Malaysia Uncut

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The Truth About Khairy Jamaluddin – 9


The Truth About Khairy Jamaluddin continues here:

Part 9 – Birth of a salesman

It is a sad but true fact that in Malaysia money is the lifeblood of politics. Corruption is endemic within political parties and money is the grease that smoothens one’s climb up the slippery pole of power. It is useful not only to reward the voters and supporters but also to make other people fear challenging your position. The more money you have, the more able you are to defend your position simply for the fact that other people who look at your immense wealth get cold feet from being a potential challenger. A person who is not capable yet but backed by hundreds of millions would triumph over a much more capable person who has nothing to show in terms of wealth except his own intelligence, track record and hard work.

Khairy Jamaluddin fully realises this. The history of UMNO Youth is laden with such examples and it is clear that, at least since the 1990s, UMNO Youth has chosen money instead of ability. This is a reflection of the main party, but UMNO Youth’s preoccupation with wealth was emphasised by the rule of Zahid Hamidi who used the immense millions he gathered as Bank Simpanan Nasional chairman to steamroll his way into politics while a still relatively unknown in terms of political quality. All other challengers such as Rahim Thamby Chik and Isa Samad then realised that a person like Zahid could only be matched with an equal if not better power at patronage. Money politics was born in the heady days of the 1990s when UMNO lost its conscience and went headlong to worship at the feet of Mammon.

Khairy Jamaludin did not start out immensely rich, although his family was well off due to the position of his father as a prominent member of the diplomatic community. The family could not equal other notable scions of UMNO Youth such as Hishamuddin Hussein – Najib Tun Razak clan who are descended from the first Malay billionaire, Tan Sri Noah, or the Sheikh Fadzir family, comprising of Kadir, Aziz, Musa and Haidar whose palatial Kulim mansion dwarfed even the National Palace in Kuala Lumpur. So Khairy realised he had to build up his wealth fairly quickly especially since, by Malaysian standards, Abdullah Badawi was a rather poor fellow.

Khairy laid the ground for his political treasury by setting a base from which his supporters could spread their tentacles. Unlike other UMNO politicians who relied almost entirely on government contracts to enrich themselves, this was but a small part of Khairy’s own tactics. That is not to say that Khairy doesn’t engage himself in getting government contracts for some of his political cronies. Rozabil Abdul Rahman is one of the major recipients of government largesse and in many countries through which he has gained government contracts, indirect shareholdings are gained by members of Khairy’s family. Contracts which have been awarded to Rozabil (and therefore Khairy) include such diverse projects as the provision of clean drinking water to the hundreds of schools in East Malaysia to the provision of pipes in government offices in Kedah. As time grew by, UMNO politicians trying to curry favour with Khairy gave contracts to people who they thought were aligned to him. For this reason, Kedah Menteri Besar Syed Razak Syed Zain appointed Khairy’s mother, Datin Rahmah, to ‘advisory positions’ within the state economic and financial structure.

Of course, many already know by now that the AP King, Haniff Aziz, is a first cousin to Khairy. Fingers point towards Khairy’s family relationship as the reason for Haniff, a former MITI official, being given tens of thousands of APs without any proper qualification. The APs are being granted in spite of the lack of showrooms and are immediately sold off to other car importers who are not able to exert the same influence on the minister in charge. But herein lies the real reason for Haniff’s success. Being a cousin to Khairy is of course useful but not key to him succeeding to the throne of AP King. It was his ability to woo the Queen, Rafidah Aziz, since at least for some five years Haniff Aziz has been an important part of Rafidah’s life. His intimate relationship with Rafidah was the door opener to his hundreds of millions.

But while these contracts are certainly significant, they are peanuts compared to the stripping of national assets that happened, for example, at the hands of people such as Daim Zainuddin, Rafidah Aziz and Zahid Hamidi. Indeed, it does not gather for Khairy more than a few million dollars, which pale in comparison to the amount of money needed to pay your way to the top of the UMNO hierarchy. They also are blatantly illegal and therefore a political minefield for the future of any politicians in an era where the Prime Minister has openly announced his so-called war on corruption. So Khairy had to think of bigger plans by which money could be obtained, firstly in large quantities, and secondly in ways which do not appear too illegal.

