the "i" files • a politician's tale • jonathan smith

“I have always had a lurking admiration for those who could keep their lies straight. It’s a deucedly hard thing to do, so I’ve generally left it to others. I have had the advantage, in both government and private work, of being disbelieved by many with whom I interact by the nature of my job for most of my life, so I’ve been free to be honest to a fault. Just by being honest, others keep better track of what I say than I do.” - Jonathan Smith

Chapter One: The Man Without A Face Chapter Two: The Man Without A Face Puts On A New One Chapter Three: Anwar The Islamist Takes Over Education Chapter Four: The Family Firm Is Launched; Or Anwar, Bhd Chapter Five: Beyond Murad Khalid: The Real Story Of Anwar, Bank Negara And The Money Machine Chapter Six: Inside Anwar’s Money Machine Chapter Seven: The Turkish Connection Chapter Eight: The Man Who Would Be King Chapter Nine: The Fall Chapter Ten: Anwar In Free Fall Chapter Eleven: What We Learnt During Anwar’s Trial Chapter Twelve: Sodomy, Money and Spin

A twelve-chapter treatise on a likely politician by a likely pseudonym

Chapter One: The Man Without A Face

This is from the first section of the I-Files they gave me, covering Anwar’s early life, and it just barely predates my arrival in-country. It is the section with which I have most clearly identified, both because of the coincidence in time, and because the fellow who put together this portion of the dossier left behind a personal journal with his impressions of his time in Malaysia, and of the witnesses he interviewed and documents he gathered. Aside from his almost monomaniacal hatred of the durian – a feeling with which, depending on the durian, I can sympathise – this portion is noteworthy for its personalised feel and recollections.

It is the section that most catches my eye now, in this age of international terrorism. Anwar’s frank admiration for Abul Ala Maududi and Sayyid Qutb – the radicals who founded Jamaat-e- Islami in Pakistan and inspired al Qaeda, respectively – show a face he never showed Westerners when they were looking. Many young Malaysians under the age of 30 today have no idea that Anwar was a sympathiser of such extremists. He embraced men who would call for violent revolution to overthrow the existing social and political order to be replaced with a world of sharia law, who would reject over one thousand years of peaceful Islamic thought and learning as corrupt and decadent.

The man’s identity as given in the file is a cover. I know because I tried to look him up, here and in London, and his name simply does not exist. Who he is, where he went, or even whether he knew that the firm for which he worked was a Box 850 front, or what we used to call a “cut-out,” is apparently lost to the mists of time.


However, the material is all very well documented, and so I present his story – and the first part of Anwar’s.

He was finally going home.

He’d loved Kuala Lumpur since coming here years ago, loved the warmth and generosity of the locals, loved the beautiful Chinese girls and the food – some of the best on Earth (though he could do without the wretched durian) – and the total absence of bone-chilling fog in May. But he was being recalled to London, back to headquarters, to set up a division for all of Southeast Asia. The Company was growing, and they needed an old hand to guide that growth. With, of course, only a tiny increase in salary.

He’d found a note on his desk this morning, telling him to come see the Chief. He had quite enough on his plate, but the old man had always been good to him, and he wasn’t back in London quite yet. He grabbed his coffee and headed for the Chief’s office. He hadn’t even reached the door yet when he heard a curt, “Come in. And shut the door behind you.”

A bit puzzled, he walked in, noting that the Chief was staring at his desk and some papers on it. He gently closed the door, and was about to exchange pleasantries, when he was ordered to sit and pick up the tablet and ballpoint on the desk and begin writing. He shrugged and got underway.

“We have something special that needs doing before you leave, and we feel you’re just the chap to do it,” the Chief began.


He walked into the small room, its harsh light giving him a headache. He laid down both the envelope and the tape recorder on the table as he looked over the man sitting in the chair opposite him. Like many Malays from Penang, he clearly had some Chinese ancestry, and was a bit shorter than average. He had a ready and relaxed smile on his face, and hadn’t even glanced at the envelope.

He did get a bit nervous at the tape recorder. “What’s that for?” he asked, inclining his head and losing a bit of his smile.

“It’s for this second envelope,” the now-weary man said. A week gone and perhaps seven or eight hours of sleep that whole time. One week left to go. He pulled a second envelope out of his jacket pocket, supplementing the 600 ringgits on the table with twice that amount. A third of the man’s yearly salary should get him to relax again. If not? There were thousands more where those came from.

The second envelope did the trick. “So I understand you’re going to ask me about Anwar,” he said, neatly pulling the two envelopes over to his side of the table. He didn’t even blink as the mat salleh pushed down the Record and Play buttons. “Very well. Yes. I grew up with him – we attended school together. Knowing him as a boy and young man, you’d never see what he’s become today…”

“We need to know about this Ibrahim chap,” the Chief had begun.

The man was eternally unable to understand Malay names. “Anwar,” he began. “His name is Anwar, his father was Ibrahim.”


His boss cut him off. “Whatever his name is, we need to know more about him,” he began, gesturing to the note pad. The man began scribbling. “Word is that Mohamad” – he meant Mahathir, but was being bloody-minded about it now – “is looking at bringing him into Government. A real prize – the radical fundamentalist who can offset PAS in one fell swoop.”

The other man stopped scribbling for a moment. “Anwar in Mahathir’s Government?” he asked dubiously. “Not likely on my view. You understand that he spent time in prison for protesting Barisan, yes?” Unspoken were the allegations of Saudi ties, but those were just rumours.

The old man took out a cigarette, lit it, inhaled deeply, and gave him that don’t-screw-with-me look. “Don’t ask me questions. You’re going to ask everyone else a lot of questions. We have interviews lined up, envelopes of cash, and you’re going to spread them both around as if you have but two weeks to live. When you’re done, report back to me,” said the station chief. Another pull on the cigarette. Exhale. A manila folder pushed across the desk, with a bundle of envelopes.

“Here is your list, and the first bundle of envelopes. Come back for more as needed. Take extensive notes, do not dictate them to anyone, make them legible, and hand them to me personally before you leave.” Another pull. “Understood?”

… all subjects agree on the basics of Anwar’s early life. The son of Umno stalwarts, his mother a Malay housewife, his father having Tamil and Malay ancestry, and later in life Secretary in the Ministry of Health. As a young man, he was quiet, studious, intense, but open and friendly to everyone. He went off to Malay College Kuala Kangsar – the so-called “Eton of Malaysia.”


His time there was remarkable only for his friendliness and general openness to his teachers and fellow pupils …

Anwar’s story is of a man raised by a middle-class family, with a father unusually literate in English classics, a profound belief in the value of education, and a very liberal attitude toward Islam. It is the story of a young man who came of age enjoying life and neither finding nor needing strong influences as he grew.

The last witness interviewed this week knew him at MCKK and before. Not precisely childhood chums, but friends and acquaintances of many years. He knew the rumours (discussed earlier) of Anwar’s father’s infidelity, something that clearly stung Anwar badly. The story changes when they both attended the University of Malaysia, where Anwar read Malay Studies …

The stocky Malay fellow asked for a cig, so the Englishman gave him one. He pulled out his spare lighter – his usual had run out of fuel the day before – and gave him a light unasked. “He had totally changed,” the interviewee resumed. “This easygoing guy – didn’t exactly get drunk, but the idea of Christians never offended him, we grew up with them – just gone. Pow. Like that. He’d always sort of drifted, but he suddenly became fervent.

“To be honest, he even became a little frightening,” he continued, taking a long drag on his smoke. “You see, 1968 was a weird time, lah? Kids everywhere grabbing onto ideas old and new for anything that would give them a grip on the madness everywhere. America in uproar. Vietnam. The Communists. Things most of us wouldn’t have imagined doing ten years before – all on the table.” Another drag.


“What was frightening about him?” This was a new description. They were on the second side of the tape, but he was totally engrossed.

“Everything.” He stubbed out the cigarette and leaned across the table. “You have to understand how he was before. Quiet, calm, easy-going. All of a sudden, he’s carrying a Koran everywhere. And the Chinese? Villains lurking in the crowd. Brutally oppressing Malays. The Brits – no offence – the Chinese, everyone oppressing the Malays.

“And Umno?” He shook his head, that same rueful smile from earlier coming back. “The party for Malays? Traitors. Weaklings. Probably secret Christians.” He laughed. “PAS – back then it was PPIM, but it was always the same – was guilty of the same sort of treason. Only the students knew the way forward for Malays.” He shook his head again. “The Umno kid who went beyond PAS. Anwar turned into some kind of fanatic at the time. And he had been relaxed, lah, before. What a crazy world it was.”

The Englishman found himself leaning in closer. “Did he say these things to you?”

“Sometimes,” came the reply. “It was really bizarre. As a kid, he’d always abhorred radicalism, and then he was swimming in it. When he became president of PKPIM–” he stopped at the blank look on the mat salleh’s face – “Persatuan Kebangsaan Pelajar Islam Malaysia, it was a radical Muslim student organisation – he started chumming around with the Saudi representatives on campus.”


He frowned. “A bad lot, those. They would get kids to jeer at women, any women, who weren’t covered head to toe. That liquor store in the Chinese neighbourhood that burned down – what was it called? – we were all sure they were behind it.

“And Anwar fell right in with them. Like peas in a pod.”

…this subject therefore fills in some critical data about Anwar’s time at university, and explains some of the photos I have gathered. Note the shot marked ‘2’ and the rock-throwing …

A recurring theme throughout this first week’s interviews is that Anwar never had many beliefs before coming to University. The cause of his radicalisation is unknown – Malay Studies? The 1969 riots? Those Saudi representatives? A chance meeting? All of these? – but by 1970, he would have as many explanations as he had friends and acquaintances.

He would gladly tell anyone who would listen how those 13 May riots in 1969 had radicalised him. He would speak of how far-left revolutionaries inspired him – of how his heroes Herbert Marcuse, Frantz Fanon, Ho Chi Minh, Fidel Castro and Che Guevara would teach him that the old social order must be overthrown. Even violently. He spoke of the ‘wretched of the earth,’ as Fanon put it. He left his audiences in no doubt that he was the man to overturn everything. He was The Rebel.

The Saudis, on the other hand, were a subject for a select few…


She was nervous. Pretty, with a sweet face, though old enough to have had a few children – and likely she had. Underneath the abaya, what her body looked like was anyone’s guess.

He was skipping the tape recorder for this one. He’d also managed to catch up on some sleep.

Six days to go. He smiled, respectful of the distance between them, and invited her to sit first. She did, but she kept glancing at the door. He sat down, folded his hands, smiled, and began. “I just wished to speak to you about what you knew about Anwar Ibrahim.” Her eyes widened and her breath quickened. Good Lord, how bad had he been?

She didn’t seem to answer at first, but she took the envelope when it was passed across the table.

“Back in the 1960s, most of us did not wear the abaya. We were not sufficiently pious,” she said. Before he could say anything, she ploughed ahead. “We sometimes did unclean things, like dancing and holding hands, and reveled in them. That changed thanks to Anwar, and the Saudis…”

…This subject, like most before, described a slightly different Anwar in person than any of the others had. He was always charming, but for each, in a different way. He could be and would be whatever was needed to move ahead with each crowd. Devout or Western. Normal middle-class Malay or Islamist firebrand.


But these last two subjects suggested that he had found his core, and his first important peer acceptance, with the Wahhabi missionaries. With them, and with those who fell in with them, he would share the inspiration he drew from Abul Ala Maududi and Sayyid Qutb. These were heroes.

I have not had sufficient time to research those men, but my understanding is that both are radicals who believe in overthrowing the social order for a world of pure Islam, one that did not and has never existed. Anwar apparently found his inspiration from them …

The boy with no apparent core had become the vessel for the most extreme ideologies of his time, and not coincidentally, the love of his fellow students. They saw in him everything they wanted to be, a pillar of certainty in a time of chaos. And so they rewarded him with their support, their loyalty. No leadership post he wanted was denied him. No favour, no accolade was too high.

Everyone agreed: Anwar reveled in it.

These ideas only sharpened in the wake of the 13 May riots. The terrible violence of those times drove Anwar to preach a belief in Malay supremacy, a vision of Malays as imperfect vessels of Islam being oppressed by a wider world. The protest marches, the heated debates, the clashes with the Federal Reserve Unit in the streets – all necessary steps to a perfected world, purified of inequality, made beautiful by sharia and hudud. …

“Ahmad al-Haj Totonji.”


“Excuse me?” The interview with this subject had only just begun, the tape was rolling again, the envelope stuffed with ringgits had made its journey across the table and had been pocketed. And now he was being peppered with obscure Arabic names. Who was this? Ahmad al-Haj Totonj? More work. More information. And only two days left.

“An Iraqi. In deep with the Wahhabis. Preached violent jihad. He came looking specifically for Anwar and found him. We were certain they’d met before, when Anwar had spent time in Saudi Arabia in the 1960s with the King Faisal Foundation. The Saudis really won Anwar’s heart, they conquered him early on.”

The Englishman looked coolly at the man across the table. A deceptively young face, with no real emotion. He’d taken his envelope, placed it in the pocket inside his jacket, and simply started talking. Thinning hairline, piercing eyes. Fifteen years spent learning to read people, and he couldn’t tell a damned thing about him, not even if he was being truthful.

This was a new detail, though. “Carry on,” he said, pretending to take notes.

Whether the Malay was fooled or not, he did. “One day in 1970, this fellow, he and Anwar met for hours, and when they came out, they were grinning like idiots. They met again and again, always in secret, usually one-on-one or with a few others. They met one last time in 1972, all day, just the two of them. The next day, Anwar is flush with cash, and founding ABIM.”


Angkatan Belia Islam Malaysia had come up a couple of times these last two weeks, but Anwar’s exact role in its founding had been obscure, and its funding even more so. “Are you saying Totonji funded ABIM?”

The Malaysian shook his head. “No. I’m saying the Saudis did. Anwar was everything they wanted – fanatical, dedicated, a true believer, and capable of moving thousands on his words alone. They’re bloody good investors, and they saw a fantastic investment vehicle.”

The obvious question. “Why on Earth didn’t Abdul Razak do something about this?”

Not even a flicker passed across the man’s eyes. “You have to remember that the country was still reeling from the 1969 riots. Tun Razak did a marvelous job patching everything back together, but there was still chaos and disorder everywhere. Student riots were a frequent enough occurrence that one more protesting group was just one more target for arrest. “Which of course, Anwar would discover.”

…On the other hand, the documentary evidence on Anwar’s time with ABIM is a little bit better developed than on his earlier life. He was quite public as ABIM’s face. He called for a national committee “to plan a proper programme for the implementation of Islamic laws.” He distributed chapters from a book calling for the implementation of an extremely strict Islamic state ruled by a 14th century interpretation of the Koran and sharia law.


ABIM took to the streets, and at the centre of it all was Anwar. Anwar was arrested with other student activists in 1974 under the Internal Security Act, and was detained for two years without trial.

The three witnesses who claim to know of Anwar’s time in prison are of variable reliability, and I have not yet had a chance to supply funds to civil servants to confirm that they were in prison with him. I frankly do not trust them. Nevertheless, though interviewed separately, over the course of two weeks, each was insistent on a single point: Anwar came to see the ISA not as a tool of his oppression, but rather a vehicle for when he took power.

Each claimed that prison was also his first lesson in hiding who he was, in becoming the “perfect chameleon,” as one of those witnesses put it, to advance his goals. (See File 13.) …

“And that, finally, is all, Chief,” he said, finishing the last page of notes. In twelve hours he’d be back on a flight to London via Singapore. He was ready to go. The last two weeks had exhausted him, physically, mentally, and emotionally.

The Chief, however, wasn’t done with him yet. “And prison? Is that all?”

His soon-to-be-former subordinate shook his head. “Dead end, Guv. Those three witnesses – I’ve flagged them all with red permanent marker – only had generalities to offer. They all said that Malaysia needed sharia, good and hard. Anwar told them that he would be the revolutionary who would bring it all down, and build up the perfect Islamic state in its place – a state where no man would spend two years in prison for advocating hudud law.


“But it’s empty after that.”

His boss simply looked at him, then sighed. “I’ve dropped £5,000 – through other investigators – trying to get at that time period,” he said, sounding resigned. “Every single source says what you’re saying, but it’s always quite general.”

“A few of them talked about what happened after,” the other man responded. He pulled out one of the manila folders, opened it, and started reading. “Anwar began teaching abroad, funded indirectly by Saudi money. The Wahhabis lifted their protégé from the wreckage of his career, made him the Southeast Asian representative to the World Assembly of Muslim Youth. Friends of Anwar, Wahhabi and others, greased the way – through chairs, introductions, and donations – for opportunities and teaching posts for him at places of learning that had benefited from Saudi largesse. They’re saying St Antony’s College in Oxford and Georgetown University in Washington.

“Haven’t had a chance to confirm those yet,” he noted, and frankly he didn’t intend to spend his last twelve hours in-country trying. Or ever looking back at this place again. All of this cloakand-dagger stuff on Anwar and the Saudis had spooked him. “I do have one question, though. Why all of this time and money on one student radical? Do we think he is that big a comer?”

His soon-to-be-former boss looked at him levelly. “Do you think all of this,” he said, pointing at the stack of folders, the receipts for thousands of pounds’ worth of witness statements, the three notepads of hand-scratched notes, the typed stack of analysis, “is for a man who will remain at the bottom forever?


He is moving up fast, and we need these files to be complete. “I could say he has a lean and hungry look, but I’d sound like a ponce. SIS has him flagged as someone to watch, and I’m given to understand that CIA does, too. They’re certain he’s building a power base, out to make himself into some sort of saviour for a Caliphate that will yet be. He is going places, and we need his file.”

He drained the last of his coffee. “One last thing. We know you keep a personal journal. That Tan girl told us so. Leave it here before you go.” He was tired enough that he didn’t complain. He simply pulled the journal from his pocket, tossed it on the desk, and left.

Thus ends the first chapter of The I-Files. The stage was now set for Anwar’s return to Malaysia from foreign academia. Back home, he was once again the pious Muslim, the opponent of all that was wrong with Umno, Umno’s sworn enemy. For at least a while. And then he turned again, or better still, he was recruited, and he embraced his sworn enemy … who would soon become his greatest benefactor.

End of Chapter One: The Man Without A Face

Chapter Two: The Man Without A Face Puts On A New One

I arrived in Kuala Lumpur at the behest of my immediate superior, who was cavorting in Bali whilst pretending to be gathering some form of commercial counter-intelligence on the Soviets.

I’m reminded, by my young Malaysian subordinates, how long ago this really was. More than the somewhat depressing change in my features over time, what would really stand out to one of my attachés transported back to that time would be how truly different the country was then, how many men who have passed into legend or would make themselves legend now were struggling to push, pull, and drive Malaysia to a destiny even they could not fully see.

Anwar Ibrahim, of course, was one of these, and his story continues here. But through the mists of time it is important to remember his patron not as Tun Mahathir, as the young of today call him and think of him – the larger than life figure whose time as Prime Minister still shapes Malaysia today – but rather the outwardly self-assured man working desperately to consolidate his power base in Umno, to pull the reactionaries and progressives into something like a working harmony in a country still finding its identity in the world. Before he was a legend, he was an unlikely Prime Minister, threatened by the men he’d defeated to reach that spot, and by PAS and a world already hostile to him outside his country.

It is this time, just before Anwar’s sudden entry into my world, that my story in Malaysia begins.


She was absolutely gorgeous, her raven hair spilling down her shoulders, her smooth face smiling lightly, her onyx-almond eyes staring into mine. She was also politely trying to get me to stop staring at her and pay attention to the message she was trying to convey.

I have never been very good on long flights, and stepping from the air-conditioned private cabin into KL’s muggy heat did nothing to alleviate this. Being approached by the virtual goddess who would become my secretary and distraction for years to come did not appreciably help, either.

Nevertheless, I gave it the old try, smiled as charmingly as I knew how, mumbled a thank you,and took the sealed envelope. My bags were being loaded in the car as I opened the envelope and took my first look at Anwar Ibrahim.

More accurately, I took my first look at a piss-poor photo of Anwar Ibrahim, with some sort of pepper sauce stain on the corner. His obvious intelligence shone through even that somewhat grainy photo, but beyond that, and his somewhat pinched features, I was at a loss as to why this picture of what looked like a Malay off the street was looking back at me.

