay.TheMalaysian fundwas on the brink of default. Deutsche Bank, finally

awareoftheproblemswiththeCaymanIslandscollateral,wasdemandingearlyrepaymentofitstotal$1billioninloans.Lowofferedasolution:IPICstumpupthe $1 billion to avoid a default, and in return Malaysia’s Finance Ministry,whichNajibalsoheaded,wouldagree toensure IPICwas fully repaid incashandassets.Itwasunclearhowthefundwouldraisesuchmoney—theIPOwason hold amid all the bad news—but IPIC’s new chief had little option but toaccept.AlQubaisiappearedtohavebeeninvolved,andhewaskeentokeepalidonthescandal.AfterspeakingwithNajib,MinisterAlMazrouiagreedtothearrangement,andbothsidessoonaftersignedaformaldeal.

LowhadotherproblemsbubblingthatheneededtosortoutinAbuDhabi.AmbassadorOtaibawasconcernedaboutquerieshehadreceivedfromBSI.AsSingapore authorities ramped up their probe, BSI had been forced to make ashowofauditingallaccountsrelatedto1MDBandJhoLow.Thebankwasinchaos.HanspeterBrunner,theheadofBSIinAsia,putYakYewChee,Low’srelationshipmanager,onunpaidleaveinthespring.

Inreturnforhisbonus,thebank’sheadofcomplianceinLuganoattemptedtowringasigneddeclarationoutofYakthathehadreceivedno“gratification”indealingwith1MDBandLow.Unwillingtobesingledoutasascapegoat,Yaktook off to rural China to bide his time, and quickly fell into a depressionbrought on by stress. The bank’s compliance department had begun toinvestigateallLow-relatedbusiness,andthathadledthemtocontactOtaibaandAwartani,whoseshellcompany,Densmore,hadanaccountatBSI.

“You should closeyour accounts.Thebank is toomuch in the limelight.I’vemovedoutmostofmymajorassetsandwillclosetheremainingaccountssoon,”LowadvisedAwartaniintheirmeeting.

Thenhesetaboutenlistinghishelp.LowtoldAwartanihewantedtobuyhisownbankasaparkingspotforhismoney—andthatoffriendsandfamily—and had just the candidate: an Amicorp Bank affiliate in Barbados. Low hadusedAmicorpformanytransactions,anditsbankwasontheauctionblockfor$15million.ButLowneededafront,andhewantedtoknowifEqualisCapital,a Dubai-based financial firm controlled by Otaiba and Awartani, would bewilling to acquire the bank. Already alarmed by the events of the past fewmonths,Awartaniwasnoncommittal.

Instead, Low shifted some of his accounts to Amicorp’s bank. He alsolookedforothernewplacestostashhismoney.Forhelp,heonceagainturnedto

TimLeissner.TheGermanGoldmanbankerwaswillingtohelp,writingaletterof reference in June 2015 to Banque Havilland, a small but illustriousLuxembourg private bank. At this stage, few banks would touch Low, butLeissner’s letter, falsely stating thatGoldman had conducted due diligence onLow’s family wealth, opened doors. It was a decision that would seal thebanker’sfate.

Lowwas taking actions to shut down scrutiny of 1MDB and to hide hisown assets.But this piecemeal approachwouldn’t do. Itwas too reactive.Heneededtomakeamoreaggressivemove—tofireawarningshotacrossthebowsofanyonethinkingofcrossinghim.

Chapter44

StrongmanNajib

KohSamui,Thailand,June2015

Onahazyhot tropicalafternoon in lateJune,XavierJustowas relaxingathisvilla on the island of Koh Samui. Suddenly armed Thai police burst in andmuscledhimtothefloor.Onceofficershadsecuredthesuspect—tyinghishandsso tightly with plastic cuffs that his wrists bled—they ransacked his office,cartingoffcomputersandotherdocuments.HewasflowntoBangkok,whereaconvoyofpoliceSUVsdrovehimacrossthecitytoaholdingcell.

Twodays later, stillwearinghisbeachoutfit—agrayHugoBossT-shirt,cream shorts, and flip-flops—Justo was paraded in front of the media inBangkok. As the Royal Thai Police chief reviewed details of the case, fivecommandosindarkshadesandbrandishingmachinegunsstoodominouslyoverJusto, whose hands were still cuffed. On a table nearby stood the computerstakenfromhisresidence.ThiswasthekindofdramaticstagingThaiauthoritiesreservedfordrugkingpins,notsomeonechargedwithattemptedblackmailandextortion.

Awaitingtrial,JustowasplacedinaBangkokjailwithfiftyotherprisoners.The stench of urine and the lack of floor space, or even a mattress, made itimpossible for him to sleep. He was relieved when a former British policedetective, Paul Finnigan, who ran his own consultancy, turned up to visit.FinniganwasworkingwithPetroSaudi,buthetoldJustohewasapoliceofficerinvestigatingthecase.

FinniganofferedJustoadeal:Pleadguiltytothechargesandhewouldgetoutof jailbeforeChristmas.TarekObaidwouldhelphim,Finniganpromised,butonly ifJustowascooperative.Afewdays later,Mahonyarrivedat the jailcell, and made similar promises, according to a complaint Justo later filed.Stressedfromtheordeal,andyettohavebeengivenlegalrepresentation,Justo

signed a twenty-two-page “confession,” inwhich he apologized to PetroSaudiforstealingthedocumentsandnegotiatingtosellthemtotheEdge.

This was phase one of a plan to discredit Justo, cast doubt on theauthenticityoftheemails,andblameMalaysia’spoliticaloppositionforstirringuptroublefortheprimeminister.HisresolvegalvanizedbyRosmah,whocalledthesituationa“testfromAllah,”Najibwasnotgoingtoresignsoeasily.

“We have been the victims of a regrettable crime that has unfortunatelybeenpoliticizedinMalaysia,”PetroSaudisaidinastatement.

The day after the arrest, the New Straits Times, an English-languagenewspaper owned by the ruling UMNO party, published a piece quoting anunnamed spokesman from Protection Group International, a London-basedcybersecurity and corporate intelligence firm, as saying it had reviewed theleakedemailsandfoundevidenceoftampering.

The firm, owned by a former British Royal Marine, had been hired byPetroSaudi,butithadconductedonlyareviewofafewdocumentsavailableontheSarawakReportwebsite.Now,itsprivatereviewforaPetroSaudiwasbeingplasteredoverUMNO’spartymouthpiece.OnlyNajib,orotherseniorUMNOpoliticians, could dictate to the New Straits Times what to write. After itspublication, Low quickly forwarded the story to Khaldoon Al Mubarak ofMubadala, the Abu Dhabi sovereign wealth fund, to mislead his allies in theGulfintobelievingthatthePetroSaudiemailsweresomehowfake.

Amonthlater,Justowasstilllanguishinginjail,awaitinghistrial,whenaSingapore journalist turnedup for an interview.The reporterhadprovided thequestions ahead of time, and Finnigan supplied Justo with the prearrangedanswers.JustotoldthejournalisthowtheEdgehadfailedtosticktoitspromisesto pay him, and now hemade a new claim:During themeeting in SingaporewithRewcastle-BrownandtheprincipalsattheEdgenewspaper,thebuyershadtalkedabouthowtheyplannedtomodifythedocumentsheprovided.

JustorepeatedtheclaimsinanothermeetingwithMalaysianpoliceofficers,his answers scripted by Mahony and Finnigan. Justo had to help Malaysia’sprimeminister byblamingRewcastle-Brown, and at all costs hewas to avoidmentioningJhoLow,theytoldhim.SincethepublicationoftheEdge’sstories,HoKayTatandfourotherstaffershadbeendetainedbyMalaysia’spoliceunderthe Sedition Act and then let go, in what appeared to be a clear act ofintimidation.Najib’sadministrationalsorecentlyhadbroughtinanewlaw,onthe surface aimed at curbing terrorism, but permitting suspects to be heldindefinitely.

Noevidenceemergedsupportingtheclaimsoftampering;Justowasunderhuge pressure from Mahony and others to back their version of events. HorespondedwithanoteontheEdge’sfrontpage,denyingthenewspaperhadpaidanyone or tampered with the documents. The publication, he wrote, had a“publicdutytofindandreportthetruth.”

So far,PrimeMinisterNajibhad stayedoutof the fray, but thatwas about tochange. The Malaysian government task force, led by Bank Negara and theMalaysian Anti-Corruption Commission, had pored through thousands offinancial transactions into theprimeminister’saccounts.Thebiggest incomingpayments—$681 million from Tanore—were still a mystery, and theinvestigatorswerenoclosertoknowingwhocontrolledthecompanyorwhyithadpaidmoneytoNajib.Evengovernmentscouldnoteasilyseebehindtheveilofoffshore secrecy, andTridentTrust,whichhad setupTanore in theBritishVirginIslands,onlyknewthatEricTanwastheultimatebeneficialowner,notJhoLow.

But investigators had been able to trace a much smaller amount of $14million from 1MDB to the prime minister’s account. The Malaysian Anti-Corruption Commission, whose jobwas to buildmajor cases for the attorneygeneral to prosecute, believed this smaller paymentwas sufficient grounds forcriminal charges. But there was a hurdle: Some members of the task force,especiallytheNationalPolice,wereobjectingtomovingaheadtoframechargesagainst a sitting prime minister. The only option was to leak the documentsdetailingNajib’sfinancialtransactions.

Justasthetaskforcewaslookingforacandidate,wepublishedafront-pagestoryintheWallStreetJournal, themostdetailedpieceyetonhowNajibhadused1MDBasaslushfund.Thestorycaughttheeyeofanintermediaryforthetask force. A few days later, aMalaysian source met in London with SimonClark,aJournal reporter, to confirm theveracityof thedocuments,which theintermediaryhandedoverhourslater.SarawakReportalsoreceived them.Thefiles,copiesofwiretransferdocumentsintoNajib’saccounts,aswellasmoney-flowdiagramsproducedbythetaskforce,wereexplosive.

Undertheheadline,investigatorsbelievemoneyflowedtomalaysianleadernajib’saccountsamid1mdbprobe,theJournalreportedonJuly2howthetaskforcehadtracedthemoneyintoNajib’saccountsvia1MDB-linkedentities.

Aftermonthsofconjectureabouttheprimeminister’sinvolvement,andhisferventdenialsofwrongdoing,thestorywasatippingpoint,splayingtheissue

across the pages of one of the world’s most well-known newspapers. TheJournalstorywasamongthemost-readonlineitemsoftheyear,garneringmorethanaquarter-millionuniquevisitorsonline.Nowthe1MDBstoryhadaglobalaudience. A few days later, we reported how Singapore was investigatingpaymentsmadetoJhoLow.

TheEdge could have its publication license revoked, but nowNajibwasfacedwiththeJournal,anorganizationthatdidn’trelyonhisgoodwilltoremainin operation. With few other options, the prime minister came out swinging,realizing this was a fight for political survival. Within a week, the Journalreceived a letter fromNajib’s lawyers asking for the newspaper to clarify itspositiononthestoryorpossiblyfacealawsuit.TheJournal’slawyersrespondedthatthepaperwasstandingbehinditspiece.NajibalsotooktoFacebooktopainttheallegationsas theworkofMahathirMohamad, theformer leader,whohadintensifiedhiscallsfortheprimeministertostepdownover1MDB.

“Letmebeveryclear:Ihavenevertakenfundsforpersonalgainasallegedbymypoliticalopponents,”hesaidinaFacebookpost.“ItisnowclearthatfalseallegationssuchasthesearepartofaconcertedcampaignofpoliticalsabotagetotoppleademocraticallyelectedPrimeMinister.”

TheJournalstoryplacedthe1MDBaffaironaworldstage,galvanizingtheMalaysiantaskforceintoaction.Membersofthegroupsharedfutherpassword-protecteddocumentson their investigationwith theJournal.Thepassword formanyofthefiles:“SaveMalaysia.”

On July 24, Attorney General Abdul Gani Patail informed Malaysia’spolicechiefthathewasdrawingupcriminalchargesagainsttheprimeminister.He was preparing to take the document—known in Malaysia as a “chargesheet”—to a judge, the first step in seeking the prime minister’s arrest. Thedocument, laying out charges against Najib, noted how the payments wereillegalundersection17 (a)of theMalaysianAnti-CorruptionCommissionActof2009,aprovisionproscribingthegivingorreceivingofbribesandthatcarriedamaximumjailtermoftwentyyears.

Najib’s room for maneuver was narrowing fast. Even Deputy PrimeMinister Muhyiddin Yassin began to make speeches quoting from theWallStreet Journal and demanding a transparent investigation on 1MDB. But thepolicechief,supposedlypartofthetaskforce,decidedtoswitchsidesatthelastmoment,andinformedNajibofhisimpendingarrest.

Overseas, the prime minister was considered charming and a democrat.Onlymonthsearlier,hehadgivenaspeechatMalvern,hisoldboardingschool

in England, in which he thanked his teachers for instilling in him “decency,disciplineandperseverance.”Apoliticianneedsatleasttwoofthese,hequippedto laughter. No one perceived Najib as either decisive or ruthless. But now,fearinghecouldendupinjail,asteelieredgetohischaractercameintofocus.Atthiscrisispoint,rawpowerwasallthatmattered.

OnJuly27,2015,threedaysafterNajibgotwindofthechargesagainsthim,hebreezed into the ballroom of Kuala Lumpur’s Hilton Hotel for a dinner tocelebrateEid-al-Fitr,Islam’sholiestfestival.Thousandsofpeople,thegreatandgood ofMalaysian society, had assembled for the event, and the conversationrevolved around the country’s mounting political crisis. Most of the guestsexpected thatNajibwould soon be political history.Dressed in aMalay-stylepurplesilkshirt, theprimeministertookhisplaceatatablereservedforVIPs,shakinghandswithmanyoftheUMNOpoliticianswhowantedhimgone.Onlytheprimeministerknew the furyhewasabout tounleashon thosedisloyal tohim.

