America’s ties with Malaysia Baharu

  • Nation
  • Sunday, 26 May 2019

IT is the third Ramadan in Malaysia for US Ambassador Kamala Shirin Lakhdhir and the envoy has been busy multitasking.

She will be spending Hari Raya in her hometown in Westport, a town in Fairfield County in the compact state of Connecticut.

But she is keeping the customary practice of the US Embassy, despatching packs of specially flown in Medjool dates from California – which are renowned for their plump size and caramel flavour – to many of her friends here.

Lakhdhir is due to attend her nephew’s wedding in the first week of June, and then her father’s 94th birthday celebration on June 9.

“I love enjoying the festivities in Malaysia but I’ll have to go home and be with the family this time,” says the envoy, whose father was born in Mumbai in 1925 and eventually moved to New York.

Looking at home in a pink baju kebaya, Lakhdhir reveals that she has several more hung in the closet.

“Usually during Ramadan and Hari Raya, I like to wear Malaysian outfits. I try to celebrate all the holidays with Malaysians, so I wear what is traditional,’’ she says during an interview at her residence in Jalan Langgak Golf, Kuala Lumpur.

As she prepares for her family reunion, Lakhdhir speaks to Sunday Star about her views on the Pakatan Harapan government and the US Department of Justice’s (DOJ) probe into the 1MDB scandal.

Recently, US Principal Deputy Assistant Attorney-General John P. Cronan was in KL to confirm the initiation of the process to return approximately US$196mil (RM812.9mil) to Malaysia, representing the first instalment of funds recovered from asset seizures related to what was described in the United States as “the worst form of kleptocracy”.The first tranche of returned funds from the United States were from Red Granite Pictures, an American film production and distribution company co-founded in 2010 by Riza Aziz, former prime minister Datuk Seri Najib Razak’s then New York-based stepson, and Joey McFarland.

The following are excerpts from Sunday Star’s interview:

The last time we spoke 15 months ago, it was mainly about the 14th General Election. You predicted correctly when the elections would be called. How do you compare Malaysia now, and then?

A lot has happened. Right after the elections we all saw that Malaysians had extremely high expectations of their new government.

Many Malaysians were proud that they had gone through this political transition. Whether they had voted for Pakatan Harapan or BN, I think Malaysians were proud that they had successfully gone through the transition without any violence and without anyone being injured.

There was a transfer (of power) where the ruling party BN stepped down and Pakatan was sworn in....

The BN was dumped!

(Laughs.) Well, BN lost! We all know in many countries in these first political transitions, there can be a lot of turmoil and potential for violence. But Malaysians handled this new experience in a very mature and safe way. And we all celebrated with Malaysians at that time.

The new government also had acknowledged that they learned many things about the financial situation and aspects of the budgetary situation which were more serious than they realised. It’s been tough going in some ways

I think people’s expectations are still very high. Malaysians in a very different way feel ownership of their government which they elected. For an American, this feels very comfortable and I think for some Malaysians, this feels very different and they are still getting used to it.

How has Tun Dr Mahathir Mohamad performed, in your view, and what aspects of his leadership appeal most to you?

Dr Mahathir had served in the government before but this is a very different situation. He does not own the whole Cabinet and had to enter into a coalition-type government. So for everyone, there have been adjustments. This is 2019, and many things have changed in the world and the region.

I respect him for having to adapt and having to be a leader in this new environment with a new coalition.

Of course, at the age of 93, this is amazing! And I’m incredibly impressed with his energy, persistence and dedication.

I think that he is aware of the expectations of the Malaysian people. The challenge is systemic reform, both political and economic to help Malaysia be in a better place for the future. The new government recognises this but being actually able to implement reform is extremely difficult for any country or government.

Much of the hope of Malaysia Baharu hinges on the recovery of funds from 1MDB. What can you tell us about money coming back to Malaysia from the United States?

The DOJ has all along been building this case. In 2016, it provided the asset forfeiture document that was publicly revealed and in the summer of 2017, they did more. From that moment, those named assets which are all over the world, as you know, were then seized and held.

You saw the first tranche which just happened, which was the Red Granite and Park Lane Hotel money. There was an agreement that these monies could be released and be returned. Many of the other assets are still in litigation.

Perhaps an individual or an entity has come forward and said these are our assets. So there has to be a judicial proceeding to determine whether these are 1MDB-related assets and should be returned to Malaysia. It depends on the different types of assets and where we are in the proceedings.

I think what is important is that the DOJ has a commitment to, as quickly as possible, fulfil the intention to return the value of the assets.