Belatedly, I realised that the other papers in the envelope might shine some light on it. Working not to turn completely purple under the slight smile of my secretary, I fished out the other contents and started reading as the car took off. The first document was a memo from an American of all things, to my superior. I remember it clear as day.


DATE: AUGUST 9, 1981 SUBJ: M

Greetings, you old bastard. Hope you are enjoying your involuntary “retirement”. I have precleared permission to join you on a fishing expedition in Thailand next month that you did not know you were attending.

Enclosed you will find the information in my files, less appropriate redactions, on the new lead on our M. Gives some local color. The Company men in my office who don’t think I know they’re Company men are convinced that this fellow will be important over the next few years. I know this, because they told me he wouldn’t be.

I’m given to understand that your old firm had a drop box location here that did some digging on this fellow last year. I know this because the Company men are adamant that nothing of the sort happened. You may wish to talk with them.

You owe me. We’ll discuss in Thailand.

-F.

I realised then that Americans are odd.

I was absorbed in the contents of the file as we zipped to what would be my office for the next two years. At the end was a handwritten note from my superior telling me to grow the file.


…the time is 18.21, and the date is 11 August 1981. The following contains my first notes from reviewing the file materials presented. Please stamp this record A36-HIGH.

Although my warrant is on Anwar Ibrahim, a review of our files on the new Prime Minister – without whom this report will be largely meaningless – shows them woefully lacking. I have therefore taken the liberty of providing additional research on Mahathir Mohamad in order to supplement these files.

…and thus Mahathir, rightly, perceives his status as self-made; his life is the story of a man who dragged himself into the ruling class by his own keen mind and force of will. He clearly perceived early on that the improvement of the Malay lot must be his first political task.

So it was that his loss in 1969 was both a political setback and a crucial moment in defining his career focus thereafter. Yusof Rawa was able to convince Mahathir’s constituency that Umno had failed them, and that the future for Malays lay with PMIP (now PAS). Although Mahathir blamed Chinese voters swinging to PAS, it seems clear that even he recognised that the problem was internal to Umno and intrinsic to PAS.

Mahathir therefore came to believe that any future battles must be within Umno first – for allowing the party to be defined as insufficiently pro-Malay – and PAS second – for the dangerously fundamentalist threat they represented and for their ability to eliminate Umno dominance in Malay areas.


…The 1969 general elections and the 13 May 1969 riots represented yet another development that crystallised Mahathir’s perception of Umno vis-à-vis Malays. His famous letter to then- Prime Minister Tunku Abdul Rahman (now in the M File) set out his grievances with Umno and Abdul Rahman. He was summarily sacked from Umno’s Supreme Council and entered into the political wilderness.

The important thing to understand about this period is that it reinforced every, single perception Mahathir carried about the Government. He would have to drag himself back into Government by his own efforts, and Umno could not be counted on to defend Malays from the Chinese and from PAS. This is why he has gone to such lengths to deliberately and purposefully crush PAS at the polls again and again, and to consolidate his power base in Umno.

His precarious position after his return to Umno, even despite Cabinet-level appointments, simply confirmed his perceptions and drove him to work harder…

…It is therefore apparent that Mahathir is working desperately behind the scenes to consolidate what appears to be an almost accidental premiership, and is beset by both internal opposition from Razaleigh Hamzah and others from his predecessor’s time in office and growing strength from PAS. Sources in the PM’s office tell us he is looking to undermine PAS by taking a critical figure from its fold. Or even beyond its fold.

Anwar Ibrahim, who has a prison record as the head of ABIM, seems the most likely choice. He has made close alliance with both the Wahhabis and the Muslim Brotherhood the centrepiece of his current identity, and appears to have closely aligned with PAS abroad and at home.


Political intelligence in the Prime Minister’s office suggests that Anwar may be ambitious enough to be tempted into office under the guise of increasing the Islamic influence there.

I am not certain that Mahathir has fully understood the quantity that is Anwar. The file materials before me indicate that the man is an Islamic radical to the core, a closet proselytizer, and he is likely to join PAS. Even if he comes into Government – an unlikely turn of events – he would probably be a destabilising rather than buttressing force. A loose cannon. Mahathir could be making an error here.

That concludes the note review. As instructed, I will move on to primary source materials and witness interviews from this point out.

I was sitting at my desk when my secretary handed me my compiled, dictated notes. They were immaculate. I smiled at her and somehow managed not to seem like a complete dunce as she smiled back and walked away.

I continued to watch until she turned and I could no longer see her. I believe she caught my looking from the corner of her eye and smiled a bit more.

Reviewing my notes and the report to date, I cross-checked against my questions for the first round of interviews. I straightened my tie and headed out, making a note to thank my superior for the secretary he’d assigned me.


“Call me Mohd,” the tall, lean fellow said, with a perfect RP accent. He waited patiently as I handed him the envelope. He handed me a thick set of folders marked only with the letter “I.” “As promised,” he noted with a grin.

I managed not to groan. “So I’m quite interested in Anwar Ibrahim,” I began, gently moving the folders to my side. “Is he looking to join PAS?”

The Malay fellow – he was using the name ‘Mohd’ though we had his identity pinned down before he ever came in – took a drag off of his cigarette, looking contemplative. “We all thought so, at first,” he began. “The Indonesians certainly tried to convince him. But he calls them ‘losers,’ and ‘perennial seconds.’ I think he thinks their faith is in the right place – he’s gone with a few of them to Saudi Arabia, that sort of thing – but he thinks they’ll never take the big chair.”

Another drag. “There’s also the matter of Iran,” he noted.

Please stamp this record A36-HIGH.

The three subjects interviewed this week are former colleagues of Anwar Ibrahim, of varying degrees of familiarity. They largely echoed each other, but the most comprehensive was ‘Mohd’ [True identity in Subject 36, I File]. I will therefore largely reference his remarks and a summary of the files he provided in this report. All notes are included in their original, following after this memorandum.


Analysis to date echoes the notes we have received from the Box 850 drop. It appears that Anwar’s ties with the Saudis go deep – and go a long way to explaining why they are using him as their stalking horse, or better still, as their Trojan Horse.

Initially, it appears that Anwar and his associated networkers were perceived as part of the Saudis’ ordinary approach to religious expansion – recruiting sympathetic Islamists in more moderate, predominantly Sunni nations, and using them to undermine the established order. For the first decade of his interaction with his Saudi handlers, based on the frequency with which they traveled to the country or brought him to Riyadh, they followed the same pattern they used elsewhere.

But what had been a liberal application of oil revenue and spiritual guidance changed with the Iranian revolution. Suddenly, Iran was a regional threat, an expansionist Shi’ite power dedicated to purging Sunni influence from its own country and from the region. All of that paled next to the seizure of the Grand Mosque in Mecca in November 1979.

The House of Saud styles itself the protector of Mecca, and its legitimacy rides on this claim. The public relations debacle of having the Haj hijacked and its armed forces decimated while trying to retake the Mosque convinced the House of Saud that the Iranians were a greater threat than they had ever imagined. Although Iran was quick to blame the seizure – undertaken by members of elite Saudi families and assorted dissidents – on the United States and Israel, Box 850’s files suggest that the Iranians were behind the attack, and the Saudis know it.


PAS – and some elements in ABIM – were oblivious to this, and saw only theocratic perfection.

PAS began making overtures to Iran, and PAS Youth has a trip to Tehran scheduled this year. …

It is likely that this is the reason that the entreaties to join PAS have fallen on deaf ears. Anwar’s backers perceive Iran as a mortal threat. Further, PAS sees Iran, and the Ayatollah’s takeover, and appear to have decided that only the ulama should lead. PAS Youth are already saying as much.

…from a purely geopolitical standpoint, it is clear that the Saudis perceive Anwar as a necessary beachhead in Southeast Asia, part of a policy of encirclement to offset Iran’s large, restive, missionary population. The Iran-Iraq War is being played out with Saudi funds supporting the Iraqis and their procurement of Western materiel, and the Saudis clearly intend to shore up their influence outside the region.

Thus the numerous documented meetings between Anwar and Ahmad al-Haj Totonji, an Iraqi-born and Saudi-bred operator whose ties to his country’s government we have not yet been able to document: It is clear that Anwar is and must be a vital element of the Wahhabi expansion in Southeast Asia, a matter in which the Iraqis have a vested interest as well. Totonji was assigned to cultivate Anwar and to help propel his rise in Malaysia. Files even indicate how he worked behind the scenes to get Anwar infiltrated into Mahathir’s establishment.


One place Anwar appears unwilling to jeopardise himself is with his money. Some of the files from ‘Mohd’ showed that the Saudis directly threatened ABIM’s funding over growing ties to the mullahs in Iran. Although Anwar appeared to be active in Malaysia on a permanent basis now, it was clear that he relied on the Saudi funds and networks that had seen him lecturing abroad to fund at least some of his lifestyle.

Furthermore, Anwar is not a member of the ulim, and as such he has no future in PAS.

…Mahathir’s entreaties are therefore more appealing to Anwar than they were a mere three years ago. What is remarkable is the extent to which Anwar appears to have kept these matters to a very small inner circle; it is not clear whether his new wife understands the extent to which he is following the Saudi lead.

It is quite clear that Mahathir does not.

I rubbed my eyes. I had started pulling long nights again, a habit I thought I’d shed after university.

The files I’d received, from ‘Mohd’ and the Box 850 drop, and from the witness interviews I’d taken, told what seemed a bizarre story to me. At first, I’d thought Anwar’s life was probably not all that unusual for Malaysia; after a few months in-country, I was convinced that this story was as strange for Kuala Lumpur as it would be for London.

What stood out to me, that late night, was not merely the web of hard-core Islamist and Saudi connections that seemed to dance about Anwar, but the manner in which he seemed to move between them.


He seemed a man utterly sure of himself, able to be anyone to everyone, but so sure of his ability to fool anyone and everyone that he very nearly got himself killed more than once.

I did not then know that narcissism is a clinical condition. I just thought him a stupendously effective liar and radical.

This quality, whatever one calls it, made him occasionally reckless. In the files ‘Mohd’ gave me, there is a record following his elopement with his wife the year before. Apparently, her father – who had once been behind Anwar’s time in prison – stormed into Abdullah Badawi’s office and announced his intention to “murder the little bastard.” His unholstered gun was perhaps more of a statement than his words themselves. Abdullah managed to dissuade him (something that, with the benefit of hindsight, he may occasionally regret these days), but I have never been able to tell if Anwar appreciates how lucky he was that day.

Wan Azizah would be the perfect complement to Anwar – driven, dedicated, ruthless, but with a charming demeanour that disarmed almost everyone who met her. She was also ideologically attractive – she wore the tudah before most others did, before she met Anwar. Her part in this story would not be obvious for years yet.

There was more, most of which would make no sense then, but would be illuminating in later years. But for all I learned of Anwar in those files, what changed my life most is what happened just a few months after, not long after Mahathir had succeeded in bringing Anwar into Umno.


Yawning, I locked up the file, turned off the light, and lay down on the couch in my office.

Months passed. The Anwar job had finished, and I was in the middle of doing commercial research when the big news broke: Mahathir had named Anwar Minister of Culture, Youth, and Sports. It was a signal moment: Anwar had been the perfect counter-point to PAS, and part of the strategy that had allowed Mahathir to roundly crush the fundamentalist party once and for all. Dr M clearly felt he had the upper hand – he’d neutralised two threats at once, and brought a young up-and-comer into his inner circle. Now a Minister, fresh off taking the top spot as head of Umno Youth, he was surely an Umno man forever after.

The day Anwar had joined Umno, Mahathir had been beside himself over the coup he’d managed. I was not so sure. I’d thought of Mohd’ and what he’d given us on Anwar.

I’d thought of the man who had aligned himself with the Wahhabis, and how they had influenced Anwar, and I’d wondered how such a man ties himself to a man like Mahathir with any sincerity.

Returning to my desk, I asked my secretary to contact headquarters and get ready for a report on the new Minister.

It was not I, however, who compiled that report, and it is here that my direct involvement ends for a time. My superior believed my talents wasted on the man whom he had not long before thought worthy of all of my attention. Instead, I was tasked with gathering intelligence on a KGB front operation working out of Penang, and supervising my juniors as they gathered data – but not witness interviews – on Anwar.


We eschewed witness interviews because even then, people who knew too much about him had a way of disappearing.

Anwar would become the consummate Umno man, and in many ways he was the perfect protégé for Mahathir. Mahathir undeniably carried with him the impression he’d formed decades before that the Malays needed every advocate they could find, and resented anything that made them seem second-class; after all, he had famously insisted on a Chinese driver for years specifically because most drivers in Alor Setar were Malay.

Anwar played the old man and played him well. But where Mahathir was a bit of a Malay chauvinist, Anwar was a supremacist. Where Mahathir believed that Malays should receive special privileges until they were no longer needed, Anwar believed they were entitled to those privileges to the end of time. Mahathir was capable of being an effective leader of a multi-racial coalition; Anwar was not and – still today – is not.

Whether from necessity, distraction, or a legitimate lack of understanding, Mahathir never perceived this difference. And so as Anwar advanced in Government, winning plaudits for his time as Minister of Culture, Youth, and Sports, he brought into his ranks operatives from his time in ABIM, men whose real allegiance to PAS and the growing influence of Iranian and Saudi radicals was only barely hidden. Because they could truthfully mouth the sorts of things Mahathir wanted to hear, he seemed deaf to the radical threat they presented.

Whatever the source, Anwar’s wealth grew appreciably during this time, as did his ties to the Muslim Brotherhood (in the open) and the Wahhabis (in the background).


He learned that working closely with banks tied to those groups could be decidedly lucrative, and he began to develop the taste for international travel that is perhaps his best-known feature today.

He clearly also understood the importance of a large war chest when challenging for leadership spots in Umno; from his first day in the party, he began courting wealthy Malay and Chinese interests with an eye to the future.

He assuredly made more than his share of enemies, but he was always careful to cultivate as foes only those men who were already opposed to Mahathir. Already entranced with his young understudy, Mahathir came to identify Anwar with his own causes and concerns, and shielded Anwar when he ran into better-entrenched parts of Umno.

Here, I and my fellows leave the story, except as narrators, until after Anwar’s ascension to Minister of Education and the damage he wrought on a generation of Malaysian youth. That, however, is a story for others, and is told mostly in their words next.

End of Chapter Two: The Man Without A Face Puts On A New One

Chapter Three: Anwar The Islamist Takes Over Education

By 1986, I had pretty well run to ground all of the Soviets’ fronts in Peninsular Malaysia, Singapore, and Indonesia. The Soviets now seem a distant memory even to those of us who spent our first adult decades hounding them and their brutal ideology to the ends of the Earth, but they were then still a true danger in Malaysia. The Communist assault on the Bukit Kepong police station in 1950 was a mere precursor to their continued infiltration of the country over the coming decades, culminating in members in the highest levels of government; Malaysia’s royal police would battle the Communist threat for decades before they had been completely eradicated.

Indeed, Siddiq Ghouse, Mahathir’s political secretary, was arrested as a KGB spy a mere three days before Mahathir was sworn in. Our file materials were vague on the veracity of that claim, but I had more dangerous quarry to hunt and so did not spend time fleshing out that allegation.

It was thus that my superior wanted the commercial influence of that murderous lot eradicated from Malaysia once and for all. This was both vital and relatively easy. Their reputation for brutality was never exaggerated, their reputation for efficiency only slightly exaggerated, their reputation for secrecy a joke to those of us who took our tradecraft seriously. I had more than my share of time on my hands, and so despite explicit instructions to the contrary, I dabbled in watching the new Education Minister work on Malaysia. In fact I did more than dabble. I worked with some friends from The Company and we worked the files extensively. Anwar Ibrahim was by now more or less completely an Umno man in every way but one: His core. Outwardly, he was a loyal party man whose allegiance to Mahathir Mohamad was unquestioned.


But as Education Minister, he finally had the chance to make good on his promises to his ABIM followers and to his Saudi friends to bring a purer form of Islam into the Government – and to Malaysia’s youth, and across Malaysian society. Where Mahathir saw the Malays as needing protection, Anwar saw them as needing perfection.

And he would give it, and he would also make the Chinese and Indians suffer for it.

1986 was also the year Mahathir ruthlessly crushed PAS electorally. To most of us watching from the outside, this was the signal moment when Malaysia’s more tolerant and moderate brand of Islam finally won out over the conservatives and radicals, those who would employ what were by then the obviously more extreme forms of Islam practiced in Saudi Arabia and Iran, forms that PAS backed and Mahathir – and most Malaysians – rejected.

Only later would this section of the I-Files come into my hand, and only then would I understand how wrong I’d been.

“He’s dangerous.”

Americans stood out in Malaysia in the 1980s, more so than Brits or the other mat salleh types increasingly on the ground. Reagan was in the White House, the Soviets were on the ropes, and after the debacle of the 1970s, America had her swagger back. Her sons were fanning out across the globe, preaching a gospel of free markets and democracy that would take root in different ways over the coming years, getting rich and living high in the world.


Three of those Americans were gathered in an air-conditioned conference room in Georgetown, Penang, nursing their alcohol of choice. With them was a Canadian, the head of the Commonwealth division of their company, and oddly for a Canadian, every bit a match for the Yanks in swagger.

It was he who had spoken, drawing the attention of the other men there. He continued. “With this fellow as Education Minister, I think this will be a very bad country in twenty years. I realise all Muslims sound the same to you – and fair enough, they basically sound the same to me, too – but this one is different. Have you heard about how he speaks about the Chinese?”

Reading any Chinese daily in this state was a fast insight into what Anwar thought of them and they thought of him, so that was largely a rhetorical question. One of the Americans absentmindedly swirled his chilled Blanton’s as he toyed with this idea. The other men in the room deferred to him, not only because he was their boss, but because he had a better feel for the country than most Americans ever would.

“Ok, Jim,” he said, taking a sip of the bourbon and setting it down on a coaster on the marble conference table. “I’ll humour you. Is this about the schools?”

“In part,” the Canadian replied. “He’s trying to force them all to use Bahasa for instruction, he’s coming down hard on the Christian schools, and he’s threatening to close a lot of them or at least make their lives miserable. I think he sees them as a rival power base – and God knows he hates the Chinese.”

“So does Mahathir,” one of the other men quipped.


Jim shook his head. “No,” he began. “Mahathir, for his sins, is a Malay chauvinist who feels his people were done wrong, but he has nothing personal against the Chinese. Anwar is different, Anwar actively hates them.” He sipped at his gin. “And worse is the brand of Islam he is pushing down the children’s throats.” He pulled out the report he’d had his right-hand man prepare and passed copies around the conference table.

…Anwar’s growing presence in Malaysia and abroad may be directly attributed to his propensity for quoting famous Western authors in policy speeches, a personality trait he inherited from his father. A significant number of local bureau chiefs – from the Wall Street Journal, Financial Times, and so on – have become enamored of Anwar, seeing him as a worldly Muslim as against Mahathir’s more strident form of Islam, mainly because he quotes from Western sources.

Credible reports have now surfaced of extensive Saudi ties and funding, however, which those local bureaus have largely avoided – much as they appear not to understand his days as a student radical. In this sense, Anwar is not so much the ideal, “moderate Muslim,” but rather a delivery vehicle, a container, for a radical strain of Islam largely unknown in Southeast Asia. The Caliphate in a Zegna suit, if you will. He quotes Shakespeare, but he thinks Sayyid Qutb.

This is in fact borne out by Anwar’s activities as Education Minister. Beyond the “Bahasa Melayu” matter discussed above, Anwar has worked to advance the spread of Wahhabi Islamic doctrine in the schools.


First and foremost has been the matter of the teachers. Traditionally, Islamic studies teachers in this country were trained here, in Singapore, or infrequently in Indonesia. Now, they are sent off for instruction to Saudi Arabia, Syria, Egypt, and Iraq, and especially to schools set up, funded, and directed by the Wahhabis. There are now – and will before the foreseeable future – hundreds and thousands of these teachers importing an alien strain of Islam directly into the minds of the young.

Anwar appears to understand that education may begin at home, but it is sealed in the classroom.

He has not stopped merely with the teachers, and instead appears determined to re-align Islam even at the academic level, presumably both to continue the Wahhabi influence at all levels of education and to make certain that no teachers slip through the net. That leads to the International Islamic University Malaysia, which bills itself as the leading international Islamic university, with English and Arabic as medium of instruction. Many of its students come from abroad, and many come from Saudi Arabia and from its mission schools abroad.