Themorningafter thedinnerat theHilton,AttorneyGeneralAbdulGaniPatailarrivedathisofficetofindthewaybarredbystaffandsecurityfromtheprimeminister’soffice.AbdulGaninolongerhadajobandcouldnotevenentertheofficetocollectdocuments,theyinformedhim.Anhourlater,NajibreplacedtheheadofthePoliceSpecialBranch,whohadbeeninstrumental intheprobeinto theprimeminister’s accounts.Later in theday, a firebrokeout inPoliceHeadquarters,destroyingscoresofdocuments.

Najib fired Deputy Prime Minister Muhyiddin and four other cabinetmembers, and he suspended the Public Accounts Committee’s probe into1MDB.ThePrimeMinistersought tocowerothercritics, includingthemedia.TheHomeMinistrysuspendedtheEdge’spublicationlicensesforthreemonths,claiming its reporting on 1MDB could lead to public disorder. In one brutalhouseclearing,Najibhadsolidifiedhiscontrolonpower.

Dayslater,BritishprimeministerDavidCameronflewintoMalaysiaforanofficialvisit.He’djustgivenaspeechinSingaporeabouthowBritainneededtostop corrupt cash from flowing into London’s property market, whereMalaysianswereamongthebiggestbuyers.Inprivate,hepressedNajibonthecorruptionclaims,andMalaysia’shumanrightsrecord.NajibwasfuriousatthelecturebyCameron.HisloveaffairwithWesterndemocracieswasover.

AsNajibbattledtostayinpower,JhoLowwasforcedtocancelhisparticipation

inaNationalGeographicexpedition,whichwouldincludeLeonardoDiCaprio,whowasfilmingBeforetheFlood,hisdocumentaryaboutglobalwarming.TheJournal published its stories about Najib’s accounts and Singapore’sinvestigationofLowjustashewasabouttosetoff.

Ashedealtwiththefallout,Low,senthisparentsinhisstead.DiCaprio,aVictoria’sSecretmodelwhoaccompaniedtheactor,Low’sparents,andagroupof National Geographic scientists spent three days flying helicopters over thereceding ice sheet inGreenland and filming polar bears.Afterward,DiCaprioannounced his foundation was donating $15 million to environmentalorganizations,includingNationalGeographic,whichLowalsohadfunded.

ByAugust, with the primeminister’s crackdown in full swing, Low feltreassuredenoughtoflybyprivatejetandhelicoptertojointheEquanimityintheseas off Greenland. For over a week, he went completely dark, visiting theNational Geographic scientific camp, and stunning people who were seekingregularupdatesondevelopments.

“Heliterallytraveledtotheendoftheearthandwentcompletelyoffline,”saidaMiddleEasterncontact.

PerhapsLowwasfeelingconfident theworstwasover.Maybehewantedtomakeashowofbusinessasusual,clingingtohis imageasaphilanthropist.Onhis return,henonchalantlywroteanothercontact: “I apologize formy lateresponseasIhavebeenonaconservationexpeditionintheArcticwithlimitedcoverage.”

Ormaybethetripwaslikeagamblingsession,ashortbreakfrompeoplecallinganddemandinganswers.Heexhibitedfewothersignsofconfidence,andheseemedincreasinglyagitatedthatNajibwouldburnhim.Overthesummer,hetolda1MDBboardmember:“Iftheysacrificeme,I’llgonuclear.Iwasactingontheinstructionsoftheboss.”TheprimeministerhadwarnedLowtostayoutofthecountryasthecrisisdeepened,andhebegantolaylowinBangkok,thecapitalofThailand,andShanghai,China’sfinancialcapital,wherehestayedinthe residences of the Peninsula Hotel. Unbeknownst to all but his closestcontacts,hehadalsoobtainedanewpassport from the tiny islandofSt.KittsandNevis.

In August, Switzerland’s attorney general announced he had launched acriminalinvestigationof1MDBandfrozenmultipleaccountscontainingtensofmillions of dollars.With many of his accounts in Singapore and Switzerlandnowshut,Lowwasbeingshuntedtothefurthestreachesoftheglobalfinancialsystem,forcedtorelymoreonThaibahtorChineseyuantransactions.

The bonds between Low and Najib remained in place. But they werefrayed,with all sides nowwatching their own backs, distrustful of thosewithwhomtheyhadconspiredforyears.WhenonecontactaskedLowaboutallthemoneythatappearedtobemissing,hewasquicktoassigntheguilttoRosmah.

“She isanavidpurchaserof jewelry in themillions.Where is themoneyfrom?”heasked.

Around one hundred thousand Malaysians, many of them young, urbanprofessionals, swarmed out of a central Kuala Lumpur monorail station onAugust 29, 2015. Wearing yellow T-shirts bearing the slogan “Bersih”—theMalay word for “clean”—they marched through the streets, protesting thegrowing evidence of mass corruption at the heart of their government. TheHome Ministry had banned yellow T-shirts after earlier “Bersih” protests,declaringthemanationalsecuritythreat,butthedemonstratorstooknoheed.

One demonstrator carried an effigy of Najib in a cage; others held uppictures asking how much an average family could purchase of differenteveryday products—KFC chicken, rice, hot chocolate—with $681million, thebiggest transfers into Najib’s accounts; a popular caricature of Rosmah, withcartoonishlybighair,replacedhereyeballswithdollarsigns.

TherewereBersihprotestsinothercities,andbyMalaysianslivingabroad,too. InKualaLumpur,manyof theprotestersstayedoutallweekend,sleepingonthestreets.FormerprimeministerMahathirMohamad,wearingasafarisuit,attended the rally, repeating his call for Najib to step down. Some of theprotesters, regular school teachers or officeworkers, were simply tired of thekleptocracythatMalaysiahadbecome.Otherswereworriedthestatewastakinganauthoritarian turn,closingnewspapersanddetaininganyonewhothreatenedthe ruling party’s hold on power. And therewere fears themassive debt that1MDBhadincurredwouldweighonMalaysiaforyearstocome,leechingfundsawayfromspendingoneducationandsocialwelfare.

“Whenyouactagainstthemediaitseemslikeyouhavesomethingtohide,”saidSheilaKrishna,aKualaLumpurtaxidriver.

Now a strongman, Najib would endure no opposition. A federal courtrecentlyhadsentAnwarIbrahim,thepopularoppositionleader,backtojailforfiveyearsforsodomy,promptingcriticismfromtheUnitedStatesandhuman-rightsgroups.AcoupleofweeksaftertheBersihprotests,progovernment“red-shirt” protesters took to the streets. Some participants admitted to receivingsmallsumsofmoneytoattend.Overthecomingmonths,theredshirts—many

of them aggressive-looking ethnic Malays wearing bandanas—disruptedantigovernmentprotestsandassaultedactivists.

“Malays too can showwecan still riseup,”Najib said in a fiery speech,praisingthered-shirtprotesters.

Glimmersofhoperemained:aHighCourtjudgeruledthesuspensionoftheEdge’s publication license was unlawful, and its journalists once again beganholdingNajib to account. Someprotesters came back into the streets over theensuingmonths.

ButNajib’snewfoundauthoritarianismscaredmany.AdeadlyturnwouldcoweventhebravestMalaysiansintosilence.

PARTV

THECAPTAIN’SRESOLVE

Chapter45

ProsecutorinanOilDrum

KualaLumpur,Malaysia,September2015

Just after dawnonSeptember 4, aworkaholic IndianMalaysiannamedKevinMoraisgotintohisProtonPerdanasedanforhisdailycommutetotheMalaysianAnti-CorruptionCommission’soffice inPutrajaya, about anhour’sdrive fromhisnorthernKualaLumpurapartmentcomplex.Hewouldneverarrive.

SinceNajib’scrackdownseveralweeksearlier,Moraishadbecomesteadilymore enraged. The fifty-five-year-old, who had a mop of black hair and ahaggard tiredness about him, had studied law in London in the 1980s beforereturningtoMalaysia,whereherosetothepositionofdeputypublicprosecutorintheattorneygeneral’soffice.InMalaysia,corruptioncaseswereplentiful,andMorais often worked weekends, darkening the bags under his heavily liddedeyes.

Afewmonthsearlier,Moraishad—tothosewhoknewhim—beguntoactstrangely. The prosecutor was nervous about a case involving PrimeMinisterNajibandRosmah,heinformedabrotherlivingintheUnitedStates.Fearfulhisphone line was tapped, Morais often talked to his brother in Malayalam, alanguage of southern India.He sounded frightened, and complained about thestress of his job. Morais didn’t go into the detail of his work, but he wastemporarily assigned to the Malaysian Anti-Corruption Commission. He wasworkingonthemoneyflowsfrom1MDBtoNajib’saccounts,andhehadhelpeddrawupthedraftcriminalchargesagainsttheprimeminister.

After Najib removed Attorney General Abdul Gani Patail, Morais feltanxiousabouthisownposition.Hehadevenbegunworryingabouthissafety.Onlydays later, an anonymous leaker emailed a copyof thedraft charges theattorney general’s office had been preparing to Clare Rewcastle-Brown atSarawakReport.Whenshepublishedherstory,makingitclearwhyNajibhad

movedsoaggressivelytofireAbdulGani,therewasawitchhuntintheattorneygeneral’s office and the Malaysian Anti-Corruption Commission to find thesource of the leak. Police arrested two officers from the Malaysian Anti-CorruptionCommissionandanofficialfromtheattorneygeneral’soffice.PolicefiledanarrestwarrantforRewcastle-Brown,butshewassafeintheUK.

The detention of the prosecutors sent a chill wave through the attorneygeneral’s office, which was now controlled by a Najib loyalist. Scared intocompliance, the Malaysian Anti-Corruption Commission put out a statementsaying the money Najib received was a “donation” from the Middle East, afabricationtoprotecttheprimeminister.Fretfulofhiscentralrole,Moraistookoff to England for several days, where he had an apartment in a town nearLondon.Hetalkedtohisbrotherofretiringfromgovernmentserviceandevenvisitedasolicitortoarrangehiswill.

Thepolicesoonreleasedthedetainedlawyers.MoraisreturnedtoMalaysiaandmovedontootherwork.AshedrovetotheofficethatearlySeptemberday,theprosecutortriedtofocusonhislatestcase,oneinvolvingaMalaysianArmypathologist chargedwith runningamedical-procurement scam.A fewminutesfromhiscomplex,thedriverofaMitsubishiTritontruckbegantotailthepublicprosecutor. The truck followed Morais for a while, and then accelerated,ramminghiscaroff theroad. Itspassengers jumpedout,draggedMorais fromthecar,bundledhimintotheirtruck,andspedoff.

Sometimeover thenexthour, theassailantsmurderedMorais,most likelyby strangulation, before tying his corpse in a gunny sack, the kind used forstoringagriculturalproducts.Theyputthesackinanoildrumandfilleditwithliquidconcrete,beforedumpingitinaswampywastelandnearaschool.Then,the perpetrators torched Morais’s car and removed its serial numbers beforedumpingitinanoil-palmplantation.

When Morais didn’t arrive at work, anxious colleagues and familymembers alerted police. Just under two weeks later, using security camerafootage to locate theMitsubishiTriton,officersmade several arrests andwereledtotheswamp,wheretheydiscoveredMorais’sbody.Itwasamacabresight,the corpse curled up in a fetal position, encased in concrete like a fossil, stillwearing his tie. Police arrested seven people, including the Malaysian Armypathologist,whowaschargedwithabettingthemurder.

ToMorais’s family, theofficial storyofhisdeath justdidn’taddup.Thebrother was convinced Morais had leaked the draft criminal charges againstPrime Minister Najib and someone had found out about it. He contacted

Rewcastle-Brown, who told him the source, unknown to her, had sent thedocumentsfroma“jibby@anonymousspeech.com”emailaddress.JibbywasthenameofaclosefamilyfriendofMorais.ButNajib’scriticsalsoused“Jibby”asaderisorynicknamefortheprimeminister.Thesenderremainedamystery.

The killing had an immediate chilling effect at the Malaysian Anti-Corruption Commission. Stafferswere scared for their lives. But a few braveprosecutors, at enormous personal risk, continued to look for away to ensureNajibwasheldtoaccount.Theprimeministermayhaveseemedsecure,buthispoweronly reached so far, and,unknown tohimandanoceanaway, thecasehad reached the desks of several special agents in theU.S. FederalBureau ofInvestigation.

Chapter46

SpecialAgentBillMcMurry

NewYork,February2015

For Special Agent William “Bill” McMurry, the story about Najib’s wealthlanded at an opportune time. A veteran FBI agent, McMurry had just beentappedtoheadanewinternationalcorruptionsquadinNewYork,andhisteamwas hunting for a high-profile case.With sandy, straight hair and blue eyes,McMurrygaveofftheairofamiddle-agedCaliforniasurfer,althoughinrealityhewas aNew Jersey nativewho had spent years fighting international crimebasedoutoftheFBI’sofficesinadowntownManhattanfederalbuilding.

His biggest triumph to date was unraveling the case of Sister Ping, aChinatownunderworldfigurewhoin2006wassenttojailforthirty-fiveyearsforherroleinahuman-traffickingenterprise.AftertheNewYorkTimesstoryonJhoLow’spropertyacquisitions,McMurry’steamwastaskedwithcheckingoutthedetails.TheWallStreetJournal’scoverageofNajib’saccountsputthecasetothefrontofthequeue.

TheFBIsquads—therewerealsounitsinWashingtonandLosAngeles—wereanintensificationofaneffortbytheU.S.JusticeDepartmentandtheFBIto combat kleptocracies—foreign governments from Russia to Nigeria andVenezuela, dominated by corrupt officials who steal from their treasuries forpersonalenrichment.Itwasnotpurealtruism.TheUnitedStatesfordecadeshadbeenconcernedthatcorruptionwouldunderminefree-marketcapitalism,makingit harder for American firms to compete internationally. And then there werefears that kleptocracy—the word is from the Greek and means “rule bythieves”—would lead to a less stable world order, in which failed states likeAfghanistanandSyriaharborterrorists.