The first vehicle which Khairy exploited to lay a base for acquiring his wealth is, again, through Ethos Consulting. There are two main reasons for Khairy wanting to plant Ethos Consulting in Najib’s office. The key reason of politics has already been explained in the earlier series of these chronicles. And the second reason, of course, is economic. Najib Tun Razak is a cash cow because of his control over large amounts of defence spending. Further to that, his connection with Mahathir and the support he receives from the former Prime Minister allows him a greater access to opportunities in the national asset system. Ethos Consulting was placed there to provide a stepping stone for Khairy to tap into some of these resources. The head of Ethos Consulting, Dr Liew, was officially given the task of providing ideas to revamp defence spending and procurement procedures (in spite of him having extremely close ties to politically sensitive Singaporeans). In actual fact, Dr Liew provided Khairy with information on the many avenues where his cronies could be brought in to secure important contracts at jacked-up prices, as is the norm in the Defence Ministry for many decades.

The other source of money within Najib’s purview is Felda. Mahathir had previously given the task of looking into Felda to Second Finance Minister Jamaludin Jarjis, a known Najib supporter. Abdullah had demoted Jamaludin, but because much of the work done by Jamaludin to implement ‘changes’ in Felda had reached penultimate stages of planning, as a compromise it was then put under the overlordship of Najib. By putting Felda under Najib, Abdullah hoped that Jamaludin would not be too disappointed and Najib would be placated that this huge cash cow would not be totally out of his grasp.

However, though Felda may be under Najib, key decisions regarding the agency are being heavily influenced by Khairy and Ethos Consulting. Initially, the task of restructuring FELDA and managing the sale of its assets was given to Jamaludin’s favorite vehicle, Avenue Assets. Avenue was supposed to identify areas where Felda could be privatised, whereby plump assets would then be sold off to key Jamaludin cronies. Jamaludin, the second Finance Minister who acted as if he was first Finance Minister, had placed people loyal to him and (therefore loyal to Najib) in key positions in the restructuring project. When Abdullah became Prime Minister and Jamaludin was removed from this responsibility, Ethos Consulting was brought in to replace Avenue. Jamaludin’s people were booted out and Khairy’s came in. One of the first recommendations by Ethos Consulting was the divestment of non-core assets, for example, in the banking and service industry. Ethos immediately suggested that people associated to Khairy be appointed as advisors to the deal, therefore making a huge percentage on the sell off. This nets Khairy commissions in terms of millions which are ostensibly perfectly legal.

While Felda continues to be a ‘non-decision’, Ethos Consulting, on behalf of Khairy, is slowly trawling through the assets list. The so-called revamp of government, economic and asset interests heavily disguises the more sophisticated ways in which Khairy makes his money. The common voters believe that politicians get rich by getting government contracts, patronage and other perks. In reality, this has long been discarded by the Abdullah government in favour of providing commissions through financial advisory roles to people associated with the Prime Minister and his son-in-law’s team.

It is in this capacity that Khairy serves as Director of Corporate Advisory in ECM Libra. It was not his first choice, quite obviously. When the rumours flew that Abdullah had no brain and Khairy ran the show in almost everything in the Prime Minister’s office, Khairy started looking for a new way out that would put him in an equally powerful position as being inside the PM’s office. In fact, he wanted a position powerful enough to build a treasure trove that would scare his enemies from the ‘old guard’ within Abdullah’s office and shut their mouths once and for all. So he used the restructuring of GLCs as the avenue to success.

The restructuring of Khazanah was the first opportunity. It was based on the usage of Key Performance Indices (KPIs), an idea mooted to the government of Malaysia by Ethos Consulting as a so-called original idea, where in actual fact, copied almost whole from the government of Singapore’s policy on Temasek Holdings, a well-known government investment vehicle. In restructuring Khazanah, Khairy hoped that he would be appointed to the most important position there, namely the position of Chief Executive Officer. But the people within Khazanah were mainly civil servants of long tenure and career experience who were hostile to the idea of a 28-year old CEO. In addition, Khairy had absolutely no business or economic background, having never worked for any such entity in his entire life. The only position Khairy had ever held outside of government was that of a part-time journalist in a foreign newspaper – and even that only for a few short months.