The school is nominally funded by member-states of the Organization of the Islamic Conference; in practice, this means that Saudi Arabia provides the bulk of the funding and guides the selection of faculty. Although formally established in 1983 by Mahathir, Anwar clearly sees the institution as a vital tool in his Wahhabification program. It would appear that Anwar’s recent ascension to the Presidency of the University was itself engineered by Anwar.


The faculty of IIU is almost entirely foreign-born, and under Anwar, has been vetted for conformity to the Wahhabi strain of Islam. It is thus that Anwar appointed IIU’s second Rector, Abdul Hamid A. Sulayman, an academic from Saudi Arabia and an influential part of the most violent faction in the Muslim Brotherhood. With this lineup of characters, Anwar has worked to create radical cells among the students, both local and foreign-born. He is involved in a dark and subtle plan to change Malaysia, to make it a more Islamist and conservative society. And the old man does not seem to have figured it out.

There is also the “Policy to Imbibe Islamic Values,” which Anwar is personally promoting. An offshoot of the so-called Islamization of Knowledge – a stalking-horse for radical Islamic beliefs that suggests that all knowledge and learning should be seen as Islamic and with an Islamic character – the Policy is an attempt to re-order Malaysian society from the top down, in line with a more radical take on Islam than is native to Malaysia.

Thus, the national schools, heretofore multi-ethnic and multi-religious in character, have begun preaching more of Anwar’s peculiar ideology. Muslim prayers are publicly recited, Muslim sermons preached, and Islamic festivals celebrated – all as part of the curriculum. This is a radical departure, but one Mahathir is endorsing apparently in his attempt to shore up his base against PAS.

Perhaps most worrisome is the approach taken to female students and teachers, who are beginning to face religious pressures heretofore unknown in this region of the world. Women are coming under extraordinary pressure in the national schools to wear the tudung, experiencing mark-downs in grades and limitations on their academic careers if they elect not to do so. Segregation of the sexes is also beginning to take shape, at a level again unknown in Malaysia before this time.


…Anwar’s elevation to Education Minister is seen as a virtual anointing, as the job of Education Minister is usually a precursor to Deputy Prime Minister and Prime Minister thereafter. This suggests that Mahathir is deliberately grooming this apparently closet-Islamist to take over in future.

…The party elections last April and the bitter contest that followed have provided Anwar with the perfect cover to advance his agenda, with Tengku Razaleigh decrying Mahathir’s nominal extremism. By allying himself more closely with Mahathir during the Umno split and the battles with the judiciary that followed, it seems clear that Anwar finally had the space needed to impose his more radical Islamic, Malay superiority views in the schools. As Education Minister he is creating Islamic cells everywhere, influencing the curriculum, finding a thousand ways to push his own people toward a more Saudi interpretation of Islam. He is creating sleeper cells through the school system. He is playing with the minds of an entire generation.

Mahathir is either ignoring this or has not yet fully realized the full extent of Anwar’s deviousness. He is also constrained by his desire to completely eliminate PAS as an electoral force. Led by his old enemy Yusof Rawa, the man who took his seat in the Sixties, PAS may be defeated electorally, but it both reflects a conservative strain in Malaysian society and is determined to leverage that strain to return to power. Anwar is thus a useful foil who can effect policies both distant from Mahathir and to which he can point in the face of PAS attacks.

Mahathir appears unaware that Anwar is essentially attempting to Arabize Malaysia.


…which in turn leads to the issue of the Chinese schools. Anwar has disclosed to numerous interviewees that he perceives the Chinese and their educational system as impediments to his vision of Malaysia as an Islamic paradise. Hence the recent increased inspections of, speeches attacking, and constant administrative threats against Christian schools and English- and Chinese-language Chinese schools. It is somewhat surprising that Mahathir does not perceive the threat to his own coalition…

Roger looked up from the report. Jim had been a good addition; the fellow had a keen eye for detail and a way of sniffing out detail. This report was, in part, going into the “I” File. “I’ve been meaning to ask,” he said, knocking back the rest of his bourbon. “What is ‘Bahasa Melayu’?”

Jim idly flipped through his copy, not looking at it. “It’s just plain old Bahasa,” he replied. “But Anwar has decided to rename it. Bahasa Malaysia means the Malaysian language. Bahasa Melayu means the Malay language. So you see,” he said, taking a sip from his gin, “When Anwar tries to force Chinese schools to teach in Bahasa Melayu, what he’s not-subtly doing is telling them to submit to the Malays.”

His CEO nodded. “What’s this about the Saudis? Is this something about oil?”

The Commonwealth Division President shook his head. “Saudi Arabia has two main exports: Oil and an intolerant and vicious strain of Islam. You’ve seen the pictures of the women clad head to toe in black? You don’t see that here, but it appears Anwar has wanted that in Malaysia for a very long time. Those mujahedeen in Afghanistan? Overwhelmingly Saudis. Anwar makes no secret of admiring their view of Islam.


“The Saudis have been bankrolling him since the late ‘60s. He’s why their missionaries are now slowly working their way into Malaysia, setting up cells of their strain of Islam everywhere, infiltrating the mosques, changing Islam under the nation’s feet.” His face darkened. “This won’t end well. Look at the concluding pages of that report – he’s teaching their beliefs in the schools now – generations of children learning that women must be kept from learning, hand-holding is punishable by whipping, Christians and Jews are targets for killing. He’s brainwashing a whole generation.

“Funny thing, though,” he continued, finishing his gin. “Most of the sources we have suggest that Anwar is a deep cover plant by the Saudis, and there’s a lot to suggest that he’s the perfect man for them. Maybe too perfect – too fanatical, too much of a true believer.

But I wonder if maybe that’s too simple an explanation. He’s gotten in so far with Mahathir by being everything Mahathir wants. Maybe he’s gotten what he wants from the Saudis by being everything they want?”

Jim had been a wonderful addition. One of the other men piped up. “Where to next, boss?” he asked, turning to Roger.

“Write it up,” Roger replied. “Every last word, every last thought. Send it to me. I have somewhere to be tomorrow morning.”

I’d known Roger since not long after he arrived in KL. Marvelous fellow. He’d give you the shirt off his back, but he expected you to be ready to follow him into Hell on a moment’s notice.


We met on his yacht before making for the Strait of Melaka. Roger regularly had his men sweep the yacht for ‘bugs,’ as even we used to call them back then, and then had the men he trusted sweep again after that. It was a safe place to talk, to knock back a few drinks, and to enjoy a day away from the office.

And to share gossip on research targets. After all, work never ends.

“So have you finally asked out that secretary of yours? She’s close to thirty and won’t wait forever, you know,” Roger began, with that irritating and endearing tendency to blunt openness that Americans have.

“Indeed I have,” I replied. “I’ve even worked my way up to proposing marriage.” I fought back a grin and lost.

Roger didn’t even try. “All right!” he yelled, gripping my hand in a bit of an over-firm handshake. “A drink for the condemned man!” He poured me a glass of that bourbon he loved so much, then another for him.

We settled in companionable silence for a few minutes, enjoying the cool breeze as we worked our way out to deep water. The American finally broke the silence. “What do you know about Anwar Ibrahim?” he asked.

I was a bit startled to hear that name outside of my office. I knew that the various intelligence services had their eyes on Anwar, but I didn’t know commercial firms other than British ones were, too. “Quite a bit, really. Why?”


“Wanna do some quid pro quo?” He had a troubled look on his face.

My curiosity was getting the better of me, but orders were orders. “Can’t,” I responded. “I have been officially instructed not to accept or seek any information on him. I’m hunting Russians in Perak instead,” I finished, trying to keep the contempt from my face, if not my voice.

Roger grinned. “How about this,” he said. “You get so drunk that you tell me what you know, and I accidentally leave part of a copy of my file to date in your hands when I drop your drunken ass off at your flat tonight. You can then accidentally leave that part of the file in your firm’s file, too.”

Americans are strange, but they can be quite clever, too.

Jim looked up as his intercom buzzed. “Yes,” he replied, trying to make the IBM-PC clone on his desk work. This DOS thing was absolutely dreadful, but he supposed it was the way of the future.

His secretary’s voice came through, tinny but clear. “Roger needs you in his office, I quote, ‘Now, please, but mostly now.’”

Jim walked into Roger’s office and noted that the corner room, normally flooded with sunlight, was dark, with all of the blinds drawn. “Everything all right, man?”


His boss turned in his swivel chair and Jim noticed the sleeping mask and the ice pack. “Did you at least manage to beat up the bottle as much as it beat you?” he joked.

Roger managed a wry grin, which in turn quickly became a grimace. “I’d forgotten how much Brits can drink,” he noted ruefully. “Get everyone to packing. We’re moving the office to KL by the end of next week. Call New York, London, and Sydney. We are also adding staff dedicated entirely to government intelligence.”

Jim nodded slowly. Roger was not prone to flights of fancy, and the only thing that had changed since he’d last seen the man two days before was a fishing trip and the discussion of Anwar. “Is this about the Education Minister?”

Roger forced a smile. “I knew it was a brilliant idea to promote you,” he replied. “I want the inside track on the next Prime Minister of Malaysia – and I want to know when we have to leave the country, at least a year before we have to do so. This Anwar is bent on transforming Malaysia, right back to the Twelfth Century.”

Looking back at the time, I’m still amazed at the extent to which Anwar managed to transform Malaysia. He perceived, correctly, that the future and the present belong to the young.

Mahathir, caught up in intra-party combat and his subsequent march through the judiciary, missed this critical moment, and allowed his Education Minister – at the time, more and more his hand-picked successor – to undermine his otherwise-impressive legacy.


Not even Hasan Ali could imagine what Anwar managed in his wildest dreams. The hudud law debates, Islamisation of the schools, PAS’s call to join the Taliban fighting the Americans in Afghanistan, to destroy Israel – all lie at Anwar’s feet.

But that is only really understandable in hindsight. At the time, we knew that Anwar was a ruthless climber who was headed up the ladder to the big chair. He wanted the power Mahathir had carved out for himself, and he wanted it soon. That, in turn, meant being rich, and being backed by even more money than that.

And it is in the accumulation of that wealth, and how he husbanded it, that I return to the story.

End of Chapter Three: Anwar The Islamist Takes Over Education

Chapter Four: The Family Firm Is Launched; Or Anwar, Bhd

One might, in reading what I’ve shared so far, assume that the ex-pat community in Malaysia in the 1980s, commercial and intelligence service, were all Anwar obsessives; or at least, that those of us who contributed to the “I” Files were. This is hardly so. I, for example, was busy falling in love with my Malaysian secretary, working up the courage to ask her out, marrying her, and then beginning a family with her. In between, I worked hundreds of matters, the overwhelming majority of which had nothing or little to do with Anwar, and almost all of which revolved around ending the Soviets’ murderous regime once and for all.

Aside from Anwar’s continued ideological war on the Chinese and Christians – he had banned the singing of Christmas carols at shopping malls and public places, and rearranged the school holidays so Christmas did not fall during the long vacation period – his day-to-day doings did not significantly register for most of us.

Most of us had similar stories. The thing about Anwar Ibrahim, you must see, is that he was very different from almost everyone but Mahathir, in that he rapidly began to occupy the centre stage, and not long after he ascended to the post of Education Minister, one could not run any sort of intelligence operation in KL without running into him, his subordinates, his influence, or his financial connections.

We of course from time to time made him our focus, but usually, he simply appeared again and again on our radar. It was especially in his financial connections that he kept intruding into our daily lives, because as one soon discovered, Anwar had his fingers everywhere, directly or indirectly.


There were already the Saudi ties, of course, and the House of Saud is composed of terribly shrewd investors; they choose their assets carefully, and they always take the long position.

But one did not then ascend the Umno ranks without money, and more than a few ringgits at that. Whatever his other faults, Anwar has always been a keen student of power, and he understood early the need to develop not only his own funding, but an array of financial backers who would help him rise in the ranks.

His financial empire – which has held him in good stead for decades, through good times and bad – began with the Saudis, but continued with his marriage. It continues to this day, and is how he is able to control his party’s internal elections, and how he always seems to end up in the very best hotels when he travels.

It is here that I must beg your indulgence, dear reader. To understand Anwar’s financial empire – how he built it and how he maintains it – will require that we step outside of the chronological narrative I have largely favoured to date. Nevertheless, it is a story worth telling, especially in light of Anwar’s decisions in the 1990s and after his release from prison to style himself one of the common men of Malaysia – at least in his dealings with ordinary Malaysians and Western reporters.

My understanding of the matter began as I was hunting the Communists’’ last vestiges, not long before the coup that overthrew Gorbachev and ended with the complete dissolution of the Soviet Union.

“How is Perak?”


The Yank, a Company man, was not asking me about the weather in the state. As I’d moved up in the world, I’d gained quite the reputation for hounding the Soviets and their allies into the waiting arms of local police and foreign intelligence wherever they hid. My legend was enhanced by my team, a group of brilliant young men from across the globe whose parents to a one had been devout Communists, and had turned away on seeing Stalin’s purges; and by the Americans, who had under Reagan and then the elder Bush launched a multi-front black ops and military buildup war across the globe, determined to shatter the Soviet Empire once and for all. Southeast Asia was no different.

But without being immodest, I was quite good, and I knew it. “Dead,” I replied. “Selangor and Penang are all that’s left, and they’re just stragglers.” I was telling him what he already knew, or I wouldn’t have told him; but we were involved in a clever little game in which he was praising me, and I was pretending not to realise it.

He nodded, a corner of his mouth turning up in a grin. He was almost a stereotype, a muscular fellow from Nebraska with a crew cut and a square jaw, but he was terribly clever, and he knew that Gorbachev was talking about openness to foreign reporters while doing the usual Soviet number on dissidents and ethnic minorities, usually Muslims, at home. He reveled in the Soviets’ demise, and I had him pegged as a future station chief, if he wasn’t already.

But that’s not why he’d come to my office. My new secretary had been uncertain about him, and my old secretary was at home with our new son, so I’d had to clear him in. I was curious, to say the least. I waited for him to speak, and very shortly, he did.


“We’re worried about Malaysia,” he said. I was a bit perplexed – hadn’t I made clear to him and the Box 850 fellows who had my office bugged (telephone, desk lamp, door handle, and left blind string) that the Russians weren’t a threat anymore? – but seeing the look on my face, he shook his head. “Not about them. Have you come across anything about any … Government ministers while finishing Perak?”

Before I could nod, he opened his briefcase. “And would you be interested in some quid pro quo? For you, and for the folks listening through the draw string in your blinds?”

Readers by now will be familiar with Anwar’s early financing at some level – the Wahhabis became his foremost financial backers, and remain so to this day. The devil, as they say, is in the details, and the details are remarkable.

By the mid-1980s, it had become obvious that Wan Azizah had brought more than love and devout faith into her marriage to Anwar. She had also brought a spine of steel, more than a little ambition, and a great deal of wealth through her family’s substantial holdings.

His wife had provided much of the seed money for his political career, the Saudis the rest. Anwar’s net worth at the time was estimated – according to these American numbers – at roughly $35 million, a not insignificant sum in 1990. It would grow with time; most private estimates today put his family’s worth at roughly $4 billion.


Most of the papers I received that day were simply warming over much of what we already knew: The Saudis funded Anwar both directly and through the increasing number of third parties through which he was tied – universities, NGOs, and banks with significant ties to the man who, it was believed, would be Finance Minister within a year.

The growth came through some of the canniest and most blatantly corrupt financial dealings Malaysia has ever seen. He was always careful to leave the direct wealth accumulation in the hands of proxies in and out of Government – except in Bumiputra shares, an oversight that would cost him dearly at a critical time.

His involvement in Communist funding was more extensive than one would think, but we believed it was quite accidental – the Saudis had no love for the militant atheists in Moscow, and even less for the rival insurgents they had planted against the Saudis throughout the world. His name, his front companies, his personal banking arrangements – all arose more from his omnipresence than any sort of explicit association with the Russians.

But the new details were quite something to behold.

One name recurred again and again, one I’d not to that point seen connected to Anwar: Saleh Abdullah Kamel, one of the wealthiest men in Saudi Arabia. The Americans were some of the least trustful allies the Saudis had – quite the statement, to be sure – and they were diligent trackers of the wealthiest of the wealthy. Saleh Kamel had founded Al Baraka Bank, the largest source of Islamic finance in the world, and had generously spread his wealth around – with a catch.


His money went exclusively to Saudi proxies and their causes. Anwar was a direct recipient of a great deal of his largesse, and had been since his ABIM days. Saleh Kamel would become important again later in the I-Files, but at the time the extent of his fingerprint was already remarkable. Anwar’s radical charities in other countries, his charities here – all of which of course paid him some sort of management fee – and his every project at home received some amount of Saleh Kamel’s largesse.

All of this would be remarkable enough, but even then, those of us who did wetwork against the Soviets knew Al Baraka and Saleh Kamel from another source: He funded the mujahedeen in Afghanistan, or more accurately, the mujahedeen who truly believed in the Saudi vision. He funded the madrassas in Pakistan and the unreachable parts of Afghanistan that would birth the Taliban a mere handful of years later – even then, we were aware of some of the danger he posed.

Al Baraka would later be Osama bin Laden’s and al Qaeda’s first choice in banks, a fact that have never seemed to bother Anwar or Saleh Kamel – and certainly did not slow Anwar down from joining the board of Al Baraka on leaving prison. He even proudly boasts of it to this day.

Anwar understood the importance of maintaining a good relationship, and so worked to keep his patron happy. In 1994, while Finance Minister, Anwar privatised Bank Islam (which Anwar himself had founded), selling 2.89 million shares to Joint Arab Malaysian Investment, which already controlled 5.27 million shares. JAMI’s largest shareholders were Al Baraka and Saleh Kamel; Anwar’s longtime associate Kamaruddin Mohd Nor, several Saudi-controlled companies, and a handful of Anwar front groups were the remaining major shareholders. JAMI saw hundreds of millions off of the deal through off-books transactions.


As Finance Minister, Anwar always made certain that Al Baraka and Saleh Kamel received their share – they, and a mysterious figure we would come to know as ‘Mr Ten Per Cent.’

The relationship has always been symbiotic. Anwar has over the years taken “consulting fees” for “introducing” foreign firms to Al Baraka and other Saudi enterprises; for example, in the last decade, he took $25,000,000 from the Hong Kong firm Pearl Oriental to “solicit investments” from Al Baraka.

It’s good to be the king; or, failing that, the Finance Minister.

There was more, and it filled in more gaps that we’d never imagined existed from Anwar’s early days. Ahmad al-Haj Totonji, the Iraqi who had apparently brokered Saudi funds to Anwar during his ABIM days, and Dr Abdul Hamid A Sulayman, his superior – and Anwar’s appointment as second Rector of the International Islamic University Malaysia – helped fund Anwar’s first American project, the International Institute of Islamic Thought. The Institute was not only a way for Anwar to help internationalise Saudi teachings under the cover of working with the more moderate factions of the Muslim Brotherhood, it was also a channel for Saudi funds into Anwar’s coffers.

The IIIT would be a money channel for funds to pour into other groups and enterprises Anwar controlled through surrogates over the decades. Over tea and spread manila folders in 1999, some colleagues and I estimated he’d made somewhere on the order of £30 million off of IIIT’s several ventures, in funds nominally dedicated to spreading a moderate and tolerant version of Islam.


By now, Anwar’s closet extremism and his Saudi ties were no surprise; his ties to the advocates of violent jihad, however, were a bit jarring. The files also suggested that the Saudis had taught Anwar the value not merely of front companies, but of dealing with banks who could be trusted to be discreet, and who could maintain anonymous accounts indefinitely. The size of those accounts was an outright mystery.

We eventually learned the size of some of those accounts. By the time Anwar made his putsch attempt on Mahathir, he apparently held roughly RM3 billion in Bank Negara, through proxy accounts and straw holder accounts – a neat little trick he’d learned from the Saudis, who hold so much of their wealth in Asian and, until recently, Swiss banks through dummy corporation after dummy corporation. Although we had some inklings before Abdul Murad’s statutory declaration just after Anwar’s fall, the sheer scope of Anwar’s holdings in Malaysia simply stunned us all as much as it did Mahathir.

We’d thought we had him pinned down, but there he was drawing down tens of millions of ringgits at a time underneath everyone’s nose. More importantly – as we would later discover – Anwar had used those very accounts to create the network of public relations consulting agencies that would later rally to his side after his downfall.

But that is getting ahead of the story a bit.