Will more 1MDB funds be coming back to Malaysia from the United States?

The asset forfeiture documents lay down in detail what the assets are. In some cases, the DOJ was already able to freeze those assets, or ask other countries and courts to freeze them.

One of the challenges is that there is an ongoing criminal investigation and in some cases, there was a stay because the DOJ has said that we need to complete the ongoing criminal investigation before we can bring our evidence to court; that this particular asset is 1MDB-related. So this will take time.

Because there is litigation, it’s hard for me to say when exactly the next tranche of money will come. But as you can see, when money or funds are freed up, we will then work to return them quickly to Malaysia.

1MDB remains an ongoing investigation in Malaysia, and the United States. What is your take on the investigation so far in Malaysia?

It’s very hard for me to comment on the nature of the investigation and the progress that they have made in the investigation either side. I’m very aware that cooperation is ongoing and it is very positive between our two governments.

In 2016, the DOJ famously referred to an “MO1” in its forfeiture documents. Will the DOJ seek to extradite MO1?

I think it was someone who named him publicly. I would say that the MO1 is currently being prosecuted in Malaysia. And he has multiple cases against him, including regarding 1MDB. I think the Malaysian authorities are taking the responsibility of prosecuting MO1.

Does the FBI know where Jho Low is? The Malaysian IGP says that there are new leads.

I don’t know because I’m not with the FBI, they won’t share information. But I think what is clear is that both the US and Malaysia have indicted Jho Low so they have an interest in his location. And an interest in prosecuting him.

Can we expect help from the United States in bringing Jho Low back to Malaysia?

Exactly how this matter develops, it’s very hard to predict. I can’t even tell you where he is because I don’t know and I don’t know whether the two countries are.... So predicting how this may happen in the future, I don’t want to do that.

Low, through his attorneys in the United States, has continued to plead his innocence, saying that the Mahathir administration has arrogantly ignored court rulings in Indonesia and established legal proceedings in the US, for example, in the seizure of the ship Equanimity. How do you respond?

I have confidence in prosecutors at the DOJ. I’m confident that they have brought forward a legitimate and strong case. That’s why Jho Low was indicted in the US.

If Low wanted to travel to the US to present his case in court in the US, I would think we would certainly welcome that. It’s fine to speak through the press but until you come and present your case in court ... well, we are waiting.

On to our economic engagement. Is it still an untold story?

Many Malaysians don’t realise how many US companies are in Malaysia and how long they’ve been here. I think everyone is aware of the number of US companies in Penang and Kedah, a lot of it are electronics, some involve medical devices which has been more recent.

I think Malaysians also do not realise the number of locals who work for these firms, and that in some cases it is the largest employer in the state.

Intel is the largest employer in Penang and Semiconductor the largest in Negri Sembilan. First Solar produces a huge number of the series six solar panels in Kulim (in Kedah). What is interesting to me is that almost all the leadership of these companies are actually Malaysian. US companies, Malaysian leadership.

Malaysians have been trained up and talent is being developed. There is very intense focus in developing talent in Malaysia, in developing engineers. A lot of the work in American companies are on R&D. Motorola is doing a lot on R&D.

A lot of US firms are putting regional hubs in Malaysia. The one challenge is that Malaysia is competing with other countries in the region. So it is important to have a very good business climate. Malay-sia has to be nimble in order to be selected as a new place for particular types of investments.

I was just at the opening of the regional centre of Edwards Lifesciences (in KL), which makes an extremely high-tech device called the transcatheter that delivers a new artificial aortic valve in the heart. They have placed their regional back office in Malaysia, and they see it growing in the foreseeable future.

Do you tell American firms that Malaysia is the place to do business in the region?

It depends what type of company. I ask them what are you looking for, what are the concerns. Sometimes I ask what other countries in the region they are looking at. I talk to them about the environment here, in some cases I counsel them on who they need to engage with here.

So it is an ongoing conversation with our companies, the American chamber and all the different players in the government. The PM is a real advocate of investment in Malaysia, of Malaysia’s interest on the economic side, which is very important.

Dr Mahathir says he will step down to make way for Datuk Seri Anwar Ibrahim. Can you make a prediction about this step?

No! (Laughs.) It was an easy prediction when the election was going to be. This is too hard! Looking at it, there’re a lot of factors within the coalition.

And I think it’s also Dr Mahathir and his engagement within the coalition. I feel that it’s very risky to predict what Dr Mahathir may do together with his coalition.

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