So the pressure within Khazanah to refuse Khairy’s demands grew. High-ranking civil servants got on their side several top accountants and corporate leaders who told Abdullah in quiet whispers that such a move would be fatal to his political career so early on in his premiership. They argued that if Abdullah really wanted a young, vibrant heading Khazanah, they could instead be chosen from the many consultants and restructuring experts that grew out of the 1997 crisis. So Azman Mokhtar was chosen instead.

But Khairy did not give up. Azman’s appointment carried an implicit condition that while Azman was the CEO with the responsibility of deciding Khazanah policies, a Chief Operating Officer (COO) would be appointed to run Khazanah’s day-to-day affairs. Azman was called in by Second Finance Minister, Tan Sri Nor Mohamed Yackop, to officially announce the offer and it was hinted to him that Khairy should be appointed the COO. Indeed, Nor told Azman that Abdullah had already given instructions to prepare a letter appointing Khairy to that position.

Azman said nothing. After settling in, he summoned Khairy to his office. Khairy thought Azman wanted to tell him when he could start work as the COO. Khairy confidently strutted into Azman’s office and plonked himself in the seat opposite Azman. Azman casually started by saying that there was a position in Khazanah which he was supposed to fill. Khairy replied that he knew. Azman then said that Khairy’s name had been mentioned for that office. Khairy then again smugly replied that he knew that too. Azman said that Khairy seemed eminently suited for that position and to confirm his initial finding, he would appreciate Khairy sending him a CV so that he could check Khairy’s credentials. Khairy was crestfallen and left the interview in a huff.

Subsequently, Khairy realised that Azman was politely saying to him that he was not suited for that position and that he was being too greedy. It was clear that Azman was hinting at Khairy’s lack of economic and financial experience. While Khairy was initially angry at Azman, he also realised that Azman had saved him from a potential political minefield. So he set about aiming to be a future CEO of Khazanah instead of a current COO. To do that he needed to gain at least some perception of experience.

Khairy went to see his old stooge Kalimullah Hassan Masheerul Hassan. Kali was the ‘relationship partner’ of the troika of two Chinese and one Indian who had successfully built ECM Libra into a powerful financial group from scratch. Kali, from his own experience, realised that Khairy would be at sea and lost in a real financial job. As a young go-getter and impatient politician, Khairy was not suited to make discounted cash-flows and read spreadsheets. So Kali suggested instead that Khairy join the corporate advisory team of ECM Libra as a relationship person. In other words, Khairy would use his contacts rather than his brains to make ECM Libra richer. The common people who are not well-versed in finance matters would be forgiven to think that Khairy’s position as director of corporate advisory means that he is responsible for financial decisions. Despite having the title of ‘Director of Corporate Advisory’, Khairy is not a real director in the sense of being a company director. A director of ECM Libra simply means that he is a bigshot but does not entail that he is an actual management board member. Corporate Advisory is a cover-all term which looks financial but in reality only means that the people in this position are glorified salesmen that bring business in for the company.

The poor, innocent, common and ordinary UMNO Youth member would not know that in actual fact their Vice Youth Chief is a mere salesman, albeit with a grander title. And yet that grand title is not mere glory. Khairy, unlike other salesman, has access to some powerful money-making opportunities. Khazanah is the first of many government institutions he would sink his teeth into…
 

Source: http://www.malaysia-today.net/Blog-e/2005/08/khairy-chronicles_19.htm

The Truth About Khairy Jamaluddin continues…in Part 10 – The National Auctioneer

Monday, October 9, 2006 - Posted by | News

1 Comment »

  1. […] The Truth About Khairy Jamaluddin continues here: […]

    Pingback by The Truth About Khairy Jamaluddin - 10 « Malaysia Uncut | Wednesday, October 11, 2006 | Reply


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