Though much of this was an open secret in KL at some level, Mahathir was absolutely blind to it.


He was still fighting his internal battles, and Operation Lalang had damaged both the Barisan Nasional coalition and Mahathir’s attention to his own Cabinet. It seemed beyond dispute that he was relying more and more on Anwar – faithful Anwar, who’d stayed with Umno Team A, who had become the perfect party man – to reliably keep doing whatever it was he was doing. Mahathir was too busy doing a march through the institutions and repairing his coalition to notice the corruption and extremism developing just beneath his nose. Or perhaps he did not wish to see it.

One place where money was already flowing was the new administrative capital, for which Mahathir had selected a choice spot in Selangor. Mahathir would later boast of the extent to which planning, materials, design, construction, and waste removal were handled by companies domestic to Malaysia. The files made clear that Anwar intended that his own, and his patrons’, companies would be those domestic corporations.

Anwar’s time in Government was therefore both a blend of cronyism and radical Islam, and a level of corruption and profit-taking from the public on a scale that would shame a lesser man. But then, Anwar never thought himself a lesser man, which is perhaps why he always seems so surprised when challenged in public.

But in the 1990s, Anwar intended to be the indispensable man, more than Mahathir had ever imagined being. And he was well on his way.

That, in turn, led to Petronas.


Roughly a month later, I was puttering about the office, trying to determine if I was needed that day or not. The tremendous advantage to being the boss is that one need only ask oneself permission to check out for the day; the tremendous disadvantage is that one rarely gives oneself permission.

This was shaping up to be one of the exceptions. Like most new fathers, I was convinced that my son had reinvented the fact of infancy, and his every movement was a delight. We were trying him on solids, and I was inclined to see him spit up first-hand. I called in my most senior subordinate to hand off some tasks.

By the time Phillip entered, I was already mentally on the walk home. I motioned for him to sit and opened my mouth when he uncharacteristically intruded.

“Sir,” he began, his American upbringing showing. Half-Chinese, half-Welsh-French-Something American mix, I suspected he’d be supplanting me in this operation soon. No matter. Today he was my excuse to depart early. “Have you seen the latest data on Petronas?”

This was quite the last thing I’d expected him to say, so I reached across the desk to receive the folder he was handing me. I opened it up and resigned myself to being around a bit longer. I read, reviewed the graphs, stopped on the second page, backed up, started again, and finished. I closed the folder and looked up.


“What are they doing with the money?” I asked. Piercing through the financial gobbledygook, graphs, charts, and formulae was a single conclusion: Petronas was apparently selling a small part of its oil at a price well below market. Not all, not most, and unless one was running intelligence on the biggest companies in Malaysia, not enough to notice.

Phillip had noticed. Bright lad. However, he was as puzzled as I. “Not sure, chief. A lot of state oil companies use this as a way to take assets off the books. They allow majors to take the oil at a low price, sell at a good markup, split the difference with the state oil company, and the state concern gets to book a loss and take an off-books profit at the same time.

“Thing is, this is so small. It’s barely worth the trouble. It’s almost like they’re running a pilot operation, trying to see if they can manage this without getting caught.”

“They?” I asked. “Is ‘they’ Petronas or some of its executives?”

He frowned. “I’m not sure,” he said, tasting the words as they left his mouth. “Without better contacts inside, I’m not certain there’s any way to tell.”

I steepled my fingers and thought for a moment. The sun was shining, the weather was unusually pleasant, and I had a beautiful wife and baby at home. Phillip had a young wife who was expecting, too. Most of my team either had families or were auditioning for the process.


“Close the office for today,” I announced. “Petronas isn’t going anywhere, the difference in the list price and the spot price won’t change, and we need a break.” I stood up, grinning, and practically raced home, feeling like a schoolboy let out early.

By itself, that episode apparently had little to do with Anwar; I tell it because like so many of the stories in the “I” Files, it would take later data to understand how it all tied together.

Friends of Anwar from his university and ABIM days had a way of entering into important positions in Government, state-owned industry, or private industry with Government contracts.

Over a decade later, I would discover Petronas apparently doing the same thing, but on a larger scale, never bothering to identify its rationale, and unwilling or unable to explain what happened to the difference or why they were using an under-market pricing method.

Digging to the bottom of that yielded more Anwar Ibrahim.

Another name would later be added to these files. Hassan Marican, who was in 1990 a rising star in Petronas, drew an enormous number of foreign intelligence reports. He’d been recruited there by Basir Ismail (Chairman of Petronas at the time, and a close confidant of Dr M) just a short time before, and was already making waves – and clearly aiming for the Presidency, then occupied by Azizan Zainul Abidin.


Hassan’s rise mirrored Anwar’s rise – if the files are to be believed, not coincidentally. Hassan’s father had been one of Wan Azizah’s father’s colleagues in Psy-Ops in the 1970s. Hassan had attended Malay College, a scant five years Anwar’s junior there, and had walked into the network Anwar developed. Anwar and Hassan worked hand-in-glove to engineer Hassan’s rise up the ranks. By 1995, they had engineered Basir’s retirement, moving Azizan into the position of Chairman. The petrochemical group naturally needed a President and CEO, and so Anwar proposed Hassan.

Mahathir was uncertain – Hassan was only 43 at the time – but by then, the old man trusted his Deputy Prime Minister implicitly, and so agreed to the appointment.

Hassan therefore had full rein on Petronas’s coffers – and, more importantly, its operations. The trickle of underpriced crude Phillip had noticed expanded significantly and almost immediately, and all of our intelligence indicated that the missing money was being directed to Wahhabi and radical causes. As time went by, numerous intelligence services, including the Americans, developed credible information that Petronas – which had numerous Anwar allies and friends in its upper echelons – was diverting funds to Anwar front groups at home and abroad.

But the files told a bigger story. Price fixing was only the cleverest of the schemes the two MCKK men worked up together. Anwar cronies and vassals received the choicest construction, development, procurement, and service contracts from Petronas – billions of pounds’ worth.


Between them, they almost singlehandedly created what amounted to an oil mafia, a source of constant graft and kickbacks to fund Anwar’s war chest and to help him in his drive for Mahathir’s seat.

All of this had the effect of diverting untold billions in revenue and savings from Malaysia’s crown jewel – and source of so much public money. For all of the file material on this matter, for all of the several pages of graphs and analysis, there is no indication that either man lost a night’s sleep over this.

Hassan was an interesting fellow in his own right. A frequent and open lover of alcohol – he was regularly observed nursing a tall draught of beer at the Long Bar of the members-only Royal Selangor Club – he was prone to let the wrong word slip with a bit too much beer in him.

More than once, he’d talk about his close relationship with Anwar – and with Mahathir – and of holding both men’s affections as hedges against the other. There is a reason that he supported Mahathir’s various pet projects aside from the enormous kickback system he and Anwar developed – Proton, Putrajaya, the acquisition/bailout of Mahathir’s son Mirzan’s disaster of Konsortium Perkapalan, all because he was determined to ride both men’s coattails as long as possible.

It was only when Najib Razak became Prime Minister and summarily engineered Hassan’s removal from Petronas that this enormous source of funds would stop flowing to Anwar.


Whether all of this was true or not was – when I first heard of Petronas’s price fixing – not my concern, but in toto, it completed a web of funding that explained how Anwar, who had had so much taken from him after his fall, was immediately able to resume his old lifestyle at home and abroad much later, in 2004.

Thus, the story of Anwar is much like the story of a spider and its web – always adding a strand here, tending a strand there. Like his patrons the Wahhabis, he learned early the importance of taking the long view, and developing contingencies and protectors. It is thus that he began cultivating foreigners – especially Americans of both major political parties – and thus that the next chapter begins.

End of Chapter Four: The Family Firm Is Launched; Or Anwar, Bhd

Chapter Five: Beyond Murad Khalid: The Real Story Of Anwar, Bank Negara And The Money Machine It is my hope that you will forgive my absence these past few weeks, dear reader. I had planned on expanding on the story of Anwar’s finances and wealth accumulation, and how he used the resources of the very people he’d sworn to serve, but events in Malaysia raced ahead of me.

When I saw the reports about Bank Negara and the RM3 billion, I decided to pause, and see what was being released or alleged before continuing with recording these files.

I would like to imagine that I had some role in the Malaysian Anti-Corruption Commission’s renewed interest in Anwar’s dealings during his time as Finance Minister and Deputy Prime Minister, but my self-regard is not that high. Regardless, with all of the scepticism surrounding the story, I wished to allow the increased interest in Murad Khalid’s statutory declaration and the allegations contained therein to die down a touch before I waded back in.

This is precisely because the allegations are substantively correct, but wrong in almost every detail. And the story of Bank Negara is merely a small piece of a much larger puzzle.

The story of how we all – each of us who contributed over the years to the I-Files – put together Anwar’s money trail is a rather long one, and if told in full, would put too many names and too many dangerous secrets in play. Instead, I will provide you with some of that back story, based on documentation and eyewitness accounts, and focus mainly on the money itself as it moved from place to place, growing as it went.

We will follow the money.

Chapter Five: Beyond Murad Khalid: The Real Story Of Anwar, Bank Negara And The Money Machine

Telling the story of Anwar Ibrahim’s money is rather like telling the story of the Pacific Ocean: Where to begin and how to end is a feat in itself. I pray that you will indulge me, as this story once again moves from place to place and time to time. It was once said that Anwar’s money washed across five continents, and I had been sincerely doubtful of such a claim until the I-Files actually coalesced, with documents; and then I understood how very true this statement was.

One must understand that Anwar’s personal fortune, before he became Finance Minister, was a significant increase over what he had every amassed or dreamed of amassing in his ABIM days, but was not nearly enough to fuel what he needed to move ahead in the world.

That all changed with the birth of Mr Ten Per Cent.

I remember the first time, not long before Anwar became Deputy Prime Minister, that we gathered together, the commercial types, the station chiefs, the Yanks, Aussies and Brits, and we spoke of the man who was increasingly important to commercial and government interests in Malaysia. This meeting was also the first time we informally began aggregating and crosschecking our work. We of course held back the occasional uncertain tidbit here and there; but generally, we began working from the same sheet, because we had no choice.

It was 1993. We were all gathered around a large table, the eight of us. Four Brits, two Yanks, two Aussies. We’d all softened a little around the edges from our hellbusting days, just a decade before, even those of us who kept in fighting shape.


But every last man at that table had seen military, intelligence, or commercial service. Our minds were our best weapons, and we were gathered to put those weapons to a common use. We were there to discuss oil prices, unrest in the Middle East and our ventures there, and most importantly, Anwar Ibrahim.

We had eschewed servants for this meeting, swept the room twice over for bugs, and we were using the best (and most expensive) transmission-blocking equipment known to man in order to keep this meeting secret. We took all of these precautions because we were all convinced that Anwar was both brilliant and dangerous, and we needed every advantage we could get.

Roger, the American I mentioned earlier, opened his folder, one of eight identical packets around the table. Photos of Anwar with Mahathir were moved aside for a series of intelligence reports acquired from Singapore, Washington, London, Canberra, and Ottawa. “The first problem,” he began without preamble, “is ‘Mr Ten Per Cent.’” We flipped to the appropriate tab, though I’d already read this section twice over. “Every single major transaction and public listing now requires a ten per cent fee, as it passes through the Finance Minister’s office. No fee, no listing, no contract, no Government approval.” It was all through witness interviews; inside Finance, never a record of the ten per cent. It was all done via friends, cronies, proxies, and outside, rented hands.

“The question before us is this,” he began, holding up a stapled ledger of the fees we’d managed to identify, dozens of pages thick. “Why is Anwar Ibrahim after this much money? He’s already filthy rich.” The total, circled in black felt marker, was in the high eight figures.


The man had done well for himself – multiplying the family fortune many times – since ascending to Finance Minister, through what we believed were the use of his hidden accounts at Hong Leong and Bank Negara, but this seemed to be somehow too simple, too crude. Mere accounts? No, there had to be more to it. And there was, as we would soon discover … much, much more.

I kept my counsel, as Roger and I had agreed I would. Stephen, one of the Australians, spoke up. “The Umno General Assembly is in October,” he said, quietly. “He’s looking to go from Finance Minister to DPM, and Ghafar Baba is in the way.” We all nodded.

Roger had clearly rehearsed this part. “How many votes has he lined up?”

Stephen again. “Enough to crush Ghafar,” he said. Then as now, becoming Deputy President of Umno was the sine qua non of being Deputy Prime Minister. “Mahathir is encouraging his ambition, like he needs it,” he laughed a little. “I don’t think poor Ghafar sees it coming. We know Anwar’s already dropped tens of millions of ringgits into this and is actively pouring in more.”

TO: CENTOPS FROM: HIBISCUS GS15/7 CC: USECSTATE- SEA RE: MY/KL/AI

… MFINANCE/AI is part of the “cost of doing business” now. Old stories of UMNO corruption light by contrast. 10% of all listings and contracts are directed to MFINANCE/AI. Receipts YTD estimated at $20M.…


I will turn to the story of the end of Ghafar Baba’s career presently. However, first one must understand where Murad was simply in error – through no fault of his own, as the events at issue were well above his rank. This is because Anwar’s financial holdings were never so simple as ‘straw man’ accounts or “master” accounts or “shadow” accounts and straightforward deposits; that was all that Anwar would have allowed Murad to see or to think.

To completely understand Anwar’s finances, one must understand the network of associates and cronies he developed. For example, Nasaruddin Jalil, Anwar’s former private secretary, worked hand-in-glove with his old patron after Anwar became Finance Minister. As director of Diversified Resources, Bhd, Nasaruddin profited from Anwar’s largesse and connections in everything from minibus servicing in KL to joint ventures with Proton to develop new vehicles.

The latter is especially remarkable, as Diversified took a 51 per cent share in the joint venture, despite no experience with developing automobiles. Anwar, naturally, took his share, invisibly as always, and his network of cronies and their companies enjoyed exclusive supply contracts with the venture.

When the Diversified-Proton joint venture teamed with Citroen to produce a round of Citroens bearing the Proton mark, the joint venture increased Anwar’s funding yet again. Murad’s statutory declaration insists that Anwar simply ordered a disbursement of RM10 million to Nasaruddin. If that had been the case, Malaysia would be a much richer country today.


As another example, Abdul Rahim Ghouse, one of the more pivotal of Anwar’s henchmen, bears particular scrutiny not only for his well-known ties to Anwar, but the manner in which he served as a gateway to so many others.

Rahim was well-known when Anwar was sacked, and later led the Free Anwar campaign from Perth, to which he fled immediately on Anwar’s arrest. That flight helped solidify much of the intelligence we had on the men and their ties, as so few of Anwar’s cronies actually left the country.

Rahim, together with Wan Hasni Wan Sulaiman, founded Abrar, a company at the centre of so much of Anwar’s business dealings; the other founder was Yassin Qadi, a Saudi businessman who would become famous in the early part of the millennium as one of al Qaeda’s funders, a terrorist financier identified as such by both the United States and the United Nations. Abrar was one of Anwar’s funding arms, and was, according to American and other intelligence agencies, used to hide and funnel assets to Hamas, al Qaeda, the Taliban, and other groups reliant on Wahhabi funding and support.

Qadi was but part of the web of Wahhabi financiers, like Sheikh Saleh Abdullah Kamel (whom I mentioned in the previous chapter), who financed and sponsored young radicals such as Anwar and others in Turkey and Indonesia. Saleh Kamel then enjoyed lucrative contracts and the opportunity to build Wahhabi teachings and influence into developing Muslim states.

Qadi’s chalet in Switzerland was raided during the hunt for al Qaeda, and there authorities found phone records for only a handful of people – Anwar, Wan Azizah, Hassan Marican, a handful of Petronas executives, and various up-and-coming Turkish politicians.


Qadi would also rely on Turkey and future Turkish Prime Minister Recep Tayyip Erdogan and other founders of the Islamist party, the Justice and Development Party, or AKP, for protection and access – but Anwar’s extensive ties to Turkey are yet another story, and for the next chapter.

Wan Hasni, though a multimillionaire from his support for and ties to Anwar, would fall when Anwar was dismissed in 1998; until then, he provided not merely a veneer of academic legitimacy, but also another source of funds for Anwar’s various off-the-books enterprises.

Rahim took part in and benefited from Anwar’s largesse. From his student days in the US in the 1980s, he integrated himself into Anwar’s Malaysian Islamic Study Group, one of several radical Muslim Brotherhood/money-laundering fronts Anwar had made his own, and eventually rose high in Anwar’s councils. Rahim himself and his children have benefited from the International Institute of Islamic Thought, Anwar’s foremost charity/financing front; Rahim’s children have received more than $200,000 from the IIIT.

Some years later, an Australian sat down in an office in a Singapore office tower so well airconditioned one might have thought it winter in Glasgow outside. On the other side of the conference table were two men, one from Hong Kong, one from Malaysia. The latter was a former Bank Negara officer.

The Australian had been sent by a group of men in Malaysia to peel apart the layers, to dig beyond the legend and the many stories of the fallen Deputy Prime Minister, to understand why and how he had fallen, and what had happened to the wealth they were certain he’d gathered before his sudden fall.


Just days before, another BNM officer, Abdul Murad Khalid, had given a sworn statement in which he claimed that the fallen Umno man had controlled billions of ringgits in the bank through proxies and straw men.

That confirmation of their long-held suspicions sent the ex-pats – my close associates who were then formally compiling the I-Files – looking for the real answers.

The Malay turned to the Chinese fellow, who nodded. The bank officer straightened his tie, took a sip of water, and remembering what had been promised on both sides, took a deep breath before speaking.

“Anwar Ibrahim’s money has washed across five continents, and is moving even as we speak,” he began.

Once a deal was done, once the fees were skimmed, once the cash was available, Anwar very rarely kept those funds immediately in Malaysia. He preferred them to flow offshore, via front companies, via obscure and less obscure banks, and always via others, never in his own name.

What he kept in Malaysia tended to be only what he needed on a daily basis. Call it petty cash. Call it operational funds.

That is not to say he did not use Bank Negara for his money; rather, it is to say he used it to move his money, rather than to hold it. Without Bank Negara to turn a blind eye, to allow and clear the massive capital flows he needed, Anwar’s financial operations in Malaysia and beyond would have come to a grinding halt.


This was not a story of “master” accounts or “shadow” accounts as has been written recently in the Malaysian media. This was a story – in part – of shadowy, but very senior Bank Negara officers who helped Anwar to make sure that huge capital flows were not subjected to any scrutiny, so that the money was allowed to move in and out of the country.

Anwar relied on a complex web of Malaysian and foreign accountants, financial advisers, tax lawyers, brokers, and other financial professionals to not only comply with, but to cleverly exploit loopholes in and shelter, a sprawling financial empire. He ran his operations from Malaysia, but his money rarely stayed for long in one place. Some of those lawyers and accountants also moved around, and switched sides, and (in exchange for the appropriate gratuity) they brought to our little team of expats, one at a time, some of the paper trail.

There were five primary holding centres for the money, through which Anwar’s web of confidantes and assistants constantly shifted the mass of his funds, chasing alpha (and beta), and using the proliferation of financial tools that became available in the 1990s to massively expand the resources Anwar would eventually need.

The story begins, as with so much else, with IIIT. Nominally a not-for-profit formed in the United States to broaden Islam’s outreach to the world, and actually operating to advance its Saudi funders’ goals, it was frequently utilised as Anwar’s personal vehicle. IIIT served a number of functions, including as an influence driver and a financial vehicle.


Despite FBI raids and lurking suspicions of terrorist involvement, nothing ever stuck, and IIIT meanwhile procured Anwar access to influential policymakers in the US Government and academia – associates of Paul Wolfowitz and other so-called neoconservatives, men who aspirationally seek democracy across the globe, even where it already exists.

IIIT eventually provided a means of direct access for Anwar, Qadi, Rahim, and others in Anwar’s personal circle to influential Washingtonians both inside and outside of government. Members of then-President Bush’s, then Clinton’s, then the younger Bush’s inner circle were treated to conferences, honoraria, and paid junkets to exotic locales to reinforce IIIT’s nominal message of moderate Islam – and to develop close ties to Anwar and his cronies. The names constitute a veritable who’s who in Washington over the years from both parties – Al Gore, Dick Cheney, Paul Wolfowitz, Grover Norquist, Bill Cohen, Richard Perle, Madeleine Albright, Donna Shalala, William Perry, Colin Powell, Michael Chertoff, Richard Holbrooke – and those same men and women would rally to Anwar’s defense when he was tried and imprisoned for corruption and sodomy. They all received Anwar’s friendship and, in some cases, largesse.