“Corruptionleadstolackofconfidenceingovernment.Lackofconfidenceingovernmentleadstofailedstates.Andfailedstatesleadtoterrorandnational

securityissues,”washowSpecialAgentJeffreySallet,chiefoftheFBI’sPublicCorruptionSection,putitwhenannouncingtheinternationalcorruptionsquads.

CorruptforeignleadersandofficialshadanAchilles’heel—theyreliedontheU.S.financialsystemtotransfercashandhadapenchantforacquiringrealestateinNewYork,LosAngeles,andMiami.TheJusticeDepartmentsetuptheKleptocracyAsset Recovery Initiative in 2010 to coordinate thework of FBIinvestigators and prosecutors to seize the U.S. and global assets of corruptforeign officials. If those kleptocrats were no longer in power, Washingtonwould transfer the proceeds back to the countries. In 2014, the JusticeDepartment oversaw the seizure of more than $480 million in corruptionproceedshiddeninbankaccountsaroundtheworldbyformerNigeriandictatorSaniAbacha.

The 1MDB scheme, McMurry’s team soon realized, was of a wholedifferent magnitude. For one thing, Low just seemed so brash: His money-laundering techniques, although sophisticated, had been carried out throughmajorbanks,andtherewasasolidmoneytrail.ThiswaseasiertodealwiththanPakistanimoneylaunderers,whooftenwouldgointohidingforyearsandmaketheir funds disappear through the informal hawala money-transfer network.Thentherewasthescale:The1MDBaffairwasshapingupasthesinglelargestfinancialscamofalltime.

Ontheground,RobertHeuchling,a thirty-four-year-oldFBIspecialagentwhoworked forMcMurry, was attempting to get his head around thismind-numbingly complex case. Slender with blue eyes and an athletic build,HeuchlingstudiedjournalismatNorthwesternUniversitybeforejoiningtheU.S.Marines,andhehadworkedattheFBIforfiveyears.McMurrymadehimleadonthecase,byfarthemostweightyofhisshortcareer.JustinMcNair,anagentwho had forensic accounting experience, was another senior member of theteam.Alongsideateamoffederalprosecutors,andwithaccesstodatafromtheU.S. financial system, and cooperation with law enforcement agencies inSwitzerlandandSingapore,theagentsweremakingprogress.

But there was a problem. Money-laundering cases are by naturemultijurisdictional,making them time-consuming to investigate. On sprawlinginternational cases, prosecutors rely on what are known as Mutual LegalAssistance Treaties, which allow for the sharing of information—documents,swornstatements,andthelike—betweenlawenforcementagencies.TheUnitedStates had signed such a pact withMalaysia in 2006, and Switzerland had asimilaragreement.Najib’sadministration,however,wasdecliningtocooperate.

At first,Najibprivatelyexpressedconfidence thatWesternnationswouldnotpursueinvestigationsinto1MDB,wageringMalaysia’sstatusasaU.S.allywould buffer it from intrusions intowhat he considered a domesticmatter. Itsoonbecamecleartheforeigninvestigationswerenotgoingtomeltaway.AtameetingofpublicprosecutorsinZurich,AttorneyGeneralMohamedApandiAli—the loyalist Najib had installed in the job—urged his Swiss counterpart,MichaelLauber,toabandonhisinvestigation.Lauberrefused.

TheNajib administration also tried diplomatic channels to get theFBI todrop its probe, without luck. But the prime minister instructed his attorneygeneralnottocooperatewithoverseasprobes,andthatleftforeigninvestigatorswithoutaccesstocrucialMalaysianbankingdocuments.

Investigators inAbuDhabi,where the scandal threatened tohighlight theshabby business practices of SheikhMansour, were similarly keen not to airtheirdirtylaundryinpublic.ItwasonethingtoquietlyremoveAlQubaisifromhisposition,butquiteanothertolaunchafull-blownprobethatcouldembarrassaseniorroyalfigure.

ThebroadcontoursoftheschemehadappearedinpagesofSarawakReportandtheWallStreetJournal,butonlythefirstheist,involvingthe$1billionthatLowhadsiphonedviahisSeychellescompanyin2009,wasclearlydrawn.TheJournalbegantofocusonexactlyhowPrimeMinisterNajibhadgottenpaidin2013,andthemoneytrailledtoAbuDhabi.

JhoLowwasperturbedbyquestions theprimeministerhad received fromtheJournal. Focusing on the money flows, we had figured out discrepanciesbetween1MDB’sfinancialreportsandthoseofIPIC.TheAbuDhabifundhadguaranteed$3.5billionin1MDBbondssoldbyGoldmanSachsin2012and,inreturn,theMalaysianfund’sfinancialstatementsshowedithadtransferred$1.4billion in “collateral” to IPIC. The collateral was accounted for in 1MDB’saccountsasa“non-currentdeposit,”meaningitwouldberepaidbyIPICinthefuture,butwasnotat thatmomentavailableincash.Thisstruckusasstrange.Whyissuebondsandthenpayalmosthalfoftheproceedsin“collateral”totheguarantor of the bonds? But what we discovered next deepened the mystery:IPIC’sfinancialreportsmadenomentionofreceivingthemoney.

Aroundthistime,wedevelopedacrucialdeep-throatinformant.ReferredtointernallyattheJournalas“MalaysianSource,”orMS,thepersonhadintimateknowledgeoftheworkingsofeveryaspectofwhathadtranspired,yetbecauseof personal involvementwas alsomotivated tomislead us.The person passed

wire-transfer documents to the Journal that appeared to show the $1.4 billionindeed flowed from1MDB toAabar, the IPIC subsidiary.MSwashopingwewouldacceptthisatfacevalueandmoveon.

But the documents in fact showed the money had been sent to AabarInvestments Ltd.—the look-alike British Virgin Islands–based shell companycontrolled by Al Qubaisi and Al Husseiny. We searched offshore companydatabasesand took the information togovernment sources inAbuDhabi,whoconfirmedthatIPICandAabardidnotformallycontrolthiscompany.AlthoughAbuDhabiauthoritiesdidn’twanttoembarrassSheikhMansour,itwasevidenttoIPIC’snewmanagementthatAlQubaisicouldnotbeartheblamealone.ThePersianGulfsuspectedJhoLowandbeganinvestigatingthematter.

Malaysian Source’s efforts to mislead us had backfired, handing theJournal a scoop about the existence of this look-alike shell company—one ofJho Low’s trademark methods for siphoning cash. We then wrote to Najibasking why IPIC had not received money that 1MDB claimed to have sent,citingAbuDhabiinvestigators.ThePetroSaudifraudalreadyhadbeenlaidbare,and nowLow feared the uncovering of anothermajor part of his scheme, theremovalofcashfromthe2012power-plantbonds.Hemovedfasttokeepalidonthetruth.TurningtoAmbassadorOtaibaandAlMubarakofMubadala,LowworkedtostoptheJournal’sstoryinitstracks.

He was particularly worried by our discovery that Abu Dhabi“investigators” had found no trace of the money. He was losing control ofevents,worriedbyourability tocommunicatewithAbuDhabiofficials. Inanemail, Low, using a pseudonym, sent across to Otaiba and Al Mubarak thequestionswe had asked PrimeMinisterNajib, attached towhich hemade hisownrequest.

“Malaysiansideisextremelyconcernedandwantstoensurestrategyto[be]consistentandcoordinated,”Lowwrote.

Najib was keen, he went on, to make sure Abu Dhabi did not formallyinvestigatethemissingcash.Insteadtheemirateshouldsticktotheagreedstory.AlQubaisiwas toblame,andadealwas inplace forAbuDhabi tocover the$3.5billion inbonds,withMalaysia later repaying thePersianGulf statewithcashorotherassets.

“Note: There are enough reviews on 1MDB being done by variousregulators.ThereisaconcernthatanadditionalreviewdonebyanAbuDhabiinvestigativeteamwillopenanotherunnecessaryattackavenuefordetractors,”Lowwrote.

Neither the Prime Minister nor the 1MDB fund, now headed by ArulKanda, a slick financier in his early forties,whopreviously hadworked at anAbuDhabi bank and knew JhoLow, responded to the Journal’s queries. ButafterthenewspaperreportedaboutthemissingAbuDhabimoney,theMalaysianfundreactedaggressively.Aformerhighschooldebatechampion,Kanda tookon theJournal’s storieswith sharp-worded tirades that claimed thenewspaperwaspartofawidepoliticalconspiracyagainstNajib.

“The inability to substantiate clearly shows the shallow nature of itsassertions and casts serious doubt on whether or not theWall Street Journaleditorsthemselvesbelieveintheweakstory,cobbledtogetherbyitsreporters,”1MDBsaidinonestatement.

Foreigners working as spin doctors for the prime minister’s office and1MDBtookasimilar tone.PaulStadlen,ayoungBritishmanwhoworkedforNajibincommunications,playedavitalroleinastrategyaimedatdiscreditingourpieces.

“TheWSJcontinuetoreportanonymously-sourcedliesasfacts,”readonestatement.“Theyareadisgracetojournalism.”

ArifShah,whowasworkingfor1MDB,onasabbaticalfromBritishpublicrelationsfirmBrunswick,tookustotaskfortakingsidesinMalaysianpolitics,withoutprofferinganyevidence.

“Iquestiontheveracityofyoursources,theirintentions,andthedocumentstheyprovide.Aquestionforyou—DoyouthinkthatyouarebeingusedtohelpousttheMalaysianPrimeMinister,”hewroteinanemail.

AddedtothemoneytakenviaGoodStar,theJournalatthistimeestimatedthat at least $3 billion had gonemissing from1MDB. In the primeminister’soffice, therewas discussion overwhat to do about our coverage.Threats of alawsuitwerenothaving thedesiredeffect—in fact theJournal appeared tobegoingdeeper,obtainingreamsofdocuments,from1MDB’sboardminutestotheauditorgeneral’sdraftreportintothefund,aswellascopiesofBlackBerrychatsbetweenJhoLowandconspiratorslikeJoanneYuatAmBank.

Some of these documents came fromMalaysian Source, who wanted toshowtheschemeenjoyedthebackingofNajib,Rosmah,andAlQubaisi;otherswereprovidedbyfrustratedMalaysiancivilservantsandpoliticians,aswellasAbuDhabiofficialsandothersources.

TheJournal’sstories illustratedhowNajibwasacentraldecision-makingfigureat1MDB,andpaintedindetailhowJhoLowrantheshow.Toshutourreportingdown,theprimeministerneededtoscareus.

At3a.m.inlateNovember2015,TomWright’sphonewokehimashesleptintheShangri-LaHotelinKualaLumpur.Itwashiscolleagueandfellowauthor,Bradley Hope, calling from the Wall Street Journal’s offices in midtownManhattan.Justminutesearlier,HopehadgottenacallfromMalaysianSource,who had some alarming news:Najib’s officewas about to send the police toarrestWrightathishotel.

TheJournalwasinvestigatingLow’sroleinthe2013elections,andWrighthad flown intoKuala Lumpur from Penang the night before.While in Low’shomestate,he’d lefthisJournalbusinesscard,withhiscellphonenumber,atthehomesandofficesoftheMalaysian’sassociates.OneofthemalertedLow,who in turn told PrimeMinister Najib. Malaysian Source told Hope that thegovernmenthadtrackedWrightdowntotheShangri-La,aresort-likehotelnearthePetronasTowers.

ThepolicewouldsoonmakeanarrestattheShangri-La,MSinformedhim,feigningworry.Itwasathreat,dressedupasawarning,andtheJournaldecidedto pull the plug on the reporting trip.After beingwoken in themiddle of thenight,Wright leftMalaysia early the nextmorning, avoidingKuala Lumpur’sinternationalairport, and travelingoverlandby taxi toSingapore’sborderwithMalaysiainstead.

Atthebordercrossing,Wrightworriedhemightgetstopped,buthewalkedeasilyoverintoSingapore.HadMSmisledHopeonpurpose,hopingtoscuttleourinvestigationsintothescheme?OrhadNajib,learningWrighthadcheckedoutoftheShangri-La,decidedhehaddoneenoughtoderailourcoverage?

ButtheJournalhadwhatitneeded,andinDecemberitpublishedadetailedstoryabouttheroleof1MDBmoneyinthe2013elections,especiallyinPenang.Evenruling-partypoliticianshadbeenwillingtotalkforthepiece.Lowclearlywasnotpopularinhishomestate.

WithnocredibleprobeinMalaysia,thegovernmentand1MDBcouldsaywhat itwantedabout theJournal’scoverage.ButNajibwasunabletostopthetideof investigations fromtheUnitedStates toSingaporeandSwitzerland.Astheprobesspread,Low’sassociatespanicked.

In November, as the Journal dug into Low’s activities, Patrick Mahony, theinvestmentdirectorofPetroSaudi,confrontedLauraJusto,whohadtraveledtoBangkoktomeethim.Shewasangry,andshewantedherhusbandreleasedfromjailinThailand.AjudgeintheSouthernBangkokcriminalcourthadsentencedXavierJustoinAugusttothreeyearsinprisonforblackmailingPetroSaudi,and

hewaslanguishinginadankcellwithtwenty-fiveotherpeople.The trial and sentencing had lasted only five minutes, but Laura Justo

believedMahonycouldpullstringstogethimout.Inherview,Justohadplayedhis part, signing a “confession” and telling a Singapore journalist, withoutevidence, that the Edge and Sarawak Report had planned to doctor thePetroSaudiserverdocuments.Shewasalonewiththeirbaby,andurgedMahonytoact.ButMahonywantedmore.

“Theonlywaythatyoucanshowyou’rereadytobeteamplayersistogoto the media, and to show that you’re ready to denounce everyone who’sconspiringagainsthim,”Mahonysaid.

He wanted her to say Clare Rewcastle-Brown was working againstPetroSaudi.

“Butarethereguaranteeshewillgetoutearlier?”LauraJustoreplied.“You can help or not help,”Mahony snapped, his voice visibly tense. “I

feel for you.But I’m also in the shit.We’re all in deep shit. There’s a primeministerofacountrywhoisintheshit.”

