If a country de-industrialised prematurely gearing to financialisation capitalism as an economic developmental approach, it becomes a major money laundry machine instead. This is why one should not be awed with surprises that questionable cash washes in our politics: from 1MDB to LCS, assisted by monopoly finance-capitals in the Global North.
In Capitalism in Crisis: Ethnocapital and Class, one have presented a macro-level overall view of ethnocratic regimes where ethnocapital is colluding with Global North monopoly-capital in depriving Global South countries, especially rakyat2, of their due and fair exchanges in international trade.
This short piece shall highlight the roles of transnational, corporate-shaped, capital-monopoly financial-service entities serving financial capitalism in the Global North with Malaysia as the intermediary conduit in this circuitry of capital.
Secret government documents have revealed that JPMorgan Chase, HSBC and other big banks defied money-laundering controls and crackdowns by shuffling staggering sums of illicit cash for shadowy characters, oligarchies, terrorists and criminal networks that spread chaos, crises and causing elected governance undermined around the world.
A pile of records show that five global banks — JPMorgan, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon — kept profiting from powerful and dangerous players even after U.S. authorities fined these financial institutions for earlier failures to stem flows of dirty money.
U.S. agencies responsible for enforcing money laundering laws rarely prosecute Big Banks that break the law, and the actions authorities do take barely ripple the flood of plundered money that washes through the international financial system.
In some cases these banks kept moving illicit funds even after U.S. officials warned them they would likely face criminal prosecutions if they did not end doing business with mobsters, fraudsters, bossku and or corrupt regimes.
JPMorgan, the largest bank based in the United States, moved money for people and companies tied to the massive looting of public funds in Malaysia, Venezuela and Ukraine.
Meanwhile, the U.S. Justice Department is in the middle of the largest asset-recovery effort in U.S. history, filing its latest complaint regarding US$300 Million the department is attempting to recover for an US$11.7 Billion Malaysian sovereign wealth fund called 1MDB, one of the major cases highlighted by ICIJ in its report on the leaked SARs - suspicious activity reports.
Absent from most coverage of the FinCEN leaks, however, is how all of these banks and financial institutions are not only laundering trillions, but are doing so together and in consort with each other, as is plainly demonstrated in the 1MDB fraud case. Most publications point the finger at JP Morgan Chase as the entity that moved more than US$1 Billion for Jho Low, one of the 1MDB’s central figures, but they fail to mention the role of Goldman Sachs, which orchestrated a significant part of the scheme that defrauded the Malaysian people and led to criminal charges against 17 of its current and former executives, including Goldman Sachs former vice-chairman - and now president of Chinese mega eCommerce platform Alibaba - Michael Evans.
The Malaysian government recently agreed to drop charges against Goldman Sachs after a US$2.5 Billion-dollar settlement was reached with the giant investment bank (theedgemarkets 04/09/2020) - nearly a quarter of the $10.5 billion-dollar debt hole it created for Malaysia’s ruling coalition, resulting in the cancelation of major infrastructure projects.
Deutsche Bank was also involved in the multi-pronged attack by the Western financial vultures on the ethnocapitalists in the country through the provision of hundreds of millions in stock-buy-back loans through the 1MDB fund for the former prime minister, who was convicted in July 2020 of graft; read his August 2022 appeal in the Federal Court, and his jailing on 23rd August 2022.
One may express this characterisation that with the ayam2 sudah balik rumah to roost, it is still important to keep an eye on who gets exposed and who doesn’t; who gets punished and who doesn’t.
The FinCEN Files have indicated the lynchpins of the prevailing financial structure. Much like Lehman Brothers and Bear Sterns were sacrificed for the crisis and opened the door for even greater consolidation among the “too-big-to-fail” banks. Indeed, a calculated take-down of Deutsch Bank and others will, no doubt, allow for a similar consolidation to occur at a maximal scale, (monthlyreview online, 21/09/2020).
This is only one dimension over the financialization capitalism landscape. At a national perspective, since the 1990s, the IMF’s sixth Article of Association – authorizing national capital controls – has been ‘flexibly reinterpreted’ by management and staff. Instead of protecting national economies, they have eased transborder capital flows – and flight (Jomo Sundaram, The world can stop capital flight now, April 2022).
It is a well-known fact that large sum amounting to US$285.24 billion (RM$872.8 billion) existed from our country between 2001 and 2010 (Global Financial Integrity, Washington 2012), earning Malaysia a dubious second ranking next to China.
Often, this genre of capital flight is enabled by intermediaries where elites influence the law and its enforcement, typically by employing enabling professionals and friendly legislators, (Jomo, 2022, op.cit.). Then, further incentivized by national environments allowing the wealthy to surreptitiously sneak financial assets offshore…..thus, worsened the haemorrhage, (Jomo, op.cit.). This consequentially deepens the class divisions between the dominating political elites and the defranchised rakyat2.
It is unsurprising in the pervasion of the systematization of a corruptive regime because often national legal jurisdictions have been changed to ease cross-border flows. Indeed, rules, norms and practices have been changed to hide wealth transfers from national and international authorities, rules and regulations. Hence, resource endowments are misplaced especially to enable capital flight, (Jomo, 2022).
EPILOGUE
According to an UNCTAD Report, “Illicit Financial Flows (IFFs) are movements of money and assets across borders which are illegal in source, transfer or use”.
There are four main categories: firstly, “Tax and commercial IFFs”, which mostly consists of fraudulent issuing of invoices for products to be imported or exported, amounting to approximately US$40 billion per year in Africa alone; second, “illegal markets”, which are principally human trafficking and toxic waste; third, “Theft-type activities and financing of crime and terrorism”; and finally, IFFs linked to “corruption”.
As a country, we are master in these illicit tradings and illegal transactions - enmeshed in a serial systemic corruption syndrome - existing since the pirates of the Strait plundered along the Malacca coastlines.
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reposted from Mint Press News and ICIJ information with additional STORM material-contents under the
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