Cohen as Secretary of Defense; Gore as Vice President; Holbrooke as State Department honcho; and Wolfowitz as Mr Pentagon and then World Bank president, and even later, in disgrace, became Anwar’s staunchest defenders.

Little did they know.


Those same men and women would provide reciprocal legitimacy for Anwar. Norquist, for example, became one of Anwar’s foremost enablers, turning his tax-cutting bona fides into a lever to propel Anwar into close confidences with Republican leaders. Norquist, who married a Muslim, would direct charitable giving to and with IIIT, bolstering Anwar’s causes and his own standing.

Those ties, in turn, opened doors for Anwar into American business, consulting, speaking, and advising on interactions with Islamic governments and finance. Anwar is able to play the ‘good Muslim’ to Americans with little practical experience in the Islamic world, guiding them to favourable investment opportunities – companies and firms with ties to Anwar.

But the real story of IIIT is its role as the wellspring of Anwar’s financial network.

From: daemon.fbi.gov Fri. April 18 14:02:34 1997 Received: from waco1 [xxx.xx.xxx.xx] by choo-choo.fbi.gov [xxx.xx.xxx.xx] ID ticklemedead Fri. April 18 14:02:35 1997 Subject: Welcome to Paradise KL Style To: [email protected] Date: Fri. April 18 14:02:34 1997

… Intl Institute Islamic Thought ties to House of Saud secondary to moneylaundering. SecDef believes Saud financing BLOWBACK through international fronts dedicated to Islamic engagement – believes Holy Land Foundation and Center for American Islamic Relations direct launderers. FBI-INT believes IIIT is primary funding conduit, but SECDEF has warned off and FBIDIRECT agrees …


IIIT began taking in Saudi funds for Anwar more or less from its inception, but it was only when Anwar became Finance Minister that its capital operations skyrocketed – with funds from Abrar and from Anwar’s own direct contributions. Some of the ten per cent Anwar siphoned from every public listing and every Government contract flowed indirectly to IIIT and to a handful of private accounts it controlled.

Murad’s assertion that Anwar directed RM2 million to IIIT is low by orders of magnitude; it appears that he confused amounts sent to ABIM (which he gives as RM5 million) with the amounts directed to IIIT. By the time Anwar was sacked, IIIT is said to have controlled or owned, always indirectly, roughly US$350 million in securities, real estate holdings, and liquid assets. Before they flowed into designated banking centres, they passed through an amazing network of companies and banks.

This was the way the Anwar money machine functioned, always indirectly, always via a variety of entities, from the British Virgin Islands to the Seychelles, from Singapore to Liechtenstein, and beyond.

Funds were poured from central holding stations, always offshore, in the form of seed capital, SWIFT transfer, and financial investments, mainly to four other banking centres: Islamabad, Geneva, Tel Aviv, and Hong Kong, which over time became self-sustaining. From there, each banking centre moved multi-denominated currency into opaque management funds, usually but not always run by Al Baraka, Hong Leong, Bank Al-Taqwa (a specialised Wahhabi institution that funds terrorism in the Middle East), and other more obscure institutions such as the Panama affiliate of PKB Bank of Pakistan, which was run by the veterans of Pakistan’s notorious BCCI before it shut down.


That money, when it was allowed to flow back into Malaysia as dividend income for nominees or as investment capital for front companies, or occasionally, as cash, would be vital for Anwar’s political projects – unseating Ghafar, attempting to topple Mahathir, even, in 2008, attempting to purchase Dewan Rakyat MPs from Sabah and Sarawak before the bungled September 16 promise came crashing down.

When it came time for Anwar to draw on enormous sums – such as when he was crushing Ghafar, and making his move on Mahathir – there was “a great big sucking sound,” in the words of one of the compilers of the I-Files, a Yank who had served two tours of duty in KL, as money was drawn from across the globe, through a very particular bank – one we all thought was dead and buried.

“Israel Discount Bank,” the Malay said after a long pause. It was the third day of this lengthy debrief meeting, and by now everyone was on a less tense and more friendly basis. Drinks had been had, meals shared, and the first part of the Aussie’s consideration delivered as promised.

“Anwar’s hatred of Jews never precluded making money off of them, and he’s long supported finance in Israel as a means to an end. IDB was the perfect location for funds – Mahathir would never look there, and with his radical leanings, no one would imagine Anwar would keep a penny there. They had the expertise, the discretion, and the international connections Anwar needed. And no one could ever trace any of the funds back to Anwar, because some of the companies used in transfers were regular, even respectable, and none owned by Anwar. So, no — no fingerprints at all. IDB could honestly say it knew nothing. As always, there was plausible deniability for both Israel Discount Bank and for Anwar.”


The Malay paused to catch his breath before speaking again. “The masterstroke,” he said, “Was keeping that wire line open from IDB to Pakistan.”

The trail of money from Tel Aviv led to a run-down back alley in a Lahore slum. The fellow who went to investigate this part was an American with combat experience in three theatres, a former Navy Seal who spoke Arabic and Urdu as smoothly as he spoke English, and whose numerous knife scars around his liver were a testament to his longevity. His hand-selected team were men of similar disposition, including a Gurkha. Their stories alone would make an engrossing read, but for their sakes, I leave their story to their own telling.

In that back alley was a permanently-ajar door with a single man, armed with a 9mm pistol and a brutal combat knife, permanently stationed before it. By providing dearly-obtained pass-phrases and a bulging briefcase filled with American dollars, the men were able to pass through the door and the balmy corridor beyond.

Inside was one of the most sophisticated banking centres in the world. Clocks set to every time zone on Earth, computers sporting the latest high-end processors, T1 lines, and posh offices that all pointed in toward a single, teak table at which some of the most important financial decisions in the world were made on a daily basis.


This was the hidden bunker for a group of veteran Pakistani, British, and Egyptian bankers who had for a long time danced in the dark, enjoying macabre relations with Langley in Peshawar. They were men who had financed extremists, kept narco-money for the druglords of Colombia, and whose scandal, known as the BCCI affair, ultimately brought the City of London near to to its knees in 1991.

And now they were reborn, at the service of the highest bidder, including a certain up-and-coming politician from Malaysia … End of Chapter Five: Beyond Murad Khalid: The Real Story Of Anwar, Bank Negara And The Money Machine

Chapter Six: Inside Anwar’s Money Machine The Bank of Credit and Commerce International, a privately-held institution based in Luxembourg for corporate purposes, publicly closed and indicted by numerous countries in the early 1990s, was in fact still operating from that dilapidated façade in Lahore for more than a decade after its closure. Well not exactly the bank, but its bankers – unofficially, of course.

In the annals of international banking, BCCI earned special dishonours for serving as a moneylaundering operation for everyone from the Medellin narco-terrorist cartel to the Abu Nidal terrorists – murderers of Jews and Arabs alike by the end – to the CIA’s funding of its operations in Afghanistan, including the training of anti-Soviet fighters by a 1980s favourite of the CIA, a fellow named Osama bin Laden.

The bank had been founded in 1972 by Agha Hasan Abedi, a Pakistani financier whose disciples would become friends of the Wahhabis and of Anwar’s inner circle. At its peak it operated in 78 countries, had over 400 branches, and assets of US $21 billion. It was, by the late 1980s, the seventh-biggest bank in the world.

The men who had established BCCI were some of the most talented bankers on the planet, and when BCCI met its nominal end in 1991, they had reached out to select patrons, determined to rebuild their operations in a more careful setting. The CIA, which had disavowed any involvement in BCCI as the institution came to what appeared to be its end, recognised the value of having a black-ops bank with worldwide offices, and so helped the men from BCCI swing back into work – unofficially, of course.

Chapter Six: Inside Anwar’s Money Machine

In a crushing double-irony, BCCI would both become Osama bin Laden’s bank of choice (after Al Baraka) and, even more perversely, through a handful of its surviving veteran bankers by now operating in a new clandestine network in 2011, also one of the funding arms through which Osama’s execution was effected.

Anwar, perhaps unwittingly, was introduced to some of the BCCI veterans in Pakistan by his former speechwriter, Munawar Anees, and his ghostwriter, Faiz Abdullah. The former, a Pakistani with long ties to both Pakistan’s ISI intelligence service and to some of the financiers who reconstituted BCCI, was instrumental in establishing Anwar’s financial network.

Anwar’s entry – not directly, but through others – into the network of BCCI veterans was vouched-for by Paul Wolfowitz, whose ties to BCCI went back to his days in the Reagan Administration, and to one Douglas Paal – of whom we will speak more shortly.

Anwar relied on a network of front companies anchored by deposits, transactions, and fund transfers through the remnants of the BCCI network, Israel Discount Bank, Al Baraka, Hong Leong, and a Hong Kong-based entity called Hong Kong Venture Ltd. Through his Saudi patrons, and through the network of bankers, tax lawyers, and financial specialists he employed, Anwar and his cronies established a network for financial transactions and investments through which money was washed again and again over time. It was a very big laundry machine.


In a curious choice, Anwar’s special-purpose investment vehicles were almost always named some variation on Black Rock. Those vehicles would invest and hold funds, sending them back into the main network as needed. In this way, around RM4.5 billion – not the mere RM3 billion Murad describes – sloshed its way around the globe up until the time of Anwar’s sacking in 1998. Since then, it appears that the mechanisms remain basically the same.

An example should suffice.

In early 1997, as a small part of the “sucking sound” of money being drawn back into Malaysia in advance of Anwar’s attempt to bring down Mahathir once and for all, US$15 million was wired from a surrogate used by the ex-BCCI team to Hong Leong accounts through Bank Negara. Those funds briefly passed through a nominal BNM account number and were never recorded by Bank Negara’s normal procedures. Two senior vice-presidents signed off on the transfer, which was immediately after burned to ash.

The US$15 million began life in four different places:

Some US$5 million came out of IIIT’s central, indirectly-held accounts in Washington, DC, after which it was diverted through a special-instructions account at a very well known US bank whose name it is better not to disclose. It was then sent to Black Rock Capital Advisors and Investment Partners, LLC, a special-purpose entity based in the Caymans that existed partially for investment purposes and partially for transfers. Black Rock never even knew from where the funds really came.


Then some US$3 million went to a special private equity fund specialising in restaurants and food operations in North America. There, it accrued value for a year before being diverted to special accounts offshore; its earnings went back through the New York bank to IIIT’s holding accounts. The remaining US$2 million went to Banque Suisse, and then through a very private Swiss fund which operated a series of special-investment hedge funds for Saudi princes, Gulf emirs, Turkish politicians, and Anwar. One year later, the total earnings – roughly US$6 million – were passed on to other accounts in Islamabad.

Obsidian Investment Partners, an Israeli private equity fund that specialised in opaque transactions for opaque clientele, wired US$3 million to Israel Discount Bank LTD, perhaps the oldest such institution in Israel – and the most discreet. As with all of these transfers, the wire did not have Obsidian’s name on it. IDB held the funds in its Special Investor Accounts, which are largely dedicated to financing Tel Aviv’s booming development – nightclubs, fledgling casinos, restaurants, office towers, residential building – for two years before sending, indirectly, what was then US$5 million to Lahore. As far as IDB was concerned, their client could have been Jewish. Little did they know.

Pitch Marble Holdings, an umbrella group based out of the Caymans with a completely Malaysian board of directors, released US$2 million from its reserves directly to a Pakistani company just two days before the greater total amount was delivered through BNM. Pitch Marble was folded by its nominee administrators shortly thereafter, and disappeared forever.


Just over US$2 million went from Anwar’s special account at Al Baraka (an unnamed account, so not even the bank’s insiders could know with certainty whose money this was) to yet another special account at a prominent bank in Geneva, and from there to a Hong-Kong-based private fund called, unbelievably, Granite Holdings, for a ‘capital contribution.’ Granite released an identical amount to a special subsidiary of a Hong Kong private equity fund, which in turn had been set up five years before to evade Beijing’s scrutiny in advance of the handover of Hong Kong. That special subsidiary served only a select clientele – politicians, the super-wealthy, and other banks.

Once all of the funds for this transaction were present, the entire amount was wired to Bank Negara. From there, it made its way out to some of the people identified in Murad’s affidavit. Anwar was never mentioned by name in any of the wires. Many of the institutions shut their doors not long after making a transaction.

If one opened and closed a company in an offshore paradise fast enough, it wouldn’t even make it into any online listing, especially if the activities took place before the invention of Google. Most of those countries prided themselves on eliminating their paper records as well.

This is but one example of many over the years, and it is hardly the largest such transaction. In advance of Anwar’s silent coup attempt on Mahathir, over RM240 million made its way back into Malaysia, a larger figure back in 1997 than it would be today. Indeed, Bank Al Taqwa, which had ties to Petronas through Anwar’s cronies there and which acted as a financier for all sorts of strange organisations, directed the transfer of over £40 million through multiple branches of the network into Malaysia in advance of the 1998 Umno General Assembly.


Al Taqwa specialised in even more exotic transactions than most – at least part of the £40 million traveled through Oando Group Holdings in Nigeria and Absa (later purchased by Barclay’s) in South Africa before arriving.

However, it is a mistake to believe that Anwar used his money only for direct political gain in Malaysia; he had other fires to tend, as well.

XXXXXXXXX, XXXX From: Wire Desk 9AA1F Sent: 2 February 1998 To: NEW YORK WIRE Subject: INCOMING WIRE/OUTBOUND WIRE AEDPA ALERT Attachments: Wire0015462285302021998.tif

Attached is a wire instruction to receive and deliver off-shore $1 million from an account in Virginia to an account in Grand Cayman. Instruction received at 13:02 this date. The size and turnaround both qualify for enhanced scrutiny and reporting to the New York Fed and FBI under AEDPA wire alert provisions.

Supervisor has signed off on the wire and explained that it is a special instructions wire and not to be impeded. I am directing this up the chain for further decision-making.

“Did you never wonder why?” Phillip asked the fund manager. He got a wry smile in return.


Phillip was both giddy and uncomfortable to be back in the States, and the sudden ubiquity of a chain called Starbucks selling sweet and frothy — he refused to call it ‘coffee’ — drinks seemed to make matters worse – he’d seen the one in KL, but had managed to avoid it. Nevertheless, he’d gamely ordered some horrible latte concoction and nursed it as he delicately asked his old friend why he’d been part of a global money-laundering operation.

His friend – a Californian who had come to New York City to make his name in banking and, by accident, left banking to run a fund with one billion dollars under management – took a gulp of the café-caramel-cream-concoction as if he had been drinking it his whole life. “When a customer instructs us to route money, and he has one of the biggest law firms in the country – the bank’s law firm too – papering it right, why wouldn’t I? When we draw our two per cent every time, and that two per cent rapidly adds into the seven and eight figures, and neither the SEC nor the FDIC nor the FBI nor the Fed is going to make my life miserable?”

Phillip tried not to grimace as he drank the sweet liquid in his cup. “Do you understand where that money was coming from? The same people who tried to bring down the Trade Center in ’93 – you were there! – they’re the ones behind that money.” It was the summer of 2000, the world’s economy was roaring, and no one in his right mind imagined that those same people would succeed a year later. “And what they didn’t put in, the customer skimmed ten per cent off of every, single public listing and government contract in Malaysia for seven years! You moved money that was either from terrorists – or from massive government corruption – or because of who the customer was, or all of the above!”


It was a Starbucks in Midtown Manhattan during the lunch hour rush, so even yelling didn’t penetrate the din.

His old high school chum just gave him a world-weary, slightly condescending smile. Phillip managed not to punch him in the nose.

“We just held and moved money,” he said. “Everything went to different, legitimate, private funds and not-for-profits, every last one registered with the right authorities. I never sent a dime to Hamas, or Hezbollah, or Islamic Jihad, or anything like that! Besides,” he said, “everyone knows that Mahathir had Anwar set up. And Anwar was supposed to be our buddy, isn’t that what the Wolfowitz Directive said?”

Phillip was bothered enough that he missed that question at the time. Sensing that this line of inquiry was getting him nowhere, Phillip changed gears. “Tell me about the money you sent to the Asia-Pacific Policy Center.”

The Asia-Pacific Policy Center features prominently in Murad’s statutory declaration. Again, the substance of Murad’s SD is essentially correct. The particulars are wrong in some of the more salient details. Murad spends an inordinate amount of time on the APPC, so it is perhaps incumbent to point out what Murad got wrong.

Firstly, there is simply no way that Anwar ever suggested that Douglas Paal, the director of APPC (and former CIA analyst), would control Bank Negara’s deposits. Paal is a savvy fellow, and in his line of work, he is one of the tops, from the intelligence world to national security policy to banking to the think tank world.


But Anwar would never jeopardise Bank Negara’s utility by putting Paal in charge. Anyone who has met Doug Paal will tell you that this is a man who may have a superb CV, but he would not have – could not have – managed tens of billions of ringgits of deposit reserves. His value in Anwar’s eyes would have been more about image-building with the Washington establishment than about money, and as a former spook who was now respectable.

Murad was also wrong about how APPC and Paal were financed – and not merely because the amounts he claims were directed to them were far too low. As I discussed above, Anwar kept very little in BNM accounts. Rather, he used BNM as a clearing-house through which his funds occasionally travelled, in and out of Malaysia, and even then, the funds did not go via BNM, they merely were eased in and out of the country with the help of some of Anwar’s friends at BNM.

Beyond that, Murad was basically correct. Paal and APPC were, as he alleged, a part of Anwar’s relations with the West in that they supported Anwar – in testimony before Congress, it came out that APPC referred to Anwar as a “client.” Along with IIIT and APPC, Anwar used ISIS to bring Westerners, especially Americans, to Malaysia. (As Murad notes, these events were always in Malaysia, because that is where Anwar was – and Anwar was their funder.) ISIS came with Noordin Sopiee (the creator of the Vision 2020 idea) a useful, if unwitting pawn, the brilliant, Western-educated Malaysian who, in conjunction with Anwar, could give sparkling dinners to Congressmen who had never left the United States in their lives.


Those men and women would be ferried the next day to special talks given by APPC, who had ties to both parties in Washington, about how Malaysia (under Anwar) was open to the West, and how Malaysia (through Anwar) could be a force for democracy and free markets. By the time they left, they often took with them the belief that if only Anwar were in charge in Malaysia, here at last could be a perfect Muslim democracy.

American liberals – amusingly, overwhelmingly Jews – accepted Anwar’s projection at face value. To them, he was their tabula rasa: A Muslim who cared about the environment, about global peace and nuclear disarmament, about social justice – basically, about all of their core beliefs, yet never with any specific detail – Anwar was the noble savage for these men and women who likely believed Malaysia a tropical rainforest where the natives went around naked most of the time.

Those men and women believed they had the perfect Muslim to help democratise the Islamic world; I don’t believe a single one understood that they were, and are, being played for fools. Doug Paal was a part of this operation, whether he knew it or not. He was introduced to Anwar by Paul Wolfowitz, and he brought a long list of credentials Anwar would find useful in all of his operations. To the West, the former CIA man and member of the American National Security Council was a vital endorser of Anwar’s seriousness and credibility. To Malaysians, he was a sign of the seriousness with which the West took Anwar, and his official-sounding NGO added even more legitimacy.


June 24, 1999 STAFF EYES ONLY

PAAL testified before SFRC about APPC. Questioned about donations by ANWAR IBRAHIM and GOVERNMENT MALAYSIA. Denied GOVERNMENT MALAYSIA funding, admitted that ANWAR IBRAHIM funding amounted to significant revenues for APPC. Denied that full amount stated in Malaysian court affidavit was true. Unable to answer questions about 501(c)(3) and so-called “client list” for APPC. PAAL reminded that SFRC subpoena remains in effect and can be recalled. SFRC adjourned and to resume. PAAL likely not to be called again.

But Anwar’s ties to the West – on which he would rely so keenly later – are only one of the many reasons Anwar was building his war chest. Unlike Mahathir, who came of age when a poison pen letter could bring down a sitting Prime Minister, Anwar understood that to thrive and survive in Umno politics by taking the top seat and holding it, he must be perceived as a hero from any angle. He cultivated favourable ties with journalists and politicians abroad to build international support; at home, he made the conquest of all of Malaysia’s journalism outlets his next stop.