The nextmonth,with Justo still in jail,Mahony told Laura that tensionsweremountingbecauseoftheprobesinto1MDBinSwitzerlandandtheUnitedStates. Investigators were wading through piles of material—bank transferdocuments, property records, shell company registrations, and mountains ofemails—topiecetogetherwhathadhappened.

Theyhadnoaccess to JhoLow,orevenanyofhis innercircle,manyofwhomhadgone toground inplaces likeTaiwanand Indonesia,but theywereinterviewingpeopleon theperipheryofeventsandwerebuildingupapicture.MahonytoldLaurathatSwissinvestigatorshadnothing,thatitwasallforshow.

But she had lost faith in Mahony’s promises to secure her husband’srelease.InJanuary2016,LauracontactedtheSwissambassadorinBangkok.Afew weeks later, she sumbitted a dossier to Swiss authorities and the FBIdetailingwhathadtranspired.ThefileincludedsecretrecordingsshehadmadeofherconversationswithPatrickMahony.

Despite his show of bravado,Mahony clearlywas troubled. The Journalhad reported that theFBIwas formally investigating1MDBandNajibRazak.SoonMahonywouldreceiveasubpoenafromU.S.authoritiestotestify.Fearingtheworst,PrimeMinisterNajibandRizaAzizhiredBoies,Schiller&Flexner,cofoundedbythewell-knownU.S.lawyerDavidBoies,torepresentthem.Thefirm assigned a tough, young lawyer called Matthew Schwartz to the newclients.

Schwartzknewsomethingaboutfinancialcrime.Inaformerlife,he’dbeenakeymemberofthecrackteamthatsuccessfullyprosecutedBernieMadoff.

AsMahony appeared to panic, andNajib braced for theworst, Lowwasdoingallhecouldtokeepupappearances.Andthatmeantcontinuingtopartywithhisfamousfriends.

Chapter47

PartyingontheRun

AboardtheEquanimity,SouthKorea,November2015

Asthescrews tightened, theEquanimitywassailing in theNorthwestPassage,thefamediceberg-strewnroutethroughtheArcticSeathatconnectsthenorthernAtlanticandPacificOceans.Foryears,Arcticpackicemadenavigationalmostimpossible, but environmental changes had opened up the channel, and theEquanimity,withasteelhulldesignedtowithstandcontactwithice,becameoneof a small groupof elite private ships to complete the journey.As it emergedinto thenorthernPacific aroundAlaska, thepilot set a course for the coast ofSouth Korea. It was early November, and Low had arranged for friends andcelebrities to fly into Seoul, before being whisked to the boat for a party tocelebratehisthirty-fourthbirthday.

Despiteeverythinggoingon,Low’sdesiretobethecenterofaneventandbestowfavorshadnotdiminished;infact,thosearoundtheMalaysiansawthathe looked forward even more to these immaculately concocted parties. Thethemeofthiseventwas“togetherness,”andcelebrityguestsauctioneditemstoraisemoneyfortheUnitedNations,beforeeveryonesang“WeAretheWorld.”Guests drank fine wines, champagne, the Korean spirit soju, and espresso-flavoredPatrón tequila,while the food includedBeluga caviar, lobster bisque,andtrufflepasta.

Oneroomoftheyachtwasmadeintoa“RoseGarden,”thewallsplasteredwith red roseswith leaves plucked off.The guests, including JamieFoxx andSwizzBeatz,worecocktaildressesandtuxedos.Thiswasn’tjustanothersecretparty,withphonescheckedinat thedoor:Lowalsowantedtopokefunat theallegationsagainsthim,tomakeitseemlikethesefalsehoodswerewateroffaduck’sback.Atonepoint,therewasevenaslideshowofpositivemediaarticlesaboutLow.

But another video he requested—a montage of world leaders includingBarackObamaandVladimirPutinwishinghimhappybirthday—even the toppartyplannerscouldnothaveachieved.

The Obama administration’s love of Najib was fast cooling. Later thatmonth, President Obama traveled to Malaysia one final time, for a regionalsummit,avisit thathadbeenscheduled longbefore the1MDBscandalhit theheadlines. After meeting behind closed doors with Najib, the president toldjournalists he had expressed to the prime minister the importance oftransparencyandrootingoutcorruption.WithAnwarIbrahimlanguishinginjail,andNajib’scrackdownoncivillibertiesathome,thewordsranghollow.

Lowcontinued toactas ifnothingwasup. Justa fewmonthsearlier, theMalaysiantoldfriendshehadbid$170millionforPicasso’sWomenofAlgiersatChristie’sinNewYork,butlostouttoaQataribuyerwhopaid$179million,the most expensive painting ever to sell at auction. After eleven minutes oftelephone bidding, Low dropped out. Along with the Nimes mansion in LosAngeles, thiswas another purchase thatwas beyond even him. Itwas hard tograsp how Low was even considering such purchases after the media storiesabout1MDB.

InDecember,hetraveledtoCourchevel,askiresortintheFrenchAlps,forhisusualend-of-yearpartywithhisclosestfriends.InavillaontheslopesoftheAlps,Lowappearedcalm,asifnoneofthenewswasfazinghim.Afterdaysofskiingandsnowboarding,thegrouppartiedbackatthevilla.Itwasaroutinehisclosest friends—Joey McFarland, Swizz Beatz, Alicia Keys, Jasmine Loo of1MDB, Fat Eric, and Low’s girlfriend, Jesselynn Chuan Teik Ying, hadfollowed over several winter ski holidays around the world:Whistler, Aspen,Courchevel.

Like theotherholidays, the itinerarywascarefullyplannedout to includeprivate-chefdinners,snowmobiling,massages,anddrinks.ButLow’sbusiness-as-usual mien was a facade, and aspects of the trip even took on a sinisterundertone at times.Lowconfided in someof his gathered friends that hewasevenworried about assassination, although he never said bywhom.As usual,Low continued to travel everywhere with his bodyguards. He instructedCatherineTan, his personal assistant, to ensure no one on theCourchevel trippostedpicturestoInstagram,Facebook,orothersocialmedia.

Hisclosestassociatesinthescheme—EricTan,JasmineLoo,YeoJiawei,the former BSI banker, and Seet Li Lin, who worked at Jynwel—were tooenmeshedinLow’sschemetopulloutnow.Butthedecisionofcelebritieslike

SwizzBeatzandAliciaKeystocontinuetofraternizewithLow,despitestoriesintheJournalandSingapore’sprobeintotheMalaysian,wasmoresurprising.

The conversation during the skiing trip, and a subsequent few days inLondon, revolved around how to change the narrative on Low.Until the last,thosewhohadbenefitedfromhislargessseeminglyrefusedtoacknowledgethemountingevidenceofwrongdoing.PerhapsSwizzBeatzandAliciaKeysdidnotread themedia, or they just discounted the stories about Low, ormaybe theysimplydidn’tcareifthemoneyfundingthetripwasstolen.

JoeyMcFarland, who owedmuch of his Hollywood career to Low, wasvociferous in the support of his friend. The coverage of Low was biased, apoliticalhatchetjob,hetoldtheentourage.Oneeveningduringthevacation,headvised Low to publicizemore of his charity work on Twitter to counter thenegativestories.Withthemoneystillflowing,McFarlanddidn’tappeartohavedoubts.Buthemorequicklybecameangered,asthestressofthesituationbegantorubawayathisnormalhappy-go-luckypersona.

RedGranite’s latestmovie,Daddy’sHome, starringMarkWahlberg andWillFerrell,hadjustpremieredandMcFarlandwasn’tyetreadytoletgooftheHollywood dream. For now, the news about Low and 1MDB had not yetpenetratedHollywood,andRedGranitewasstillagoingconcern.OnInstagram,McFarland kept up the appearance of the successful producer, although thereweresignsoftrouble.

Somestarsseemedtobedistancingthemselves.DiCaprio,forinstance,hadpassedontakingtheleadinPapillon,thecompany’slatestfeature,whichwasinpreproduction,withCharlieHunnamplaying the role instead.DiCapriohadn’tevenattendedLow’slatestyachtpartyoffthecoastofSouthKorea,andwasnotpresent in the latest auction at Christie’s. Talk about Scorsese making TheIrishmanstarringRobertDeNirowithRedGranitealsohadgonequiet.

Itwasaworryingsign;theslowpeelingawayofLow’scoterieoffamousfriends had begun. But theMalaysian had other—bigger—worries to contendwith. The FBI’s probewas scaring his business partners. To save his empire,LowturnedtoChina.

Chapter48

ChinaConnection

Shanghai,China,April2016

Fromhis residence in thePeninsulaHotel complex inShanghai,Low’s lifeofexilefromMalaysiawasnot tooshabby.SituatedneartheBund,thecity’soldcolonialheart,thehotelandresidencesboastedtwoMichelin-starredrestaurants.From his rooms, Low enjoyed unbroken views across Shanghai’s HuangpuRivertothemodernisticskylineontheotherside.

Itwas here in Shanghai,China’s financial capital, thatLowwas fightinghardtokeepholdofhisbusinessempire.WiththeFBIaskingquestions,Low’sbusiness in the United States was in peril. Major banks no longer wanted totouchhim,andWellsFargowasrefusingtopushthroughitsloantofinancethepurchase of the Park Lane, Low’s flagship development projectwith theAbuDhabi fundMubadala and theU.S.developerSteveWitkoffnearNewYork’sCentralPark.

Theprojectwasallbutscuttled,butLowhadhatchedaplaninShanghai.Unwilling to give in, his latest maneuver involved enlisting the help ofShanghai-basedGreenlandGroup, aChinese state-owned developer.OnApril26, Low fired off an email to Khaldoon Al Mubarak, the chief executive ofMubadala,outlininghowheplanned tosellhis stake in theproject toaminorKuwaitiroyal.TheroyalwassimplyanotheroldfriendofLow—anomineetokeeptheMalaysian’snameoffthebooks.TheKuwaitiwouldthensellapartofhisstaketoGreenlandGroup,whichwouldhelpfundtheproject.

“In 2015, I have been faced with vicious, false and misinformed mediaattackswhichresultedinchallengeswithrespecttothe[ParkLane]financing,”hetoldAlMubarak.Butthisdeal,headded,solvedtheproblem.

Low had again pulled stringswith a state entity—this time in China—tosolve a problem. His ability to enter the halls of power, getting to know the

chairmanofGreenlandinShanghai,heldoutaslimchancetheprojectmightnotdie—andhecouldgethismoneyfromtheprojectoutoftheUnitedStates.

FearinganimminentFBIaction,Lowwastakingotheractionstosellassetsforcash.InApril,heorderedSotheby’stosellDustheads,theBasquiatpainting,whichhehadpledgedascollateralforaloan.U.S.hedgefundmanagerDanielSundheimpaid$35million,almost$14millionlessthanithadcostLowthreeyearsearlier.TheMalaysianbegantosellotherpiecesofhisart,alsoatfiresaleprices.When he’d bought art, it was exactly for this kind of emergency. Themansionsandcompanieswerehardertodivestinarush.

As theMalaysianwas trying to save his Park Lane deal, theWall StreetJournal published the most detailed story yet about Low’s involvement inNajib’ssecretaccountsandhisbehind-the-scenesroleat1MDB.Afterthestorypublished,MalaysianSource,oursecretcontactinvolvedinthescheme,stoppedallcommunication.MSrealizeditwasnotsoeasytoinfluenceourcoverage.

TheJournalthentriedtolocateLow.BradleyHopeflewouttoShanghai,whereafemalereceptionistatthePeninsulaconfirmedthatLowwasalongtimeresident at the hotel. But when he showed up at the entrance to the hotelapartments,aburlysecurityguardinsistednoonebythatnamehadeverresidedthere. Returning to the receptionist, she looked at her computer again andnoticedallrecordsofhisstayhaddisappeared.HopethenflewtoHongKong,wheretheEquanimityhadberthedforrepairs.Thecaptainsaidtheownerwasn’tonboard.Lowwasnowheretobeseen.

Low’s connections with Chinese state-owned companies proved helpful inanotherway.The1MDBscandalhadwreckedNajib’srelationswithAbuDhabiandSaudiArabia.The attorneygeneral had tried to pass off themoneyNajibreceivedinhissecretaccountsasadonationfromSaudiArabia.TheSaudishadrefused to publicly confirm this fiction, despite Malaysia’s entreaties. Thekingdom’sforeignministerwouldonlysayhebelievedNajibdidnothingwrongand that there had been some kind of donation toMalaysia, but he wouldn’tcommitfullytothefalsestorybeingputforward.

Whattheprimeministerneedednowwasawaytofillthe1MDBfinancialblackhole.Thefundhadmorethan$13billionindebtandneededtorepayAbuDhabiforbailingitout.Butitsassetswereworthnothinglikethisamount.Inaseries of deals, Chinese state-owned companies agreed to acquire the bulk of1MDB’sassets:landinKualaLumpurandpowerplants.Ifcompleted,thedealswouldraiseabout$4billion,stillwellshortofwipingout1MDB’sdebt,buta

starttocleaningupthemess.Thetroublesat1MDBofferedaperfectopportunityforChinatosupplant

theUnitedStatesinMalaysia—justthelatestsignofAmerica’sdecliningpowerintheregion.

ItwasnosurprisethenthatNajibturnedawayfromPresidentObama,whohadlostfaithinMalaysiaasamodelIslamicdemocracy,andlookedinsteadtoChina’sauthoritarianrulers.UnderPresidentXiJinping,Beijingwasextendingits influenceoutsideof itsborders,whether throughmoreaggressive territorialclaims to islands in theSouthChinaSea, or via a softer diplomatic approach,offeringtobuildinfrastructurelikehighwaysandportsinneighboringcountries.

Najib was quick to claim victory, saying the deals, and the end toMalaysian investigations, put the fund’s problems behind the country. TheNational Audit Department had finished its probe into 1MDB, but thegovernment classified it under theOfficial SecretsAct, attempting to bury itscontents.

