This Whale of a Tale Shows Elite Looked the Other Way

Over the summer, authorities in Malaysia confirmed that the fugitive con man Jho Low, who is accused of stealing billions from the Southeast Asian country’s treasury, had surfaced to offer the equivalent of $350 million in restitution to his government. His angle, apparently, is to coax the Malaysian government into a compromise to unfreeze his passport so he can travel freely.

Low, whose given name is Low Taek Jho, is believed to have been living in China since U.S. authorities caught up with the multibillion-dollar fleecing of the Malaysian sovereign wealth fund 1MDB. The U.S. is involved because Low blew most of the cash on parties, penthouses and other wild extravagances in New York, Las Vegas and Hollywood. 

I saw the story because I was looking for Low updates as I happened to be reading Billion Dollar Whale, the 2018 book on Low’s globetrotting scheme, written by some of The Wall Street Journal reporters who covered the scandal as it unraveled. The scandal was tailormade for a book and movie treatment, as a film is allegedly in the works. Low allegedly talked powerful people across Asia and the Middle East into giving him the reins to billions of dollars of taxpayer money, fueling a life of private jets, superyachts, supermodels, celebrity parties in Las Vegas, and even an Oscar moment in Hollywood – Low used his stolen money to bankroll production of Martin Scorcese’s “The Wolf of Wall Street,” starring one of Low’s favorite erstwhile jet-setting pals, Leonardo DiCaprio. The film was nominated for Academy Awards in several categories. The early pages of the book are packed with the likes of DiCaprio, Paris Hilton, Kim Kardashian, Jamie Foxx, and a host of famous rappers and other musicians.

But beyond all of the glitz that makes the story an obvious magnet for tabloid attention, Billion Dollar Whale does a yeoman’s job of sifting through the nuts and bolts of how Low pulled off his scheme, and that is a serious story involving a complicated network of shell companies strung across the offshore banking systems of the world, and the dealmaking, complacency, and even complicity, of some of the biggest financial institutions on the planet.

For a few years, Low’s subterfuge pumped hundreds of millions of dollars in fees into the coffers of Goldman Sachs, and New York’s most prestigious investment bank does not fare well in the book’s assessment of its conduct. In February, a former Goldman banker was convicted of federal bribery and corruption charges in New York for his part in the scheme. According to an Associated Press account of the trial, another former Goldman banker testified in the case that at a 2012 dinner in London, Low laid out a kickback scheme in exchange for Goldman’s backing of the schemes. The witness, Tim Leissner, testified that he knew they were breaking the law but “didn’t care because if the deal went through he would be ‘a hero’ at Goldman Sachs.” For his part, Leissner pled guilty in 2018 to paying bribes to government officials in Malaysia and Abu Dhabi while he was a Goldman executive. He had to forfeit more than $43 million in ill-gotten money and agree to testify against others. 

Billions Dollar Whale presents ample evidence that executives at the highest levels of the bank were aware of their company’s role in defrauding the people of Malaysia. Former Goldman president Gary Cohn, who was pushing the bank to do more business with sovereign wealth funds, comes off particularly poorly. As some executives began to raise questions about the Malaysian deals, Cohn pushed ahead and, as the book argues, “The backing of a domineering and powerful personality like Cohn afforded significant cover to those involved in the 1MDB business and drowned out the voices of those who were uncomfortable with the plans to raise billions of dollars for the fund.”

But by the time the mess began to unravel and draw the attention of law enforcement, Cohn had moved on, to serve as director of the National Economic Council in the Trump Administration. When he was last in the news, Cohn was being painted as one of the grownups in the Trump White House, who would occasionally remove documents from the president’s desk before he could take some kind of irresponsible action. 

With Low allegedly living under the protection of the Chinese government, and lower level Goldman executives taking the fall for actions that were facilitated at the highest levels of the bank, Billion Dollar Whale raises important questions about accountability in a world where so much money is flowing from government treasuries to offshore funds, through deals constructed by banks in Switzerland, London and New York, with legal oversight of any of it amounting to little more than an incomplete quilt with lots of holes and porous fabric. 

What’s fascinating about Low’s offer of hundreds of millions of dollars in restitution is that it begs the question of where and how much money is he hiding? All of his known assets were allegedly locked up by law enforcement agencies around the globe. His bank accounts are frozen. His yacht and homes were seized. So how is he in a position to bid so much money in an attempt to skate free? And how much more would he have left if the Malaysians accepted his offer? This again, is one of the troubling mysteries created by the opaqueness of the offshore financial world. 

The tale of Jho Low’s exploits may draw your attention with the likes of Leo and Kim, and celebrities cavorting on the deck of Low’s 250-foot yacht at Cannes. But it’s the years of painstaking investigative work, talking to sources, and peeling back the labyrinthine networks of shell companies, that makes the story go. Like any good corruption tale, remember the ultimate rule: Follow the money.

Cover photograph: AFP