Anwar had learned from his Saudi patrons that the key to political control is control over appearance and image. His frequent outbursts of anti-Semitism at home were ignored in the West because he had so completely convinced opinion-makers that he would never engage in such a thing (a useful effort after he accused the United States and Malaysia of being run by a cabal of Jews in 2010). In Malaysia, he needed to lock down the establishment Malaysian press.


The campaign against Ghafar had been brutal, and well financed. The old man, an Umno stalwart of decades and DPM for nearly a decade, was destroyed back in 1993. Anwar’s rise to the top continued, with only Mahathir now standing between him and the pinnacle, and the wreckage he left behind was not inconsiderable.

We were good, and we had sources everywhere, but despite what one may read in cheap fiction or even John Le Carré, we were hardly omniscient. We nevertheless estimated that a total of roughly 58 million pounds had worked its way through dummy corporations, fronts nominally created for Islamic revivalism, and of course, for Anwar proxies as the Finance Minister booted aside the long-serving and faithful Ghafar. (This, of course, is an area where Murad’s estimate of the amount that went to ABIM was so dreadfully low.)

Not that we had ignored him before – Mr Ten Per Cent made it impossible to do business in Malaysia and ignore him – but Anwar Ibrahim was very much on all of our radar screens at that point. In just over a decade he’d gone from hardbitten, eternal Islamist rebel to the ultimate Umno insider, scaling the political ladder at a speed unseen since Malaysia’s independence.

Even Mahathir’s impressive climb was not so rapid, or so improbable.

Tracking the web of connections that made this rocket-like ascent a reality became every intelligence station’s foremost goal.


Dimwitted ambassadors and reporters could afford the luxury of illusions. Intelligence services are supposed to be the first – and to hear them tell it – most vital line of defence for their nations. A man who’d called for a universal Caliphate modeled on the 14th Century was extraordinarily close to controlling Malaysia’s booming economy and energy reserves, in a part of the world where violent Islam had never taken root.

I’d opened a private consultancy a few years before, and saw which way the wind was blowing. I began a private project called Operation Next, designed to aid intelligence agencies and private firms as they prepared for the next Prime Minister’s ascension before the end of the decade. I never could have imagined that Anwar would royally foul up the entire operation because of his hubris.

I confess that I have never been a great consumer of local news, relying on my own sources for in-country developments and otherwise sticking to the BBC, the Financial Times, the Wall Street Journal, and bits from The Times of London. So it was that the stories of Anwar’s attempt to take control of the New Straits Times Press and TV3 were beneath my radar for another few years yet.

Others, however, were sensitive to the changes, and over time, my collaborators and I developed the back story.

If 1992-1993 could be considered the culmination of Anwar’s drive for the DPM slot, 1993-1994 should be considered the beginning of his next push to be Prime Minister.


Not only did he begin building an extraordinary global network of offshore corporations, front companies, proxies, and money handlers, but Anwar also marshalled his political and economic resources to make certain that the English and Bahasa press would bring the public round to seeing him for the saviour he was.

In early 1993, Realmild Sdn Bhd, a private company owned by Malaysian Resources Corporation Bhd, in turn controlled by four of Anwar’s cronies, took control of the media conglomerate that owned the major Bahasa dailies, the New Straits Times, the Malay Mail, and TV3. That coup was accomplished entirely with Anwar’s funds and direction, making him the de facto controller of the largest concentration of media power in Malaysia.

This was yet another thing Murad got right and wrong in his statutory declaration – Anwar did indeed use Bank Negara and Hong Leong to take control of those entities. However, that money originated not in a BNM account, but rather in the little known Familienstiftung Jakob Schmidt in Liechtenstein.

Anwar began by placing senior editors in key spots at TV3 and in the print press, determined to micromanage his image to the country. Johan Jaafar, Nazri Abdullah, Yunus Said, others littered throughout the media became his proxies in his covert war for the Prime Minister’s spot. Reporters who failed to provide sufficiently favourable coverage were warned, and then if needed, sacked and blacklisted.

(Amusingly, some of these same men and women would later join the Opposition press, totally unaware that they were writing hagiographies of the man who’d had them terminated.)


The extent of Anwar’s complete control of the media is hard to express to someone who today might view the BBC, CNN, or any of the plethora of media channels broadly available online and off. Google now makes some of the old press clippings available, and there are certainly archives about, but the number of above-the-fold headlines and opening broadcasts that began with ‘Anwar Ibrahim Rescues…’ or ‘Deputy Prime Minister Anwar Ibrahim Accomplishes…’ or the equivalent is simply remarkable.

Anwar’s control of the media was very close to complete, a situation he would naturally decry and of which he would pretend total ignorance a decade later. But then, Anwar has always had a talent for righteous hypocrisy.

Neutralising Anwar meant neutralising his press operation, something Mahathir finally realised when he finally acknowledged the extent to which he had clutched a dangerous snake to his bosom. Just before Anwar was sacked, the editors of Utusan Malaysia and Berita Harian were forced to resign, with the director of operations of TV3 close behind. All three men were, by Anwar’s own admission, his confederates.

But that is once again getting ahead of the story. Before we resume the tale of Anwar’s rise and fall, it will be necessary to journey far away, to distant Turkey, and in Turkey we can understand more about Anwar than his money or his Malaysian power base. Anwar’s Turkish connection is a very significant part of the I-Files. There is a reason he went running to the Turkish embassy in KL some years ago. Anwar, and his ties to the AKP of Turkey, Turkish politicians, their money, and political cooperation is worthy of a whole chapter on its own.


The next chapter will be the full and unvarnished story of Anwar’s Turkish connection. End of Chapter Six: Inside Anwar’s Money Machine

Chapter Seven: The Turkish Connection The hard thing for the conspiracy-minded to understand is that most of the world as we see it is the truth. Most of the things that we think happen behind closed doors actually do happen. It is just that some politicians are better at covering their tracks than others.

It is amazing how much one can find out by investigating those who never really bother to hide things too carefully – such as bank accounts in the United States or in Israel that contain pieces of a war chest for a Malaysian politician named Anwar Ibrahim. One might find behind-the-scenes connections to Wahhabi agents from Riyadh, or even occult money and political schemes launched together with the Islamist-leaning leaders of modern Turkey.

We are not speaking here of clandestine operations, but of money transfers and laundering; of special accounts in Turkey for financing Malaysian political operations; of mobile and barely concealed political operatives; and even of a Turkish foreign minister with university experience in Malaysia, a true Islamist radical, who got all wrapped up in political plotting in Malaysia with and on behalf of his friend Anwar. We are speaking of Anwar’s support for Turkey’s AKP party through political and media channels. Much of this was financed by Anwar’s money, some of it going back to pay Turkish political operatives who would enter Malaysia to assist Anwar.

I have spoken extensively of Anwar’s ties, from his student radical days all the way to the present, to the most extreme of the Saudi oligarchs, both in terms of ideology and in terms of funding. Anwar was hardly their only project, though they have long taken a special interest in him. Everywhere Muslims were governed by secular – or, worse to their eyes, moderate Muslim – governments, there the Saudis have planted their flag.

Chapter Seven: The Turkish Connection

Money, material, logistics, teaching, and training – they have supplied it all, funded by the world’s use of their only natural resource.

This was true in Indonesia, though that project has been much less successful than elsewhere. Singapore locked them out. The Chinese have been brutal with Wahhabi missionaries in Xinjiang Province, but the House of Saud is nothing if not patient. The former Soviet republics in Central Asia have been ripe for the plucking, though their leadership also has a somewhat severe approach to unwanted radicals.

Turkey has long been a central dream of the Islamists. The home of the last Caliphate, the Ottomans swept with fire and death and righteous fervour through Asia and Europe, tossing aside the tottering old Islamic sultans and lesser caliphs and Europeans alike. Stopped only at Lepanto and at the gates Vienna, for hundreds of years they were the scourge of Europe and Christendom, and turned whole nations of devout Christians into fervent Muslim warriors.

The Ottomans were what every little jihadi wants to be when he grows up. Bringing them into the Wahhabi fold – despite their decades-long policy of secular government, backed by a military fiercely committed to that ideal – would be one of the greatest coups of all.

It is in Turkey – through a portion of the I-Files that were never part of the original, and only added after furious searching when Anwar fled to the Turkish Embassy in 2008 – that we can see how Anwar was specially connected to the worldwide Wahhabi movement, and how it has become one of his touchstones.


I beg your indulgence as we leap ahead to when I first began to wonder about these things, as for once my network of informants was only as fast as the local media, and I turned on the telly to observe Anwar doing his best (and most melodramatic) impersonation of a political refugee fearing for his life and running to the Turkish Embassy in KL.

By 2008, I was flitting in and out of Malaysia with some frequency. My wife and children would usually accompany me, along with a train of tutors, aides, and secretaries. While Anwar’s release from prison some years before had been quite the bit of news, and had generated a renewed burst of intelligence gathering, I had left most of the day-to-day operations with my subordinates as I tended to unrelated concerns on the other side of the world.

We had returned in late June when I got a call on my mobile from my office. I almost sent it straight to voice mail, but instead picked up.

“You must turn on TV3. Now.” With that, my secretary hung up. I assumed something important had happened, so I did as I was bidden.

My first thought was Sodomy, again? I am hardly privy to Anwar’s sexual escapades, but the rumours of his infidelity, with both men and women, had circulated long before Mahathir ejected him from Government, and even on his successful appeal, the court made clear to underline its thoughts on his sexual behaviour. But that thought was quickly lost in the more interesting details of Anwar’s flight to the Turkish embassy.


Anwar’s persistent melodrama was piled high in this caper: He ran to the Turkish embassy and posted a statement on his blog, saying that political developments have put his life in danger. “Certain agents” of Barisan Nasional “have initiated plots” to harm him, he said.

Even better, Anwar said, “I have been told that my assassination has not been ruled out as means to subvert the people’s will and bring an end to the transformational changes taking place in Malaysia.”

This would be unbelievable in a poor novel, so bad no author would expect an audience to believe it. But Anwar did.

After watching for a while the sordid Anwar-flees-to-the-Turkish-embassy story, I picked up my Blackberry and sent off a single instruction to my team.

Stop watching the bloody tube and find out why he ran first to Turkey. Why Turkey?

Of course, to answer that question, we would first need to learn more about Turkey and its government, something I’d eschewed as the country had drifted gradually in the direction of more radical Islam over time. With the exception of Malaysia during Anwar’s time in Government, I’d had an iron-clad rule that no funds of mine would support people who would force sh’ria on a people. I’d had quite enough of that kind of brutality from the Soviets, thank you.


LEVEL: SECRET-2A-EO SUBECT: SECRET OPPOSITION LEADER CABLE TRAFFIC ORIGIN: GS-95191A2 DATE: 2008-06-28 2215 GMT+8 (SEND GMT-6)

CENTWIRE informs of increase in traffic into EMB-TURKEY since 2000 KLT from surrogates for Opposition Leader ANWAR IBRAHIM and from QUALITY HOTEL in Shah Alam. Cause unclear. Sources in PKRHQ inform us that ANWAR IBRAHIM to make some sort of announcement at EMB-TURKEY.

PM-TURKEY and FM-TURKEY old associates of ANWAR IBRAHIM. DOSSIERS from ANK already sent ON-PR-1. Should be present in KL by 1 p.m. tomorrow.

SECSTATE has asked for updates.

Recep Tayyip Erdoğan and his Islamist party were the first, and most obvious stop. As with so many Wahhabi machinations, the truth was fairly easily discovered – at least on the surface.

During the 1970s and early 1980s, Anwar and Erdoğan had been frequent and devout attendees at conferences, youth gatherings, and academic events held in Saudi Arabia for the network of protégés the Saudis developed over time. They were able to put aside their secular political leanings – Anwar was enamoured of Marxism, Erdoğan a devout anti-communist – because of a belief in a purifying strain of radical Islam that could bring the world a little closer to perfection, and a belief in presenting this strain to the electorate through the lens of apparently moderate Islam.


Erdoğan was a prime pupil, a man who hated the communists (as the Saudis did), who hated the Jews (as the Saudis did), who was possessed of enormous energy and drive (as the Saudis were), and who, it was felt, could blend into the mainstream of Turkey’s society and slowly alter its course (as the Saudis could not). His political career mirrored Anwar’s in critical ways – the convert to the mainstream, the respected secular leader (as mayor of Istanbul) whose radical trappings seemed to largely disappear, the imprisoned political hero held out of national elections.

Whilst they diverged in Erdoğan’s successful return to politics, and rise to the Prime Minister’s slot, they shared the critical feature of Saudi backing and patronage in common. Prince Nayef, of the House of Saud, backed both Anwar and Erdoğan, as well as their respective parties, because Nayef – an odd, self-impressed little man, to be sure – is as canny as anyone who has ever lived. It is no coincidence that both Anwar’s and Erdoğan’s parties use ‘Justice’ in their titles – Nayef is a great fan of the word, though he sees its meaning differently than most.

He has long seen Anwar and Erdoğan as his best bets, as the first line of assault in bringing their two countries into the Wahhabi fold, and so he poured and continues to pour Saudi assets and money into both Erdoğan’s and Anwar’s parties, advancing them and their causes. With both, he has been successful. Erdoğan not only normalised relations with Saudi Arabia – a first after four decades of estrangement after the House of Saud first attempted to gain a beachhead there – but also invited King Abdullah, the man who with his brother Fahd had first poisoned relations between the two states, to not one, but two ceremonial visits to Istanbul.


More importantly, Erdoğan successfully broke the army’s historic role in maintaining Ataturk’s policy of a secular sphere once and for all. When Erdoğan’s moves signaled the return of creeping Islamism, the Army attempted to intervene to restore the secular balance. Generals resigned, but Erdoğan managed not only to hold his government together, but to unilaterally replace those generals with his stooges, thus breaking the army’s sworn duty to uphold the secular state once and for all.

Policy followed leadership, and soon Erdoğan was driving his country to closer relationships with Saudi Arabia, lifting the decades-long ban on headscarves (whilst his NGOs began proselytising their use and his wife wore them at every occasion), and eroding Ataturk’s successful creation of a powerful, modern state, all while a gullible Western press looked on.

That was no coincidence; Erdoğan and Anwar share not only funding, but the same media operations, even some of the same strategists for campaigns, who are expert at bringing gullible Western reporters on junkets to Georgetown, Istanbul, Ankara, and Kuala Lumpur, building influence the old-fashioned way.

He and Anwar remained very close, and Erdoğan was one of Anwar’s preferred guests while the latter was Deputy Prime Minister. Under the cover of advancing Islamic governance in the modern world, the two men hosted each other in countless conferences and official meetings in Kuala Lumpur and Istanbul in the 1990s, and Anwar continues to make Istanbul one of his homes away from home even now.


Their ventures together – a veritable smorgasbord of benign-sounding non-governmental organisations – simply expanded the aegis under which the two men, especially Anwar, have been able to operate: The Global Peace Mission, the Union of NGOs of the Islamic World, the Future Global Network, the World Futures Online, the World Civilisation Research Group, the Center for Study of Islam & Democracy – the list goes on for some time. These entities operate and operated out of Malaysia, Turkey, London, and the United States, serving the dual purpose of providing funding and intellectual legitimacy for both men as they reached out abroad.

It is no secret that the Al Baraka bank – the source of so much of Anwar’s financial strength – has also backed Erdoğan, maintaining offices in Istanbul for precisely that purpose. That relationship began in earnest in the 1980s, when Erdoğan’s first political party was dissolved for preaching radical Islam, and continues to this day. Through Al Baraka and their own web of funding entities, the two men sponsored strident – if iconoclastic – Islamic radicals such as Hassan al-Turabi in Sudan and others who argued for the imposition of sh’ria law on Muslims everywhere.

When the American government began to close in on the IIIT – Anwar’s central source of legitimacy and an element of his laundering – the Institute began moving its assets to Turkey and Saudi Arabia, in coordination with the NGOs Anwar and Erdoğan had established for precisely that purpose. When the remainder of Anwar’s NGOs in the US came under further scrutiny, he shut most of them down, one by one, moving their assets and offices to the friendliest country he knew – Turkey.


When Anwar was released from prison, and began to reconstruct his political and economic fortunes, he turned to the only two sources he truly trusted: Erdoğan and the Saudis. With their extensive network of NGOs, proxy accounts, reserve funds, and funding opportunities, Anwar was able to quickly re-establish himself politically and financially.

Yet it was not only on Erdoğan that Anwar relied, but also later on Turkey’s foreign minister, Ahmet Davutoğlu, as well. Davutoğlu is in many ways Anwar’s truest friend in the AKP – an intellectual, a professor, and a believer in a creed that he refuses to call neo-Ottoman but which calls for Turkey to once again be at the centre of the Islamic world, guiding a new Caliphate to glory. This was not Davutoğlu’s original idea, but the idea that fired his imagination, and drove him to seek out like-minded men wherever they may be found.

It was no coincidence that Davutoğlu was briefly a student and, more importantly, a professor at IIU during Anwar’s days overseeing the institution, an intellectual who happily brought Saudi theology to once-moderate Malaysia. He was on the leading edge of renewed relations between Turkey and Saudi Arabia, working hand-in-glove with Saudi Arabia’s policy establishment to bring the two countries closer, a project he had imagined during the days and nights discussing hudud with Anwar.

When Anwar needed a stage for his Theatre of the Absurd – when he needed a true ally who would never question Anwar’s ridiculous claims to being in mortal peril over a sodomy charge – Anwar knew there was one embassy, and one foreign ministry, that would not look askance, and would never publicly question the entire stunt.


And so it was that he fled to the Turkish Embassy when faced with new sodomy charges. While many news reports claimed that Anwar had considered several possible refuges, there was really only one he trusted to sever ties with Putrajaya if need be, one where he knew staunch friends were waiting. And so he used his Turkish connection.

LEVEL: SECRET-1C-EO SUBECT: SECRET M-OPP/EMB-TURKEY ORIGIN: CS-KL DATE: 2008-06-30 1402 GMT-6 (SEND GMT+8)

FULL UPDATE SENT BY CYPH-WIRE.

SYNOPSIS FOLLOWS.

Review of DOSSIERS shows extensive ties between ANWAR IBRAHIM and PMTURKEY and FM-TURKEY. GOV-TURKEY filled with ANWAR contacts. CS-ANK informs that EMB-TURK BARLAS OZENER agreed to assist ANWAR with scene at request of FM-TURKEY.

ANWAR IBRAHIM has now departed EMB-TURKEY. Extensive wire traffic between EMBTURKEY and FM-MALAYSIA suggesting poisoned relations. EMB-TURKEY for FMTURKEY informed ANWAR to depart, ANWAR departed ahead of demand.

NO SOURCES show substantiation of “death threats” as ANWAR IBRAHIM claimed on 6.29.2008. OPS in PM-MALAYSIA completely unaware of same.


PREDICTIONS:

GOV-MALAYSIA’s judiciary’s independence was in some doubt decade ago after PM-MALAYSIA MAHATHIR MOHAMAD. ANWAR IBRAHIM claims new sodomy charges attempt to end his return to politics. Not clear. ANWAR IBRAHIM has known penchant for street politics and street theater. Expect last two days to feature in protests.

The entirety of the material related to Anwar and his ties to Erdoğan took time to develop, and it was not until after the fateful 16 September 2008 promise was made – and abandoned – that it was usefully collated. My compatriots and I only discussed it briefly at the time, but the more we dug the more we discovered. And ultimately we found that an active financial and political channel between Anwar and his Islamist friends in Turkey was a key to understanding his plans, dreams and tactics.

As I noted before, I fear I have quite gotten ahead of myself. It is perhaps time to return to the central narrative, and resume where we left off: With Anwar growing his war chest, and preparing to replace Mahathir once and for all. This is perhaps the most remarkable part of the story, for it was the first time Anwar had so badly miscalculated when chance thrust his opportunity on him.

It begins with Mahathir’s recognition that he’d clutched a cobra to his bosom.


Here, though we did not realise it at the time, is where the Saudis first began to redouble their efforts with both men. Erdoğan’s sentence for revealing his radical roots – by calling for a religious uprising in the form of a poem at a political demonstration – virtually overlapped with Anwar’s sacking after his coup attempt failed. Unwilling to abandon assets developed over the course of nearly three decades, the Saudis began applying monetary, political, and diplomatic pressure to preserve both men, with indifferent success.