ThePrimeMinister continued to instill fear in his political opponents. InApril,policearrestedanoppositionleaderwhohadgottenholdoftheNationalAuditDepartment’s report,which showedbillionsof dollars of 1MDBmoneywasunaccountedfor.Hewassentencedtoeighteenmonthsinjailforbreakingthe Official Secrets Act.When the Journal reported on the secret document,NajibthreatenedtheJournalwithalawsuit.AleaderoftheBersihprotestsalsowasdetainedunderanewlawmeanttofightterrorism.

Therehadbeenintimidation—amurder,even—ofthoseinvolvedin1MDBinvestigations,andpeoplewerefrightened.YetsomepatrioticMalaysiansheldouthopethatauthoritiesoverseaswouldnotlettheirinvestigationsdrop.AttheMalaysian Anti-Corruption Commission, which had recommended the primeminister’s arrest, there was simmering anger over the mothballing of theirinvestigation.

Andso,ahandfulofinvestigatorsbegantosecretlyfeedinformationtotheFBI. McMurry’s team of agents had spent months disentangling the moneyflows.ByJuly2016,theDepartmentofJusticewasreadytotakeaction.ItdidsoinawaythatcaughtLow,Najib,andotherconspiratorsoffguard.

Chapter49

GlassHalfFull

WashingtonDC,July2016

U.S.AttorneyGeneralLorettaLynch steppedup to themicrophone at a pressroom in the Department of Justice’s offices on Pennsylvania Avenue inWashington,DC.Moments later, she announced the largest-ever asset seizureundertheKleptocracyInitiative.WiththehelpoftheMalaysianAnti-CorruptionCommission,andotherMalaysianofficialswhometFBIinvestigatorsinsecret,the Bureau had pieced together the details of one of the biggests frauds inhistory.

FlankedbyseniorJusticeDepartmentandFBIofficials,LynchlaidouthowtheU.S.governmentwasseekingtofreezemorethan$1billioninassetsboughtwithproceedsstolenfrom1MDB—thebiggestcorruptioncaseonrecord—frommansionsinNewYork,LosAngeles,andLondon,toastakeinEMI,aprivatejet,andthefutureproceedsfromTheWolfofWallStreet,tonamejustafew.Formaximumpublicity, the JusticeDepartment filed its lawsuit—United States v.The Wolf of Wall Street—at the District Court for the Central District ofCalifornia,whereHollywoodislocated.

“TheDepartmentofJusticewillnotallowtheAmericanfinancialsystemtobeusedasaconduit forcorruption,”Lynchsaid.“Corruptofficialsaroundtheworldshouldmakenomistake thatwewillberelentless inourefforts todenythemtheproceedsoftheircrimes.”

Thiswas the largest kleptocracy seizure inU.S. history, andHeuchling’steam, togetherwith JusticeDepartmentprosecutors, hadpainstakingly laidouteverytwistandturnoftheschemeinclearprose.

ThelawsuitnamedJhoLow—thefirsttimehehadbeenpubliclyreferredtoby a law-enforcement agency—as well as Riza Aziz, Khadem Al Qubaisi,MohamedAl Husseiny and Jasmine Loo of 1MDB. (Later addendums to the

lawsuit would name Tarek Obaid and “PetroSaudi Officer,” a reference toPatrick Mahony.) Tim Leissner was referred to as “Goldman ManagingDirector,” and his interactions with Jho Low during the meeting with SheikhMansourinAbuDhabiweresketchedout.Butmostshockingly,PrimeMinisterNajib Razak was thinly disguised as “Malaysian Official 1,” the lawsuitdescribinghimasarelativeofRizaAzizandholdingapositionofauthorityat1MDB. (Later, the department would add Rosmah as the wife of “MalaysianOfficial1.”)

TheallusiontoNajibshockedtheprimeminister’sentourage,whichneverthoughttheUnitedStateswouldtakesuchaboldstep.Thiswasacivillawsuit,lookingtoseizeassets,butfromhereonJhoLowandRizaAzizwouldavoidtheUnited States, fearing criminal proceedings were also under way. EvenNajibwouldkeepoutof theUnitedStates forawhile, sendingadeputy to theU.N.GeneralAssemblyinNewYorklaterthatyear.

Theprimeminister never expected thehammerofU.S. justice to land soclosetohisdoor.Afteryearsofprivilege,ofgolfingwithPresidentObama,ofendless speeches to the United Nations, he felt untouchable. It was hard forNajibtoevenconceiveofanindependentjusticesystemthatwouldembarrassasitting prime minister. It formed a stark contrast to his ability to shut downinvestigationsathome.

In thedaysafterLynch’spressconference,Najib toldfamilymembershewasnotawareofthescaleofLow’stheft.Itwashardtobelieve—heknewforsure about the homes in Los Angeles, NewYork, and London that Low hadboughtandtransferredtoRizaAziz.Butit’spossibletheprimeministerdidnotknow the full extent of Low’s theft. The JusticeDepartment estimated that atleast$3.5billionhadgonemissing,anestimateitwouldraisebyabilliondollarswithin a year. In the days after AttorneyGeneral Lynch’s announcement, theprimeministerdidnotknowwhattodo.Therewasnowayoutofthis.Aweeklater,inafeeblenewsconference,Najibpointedoutthat1MDBdidnotdirectlyownanyoftheassetsnamedbytheJusticeDepartment.Itwastechnicallytrue,butbesidethepoint.

The Journal had reported the Justice Department’s suits just ahead ofLynch’s press conference. When Low read the story, he thought itwas a bigmistake, because U.S. authorities had not served his lawyers with any legaldocuments.TheactionscuttledLow’sefforts to liquidatehis stake in theParkLane,ortosellanyotherU.S.assets.Hismansions,art,evenhisBombardierjet,werenowfrozen.Only theEquanimity, in theopenoceanandoutof reachof

U.S.authorities,wasstillhistoenjoy.ButLowalreadyhadhundredsofmillions—if not billions—secreted away in secret accounts around theworld.And heremainedfree.

Watching from the sidelines, Bill McMurry, whose New York–basedinternationalcorruptionsquadhadledtheinvestigation,perhapsfelt thiswasaglass-half-full moment. Global Financial Integrity, a Washington-basedanticorruption group, estimated that $1 trillion was drained from developingeconomiesin2012alone,especiallypoorlyregulatedplaceslikeBrazil,China,India,andRussia.ButMcMurryhadamoreoptimistictake.

By mid-2016, the FBI was ratcheting up its cooperation with foreignanticorruption agencies, including Brazilian investigators looking into thePetrobrasscandal,inwhichthestate-ownedoilcompanymadeillegalpaymentsofmorethan$5billiontocompanyexecutivesandpoliticians.Brazil’sattorneygeneral already had secured convictions of scores of Petrobras officials,politicians, and businesspeople. And despite Najib’s best efforts, the JusticeDepartmentwasmovingtopunishthoseinvolvedin1MDB.

“There is undoubtedly aglobalpush toward anticorruption that hasneverreallyexisted,evenjustadecadeortwoearlier,”McMurrytoldaseminar.

Inalaternewsrelease, theFBIevenpraisedthe“tremendouscourage”oftheMalaysianAnti-CorruptionCommissioninpursuingitsowninvestigation.ItwasascloseastheFBIcouldgettothankingthecommission’sstaffforsecretlyhelpingthebureauwithitsownprobe.

Therewasaglass-half-emptywayoflookingatevents.Hadn’tthesystemofchecksandbalancesatbanksfailedtocatchJhoLow’smalfeasanceforsevenyearsbecauseofthegreedoffinanciers?Wasn’thestillatlibertytoenjoyalifeofease infive-starresidences inChinaandThailand,wherehe livedin theSt.Regis apartments in Bangkok, or on his superyacht berthed in Phuket? InMalaysia,Najib’spositionappearedunshakable.WhatsanctionhadanyonefromAlQubaisitoLeissnerandtheBSIbankersfaced?

What remained to be seen was whether the U.S. government—orSingapore, Switzerland, and Abu Dhabi—would launch criminal prosecutionsagainstthoseinvolved.TheU.S.kleptocracyactionwasacivilcase—anattemptto claw back assets. But only jail time, not simply a slap on the wrist and aconfiscationofassets,wouldserveasarealdeterranttothiskindoftransnationalfraud.

Chapter50

White-CollarCrime

White-Collar CrimeNew York, Fall 2015In the fall of 2015, Goldmancompliance executives sifted through Tim Leissner’s official Goldman emailaccount.Afterthe1MDBscandalhitthepagesoftheWallStreetJournalinJuly2015,GoldmanlaunchedaninternalinvestigationintoitsdealingsinMalaysia.The German banker told Goldman executives conducting the probe that hebarelyknewLow.Buttheydidn’t takeLeissner’swordforitandcarriedoutareviewofhis communications.Normally,WallStreetbankersare savvyaboutkeeping sensitive business offline, either meeting in person or using privateemailsandphonemessages.

ButLeissnerhadbeensloppy.Earlier in2015, thebankerhadpreparedhisunauthorized reference letter

for Jho Low—to help him open an account with Banque Havilland inLuxembourg—fromapersonalcomputer.The letternever shouldhave formedpart of Goldman’s internal inquiry. But someone on Kimora Lee Simmons’sstaff mistakenly sent the document to Leissner’s Goldman email, andcomplianceexecutivesuncoveredit.

At Goldman’s Manhattan headquarters, there was a heated debate abouthow to deal with the 1MDB issue, which was turning into a public relationsdebacle. Some executives cautioned against scapegoating Leissner. PabloSalame,coheadofGoldman’ssecuritiesdivision,rejectedaninternalsuggestionthatthefirm’sinvolvementinthemesscouldbeblamedsolelyonhim.

“GoldmanSachsdidthesedeals,”Salametoldcolleaguesinonediscussion.In public, Goldman Sachs stood by its actions, pointing out it had taken

risks in helping 1MDB raisemoney and was fairly paid for its services. Thebank said it had no idea of Low’s role at the fund and could not have been

expectedtoknowwhat1MDBwoulddowiththemoney.Despite high-level Goldman support of the 1MDB business, Leissner

couldn’t survive the evidence of his secret support of Low to open theLuxembourgaccount.InJanuary2016,GoldmanputLeissneronpersonalleave,andthenextdayhequit,formallyleavingthebankthefollowingmonth.

In the following weeks, Leissner often was spotted at Club XIII, afuturistic-looking nightclub in Hong Kong’s financial district, where he toldfriends he felt betrayed by Goldman. Sporting a graying beard and lookinghaggard,thebankercomplaineditwasunfairhewasbeingsingledout,arguingthat senior Goldman executives in New York had signed off on these deals.Despite thebank’sdenials,manyexecutivesatGoldmanwereawareofLow’srolein1MDBbuthadnotraisedconcerns,heclaimed.

Andrea Vella, who structured the 1MDB-bonds deals and backed theminternally, had been promoted to cohead of investment banking inAsia.GaryCohn,Goldman’spresidentandabigsupporterofthe1MDBbusiness,becamedirector of President Donald Trump’s National Economic Council in January2017,ajobhestayedinforalittleoverayear.

Leissner didn’t go public with his grievances. He was still engaged innegotiations with Goldman over deferred pay worth millions of dollars. Thebanker had not expected to be fired, and it appeared he needed themoney tofinancehis lifestylewithnewwife,KimoraLeeSimmons;aroundthat timeheevenaskedafriendforacashloanofafewmilliondollars.Plus,therewasthecodeamongGoldmanbankerstonevertalkaboutdeals,evenonceyouhaveleftthefirm.

He tried to build other businesses. With Simmons, Leissner had set upCuscadenCapital,aBritishVirginIslands–basedventurecapitalfund.Cuscadeninvested in Celsius, a U.S.-based energy-drink company, and he becamecochairman. Leissner divided his time betweenHongKong and LosAngeles,where Simmons purchased a $25 million mansion in the gated Beverly Parkneighborhood, a twenty-thousand-square-foot estate with an olive-tree-lineddrivewayleadingtoaseven-bedroommansion.NeighborsincludedRodStewartandDenzelWashington.Simmonsposted Instagrampictureswithherhusbandontheskislopesinearly2018.ButthespecteroflegalproceedingscontinuedtohangoverLeissner.

FBI agents had begun to look at payments of hundreds of thousands ofdollars by Jasmine Loo, 1MDB’s former legal counsel and a close Low aide,into one of Leissner’s personal accounts. The purpose of the transfers was

unclear. The banker appeared tomaintain other links to people close to Low.TheWallStreetJournal, inNovember2017, reported thatLeissnerandaThaiassociateofLow’shadattemptedinlate2016tobuyasmallbankintheIndianOceannationofMauritius—butregulatorstherehadblockedtheacquisition.

Low’sroleintheMauritiusdeal,ifindeedhehadone,wasunclear.ItalsowasunknownifLeissnerkeptincontactwiththeMalaysian.OnceaubiquitouspresenceatHollywoodpartiesandaninternationaljet-setter,Lowhadseeminglyfallen off the map as authorities tightened the screws. He was sighted inBangkokandShanghai,buthisassociatescouldn’tgetholdofhimaseasilyasinthepast.Nooneseemedtobesurewherehewasatanygivenmoment.

Inearly2017,SingaporebannedLeissnerfromitsfinancialindustryfortenyearsinconnectionwiththeletterhewrotetotheLuxembourgbankonbehalfofJhoLow.Laterintheyear,theFinancialIndustryRegulatoryAuthority,aU.S.body,barredhimfromtheAmericansecuritiesindustry,afterhedidn’trespondto requests for documents and other information stemming from his departurefromGoldman.

Then in August 2017 the Justice Department made a bombshellannouncement:Itwaspursuingacriminalinvestigationintothe1MDBscheme.

TheJusticeDepartment’searlier legalactionswerecivilproceedings,anefforttoseizeassets,nottoputpeoplebehindbars.U.S.authoritieshadfiledanumberof additional civil lawsuits, targeting a growing list of assets, including theEquanimity, the proceeds from Red Granite’s Dumb and Dumber To andDaddy’sHome, the$8millionin jewelryLowhadgiventoMirandaKerr,andthe$13millioninartpresentedtoLeonardoDiCaprio.

