Jeff Hirsh Read: August 2022
Inspiration: What was the 1MDB scandal involving Malaysia and Goldman Sachs about?
Summary
Written with the help of ChatGPT, below is a brief summary to understand what is covered in the book.
“Billion Dollar Whale”, published in 2018 by authors and journalists Tom Wright and Bradley Hope, tells the story of Jho Low, a Malaysian businessman who was accused of orchestrating one of the largest financial frauds in history. The book details how Low, a relatively unknown figure, was able to pull off a massive scheme that involved the theft of billions of dollars from a Malaysian sovereign wealth fund called 1MDB. Wright explores the complex web of international finance and politics that allowed Low to carry out his scheme, and discusses the efforts of investigators and reporters to uncover the truth. The book also examines the broader implications of the 1MDB scandal, and the ways in which it reveals the vulnerabilities of the global financial system. Billion Dollar Whale is a gripping tale of financial crime and international intrigue.
Unedited Notes
Direct from my original book log, below are my unedited notes (abbreviations and misspellings included) to show how I take notes as I read.
Jho Low grew up in Malaysia rich but not uber wealthy, went to Penn, used it for connections—spend beyond means to make friends, specifically connect with middle eastern rich at Penn (and previously at boarding school in US), sov wealth funds began in 1950s by kuwait/saudi to leverage oil money more broadly/diversify long term, Tim Leissner was fast rising Goldman banker in HK late 90s, then Leissner to Malaysia where Low was trying yo start sov wealth type fund in midst of western financial crisis but struggle until Malaysia PM change to friend Najib, Leissner known to cut corners but brought in deals (was a GS partner), with Najib Razak as PM, Low get approval for 1MDB fund and pursue other middle east money to grow (1MDB formed from Low previously failed fund), Low spend thousands/millions to bring in celebs/models 2009 to party and network (work with Tepperberg/Strauss), Dicaprio frequently alongside, flush with cash post-700m transfer (leverage areas of int’l finance under the radar of regulators to move money), 1MDB board chair resign soon in 2009 as suspicious but no alarm, independent newspaper in Malaysia The Edge start digging also (funded by opponent to PM Najib rich Malaysian), Low start Red Granite movie production house and co-produce Wolf of Wall Street, at party in Cannes before even in production 2011 Belfort there and sense fraud in antics/spending, JV with Low and PetroSaudi souring but PM Razak approve more funds, Low and 1MBD work with BSI bank (offshoot of Coutts ex employees in Singapore) to move funds, coordinate with complex offshore arcane structures to wash money, 1bn+ flow through BSI but add to Singapore radar for laundering, banks somewhat suspicious alleged Malaysian state fund require all these private channels but Low say secret channel (and banks eager to profit), 2011 Low go to Abu Dhabi sheikh Mansour to get IPIC to guarantee 1MDB bonds (odd to have sovereign back another but kickbacks push forward) and GS arrange financing and also provide egregious valuation as advisor for oil assets to issue bonds (Lazard declined), GS buy 1.75bn in bonds and sell for 190m fee (usually 1m), Leissner supported by Gary Cohn at GS but Leissner eventually siphon money for himself (steal from GS), Low get riskier as needs to fund PM re-election 2013–needed lots and owed favors so more on radar to fund campaign in close race, 2013 low buy Park Lane tower to develop but also move cash via selling interest, Low owned EMI music then buy Coastal Energy in US (profit 600% in days), Xavier Justo former PetroSaudi partner who felt duped out of money sat on server copy for 2 years then approach Mahony for money but Mahoney rebuke, Obama support Malaysia and Najib, Low get close via Frank White, Obama visit Malaysia 2014, Clare Rewcastle-Brown malaysian journalist in UK suspicious then get in touch with Justo and begin to expose publicly, into 2014 with IPO banks scrutinize more and denied requests—protests in Malaysia at PM wealth, Low make risky manuevers which fail and eventually destroy/wipe all servers at 1MDB claiming hack, Feb 2015 Heist of the Century published—Low try to play down while Najib debate resignation (rewcastle-brown laid out proof), challenge was proof of PM directly (eventually tied to 1bn in funds), 2015 Najib and Low turn to China for cover and China oblige for diplomatic reasons/supplant US in region, Loretta Lynch lay out federal civil case vs Low/1MDB to claw by 1bn in assets—Najib shocked US would do this given Obama friendship, Aug 2017 justic dept announce criminal case, 1MDB put malaysia 7.5bn in debt—crushing for generations, Leissner not jailed but fined and lost licenses to operate (Gary Cohn to WH, Blankfein leave ’18), 2018 Najib Razak lose election shockingly and arrested later (250mm of items taken from home), Najib tried to get Trump to end but fail, new Malaysia PM scrap deals with China (low hide in China—but china dealings reveals and embarrassed)