Their attempts to save Anwar began almost immediately with Mahathir’s swift measures. It is a story – from Anwar’s first betrayal through his successful appeal – that is almost as remarkable as what came before, and its reach – from Washington to Riyadh to Ankara to Putrajaya – brings together all of the things that brought Anwar so close to power in the late 1990s, even though he was doomed to fail. The length and breadth of it is, however, a tale for next time.

End of Chapter Seven: The Turkish Connection

Chapter Eight: The Man Who Would Be King I thank you for your indulgence as we leapt ahead of the bulk of this story in the last chapters to speak of Anwar’s Turkish connections and money machine. There will be more on Anwar’s finances as we go on – as I said, they can truly be likened to an ocean – but for now, let us return to the wreckage of Ghafar Baba’s career and the blossoming of Anwar’s.

Anwar Ibrahim was a man for whom fortune did not merely smile, it offered to carry his briefcase. But his incredible run of luck, his numerous talents, and what appeared to be a void in his soul that allowed him to be anything and everything to anyone and everyone else would have been wasted but for Mahathir’s patronage – a patronage that would very soon prove very dangerous and mistaken in the end.

Explaining how Mahathir missed all of this for so long requires understanding some things about the man lost on the young – when I first told my sons this story, what should have been a quick five minutes instead turned into an hour-long history lesson on Malaysia, the details of which seem lost to the mists of time today. For this, no secret files are needed, merely the accounts of eyewitnesses who lived there.

Well, perhaps a few semi-secret files.

As I’ve mentioned before, Mahathir had fought his way out of the political wilderness all the way to Prime Minister by his own force of will and by his predecessor’s almost accidental decisions. Once there, he’d spent almost the entire 1980s cementing his control of his own party and ruthlessly driving PAS into permanent minority status.

Chapter Eight: The Man Who Would Be King In the process, his tendency to Malay chauvinism and his response to the Umno Team A/Team B split had opened fissures in Barisan Nasional that he would spend the next decade unsuccessfully repairing as he drove Malaysia toward the 21st Century.

Mahathir, you see, really was preparing to hand over the reins to Anwar – but he wanted his legacy, and Malaysia’s future, secure first. The old man clearly believed Anwar his natural heir as the outsider who’d come in determined to conquer the world. It was yet another case of Anwar being Anwar, being everything to everyone. A master manipulator. He even fooled Dr M.

And so Mahathir was obsessed with Vision 2020, and Putrajaya, and Cyberjaya, and bringing Malaysia into the foremost of the ranks of nations. Formula One teams, infrastructure development, all of that talk of ‘green spaces’, all of the things that other nations take for granted, Mahathir wanted for his beloved country.

The first thing was to eliminate the power of Malaysia’s royalty to stymie his programmes, a feat he accomplished in 1994 by constitutional amendment and publicising the alleged extent of the corruption, viciousness, and venality present in some of their households – and all because one hockey coach was beaten. With that remaining threat eliminated, that meant Mahathir’s only real opponents would be inside his own team.

This ruthless consolidation of power would earn Mahathir several well-deserved titles, ‘autocrat’ among them. He was a man who tended to see politics not as the give and take of opinion, but as a war that must be won at all costs. Political opponents should not merely be defeated, they should be crushed and if necessary imprisoned.

Chapter Eight: The Man Who Would Be King

And it must be remembered, he still faced war in his own party.

This was no small thing, much as it is no small thing for Najib now. Then as now, an old guard who believed in personal advancement before public service – and were therefore a drain on and impediment to large-scale infrastructure projects – was riddled throughout Barisan Nasional. Mahathir had only a few years before he succeeded in reunifying his party, and did not have enough internal political capital to toss aside those old warlords, even as they worked to undermine him again and again.

What this in turn meant was that Mahathir had to tolerate a certain level of corruption even while working behind the scenes to stem it. He had a macro-plan for Malaysia, and he was thinking big. He therefore tolerated corruption in his mega-projects – Anwar’s corruption, quite often – in the Peninsular and in Borneo, believing the cost was worthwhile. Anything that stood in his way needed to be eliminated or suborned.

Mahathir fought these pitched battles even as he guided his country into its position as one of the ‘Asian Tigers,’ the economies taking off so rapidly and, in theory, showing the old West how to beat the world.

It was in this environment, with his trusting patron occupied, that Anwar would expand, and finally become too comfortable, and too secure. It is here that his certainty that he would always win would finally trigger the chain of events that led to his downfall.


It is important to remember that while Anwar is a bit of a bumbler these days, perhaps a bit too busy to keep his own coalition unified, back in the 1990s he was on top of his game. So many aligned with him on the strength of his force of will, his charisma, his intelligence, his canniness …… and of course, his graft and scheming.

It was a good time to have business concerns in Malaysia.

I had gone, since coming here, from being a salaried field agent to being the deep cover MD of a small multinational, to opening a specialised consultancy that brought the best of both worlds together. I had never cheated on my taxes or in business, I had worked hard, and I had been blessed with a brilliant local wife who somehow managed to raise our children and provide me the sort of shrewd outsider’s view that is so vital to anyone running a complex set of activities and surrounded by chaps who all see the world the same way.

But being in Malaysia in the 1990s made everyone involved with making money look good.

I nevertheless insisted on getting my hands dirty. My father instilled in me lessons learned from his time in the Air Force: Stay in, stay engaged, support your wing, and you’ll both come home.

So it was that one beautiful morning I discovered that the Prime Minister was taking an extended holiday in Italy, and making his Deputy Prime Minister his temporary replacement.

Looking through the file notes my assistant had worked up, I asked, “Why does the name Paul Wolfowitz sound familiar?”


The other names were immediately apparent – William Cohen, Richard Holbrooke, Madeleine Albright, all members of the American Cabinet or its foreign policy apparatus – but the name was tickling me for some reason.

“Former Reagan Administration official, and old friend of Anwar’s,” Philip responded. He’d left our old shop shortly after I had, and I’d gladly taken him on as my associate. “He’s in touch with the Republican opposition, sort of an intermediary between his old friends at State and Defense.”

I nodded. “Why on Earth are these names arranged here as if they’re somehow important?”

“Anwar has been preparing the ground for a sudden takeover. He’s trying to get it pre-cleared with the Brits and the Americans. Those are the Americans he’s contacted who we can confirm are Anwar-friendly, and they’ve all given him the thumbs-up.”

To say there was no love lost between Mahathir Mohamad and the Americans is to understate the matter. Reagan had respected him for what he’d done to the Communists, and the elder Bush had found Mahathir’s positioning on the Israelis unhelpful, but Bill Clinton saw in Mahathir everything he hated: Protectionist, chauvinist, stern, proud, authoritarian, and prone to bucking the President of the United States in all but the direst of situations.

In Anwar, finally, here was a Malaysian politician that the Democrats could appreciate. The perfect chameleon. The man who seemed to share the values of the American establishment.


Anwar did not drink, but even by the mid-1990s the tales of his alleged infidelity were thick on the ground, and he had meanwhile decided at some point that in economics, he would be a neoliberal.

Neo-liberalism clashed with Mahathir’s more guarded approach of sheltering – one might say favouring – certain industries and companies until they were strong enough to compete on the global stage, but the friction this caused between the two men was minimal: Anwar yielded where Mahathir was most insistent, and with the raging economic boom in the region, everything everyone did seemed to turn to gold.

But to the Americans, neo-liberalism was the only acceptable form of economic policy, and Anwar played them well. Mahathir’s open anti-Semitism was a particular affront to Western leaders, who treat that behaviour as a sickness – a view Anwar nurtured. According to first-hand reports, Anwar actually won over Wolfowitz by seeming to be pro-Jewish and by condemning Mahathir behind his back. Coupled with his bold and eloquent proclamations at various international fora – Shakespeare and TS Eliot quotes at the ready – here at last was the Malaysian for whom the world had been looking: a Malaysian who could prove charming in Washington, D.C. and right-minded in Whitehall, a Malaysian who could mutter to Wolfowitz that it was a shame Mahathir was such a Jew-hater.

When Anwar came to them and let them know that he hoped for change in his country and that Mahathir would soon be gone, they were overjoyed. Anwar made himself into a hero of the State Department and the East Coast Jewish establishment, both Democrats and Republicans.


But it was not just abroad that Anwar began to work in earnest for the takeover, with a special emphasis on his portfolio in Finance. As I mentioned before, he understood the importance of media control. The business editors and reporters of the New Straits Times and Utusan Malaysia were threatened and where appropriate replaced or supplemented with ‘deputy editors’ who would see to it that coverage of Anwar was not merely favourable, but glowing. The editors of those papers and at TV3 exercised final control, and worked diligently to reinforce the message.

It was here that Anwar began to overplay his hand. Mahathir, for all of his many flaws, is not a man who believes in luxurious holidays. Anwar’s unrelenting caginess had finally slipped, and when given the chance to exercise power as Acting Prime Minister, his pride overwhelmed him.

We were all a bit surprised by Mahathir’s decision to go on holiday, and decided that the old man was either testing Anwar’s fitness to be Prime Minister; preparing to step down himself; or – and this is something I frankly did not believe at the time – testing Anwar’s loyalty. To this day, none of us quite know why Mahathir did what he did. He’s been cagey about it all these years, and I personally suspect he is still hurt by Anwar’s betrayal. Regardless, off he went. Anwar stepped hungrily into the gap.

One of his first major acts was the Anti-Corruption Act, a facially commendable move designed to replace the 1961 Act and to root-out the perennial corruption in Malaysia’s political system.


Of course, we all noticed that he waited until the probe of his political secretary Azmin Ali had been shelved and then appointed cronies to fill every slot created or reformed by the ACA. Rumours were that he almost appointed Azmin to head the agency, but common sense finally got the better of him.

Eliminating corruption is one of those noble things politicians like to talk about, and that a handful actually want to do. Anwar was not one of those. He directed his appointments to begin investigating every enemy he had in Umno, fairly transparently to develop files on each for later use. He even sent his best men tunneling into Mahathir and his family, hoping to prepare the trump cards needed to win out in the leadership battle he saw coming.

This was all obvious to any intelligent observer at the time. My only question – answered in the negative both by my associates and by later events – was whether Anwar realised that Mahathir already had a box of files deep on him.

By this point, we were largely resigned to Anwar becoming the Prime Minister. I was in a meeting in July when one of my juniors raced into the conference room to tell me that there was a panicked call coming in from our subsidiary in Bangkok: The government there was set to float the baht. What had up until that point been concern about Thailand’s finances was now dangerously close to becoming a financial contagion.

The chain of events this set in motion completely rewrote Malaysia’s political landscape.

The Asian Financial Crisis had struck. We all lost a great deal of money.


Anwar would lose far more.

One by one, the Asian Tigers started to falter and collapse. Real estate prices cratered. Centuries-old trading houses were crammed down in vicious takeovers. Governments faltered and in a handful of cases fell. Malaysia, stronger in its own way than many, was pushed to the brink: shares fell by over two-thirds, the ringgit nearly collapsed, foreign direct investment plunged, and riots began.

The West stood with its mouth agape. When it finally realised the extent and the depth of the crisis, it reached for the only policy tool it had at hand: The International Monetary Fund.

The IMF is a curious institution, and certainly a polarising one. Its opponents accuse it of neoliberalism and neo-colonialism; its supporters describe it as one of the bulwarks of the international system.

It’s really just a group of clods.

The IMF’s policy prescriptions are almost invariably associated with loans and conditionality; its loans, with its policy prescriptions; and its policy prescriptions, with demands for austerity and some sort of governmental reform. This tends not to work, because financial crises tend to be immune to easy resolution by any system.

It is here that most observers believe they know the story: Anwar sided with the IMF. He blamed ‘cronyism and corruption’ for the crisis, never explaining how his own cronyism and corruption and the system he created and maintained as DPM was not a key factor.


He implemented austerity programmes, including cutting government expenditures and ministerial and government salaries by upward of 20 per cent, and stripping funding from the enormous infrastructure projects into which the country had poured so much effort for so long.

He also let every press outlet with a Singapore or KL office know that he was a sudden and devout convert to the cause of free market capitalism. Mahathir, by contrast, blamed the entire crisis on foreign currency speculation, was not about to be dictated to by the IMF, and was not about to see Anwar and his friend the international financier George Soros win the day.

Mahathir claims to have been vindicated by history, a claim greater in the telling than in the proof. Those Asian Tigers who adopted austerity and free market reforms recovered as quickly as those that did not; and at any rate, Mahathir’s almost paranoid insistence on blaming the crisis on the Jews seemed deranged and also alienated Western nations at a critical time.

As the story goes, so began the rift between Anwar and Mahathir in earnest. And it is true, so far as it goes.

But the real story is deeper. In Hong Kong in September of 1997, the major economies of the world were working desperately to avoid an international financial collapse, and to get the Asian Tigers running again. While there, Mahathir and Soros began taking potshots at each other in the assembled international press, with everything from attacks on preferred policy (Mahathir called for an end to currency exchanges, Soros called for a variation on the IMF prescriptions) to personal attacks.


Into this free-fire zone Anwar leaped. He began immediately explaining away Mahathir’s comments, taking Soros’s arguments as his own, and even occasionally directly undercutting Mahathir with hundreds of reporters about. He portrayed this to the gullible reporters covering the event as his heroic attempt to save Malaysia from Mahathir’s ill-considered rhetoric.

This was not mere insubordination. Malaysian civil society was on the brink. Anwar was damaging Malaysia. Seeing where Indonesia was headed, he was inciting anti-Mahathir sentiment. It worked because some foreign investors were frightened of Mahathir’s rhetoric,; and Mahathir was frightened of the enormous damage those same investors had just done in the region. The question of how to stabilise the ringgit and to keep Malaysia from devolving into chaos was not a trivial one, nor an easily-resolved one.

Indeed, Anwar began working in secret and in earnest with the American delegation to pave his way to the top, pointing up Mahathir’s ‘dangerous’ talk. Members of the Clinton Administration – from Treasury Secretary Robert Rubin (in Hong Kong) to Defense Secretary William Cohen – told Anwar that Washington was behind him. Wolfowitz and his allies in the Republican Congress also sent their encouragement. Wolfowitz was enthusiastic, according to one of his aides, and determined to see Anwar become Prime Minister.

Anwar’s Saudi backers, delighted at seeing their Islamist protégé finally reach his goal, pledged billions of ringgit to aid Malaysia after his ascent. Their funds would be credited to Anwar’s leadership, and would sweep him – and his radical real agenda – into a lock on power greater than Mahathir’s ever was.


Word was sent back to Anwar’s cronies to prepare for the sudden change, to be executed in 1998.

On Anwar’s return to Malaysia, he doubled down on his austerity programme. He felt emboldened; after all, Mahathir had done nothing more than dress him down in private. Anwar had truly begun to believe the image he had crafted for himself.

Mahathir was incensed, but more importantly, if he had harboured any doubts about Anwar to that point, they were finally vanquished. On his return to Malaysia, he summoned his closest advisors – those who he could be sure were not Anwar’s – into a private meeting at an advisor’s home. Seri Perdana had not yet been completed, and everyone assumed there was no safe place in any government building for this meeting.

While Mahathir was designing the currency controls and reforms that would ultimately stablise and save Malaysia, he appointed his most loyal followers to another cause: Determine whether Anwar could be saved, or whether he was past redemption. He was not ready to let Anwar go yet, but he was still loathe to destroy the man he’d once thought of as like a son.

It was some time later that Mahathir finally began to use the weapons at his disposal to destroy his deputy once and for all. He opened his files to his allies, not just on Anwar, but on Anwar’s friends, allies, cronies, and family.

In the end, it was his corruption, and not his dalliances, that would bring Anwar down.


But that is a story for next time.

End of Chapter Eight: The Man Who Would Be King

Chapter Nine: The Fall I have always had a lurking admiration for those who could keep their lies straight. It’s a deucedly hard thing to do, so I’ve generally left it to others. I have had the advantage, in both government and private work, of being disbelieved by many with whom I interact by the nature of my job for most of my life, so I’ve been free to be honest to a fault. Just by being honest, others keep better track of what I say than I do.

Anwar Ibrahim has gone a long way by never being honest the same way for any two groups of people. I truly believe that this stems from a fundamental defect at his core – I’ve suggested before that he is a man without a face, who can put on whatever face is needed for the occasion.

According to the Company’s best psych-profile of Anwar, he is a genuine narcissist. And like most narcissists, he truly believes he occupies a special place at the centre of the universe, and this appears to make his constantly-evolving statements and self-characterisations honest, if not necessarily true.

We used to laugh out loud at Anwar’s utterly unabashed self-descriptions as being the next great martyr, the next Nelson Mandela, the next Aung San Suu Kyi, whoever struck his fancy that day.

In retrospect, this was terribly small of us; it’s rather like laughing at the fellow who truly believes he’s Napoleon.

Chapter Nine: The Fall

However, whether this was a mental disorder or a personality defect is beyond my capacity to diagnose. What we do know is that this critical trait gave him the ability to seamlessly move between completely contradictory social circles and groups, always telling them – and seeming to believe – exactly what they wanted to hear. And he lived quite well off of it.

To this day, many still believe the first image he gave them. For American liberals, he was the earnest, moderate reformer. For PAS types he drew to Umno and his old guard in ABIM, he was the radical out to make Malaysia a perfect Islamic state. For the neoconservatives, he was a bulwark against what they perceived as the next great threat: Islamic radicalism. To Western reporters – whose policy preference overlapped strongly with American liberals – he was the Shakespeare-quoting, dedicated believer of reform from within. To Mahathir Mohamad, he was the capable son and political heir, the outsider who became the insider and who saw Mahathir as a surrogate parent.

To them all, he was a man of the people, a man of principle and honesty. Nonsense. Anwar Ibrahim is a man who made a great deal of money and power out of corruption and graft, and has never bothered to apologise for it. He is a man who all but banned Christmas in Malaysia and was on track to drive the Chinese out and close down their schools.

In the days before the internet and social media was an everyday fixture, this sort of duplicity was easy. He played them all for fools.


But as an American president once said, you can fool some of the people all of the time, and all of the people some of the time, but you simply cannot fool all of the people all of the time. The Asian Financial Crisis encouraged Anwar to let his mask slip, and he did; and when the fooling ended, the real game began.

It is little remembered now, but in 1998, Karpal Singh, then already a supremo in DAP, publicly accused Anwar Ibrahim of homosexuality, sodomy, and fornication with both men and women other than his wife. He demanded, in public, at a DAP conference, and in the Dewan Rakyat, that Mahathir explain why he was keeping such a man in his Cabinet, and demanded that Anwar be dismissed or resign, for the good of the nation.

Then as now this was not a charge lightly made. Although Mahathir was publicly and angrily denying it, this sent a minor shockwave through the world of politics. The news of this demand made it to my desk along with a number of other details that, for the first time, told me that Anwar was on uncertain ground.

It was a warm evening, and a humid breeze wafted past. I was reviewing the stack of pages accumulated over the last month as I leveraged every bit of information at my disposal to beat alpha during the Asian Financial Crisis. I’d decided a few days before to end our holdings in the ringgit, gambling that Mahathir would win out and take the currency off the foreign exchanges. Here was a hastily scribbled copy of a note Chandra Muzaffar had sent to Anwar begging him not to try to bring down Mahathir in the midst of this terrible crisis. Now was not the time, he said here and elsewhere, to “take down the captain of the ship.”


Here was a note on the ringgit’s fall against all major currencies, with both public and private ratings on its creditworthiness. Private analysis said that foreign investment would only return with Mahathir’s mega-projects, and that Anwar’s attempt to dismantle them all at once would destroy the currency and the economy.

Here was a list of interviews with business reporters at the New Straits Times, Utusan Malaysia, the Star, and TV3, all of whom had been summoned to Anwar’s office for specific instruction on how his programmes were to be portrayed in print. One print reporter was ordered to transition into broadcast work; when she refused, she claimed, Anwar threatened her until she in turn threatened to go public with the story.

Here was Newsweek naming Anwar ‘Asian of the Year.’ The story barely bore reading, but months later, when Newsweek was a laughing stock for having buried the story on President Clinton’s affairs in the White House, the catastrophe the newsweekly had become was complete.

I sipped some scotch. My sons were in bed, my daughter in her crib, my wife was doing the Sunday Times crossword puzzle. I should have been enjoying a quiet moment. Instead, I was trying to determine how this saga played out next.

I turned back to the handwritten notes I’d received on Mahathir’s meetings with his private circle. It was by now fairly clear that the war Anwar had started in Hong Kong and that had continued through the fall and winter was coming to a head. There was already talk that the Umno General Assembly in June was when Anwar would make his move, trying to force Mahathir to step down once and for all.