The civil action, however, was just a way to tee up the main event: acriminal investigation. Before the judge in California could rule, the JusticeDepartment, inAugust2017, asked for an“indefinite suspension”of its asset-seizuresuitstopermittheFBItofocusonbuildingacriminalcase.ItwasasigntheU.S.governmentwasseekingtoprosecuteindividualsinvolvedinthefraud,anddidnotwanttoshowitshandincivilproceedings.

Jho Low, of course, was the central focus of the U.S. government’sinvestigation. Itwas unclearwhether others involved—RizaAziz,AlQubaisi,Al Husseiny, Jasmine Loo—were possible targets of the criminal probe. TheJusticeDepartmentcontinued to lookatLeissner’s role inevents. In thesevenyears since the financial crisis, only oneWall Street banker—a Credit Suisseexecutive—had gone to jail, despite an economic collapse that had thrown

millions out of work and lowered living standards. More than one thousandbankerswereconvictedfortheirrolesinthesavingsandloanscrisisinAmericainthe1980s.In2006,acourtfoundKenLay,theformerCEOofEnron,guiltyof fraud.Since thecrisis, though, theJusticeDepartmenthadshiedawayfromsinglingoutindividualsforwhite-collarcrimes,preferringinsteadtoreachdealswithbankstodeferprosecutionsinreturnforheftyfines.

Goldmanagreed in2016topayup to$5billion inacivilsettlementwithU.S. federal prosecutors to resolve claims stemming from the sellingof faultymortgage securities to investorsduring the crisis.WallStreet banks, includingthe Bank ofAmerica and J.P.Morgan, in total paidmore than $40 billion insettlements. Critics pointed out that Wall Street saw these fines as a cost ofdoingbusinessthatdidlittletoalterbehavior.

Now,theJusticeDepartmentwastryingtodeterminewhetherGoldmanhadreasontobelievethemoneyitraisedfor1MDBwasbeingmisused,whichcouldleadtoasteeppenaltyundertheBankSecrecyAct,perhapsinthequantumofthe$2billionthatJ.P.MorganpaidforfailingtostopMadoff’sPonzischeme.TheFederalReserve,theSecuritiesandExchangeCommission,andNewYorkState’s Department of Financial Services also were examining some of thebank’sactions.

Fewobserversofthescandalwereholdingtheirbreath.InAmericainthetwenty-firstcentury,WallStreetbankerstypicallydidnotendupinprison.

AfterthereleaseofthePanamaPapersin2016,detailinghowtheultrawealthyuse shell companies to conceal ownership of assets, there was a heightenedglobal debate about anonymity in the purchase of multi-million-dollar assets.TheUnitedStateswastakingothermeasurestostopmoneylaunderingthroughitsrealestatesector.TheTreasuryDepartmentlaunchedapilotprogramin2016forcingall-cashbuyersofluxurypropertiesinManhattanandMiamitodisclosetheiridentitiestotheU.S.government.Therulestargetedpropertiesboughtbyshell companies andworthmore than $1million inMiami and $3million inManhattan. Title insurance companies, which are involved inmost real estatedeals,wereorderedtocarryoutthechecks.

More thanaquarterofallhomepurchasesmadeovera six-monthperiodwereflaggedassuspicious,leadingtheTreasuryDepartmenttorolltheprogramout in Los Angeles and other city areas, with a view to bringing in new,permanentregulations.Majorloopholesremained—lawyers,forinstance,couldcontinue to cite client privilege to avoid giving up the names of beneficial

ownersinvolvedinrealestatetransactions—buttheUnitedStateswasmovingtodealwiththeproblem.

Christie’s, the auction house that sold Low many paintings, begandemanding that agents looking to buy or sellworks reveal the names of theirclients.Theseruleswerevoluntary,butChristie’swastakingaction.Therewerestillno regulations toeffectivelystop the flowofcorruptcash intonightclubs,casinos, andHollywoodmovies, but theU.S. governmenthoped the shameofthe1MDBfiascowouldmakenightclubspromoters,directors,andactorsthinktwicebeforereceivingmoney.

LeonardoDiCaprioandMirandaKerrin2017voluntarilygaveupthegiftstheyhadreceivedfromLowtotheU.S.government,andtheactorevenreturnedMarlonBrando’sOscarstatuette,whichwasnotnamedinthelawsuit.Bythen,hehadanBestActorOscarofhisown,forTheRevenantin2016.

KerrhadsplitwithLowafterthefirststoriesabouthimbegantoemergeinearly 2015. InMay2017 shemarriedEvanSpiegel, the billionaire founder ofSnapchat,cuttingalltieswithLow.

AsforStrategicGroupfoundersNoahTepperbergandJasonStrauss,theirinteractions with Jho Low had played a role in building their business. InFebruary 2017, Madison Square Garden Company paid $181 million for acontrolling stake in a new company, TAO Group, which included theirnightclubs.

RedGranite,inMarch2018,agreedtopay$60milliontosettletheJusticeDepartment’s efforts to seize rights to the film company’s future profits. JoeyMcFarland maintained a public presence, attending the premiere of RedGranite’sPapilloninSeptember2017attheTorontoInternationalFilmFestival.OnInstagram,hepostedpictureswithCharlieHunnam,thefilm’sstar,fromtheredcarpet.

ButMcFarlandappearedtokeepintouchwithsomeofhisoldassociates.InMarch2017,hepostedanInstagrampicturefromtheBatuCaves,justnorthof Kuala Lumpur, the capital of Malaysia. That was where Riza Aziz, thecofounder of Red Granite, had been cooling his heels since the JusticeDepartment’s asset-seizure lawsuit in mid-2016. Scared to travel back to theUnited States, fearing possible arrest, Rizawas trying to do business deals inAsiawithoneofNajib’ssons.

TheexactwhereaboutsofLowremainedunclear.OnMarch27,2016,YeoJiawei,thefundexpertonwhomLowhadrelied

tohidemoneyflows,arrivedforameetingattheSwissClubinSingapore.Yeo

wasfranticashemadehiswaythroughthedoorsoftheprivateclub,aformertwo-story,whitewashedBritish colonialmansionwith bright red shutters, andmadehiswaytoacaféonaverandahoutback.

There to meet him was Kevin Swampillai, his former boss at BSI, withwhom he had conspired to takemoney from 1MDB.As they sat at the café,looking over the Swiss Club’s lush garden, Yeo told Swampillai that he’drecentlybeenarrestedbySingaporepoliceandletoutonbail.

Fearing jail time,Yeo sketched out a plan of action.The pair should tellSingaporeauthoritiesthatthe1MDBmoneythey’dreceivedintotheirpersonalbankaccountswasactuallyinvestmentsfromanotherfinancier.Swampillaiwasnoncommittal.

The same month, Yeo used the encrypted Telegram instant-messagingservicetocontactJoséRenatoCarvalhoPintoatAmicorp,whoseCuraçaofundshaddisguised the flows of 1MDBmoney. In hisTelegrammessage,Yeo toldPinto to destroy his laptop and avoid coming to Singapore in case authoritiestriedtointerviewhim.

Yeo hadmade a hugemisstep. Unknown to him, Singapore police weremonitoring his actions, and now authorities had evidence that Yeo wasobstructingthecourseofjustice.Hewassoonbackinjail.

As in theUnitedStates,Singaporeseizedassets:$177million inpropertyandcontentsofbankaccounts,abouthalfbelongingtoJhoLowandhisfamily.Authoritiesinthecity-staterevokedBSI’sbankinglicense,thefirsttimeithadshut down a bank for more than three decades. The Monetary Authority ofSingapore levied fines of over $20 million in total against eight banks, themajority to be paid by BSI and Falcon, with smaller penalties to Coutts,Standard Chartered, and others, for failing to stop money laundering. Thefinancial penalties were paltry, but Ravi Menon, managing director of theMonetary Authority of Singapore, defended the city state’s response to thecalamity.

“When you fine a bank billions of dollars, it hurts basically shareholdersandotherstakeholders.Itdoesn’thurttheboardandseniormanagement,anditdoesn’thurt the individualsmuch.And that iswhat, inmyview, isoneof thefailingsofthecurrentregimeglobally,thatpeoplecontinuetodowrongthingsbecausethey’venotbeenheldpersonallyliableandresponsible,”Menonsaid.

ButSingapore’scriminalsanctionscouldhardlybecalleddraconian.Aftercooperatingwith authorities,YakYewChee, JhoLow’s personal banker,wassentencedtoeighteenweeksinjailafterpleadingguiltytoforgeryandfailingto

reportsuspicioustransactions.Hehandedoverafewmilliondollarsin1MDB-related bonuses to Singapore’s government but was allowed to keep millionsmore. Haughty and defiant through his trial, Yeo was handed a thirty-monthsentence for witness tampering and a further four-and-a-half-year term formoneylaunderingandothercharges.

Threeotherpeople,comprisingasubordinateofYak’satBSI,theheadofFalcon’s Singapore office, and a Singaporean broker, got short sentences of amatter of weeks. Prosecutors said Jho Low was a person of interest, butauthorities had no idea where to find him. Singapore’s central bank referredHanspeterBrunner,whohadretiredasheadofBSI inMarch2016,andKevinSwampillai, alongwith anumberofotherBSI executives, to stateprosecutorsforfurtherinvestigation,butmorethantwoyearslater,authoritiesdidnotappearto have taken any action against either man. Switzerland’s attorney general’soffice also launched a criminal probe into the 1MDB affair. InvestigatorsfocusedontheroleofJhoLowandAlQubaisi,buttheofficealsonamedBSIasatarget,andSwissfinancialregulatorsorderedthebanktohandover95millionSwissfrancsinillegalprofits.After143yearsinoperation,BSIceasedtoexistin2017,itsassetsfoldedintoanotherSwissbankunderordersfromauthorities.

FalconBank,ownedbytheAbuDhabifundAabar,alsowasundercriminalinvestigation in Switzerland. Like Brunner, Eduardo Leemann, the chiefexecutiveofFalconwhohadcomplainedtoJhoLowabouthundredsofmillionsofdollarsofriskypaymentsin2013,beforelettingthemthroughanyway,alsoretired in 2016. Unlike BSI, Falcon was allowed to remain in operation, butorderedtoreturnover$2.5millioninillegalprofits.

MarkBranson,chiefexecutiveof theSwissFinancialMarketSupervisoryAuthority,thefinancial-sectorregulator,worriedpubliclythatSwissbankswerebecomingmoreexposedtomoneylaunderingastheytargetedwealthyclientsinemergingmarkets.“Moneylaunderingisnovictimlesscrime.Itallowscriminalsto profit from breaking the law. It also facilitates corruption and the abuse ofpowerandprivilege,”Bransonsaid.

As in the United States and Singapore, the proof of Switzerland’sseriousness incombatingwhite-collarcrimewouldbe incriminalprosecutionsofSwissbankers,notrhetoric.

Chapter51

KingKhademFalls

AbuDhabi,August2016

InFall2016,AbuDhabi’spoliceswooped,detainingKhademAlQubaisi.ItwasanunprecedentedmovefortheGulfemirate,wherethedirtylaundryoftheeliteis rarely hung out for public view. For years, Al Qubaisi had acted withoutboundaries, a seemingly omnipotent figure who had the authority to movearoundbillionsofdollars.ThekeytohisuntouchabilitywasacloserelationshipwithSheikhMansour.

TheJusticeDepartmentlawsuitshadforcedtherulingAlNahyanstotakesternaction.AlQubaisi’s role in the1MDBscandalhadbeenexposed for theworldtosee,bringingshameonAbuDhabi.Someonehadtopay.AlQubaisi’stenureatoptheworld’sfinancialsystemhadcometoaclosewithhisdismissalfromIPICin2015.Nowhewastakenintocustody,alongwithAlHusseiny,theformerheadofAabar.Authoritiesdidsowithoutfanfare—therewerenopublicstatements—butthearrestneverthelessmarkedararemomentofaccountabilityin the emirate. Though the men’s assets were frozen, neither was formallycharged.

Bothmenwereheldinadetentionfacilitymeantforcriminalsontheirwaytoprison.GivenAlQubaisi’sclosenesstoSheikhMansour,itwouldhavebeendifficult to sanctionhimwithoutopeningup the innerworkingsof thePersianGulfstate,anditappearedunlikelyhewouldbehandedalongprisonsentence.ThefateofAlHusseiny,whowasnotevenacitizenofAbuDhabi,wasunclear.

FromhisbasesinBangkokandShanghai,LowhadbeenworkingtoreachadealwithAbuDhabiauthoritiestobrushtheschemeunderthecarpet.WithAlQubaisi’sarrest,suchhopeswerefastebbingaway.

Instead,bothsidesbecameembroiledinapublicscrapoverwhowasliabletopay intereston1MDB’sbonds,which IPIChadguaranteed.TheMalaysian

fund defaulted, butAbuDhabiwas on the hook for payments, orwould facecross-defaultsbyinvestorsonitsowndebt.

The bigger issue ofwho should pay for themoney Low andAlQubaisitook remained unresolved. Abu Dhabi’s negotiators argued this was not theirproblem,buttheycouldn’twalkawaybecauseIPIChadguaranteed$3.5billionin1MDBbonds.Therewasalsotheissueofthe$1billionemergencyloanthatIPIChadmadeto1MDB.

Abu Dhabi authorities had taken action against Al Qubaisi, but now therulers wanted this embarrassment to melt away. IPIC took a $3.5 billionprovision, basically an admission to investors that it never expected1MDB topay its debts, and then was merged into Mubadala, bringing an ignominiousclose to the $70 billion fund’s thirty-two-year history. For years, Goldman,MorganStanley,andotherbankshadmadehugeprofitsdealingwithIPIC,andnowsuddenlyitdidnotexist.

The empire of Khaldoon Al Mubarak, the chief executive of Mubadala,whichhaddonesomanydealswithLow,appearedtohavegrownevenlargerasIPICnowcameunderhiscontrol.

