- I followed the illicit wealth from timber corruption and found it all disappeared behind a curtain off-shore

November 13, 2017

Off-shore "paradise" islands are back in the news and as far as I am concerned they should stay in the news until these shelters for the super-rich, tax evaders and also mega-criminals are sorted out.

Written by Clare Rewcastle Brown*

I came across the problem investigating an issue of immense concern that was being woefully under-reported. I had spent my childhood in the rainforest region of Sarawak (a genuine paradise) that has now been largely destroyed. The Borneo Jungle was the most biodiverse region of the planet, yet at lightening speed has been largely wiped out and replaced by relentless oil palm monoculture. It has been a disaster and it didn't take much research before it became plain to me that the driving force behind this needless destruction in such a sparsely populated region was rampant political corruption.

Indigenous people thrown off their land

The consequences for the indigenous peoples, who were being thrown off their lands and left even poorer than before, are heart-rending. It was plain that most other people in Malaysia did not really understand what was going on and neither did the rest of the world. As the online revolution was starting to take hold in the region around 2010, I began writing about the situation in a blog, which I named the Sarawak Report.

I applied my experience as an investigative journalist to 'out' some of the worst offenders responsible for the problem by avoiding the politically controlled mainstream media, which had ignored such issues. As a result I soon became unpopular with the Chief Minister of Sarawak, one of the world's richest men thanks to this rampant corruption and destruction, and was soon banned from the country, labelled a poisoner of minds, a dangerous seditionist, liar, fraud etc. There is a warrant out for my arrest and they have now banned my blog.

Spotlight on the kleptocracy

However, my exposes have had their impact. The Chief Minister was forced from office, although he remains the ceremonial head of state and still controls most of the Sarawak economy.

From 2014 my investigations progressed to a major expose of the Malaysian Prime Minister himself, sparking what has become the largest ongoing global kleptocracy investigation into thefts from Malaysia's development fund 1MDB.

What I was learning all the while was how the off-shore financial system facilitates and encourages these monstrously corrupt local dictators, by enabling them to channel out their vast fortunes, stolen from their own people into wealthier and more developed parts of the world. Indeed, what is the use of raping a rainforest if you can't enjoy the proceeds in the world’s gambling hotspots and escape into fancy penthouses, ranches and super yachts elsewhere?

“Nothing illegal”

At the service of these criminals, I soon discovered, lies a huge network of bankers, accountants, wealth managers, tax advisors, lawyers, private investigators and image consultants, who are all dedicated to making it possible for crooks to present their dirty money as respectable - ready to invest. These industry sectors rely completely on the anonymity of the off-shore world, into which I soon discovered all the money emanating from Borneo's timber corruption would inevitably disappear. The trail would start through a web of local companies, which would then turn out to be owned by another company registered in Singapore or Hong Kong, which would in turn be owned by some entity in Jersey, BVI, the Caymans, Delaware, Macau, Bermuda etc....

Most of the professional facilitators running these efficient laundry machines are British, European or American, every one of whom has to be aware that the politically exposed people they were assisting in these cases had stolen the money.

Using the mantra that "there is nothing illegal" about the so-called off-shore industry they have plainly parked their consciences back at home and are engrossed in competing for the business and in some cases making themselves very rich indeed out of the bonuses and even kickbacks that can be obtained by 'turning a blind eye'.

“Stupid banks” and “blind accountants”

In the 1MDB scandal, for example, the US Dept. of Justice investigation has detailed in minute and revealing detail how a network of criminals used 'stupid' banks and 'blind' accountants to transfer around $5 billion in stolen cash through Hollywood mansions, private jets, grand-masters, casino chips and movies such as The Wolf of Wall Street.

This was all money pouring from a poor country into the developed economies to considerable negative effect, pushing up property prices in capital cities and injecting criminality. Corruption is a very catching condition after all, which is one of the reasons by the Deputy Director of the FBI Andrew McCabe explained that this form of money laundering is a global menace, which not only devastates poor countries like Sarawak, but threatens wealthier societies like his own.

“The media shares its responsibility”

For far too long the established media has failed to call out this glaring off-shore scandal, burgeoning out of control since the early 1980s. I am sure that is not unrelated to the fact that major media shareholders were likewise availing themselves of the opportunity to avoid tax by hiding off-shore. Why would they not?

So, the media shares its responsibility for this scandal and the grotesque and dangerous consequences in terms of the enormous disparities of wealth and power that has rapidly evolved between a tiny global elite (much of it criminal) and the rest of us; in terms of the health of our planet; in terms of the protection of the world's most vulnerable people and our own vulnerable democracies.

“The most insidious problem of our age”

Paradise Islands have become the most insidious problem of our age and we need to unite in drawing attention to it. Like many journalists I learnt this from the bottom up by reporting on a tragic local disaster, moving to the corruption that caused it and then discovering how that corruption was being facilitated by the failings of high finance.

The felling of a major rainforest and disinheritance of the million indigenous peoples who once owned it is just one example of the damage being done by thanks to these so-called treasure islands.