AbuDhabiauthoritiesand1MDBcontinuedtonegotiatehowtosortoutthedebtproblem,but itwasunclearhowtheMalaysianfundwouldcomeupwiththemoney it owed. The hopes thatChinawould bail outMalaysia seemed tohave been misplaced. In early 2017, one deal for a Chinese state–ownedcompany to acquire a parcel of 1MDB’s land fell apart, after President XiJinping’s government declined to sign off on the arrangement. It seemed thatBeijing didn’t want to get involved in this imbroglio, even if it helped bindMalaysiaclosertoChina.

Low’s efforts to cover up the PetroSaudi phase of the fraud also werefailing.InNovember2017,PrinceTurki,cofounderoftheoilfirm,wasdetainedin a consolidation of power in SaudiArabia.His father, the former king, hadpassed away, and Saudi’s new rulers detained scores of princes and cabinetmembers, ostensibly for corruption. Prince Turki’s fall was another blow toLow’sprospects.

PetroSaudi’s role in the 1MDB affair was a focus of investigations inSwizerland.WhilePrinceTurkiwasdetained,XavierJustowasletoutearlyinDecember2016fromjailinThailand,andhereturnedtohisfamilyinGeneva.Angryoverhis treatment, he filed a criminal complaint inSwitzerlandagainstTarekObaid,PatrickMahonyandPaulFinnigan.ObaidandMahonystillranthePetroSaudi business, although it had few real operations. Obaid continued to

partyandwassnappedonasuperyachtoffthecoastofTurkeyinAugust2016.MahonywasathomeinLondonwithhisfamily.

In June2017,BradleyHope receivedan intriguingmessage inhisWallStreetJournal email. The message, from a mysterious group calling itself GlobalLeaks, offered him access to emails hacked from the computer of Yousef AlOtaiba,Low’sassociateandtheUAE’sambassadortoWashington.

“We have something extremely smoking gun and exclusive,” the emailpromised.

Theemailwassentfromglobal-leaks@inbox.ru,asuffixdenotingRussia,butthelocationofthegroupwasamystery.Theirmotivationwascrystalclear.GlobalLeaksapproachedanumberofinternationalnewsoutletsatthetime.Inmessages, they pointed outAmbassadorOtaiba’s role inMiddle East politics,includinghiseffortsinJune2017toisolatethetinyPersianGulfnationofQatar.

HopewasinterestedinadifferentaspecttoAmbassadorOtaiba’slife,oneabout which other news outlets had no clue: his connection to Jho Low. HeaskedthegrouptosearchtheirfilesandcomebackwithanythingrelatedtoLowor1MDB.Thehaulwasremarkable.

TheemailsgaveacomprehensivepictureofOtaiba’srelationshipwithJhoLowandhowtheambassadorhadbenefitedfinanciallyfrom1MDB.TheyalsoshowedhowOtaiba,afterthestoriesintheJournalandSarawakReport,hadcutoffLow,whowasdesperatelytryingtogetintouchwithhim.

TheAbuDhabigovernmentattemptedtodiscredittheemails,pointingoutthehackerswerebackedbyOtaiba’spoliticalenemiesintheMiddleEast,butitdidnotgoasfarastoclaimthedocumentsweredoctored.Otaibaremainedinhis position, appearing on Charlie Rose’s talk show in the United States todiscourseonMiddleEastpoliticsnotlongaftertheJournalpublishedastoryinJuly2017onhistiestoLow.

AmbassadorOtaibawasasurvivor;sowasMalaysia’sprimeminister.

Najib started to act as if 1MDB had never existed. He disbanded the fund’sboardandplaceditdirectlyunder theFinanceMinistry,whichhealsoheaded.After the Justice Department suit, Deloitte Touche said it had resigned asauditor, and cautioned that 1MDB’s 2013 and 2014 financial statements—accountsthatDeloittehadearlierapproved—couldnolongerbereliedupon.ThecostofthecorruptionwassettoimpactgenerationsofMalaysians.

Moody’s estimated the governmentwould be on the hook to repay about

$7.5 billion of the fund’s debt, a sum equivalent to 2.5 percent ofMalaysia’seconomy. Foreign investors, worried over the 1MDB scandal, soldMalaysianassets,pushingthelocalringgitcurrencydown30percentagainsttheU.S.dollarinjustafewmonths.

Abouthalfofthefund’sdebtwasindollars,andaweakerringgitmadeitevenmore costly to repay in local-currency terms. The fundwas supposed tohavecreatednew jobs forMalaysians,but insteadwouldbe aburdenon statefinancesforyears tocome.Mostof theborrowingsweren’tdueforrepaymentforafewyears,but1MDB’sdebtwasatickingtimebomb,waitingtogooffinthefuture.

AnyhopesMalaysiawouldonedaybecomeatrueliberaldemocracywereshattered.ManyMalaysians, from top bankers to lawyers and officerworkerswere tired of the direction of their country. The country’s brain drain, aphenomenonwhich had pushedmany of the country’s brightestminds to liveandworkintheUnitedStates,theUnitedKingdom,Singapore,orAustralia,wasunlikely to reverse anytime soon. Money politics, meanwhile, continued todetermine thedirectionof the country.Theprimeministerwasgearingup forelections in 2018, the outcome of which would come down to cash andgerrymandering,notideas.

Sticking by her husband’s side, Rosmah became more staunchly anti-Western after the Justice Department suits described how she had receivedjewelry from Low worth almost $30 million. The attempts to use charity toburnishtheimagesofthoseinvolvedwith1MDBalsodidnotstop.InSeptember2016,Rosmahwastohavereceiveda“LeadbyExample”awardatagaladinnerhostedbytheUnitedNationsEducational,ScientificandCulturalOrganizationandaU.S.charityatNewYork’sMetropolitanMuseum,inhonorofherworkforchildren’seducation inMalaysia.Theorganizerscanceled theawardat thelastminuteafterqueriesfromtheWallStreetJournal.

Malaysia slipped more into China’s orbit. To coincide with a visit toBeijing late in 2016, Najib wrote an editorial in the People’s Daily, theCommunistPartymouthpiece,sayingformercolonialpowersshouldnotlecturenations theyonceexploited.Afewweeks later,atanAsia-Pacificsummit thatNajib also attended, PresidentObama, in his last fewdays in office,made anallusiontoMalaysia,onethatwasn’tlostonitspeople.

“Therearelimitstoourreachintoothercountriesifthey’redeterminedtooppresstheirpeople,”Obamasaid,“orsiphonoffdevelopmentfundsintoSwissbankaccountsbecausethey’recorrupt.”

The United States’s reach was indeed constrained. As the JusticeDepartmentprepareditscriminalcase,itfocusedonJhoLow,themaintargetofitsinvestigation.ButensconcedinBangkokandShanghai,theEquanimitysafelyparkedinwatersnearby,heappearedoutofthereachofAmericanjustice.

Epilogue

Phuket,Thailand,February2017

From the narrow jetty that jutted into the sparkling waters off Phuket, thesouthern Thai resort island, the hulk of theEquanimity was still visible, eventhoughitwasanchoredafewnauticalmilesfromthepalm-fringedshorelinetoavoid scrutiny. Local fishermen said the captain had recently come ashore toloadsuppliesontotheboat.ItwasFebruary2017,andwehadreceivedatipthatJhoLowwasplanningyetanothermajorpartyaboardtheyacht.

With the threat of arrest by the FBI, and the jailing of his associates inSingapore, it seemed barely credible to us that Lowwould try to entice U.S.celebrities to his yacht in Phuket. But as we continued to try to locate theMalaysian, it became clear to us that he could never settle for a quiet life ofexile.Afteramiserable twoyears,Lowwas regainingconfidence.He thoughthimself untouchable. A huge party, attended by big name U.S. entertainers,wouldbetheperfectwaytoshowhewasbackinthegame.

Sinceearly2015,Low’sworldhadnarrowedconsiderably.FearingarrestifhesetfootintheUnitedStatesoranyWesterncountry,heappearedtobelivingmuchofthetimeinaservicedapartmentinBangkok.Onebankerspottedhiminthelobby,surroundedbysecurity.Inanothersighting,LowwasaccompaniedbyJesselynnChuanTeikYing,whowascarryingababy,apparentlytheirchild.

Thailand, ruled by amilitary junta that had taken power in aMay 2014coup,wasasafeharborforLow,whosegrandfatherhadlivedinthecountry.Heappeared to still have access to copious amounts of cash, and the LowsreportedlyhadinvestedinanewBangkokshoppingmall.Itwasacomfortableexistence,ifisolated.

YetLowwasrestless.Hehadnothostedamajorpartysincethedinneron

theEquanimityoffthecoastofSouthKoreainNovember2015,ashedealtwiththefalloutfromtheimplosionofhisscheme.As2016cametoaclose,though,Lowstruckanewchordofoptimism in aNewYearmessage to close friendsandfamily.Thegrandioseposturing,writteninLow’snormalslapdashmanner,revealedlittleremorse.

“2016wasthePerfectStorm;butthecalmnessandresolveofourCaptain,ledhisloyalSailorswhomplacedtheirliveswithutmosttrustinhisleadershipweatheredthestorm,”LowwroteonWeChat,theChinesemessagingapp.

Itwas not clearwhetherLowwas referring to himself, or perhaps PrimeMinisterNajib,but the intentionwasclear:hewas ready to fightanything theU.S.justicesystemhadtothrowathim.

“Theverymoment theywerebrought to theirknees, and theirworldwasabout to fall apart,”Low added, “theirCaptain’s exemplary leadership guidedthem to safety; and through this experience, they achieve a new level ofhumility, nobility and higher intelligence ready to set sail for greaterachievementsin2017fortheirpeople!”

Itwasacalltorallythoseclosesttohim,associateslikeSeetLiLin,whowasholedupinHongKong,andJasmineLooandCaseyTang,former1MDBexecutiveswho,likeLow,alsohadbeenforcedintoexilefromMalaysia.Lowmust have beenworried theywould cooperatewith authorities, and he had tokeepthemonhisside.

Andwhat betterway to put himself backon themapwithyet a blowoutcelebration. Low had tired of the lackluster existence in luxury apartments insecond-tiercities,yearningforNewYorkandLasVegas.Withthosecitiesoff-limits,he’dhavetomakethepartycometohim.Intypicalfashion,heworkedtolineupanumberofbig-name,ifB-list,U.S.performers:Nelly,Ne-Yo,NicoleScherzinger,andothers.

WethoughttheeventwouldbeheldontheEquanimity,whichhadbeenontheconstantmovesince theUnitedStates filed its lawsuits, inabid tokeep itsafe.SingaporehadseizedLow’sBombardierjet,andhewaskeentoensuretheEquanimitydidn’tsufferasimilarfate.TheyachthadsaileddowntoAustralianwaters.Everynowandagain,theboat’scaptainappearedtoturnthetransponderoff, meaning it was hard for us to track on sites that monitor the course ofoceangoingvessels.Then, in late2016, theyachtappeared inPhuket,where itberthedattheluxuryAoPoGrandMarinaonthenortheasterncoast.

We checked out the marina in February 2017 and learned that Low hadbeen paying the berthing costs from a Bangkok Bank account, but the

Equanimityhad left thefacilityonlydaysearlier. Ithadn’tgonefar, justdownthe coast,where it anchoredoffshore.The captainwas clearlyunderorders tokeepmoving.Wecouldseeit,andwethoughtofwaystogetouttotheboattoviewthepartyinperson.

But our tip had been wrong about the location. Low wasn’t on theEquanimity.HewasinBangkok.He’deludedus,buthecouldn’tkeepthepartydetailssecret.

On the banks of Bangkok’s Chao Phraya, the Avani Riverside was a curiouschoice forLow to throw an event. Itwas located on the far side of the river,almostanhour’sdrive from thecity’sdowntownareas,andwasa favorite forfamilies looking for a quiet, resort-like atmosphere. Low had a reason forchoosingsuchademurespot:hewantedtheeventtogounnoticed.

Oneof theparty’splanners,AprilMcDaniel, anAmericanwhohaddoneworkforTepperbergandStrauss,theU.S.nightclubowners,wasclearabouttheneedforsecrecygivenLow’sverypublictroubles.

“With what’s going on, they’ve got to be careful,” McDaniel, who hadstartedherownevent-organizingcompany,toldsomeguests.

It was clear themusical performers didn’t really care about Low’s trackrecord,despitetheU.S.lawsuitsandextensivecoverageintheJournalandothernewspapers.Formanyof them, itwas justanothereasypaycheck,courtesyofLow.

NicoleScherzinger,theformerleadsingerofthePussycatDolls,whowasduetoperformafteradinnerformorethanfiftyguests,hadbeenpickedupbyachauffeuredcaratBangkok’sinternationalairport.Onthewayintotown,LowhadorganizedforThaipolicetoescortScherzinger’svehiclethroughBangkok’sfamouslysnarledtraffic.InBangkok,hestillhadsomeclout.

Astheguestswereseatedfordinner,LowwalkedinaccompaniedbySwizzBeatz, theproducerwhohadbeenbyhissideforyears.Forsecrecy, thepartyplannersandsecuritypersonnelhadbeentoldtorefertoLowas“Panda”inanycommunications about the event.Sitting around the roomwashis family, richThais,Chinesebusinessassociates,andafewcelebrities.

Afterdinner,ataround9p.m.,LowgrabbedashotofPatróntequilafromthebar,andlookedonathisparty.Itwasapaleimitationofhis2012birthdayinVegas.TherewasnoDiCaprio,nomarqueenameslikeBritneySpears.Buthecouldstillattractacrowd.AndSwizzBeatz,ofcourse,wasonhandtohelp.Theproducertookamicrophoneandurgedeveryonetodowntheirtequilashots,as

theDJturnedupthemusicandguestsfiledoutintoanadjoiningspace-themedroomfortheafter-party.

Onastageintheroom,JaneZhang,afamousChinesesinger,beltedoutanumberofsongstothemainlyAsiancrowd.Then,at10p.m.,LowwatchedastheMCinvitedhiselderbrother,Szen,andanotherChinesebusinessassociateupon to stage.Thepartywasostensibly tocelebrate theirbirthdays, and JaneZhangsang“HappyBirthday”inEnglish.ThewholeLowclangatheredaroundasmodels brought a birthday cake onto the stage, a family still united. Then,NicoleScherzinger tookto thestagetoperformthreesongs.Shewasfollowedbytwohour-longsetsbysingersNellyandNe-Yo.Sofarsogood,Lowthought,buthestillhadatrickuphissleeve.AroundmidnightCyberJapan,agroupoffemaleperformers fromJapan,emerged.As foamfromamachinecovered thedancers,theyremovedtheirclothestorevealbikinis.

Afterward models who had been paid to attend jumped into the hotel’spool,invitinggueststojointhem.

Lowsmiledashelookedon,aglassofwhiskyinhishand.

For years, corrupt rulers have been looting their states; PrimeMinister NajibRazakwasjustthelatestinalinethattracesbacktotheArableadersoverthrownin the Arab Spring of 2011, and, even further, to Sani Abacha of Nigeria,SuhartoofIndonesia,andFerdinandMarcosofthePhilippines.

It’s tempting tosee thiskindofcorruptionasadiseaseafflictingonly theThirdWorld, where kleptocrats live in splendor at the expense of their long-sufferingpopulations.ButJhoLow’scrimeisamoderntakeonthatoldstory.The money he took, by and large, was not stolen directly from Malaysia’streasury or through padded government contracts. Instead, it was money that1MDBraisedoninternationalfinancialmarketswiththehelpofGoldmanSachs.

In our global financial system,where trillions of dollarsmove daily, andhuge institutional funds are looking for the next great investment, sovereignwealthfundscanraisebillionsofdollarsatthedropofahat—in1MDB’scase,evenwithoutatrackrecordorabusinessplan.Low’sgeniuswashesensedthatworld’slargestbanks,itsauditors,anditslawyerswouldnotthrowupobstaclestohisschemeiftheysmelledprofits.It’seasytosneeratMalaysiaasacesspoolofgraft,butthatmissesthepoint.Noneofthiscouldhavehappenedwithouttheconnivanceof scoresof seniorexecutives inLondon,Geneva,NewYork,LosAngeles, Singapore, Hong Kong, Dubai, and elsewhere. Low straddled boththeseworlds—Malaysiaand theWest—andheknewexactlyhow togame the

system.

Will Low ever be brought to justice? TheUnited States continued in 2018 tobuilditscriminalcaseagainsttheMalaysian,ashelivedouthislifeofluxuryinThailandandChina.TheUnitedStateshasanextraditiontreatywithThailand,but it’s unclearwhether themilitary junta in power todaywould cooperate ineffortsbytheFBItoensureLowfacestrial inAmerica.AsLowwaitedtoseewhethertheUnitedStateswouldcomeafterhim,andifThailandwouldact,hedrewstrengthfromthelifeofMarcRich.ItwasRich’swidow,Denise,whohadgiven Low a big philanthropic award inOctober 2014, and Low had becomeobsessedwithherdeceasedhusband.HetoldfriendshewasreadingKingofOil:The Secret Lives ofMarc Rich, a biography of Rich by a Swiss investigativejournalist.

ABelgian-bornU.S. citizen, Rich had become a billionaire in the 1970sfrom his oil-trading business. In 1983, however, Richwas indicted by aU.S.grandjuryonmorethanfiftycriminalcharges,includingtaxevasionandtradingwith Iran despite sanctions. The FBI put Rich on itsmost-wanted list, yet helivedtheremainderofhislifeinasumptuousvillaonLakeLucerne,wantingforlittle.ThatsoundedprettygoodtoLow.AstimepassedwithoutactionfromtheJusticeDepartment,Lowbecamelesscareful.HeallowedtheEquanimitytosailoutofsafeThaiwatersdowntotheIndonesianresortislandofBali—supposedlyadivingtripforhisfamily.RobertHeuchling,theFBIagent,andhisteamwerewatching, and they flew to Indonesia, persuading local authorities to seize theyacht.Lowhadlostcontrolofhisonelastbigassetboughtwith1MDBfunds.

Hehadonelastplaytomake,andagainhelookedtohishero,MarkRich.Onhislastdayinoffice—January20,2001—PresidentBillClintonhadgrantedRichapardon,wipingtheslateclean.Itwasacontroversialmovethatledtoastorm of criticism and a debate about the nature ofwhite-collar crime and itsvictims.Lowdidn’tneedapardonfromMalaysia;PrimeMinisterNajibwouldneverallowhimtobeprosecuted,aslongashestillclungtopower.

ButtherewasanothermoraltobedrawnfromRich’sstory:U.S.presidentscouldmake unpredictable decisions.Low andNajibwere looking forways tolobby the U.S. government over the 1MDB issue.. They cozied up to ElliottBroidy, a venture capitalist, Republican fund-raiser, and close associate ofPresident Donald Trump. Broidy’s wife ran a law firm, and Low, in 2017,negotiatedtopaytensofmillionsofdollarstothecompanyinreturnforeffortsto lobby the Justice Department to drop its probe. There was no sign of that

happening, but the prime minister was making headway with America’s newleader.

OnSeptember12,2017,PresidentTrumpwelcomedPrimeMinisterNajibtotheWhiteHouse.BackhomeinMalaysia,oppositionpoliticianswerefurioustheU.S.presidenthadgivenNajibanofficialaudienceatsuchajuncture.Inthemeeting, in theCabinetRoom, justoff theOvalOffice, itbecameobvious theprime minister was hoping money, again, would buy him a way out of thesituation.

Under the austere gaze of George Washington and Benjamin Franklin,whosebustsfilltwoalcovesatoneendoftheroom,theprimeministerandhislargeentourage took their seats, as journalists filed in foraphotoopportunity.Ranged on the other side of the room’s large elliptical, mahogany table satPresident Trump and senior U.S. Cabinet members. Turning to Najib, thepresidentmentionedtheimportanceoftradebetweenthetwonations.

The primeminister saw his opening and began to talk about purchasingBoeingplanesandGeneralElectricjetenginesfromtheUnitedStates.Itwasasif hewanted Trump to seewhat a trusted allyMalaysia could be, if only theJusticeDepartmentwouldstopmeddlinginthe1MDBaffair.

Tomakehiscase,heappropriatedthegloballanguageoffinance.“Wecomeherewithaverystrongvalueproposition toputon the table,”

Najibsaid,asthecamerasflashedonthetwoleaders.ItsoundedlikesomethingJhoLowmighthavesaid.

Acknowledgments

Writingabookisateamendeavor,andwe’refortunatetoworkwithagroupoftalentedjournalists.AttheWallStreetJournal,PatrickBarta,PaulBeckett,andKenBrownwereinstrumentalinthesuccessofthisproject.

ItwasKen’searlyobsessionwiththisstorythatgotusinterested,andhissagecounsel,asAsiafinanceeditor,kepttheprojectontrack.FromhispositionofAsiaeditor,Paulgaveuscovertopursuethisstoryindepth,aluxurywedon’ttakeforgranted.Hisunparallelednewsjudgmentandenthusiasmforthisstorygave us impetus. Patrick skillfully edited many of our pieces, ensuring thesignificancewasnot lost in amorassof detail,whilemaking certainour factswere always locked down. All three were the earliest readers of our draftmanuscript, and gave us invaluable (and honest!) feedback on structuring,characterdevelopment,andevenpointingoutwherewehad fallen intocliché.Withoutthem,wewouldnothavecompletedthisbook.

ThankstoGerardBaker,theWallStreetJournal’seditorinchief,andourotherbosses—ThoroldBarker,DennisBerman,RebeccaBlumenstein,AndrewDowell, andCharles Forelle—for giving us the space and time to pursue thisproject. Inanageof round-the-clocknews, theJournal’s commitment todeepreportingmarksitapart.Wedon’ttakethatforgranted.

TheWall Street Journal’s talented team of lawyers and standards editorsensuredwemet the highest levels of accuracy forwhich the paper is known.They helped shape our coverage of an extremely complicated and contentiousissue.TheyincludeJasonConti,JacobGoldstein,CraigLinder,NealLipschutz,KarenPensiero,andRobRossi.Thepage-oneeditingteam,ledbyAlexMartin,and laterMatthew Rose, and includingMike Allen, Dan Kelly, andMitchellPacelle,skillfullyshapedourpieces.

Anumberof fellow reportersplayed a significant role in the coverageofthisstory:JustinBaerandMiaLamarledthereportingonGoldmanSachs;JakeMaxwell Watts was industrious following developments in Singapore; Kelly

Crow detailed Low’s art market purchases; while Simon Clark played animportantearlyroleincoverage.InLosAngeles,JohnEmshwillerandBenFritzfollowed the Hollywood angles, John Letzing covered investigations inSwitzerland,andNicolasParasiemonitoredeventsinAbuDhabi.RachelLouiseEnsignandSerenaNglookedatthearcaneworldoflawfunds.

CelineFernandez’sbraveandtenaciousreporting inMalaysia led toearlybreakthroughson1MDB’sroleasaslushfund.JamesHookwayandYantoultraNguiof theJournal’sSoutheastAsiabureau,honchoedbyPatrickMcDowell,coveredthepoliticalreactioninMalaysia.

Paolo Bosonin and Tom Di Fonzo of the Journal’s video departmentproducedcreativeanimationsandadocumentaryonthe1MDBscandal,whichgreatlyenhancedourcoverage.TheJournal’sartdepartment,ledbyJessicaYuandMinJungKim,craftedoriginalwaysofbringingthescandaltolifethroughgraphics.

Clare Rewcastle-Brown, whose Sarawak Report website broke the firststoriesonJhoLow,generouslysharedinformationandhelpedusunderstandtheearlystagesofthefraud.Herwebsite,repletewithdocumentsandscreengrabsofsocialmediasitesbeforetheygottakendown,wasanimportantresourceforus.

AlexHelan,whowasmakingadocumentaryabout JhoLow, also sharedsources and carefully read our manuscript, proffering perceptive suggestionsabouthowtoimprovethebook.

Tooureditor,PaulWhitlatchatHachetteBooks,ahugedebtofgratitude.Hisdeft early readingof themanuscript ledusaway fromdensityand towardlightness.It’sstillacomplextale,butPaul’ssenseforastoryhelpedmakethisamorereadablework,andhisskilledhandgavetheprosemorevigor.Thanksalsotoouragents,SteveTrohaandDadoDerviskadicatFolioLiteraryManagementfor seeing thepotential in this projectwhen itwas just a fewpagesof a limpproposal.

KeithRichburg,directoroftheUniversityofHongKong’sJournalismandMediaStudiesCenter,suppliedawonderfulspacetoworkonthisbookandfreecoffee,aswellascarefullyreadingpartsofthedraft.TiernanDownes,whoreadthedraftatleasttwice,andNadiaChiarinaofferedapalatialhomeinJakartaforwriting. SueWright andMarkHope provided valuable feedback on style andsubstance.

A number of other people read the manuscript or offered importantguidance, and they include: Sylvain Besson, Luca Fasani, Alex Frangos, Liz

Hoffman, Mark Hollingsworth, Deborah Kan, John Lyons, Dejan Nikolic,AndrewPeaple,RaphaelPura,BradReagan,JustinScheck,andBenWootliff..Therearemanyotherswewishwecouldthank,butfortheirsafetyorpreferencetheyremainanonymous.Weappreciatetheirtrust.

Finally, our families—Tom’s wife, Nina, and Bradley’s wife, Farah—provided real-time feedback on draft chapters and endured our obsession overmultipleyears.Withouttheirsupport,thebookwouldnothavebeenwritten.

TableofContentsDisclaimerTitlePageCopyrightDedicationTableofContentsAuthors’NoteCastofCharactersProloguePARTI:THEINVENTIONOFJHOLOW

Chapter1.FakePhotosChapter2.AsianGreatGatsbyChapter3.WinTonsofMoneyChapter4.We’reGoingtoNeedaBiggerVanChapter5.ANiceToyChapter6.DoctorLeissner,IPresumeChapter7.Saudi“Royalty”(TheFirstHeist)Chapter8.HittingaGoldMineChapter9.“IFeeltheEarthMove”

PARTII:OVERNIGHTBILLIONAIREChapter10.AnEveningwiththePlaymatesChapter11.RainingCristalChapter12.HowtoSpendaBillionChapter13.Where’sOurMoney?Chapter14.RollthePressesChapter15.WelcometoNewYorkChapter16.Shitty,JunkProductsChapter17.MyGoodFriend,LeoChapter18.Two-Million-EuroBottleParadeChapter19.“KeepYourNonsensetoYourself”Chapter20.BelfortSmellsaScamChapter21.BitterSeveranceChapter22.PenthousewithaViewChapter23.SwitzerlandoftheEastChapter24.BrazenSky

Chapter25.GoldmanandtheSheikh(TheSecondHeist)Chapter26.BilkingtheState

PARTIII:EMPIREChapter27.MakingBustaHisBitchChapter28.AlltheWealthintheWorldChapter29.MystiqueoftheOrientChapter30.“681AmericanPies”(TheThirdHeist)Chapter31.ArtNoOneCanSeeChapter32.JewelersandBankersChapter33.BonaFideBusinessChapter34.140GigabytesChapter35.Leo’sWallStreetIndictmentChapter36.TheOvalOfficeChapter37.SizeMattersChapter38.LosingControl

PARTIV:BONFIREOFSECRETSChapter39.“NoCash.NoDeal.”Chapter40.GenerousJhoChapter41.SacksofMoneyChapter42.TheExposéChapter43.ButtocksinaG-StringChapter44.StrongmanNajib

PARTV:THECAPTAIN’SRESOLVEChapter45.ProsecutorinanOilDrumChapter46.SpecialAgentBillMcMurryChapter47.PartyingontheRunChapter48.ChinaConnectionChapter49.GlassHalfFullChapter50.White-CollarCrimeChapter51.KingKhademFalls

EpilogueAcknowledgments