My intelligence sources all concurred that over a billion ringgit was in play for the final move, from Anwar’s own holdings at Hong Leong and Al Baraka. It was the Ghafar Baba Operation all over again, but on a far grander scale.

Another sip of scotch as I breezed through the executive summary of 50 Reasons Why Anwar Can Not Be Prime Minister, a delightful tract that accused the Deputy Prime Minister of everything from murder to embezzlement to fornication to sodomy to being a CIA spy. That last was particularly funny. I knew all of the CIA spies in Malaysia’s government, and Anwar was definitely not one of them.

The important thing about 50 Reasons was not its allegations, but rather the fact that it was not merely being published, but widely distributed as well. Mahathir was clearly firing a warning shot at Anwar, who was by that point either too proud or too taken with his own cleverness to understand what was coming.

Anwar’s men were already telling anyone who would listen that the upcoming Umno General Assembly would be entirely about cronyism and nepotism, especially in Umno, and especially in the contracts doled out for the mega-projects. Of course there was cronyism in those projects!

The Finance Minister and Deputy Prime Minister had personally seen to it.


Undoubtedly, the targets were Mahathir’s family, and the families of other Anwar enemies in Umno. Anwar was trying to recreate the Indonesian regime change that was in the process of happening as I sipped my scotch – he was trying to make Mahathir into Suharto and, laughably to anyone who knew Habibie, Anwar into Habibie.

Suharto was a corrupt autocrat whose children were granted monopolies over critical industries. Mahathir was the duly-elected prime minister of a democratic nation, whose children were associated with both successful and unsuccessful ventures in competitive industries.

As I sat watching the moon rise, I rather wondered if Anwar understood that the difference was more than semantic. Without widespread discontent and the resulting domestic and international pressure, as Suharto had faced, there would be and could be no leverage to force the old man to step down. Whatever Mahathir’s faults, whatever may be said of Malaysia’s political system in 1998, the comparison was simply ridiculous.

To top it off, word was that Daim Zainuddin was being recalled from semi-retirement to essentially take over Anwar’s portfolio.

For the first time, on the eve of the Umno General Assembly, with what felt like the world crashing down on us, I understood that Anwar was probably a spent force, and simply did not know it yet.

June 1998 was probably the month when Anwar realised he had lost his gamble.


Things started inauspiciously when Anwar picked the first week of June to begin his attack. He issued a public call – echoed by his crony, Umno Youth chief Zahid Hamidi, to stop cronyism in Umno and in the bumi mega-companies. By now his plan was out in the open – too out in the open – and so most everyone recognised this as the beginning of the putsch on Mahathir, rather than as a sincere call for reform.

Anwar seemed nonplussed by the collective yawn he received.

Less than a week later, Zahid promised to produce examples of corruption in Mahathir’s megaprojects at the General Assembly. Ahead of the event, lists – prominently featuring Mahathir’s son – were distributed to anyone who might even seem to have a passing interest.

Unbidden, Mahathir announced that there was no split between him and Anwar.

By then, Anwar was cagey enough to understand that Mahathir was letting his protégé know that the game was over, and there was still time to back down. We will never know why Anwar went ahead: Was it because he felt he had no choice? Did he still think he could win? Was he hoping to push Mahathir to announce a retirement timetable?

On June 18, 1998, the Umno General Assembly began, and every attendee was on edge. Copies of 50 Reasons were liberally handed out. Early copies of the lists of corrupt bumiputra projects were distributed. Behind the scenes, Anwar sent Mahathir a letter gushing with praise, promising that the future would be as glorious as the one Mahathir had made as Prime Minister.


Anwar did not know then that Mahathir had convened almost the entire Supreme Council for three hours on the night before the General Assembly began.

Zahid released the list of corrupt projects and ventures, and at the top, for all to see, was Mahathir’s son.

On June 19, 1998, a new list was released, that of the shareholders in privatised bumiputra companies. Anwar’s family and cronies were liberally represented, with millions of shares held between them – his father and brothers holding millions alone.

But everyone knows that story. The real coup came that night when the Supreme Council – through Najib Razak – announced that the Government would be releasing lists of the recipients of privatised projects for the sake of good governance.

In one move, Mahathir had managed to surpass Anwar’s reformer credentials, used his hated rival Najib to deliver the blow, and most importantly tell Anwar that all of the Deputy Prime Minister’s shady dealings would now be public knowledge. In the space of a day, Mahathir neatly disarmed Anwar once and for all.

I am reliably informed that Anwar raged and wept by turns that night. There were rumours that he buried his pain in an extramarital liaison that night, but I’ve long believed those to be fantasy.


Anwar publicly denied any desire to try for the Presidency of Umno in the next year’s elections. Mahathir took the occasion to say he would support Anwar against any challengers for the number two spot in Umno. No challengers appeared. By now, Anwar understood the message: His political survival was in Mahathir’s hands. Two days later, he made a public profession of support for Mahathir – amusingly, in a pantun – publicly chastened and brought down to Earth.

Mahathir was not finished with his wayward disciple. A handful of days later, he appointed Daim Zainuddin, Anwar’s predecessor, as Special Functions Minister – a post specially created to aid in implementing Mahathir’s policies in response to the Financial Crisis, taking on many of the roles of … the Finance Minister. Daim would of course report directly to Mahathir.

Both Anwar and Mahathir made clear that there was no threat to Anwar in this, and that Anwar retained Mahathir’s full confidence. Neither believed it.

It was obvious to all of us by early July that Mahathir was both punishing Anwar and giving him a final chance at salvation. Everyone knew that Mahathir kept private files on everyone in his Government, and he has clearly opened that file on Anwar.

But one must remember the back story: Mahathir himself had fallen from grace, once. He had campaigned with PAS while in exile, he’d gone to war with Umno, but in the end, he’d been brought back in from the cold and rocketed to the top.


I believed then, as I believe now, that Mahathir was testing Anwar under pressure. If Anwar had pledged himself a faithful servant – which he did – and then stood by that pledge – which he did not – Mahathir would have let the whole matter disappear.

And Anwar’s public professions of loyalty were frequent, they were widely publicised, they appeared earnest, and they showed up in every major daily.

But behind the scenes, it was a different story. Instead of taking the entire episode as a lesson in humility and better planning, Anwar took it as a sign that his last chance was slipping away. A flurry of urgent emails and calls went out to Anwar’s friends at home and abroad, through proxies and third-parties, begging for an increase in the international pressure. Bank Negara officers lined up to support Anwar and turn a blind eye to capital flows back into Malaysia from offshore havens. Editors in print and media played up his statute and loyalty while reminding the nation how poorly the economy was performing under Mahathir. George Soros opened his direct lines to Anwar, and the entire American foreign policy establishment began unsubtly calling for Mahathir’s resignation. The IMF floated the idea of aid being tied to Mahathir’s absence. Tony Blair, still getting his stride at Number 10 (Number 11, really), spent hours on the phone with Anwar, working to leverage out the old man.

Everyone with business concerns in Malaysia was on edge. Mahathir was a known quantity, but Anwar had made his entire public career out of being the precise opposite. Every foreigner was looking, desperately, for someone with in-country experience and a network of informants and contacts for that most precious thing of all to every investor: certainty.


In the three months following the Umno General Assembly, I made back every penny I’d lost during the Financial Crisis.

Anwar lost nearly everything he had spent twenty years building.

August was so very quiet. Everything seemed balanced on a knife’s fine edge. Reports leaked out of both Mahathir’s and Anwar’s offices about what was happening. Mahathir had demanded Anwar’s resignation. Anwar had threatened to take compromising pictures to the press. Anwar had resigned. The men had eaten together, hashed out their differences, and were stronger than ever.

That last rumour almost certainly came, indirectly, from Azmin Ali. We all disregarded it.

The daily affirmations of loyalty from Anwar continued. Mahathir remained largely silent.

We now know how August went: Anwar diligently worked to shore up his badly-damaged position in Umno whilst Mahathir built up a legal case against Anwar – he knew in July that Anwar was still working to topple him. By mid-August, he had sufficient evidence – so everyone in his office believed – to try Anwar for corruption and embezzlement, without destroying the people’s faith in the Government Mahathir had built.

It was careful, it was complex, it was deliberate, and it was ultimately successful; but in the end, the damage Anwar did in his political death-throes was almost as great as the damage he’d done in office.


Wan Azizah stoically complained to the Borneo Post, late that August, that Siti Hasmah had snubbed her at National Day celebrations in Penang. The two had once been terribly close; by now, it was obvious that every relationship Anwar had cultivated was in danger.

Mahathir began a quiet sweep of the newsrooms, and began isolating Anwar’s editors as he had Anwar when he brought in Daim. Ahmad Dom, the Bank Negara governor, and Fong Weng Phak, his lieutenant, resigned. Both men had been in Anwar’s circle of cronies; they knew their time was nearly up.

It is hard to imagine now, but the tension as the Sodomy II verdict approached, or in the aftermath of the Twelfth General Elections, was a fraction of what the nation experienced that August. Hot, balmy days became filled with a terrible electricity. Everyone knew that something was coming from one man or the other or both; no one knew what.

Or rather, those of us who had watched Mahathir slowly eviscerate every political enemy he’d ever faced, leaving them ground in the dust, knew. And I think – as did everyone still living who contributed to the I Files – that Anwar did, too. In those last two weeks of August, Anwar slowly realised that the Americans and the Brits and the Turks and the Saudis had nothing left to offer him. He realised that there was virtually nothing left for which to fight.

For the first time, the Faceless Man stood alone.


When September began, the world seemed to come unstuck, and Malaysian politics would never be the same again. But that is a story for next time. End of Chapter Nine: The Fall

Chapter Ten: Anwar In Free Fall

September 1998 was actually quite pleasant, as the climate goes. The temperature did not seem much above 30 degrees, and there always seemed to be a breeze waiting about.

It was also the end of the third chapter of Anwar’s life, and the beginning of the fourth. Despite what he would have you believe, his sacking and his rapid race to the streets, followed by his trip to court, did not augur any change in the weather, nor did it change his political fortunes. It did, however, completely alter the way Malaysia functions as a polity; it energised and – paradoxically – permanently neutered the Opposition, adding a different old face to the old faces already so prevalent in the DAP and PAS.

But that is getting ahead of things a bit.

I am going to break from the narrative format in which I have engaged to date, as the story of Anwar’s final fall and the days that followed is not appreciably more interesting with notes of my goings-on at the time. Suffice it to say that, as I said before, I made a great deal of money by predicting and helping foreign entities through the change in the Government’s structure, and that my tightly-knit group of ex-pats met frequently, especially when the riots began, to determine if Malaysia was descending slowly and inexorably into chaos.

So we begin with the first week of September, when all that Anwar had built finally crashed down upon him.


On the evening of 1 September 1998, Mahathir summoned the Mentris Besar to a room in his private residence, after it had been swept by one Malaysian, one British, and one American security firm for electronic listening devices. A military-grade ‘static’ device was activated to eliminate electronic eavesdropping from a distance. Each MB was patted down. Mahathir himself submitted to the pat-down to demonstrate that this was serious.

To each man, Mahathir handed a thick folder of photographs, bank ledgers, invoices, communiques, electronic mail, and corporate records. Each was a synopsis of the file the old man had kept on his Deputy Prime Minister for years, grown with the frantic investigations of the last three months. Mahathir walked them through each photograph, each document, each note.

Anwar’s financial dealings, his Saudi ties, his coup attempt, his backdoor dealings with PAS, everything was in those files in some level of detail. The photos included pictures of Anwar in compromising positions with – I am told – both men and women.

Mahathir was never one to let on weakness where others could see it, but he was actually seeking these men’s counsel. Could Anwar be saved even now? Should he be?

They gave their verdict, to which Mahathir said nothing. Each copy of the file, even Mahathir’s, was shredded, burned, and liquefied with acid. To this day, I bitterly regret not paying an acquisition fee for more than a summary of those files.


The press, by that point camped outside of Mahathir’s and Anwar’s residences, was oblivious to most of this, as usual.

The next morning, Mahathir summoned his lieutenant and demanded his resignation. Anwar refused, and Mahathir gave him an afternoon deadline to reconsider. Anwar’s response was to begin preparations for street protests, and to send carefully-worded messages to foreign reporters and politicians that the same riots that had brought down Suharto in Jakarta a handful of months before.

Anwar’s supporters began to gather at his residence and, in a particularly clever move, started to hand out candles to women in the group to light that evening. Reporters, massing before this, became a throng.

That evening, Anwar received the letter notifying him of being sacked. The candles were lit. Praying began.

Wan Azizah left, allegedly to say farewell to Siti Hasmah. The story quickly leaked out to anyone who would listen that the two women had hugged and wept. Anyone who loves the theatre could appreciate it.

The crowd swelled through the night, and when Anwar made his departure (after enormous fanfare) the next day, they followed him to his private residence. There, he gave what is now a famous press conference, the theme of which would become Anwar’s chorus for over a decade: I am the victim of a plot at the highest levels of Government.


They have targeted me because of my reforming spirit. I’m the best chance for democracy in this hell-hole, and that is why they are after me.

As we listened to his interview on CNBC that evening, we were struck by a man who had twisted and corrupted governance to his own end, taking by theft and graft untold billions in the process, who had worked to turn Malaysia into a redoubt for Wahhabi theocracy, who had launched attacks on the Chinese and the Christians, and who had worked to launch a bloodless coup against Dr M, tell the world that it was his reforming spirit that brought him low.

I lie. We were not struck. Once we were able to close our jaws, we laughed.

Anwar made a show of heading to prayers for the cameras as the Umno Supreme Council began to assemble for the meeting Mahathir had called. Well-placed and well-paid Anwar supporters began to throw garbage at those considered Anwar’s enemies, especially Najib Razak and Mahathir.

When Anwar arrived, strategically-placed reporters began to chant “Reformasi!” for the cameras.

This was no accident. Suharto had fallen before exactly that cry in Indonesia months before, cast aside by the military and his party’s leadership, and Anwar was trying to convince credulous reporters that Mahathir was poised on the same razor’s edge.

Anwar was unceremoniously drummed out of Umno by a unanimous vote.


Anwar emerged to give a speech to the crowd, which by then was largely composed of paid Anwar supporters. If the man understood anything in his heart of hearts, it was street theatre. He called for quiet, and with wads of ringgits in hand, the crowd went silent. Anwar told them that the charges against him were false, and that he would fight them to the end. Anwar’s lieutenants called for applause, and chants of Allahu Ackbar! rose from the crowd. CNN’s and BBC’s cameras picked up every instant of it. As well they should have; Anwar’s people had spent hours helping them set up in precisely the right spots, clearing the crowd as needed.

The protesters took some time to throw more garbage at Mahathir and the rest of the Supreme Council as they left. They then promptly went home, got a good night’s rest, and waited for the next cash drop.

What happened next raises a single question: Was the ABIM Anwar ever truly gone, or had he merely gone into hiding for a decade and a half?

Anwar made a great show of beginning a nationwide tour, to fight against corruption and cronyism. His press operation, which we had theretofore believed limited to Malaysia, distributed professional-quality press kits to foreign and domestic media, including high-quality glossies of a righteous Anwar exhorting some faraway crowd. Those photos would be used in newspapers domestic and foreign, and in international television shows covering the event.


The photo was from a handful of years before, at an Umno gathering, denouncing Lim Kit Siang’s allegations of corruption in Umno. Perhaps most damningly, it was a Reuters photograph, and yet no one at Reuters seemed to recognise it. Or if they did, they did not bother to mention it.

Anwar’s ‘national tour’ was cancelled once, then cancelled again. His stated reason was fear that he would be subjected to violence. The press ate it up.

The real reason was that he was mobilizing the money he had put into play to bring down Mahathir to try to re-create Indonesia’s chaos from six months before, to force Mahathir to step down. All of the talk of a nationwide tour was kabuki theatre; nationwide tours are for politicians hustling their trade, not revolutionaries trying to accomplish by violence what democratic procedures could not.

Across Malaysia, protesters were paid thousands of ringgits to come into the streets and cheer, and so out they came, and cars were set on fire, and marches held, and riot police and water cannons deployed.

The United were dominating Premier League football that season, so one supposes these chaps felt they weren’t missing much by not staying glued to the telly. United of course had an historic run, so those chaps not only got a face full of water cannon, they also missed history.

Anwar was at their head, and Anwar was in the streets. He was reliving his youth, leading cheering masses demanding what they had been paid to demand. He was working to throw Malaysia into chaos, and the camera crews were lined up to see it all.


He was Anwar. He was BJ Habibie. Mahathir was Suharto. The end was nigh.

It was here that we not only saw that the old Anwar was either back or had never truly gone, but also that Anwar had developed a profound streak of incompetence somewhere along the way, for he got the entire process quite backward.

Suharto faced months of riots over increasing poverty, social disruption, and years of brutal, totalitarian government of a kind never experienced in Malaysia. Only after all of this was done did his support in his own party and in the armed forces dry up, forcing him to step down for his successor.

Mahathir’s successor had lost the support of his party, had been cast out, and then small-scale riots erupt, led by Anwar’s men and made up overwhelmingly by those paid handsomely to appear.

Worse for Anwar, by then, Habibie’s increased international and national stature had begun to bring out some of his less desirable qualities – his corruption, his tendency to be all things to all people, and his grasping ambition.

He was every bit the con artist Anwar was, but not the con artist Anwar wanted anyone to think him.

Leading riots – a frontal assault on Malaysia’s democracy – was the final straw for Mahathir, and so Anwar was arrested under the Internal Security Act. When he was beaten in custody,


Mahathir demanded that heads roll, and I am given to understand that he meant that precisely. He understood that Anwar was playing the martyr for the whole world to see, and that anything that took away from his corruption and lawlessness was not merely criminal, but criminally stupid.

True to form, when Anwar appeared in public, he played every inch the wounded hero. The exaggeration was obvious – he famously threw off a back brace during his trial whilst he thought no one was watching – but he had another critical piece of his puzzle as the beleaguered martyr.

The Saudi Foreign Minister sought to intervene to protect their investment, ringing Mahathir directly and begging for forgiveness. Mahathir was and is many things, but inclined to have his commitment to Islam questioned – as his interlocutor did – he is not. The call ended with the Saudi cut off mid-word.

The United States sought to intervene, threatening Malaysia with an end to foreign aid and sanctions the likes of which had crippled South Africa a decade before. They too were ignored.

Anwar was charged under the ISA, and then charged with corruption and sodomy. The story of his trial is for next time, but I briefly wish to return to something I mentioned in my last installment.

I am not altogether comfortable discussing Anwar’s sex life, and not merely because I believe him a repulsive person. The rumours of his infidelity, with men and women, were such that I received credible reports that his wife paid private contractors to follow him and his paramours about.


These rumours, which began not long before he became Education Minister, only increased in frequency over time.

So widely believed were these stories that Karpal Singh – who would later unabashedly declare them defamatory – repeated those same stories in public during Anwar’s tenure in Government.

Although I do not know Anwar’s sexual proclivities and have little desire to explore them in any meaningful way, it is not the uncertain nature of the charges that stays my hand.

The strain on Wan Azizah is the source of my reluctance. The lady is no child, and matches Anwar’s ambition with ease, far surpassing him in cunning and brilliance. But she clearly loves her husband, and these stories clearly wounded her then and wound her now.

Thus, if the stories are true – and a raft of evidence, video and otherwise, court decisions, whispers on the ground, the testimony of victims, and Wikileaks cables strongly suggest they are – then Anwar Ibrahim is not merely a ruthless radical whose corruption in Government is matched only by his incompetence out of it.

He is also a cad, a small man who abuses the most precious gift a woman can give a man: her trust. And I do not like bringing it up for what it does to his wife, because my father raised me better than that.

But then again, isn’t that the story of Anwar’s life? One betrayal of trust after another? Of his ABIM allies, of Umno as he brought ABIM values into it, of his mentor and father figure, of his wife, of his Government?


That question would in its own way occupy centre stage along with protesters, witch doctors, and a bizarre cast of characters over the course of nearly three months. From the crucible would emerge the Anwar the whole would could come to love, a new Anwar whose old infatuation with poetry and clean governance would sweep aside for so many the man who’d corrupted a generation of Malaysian youth and liberally helped himself to so much graft.

The next chapter in Anwar’s life was set to begin. End of Chapter Ten: Anwar In Free Fall

Chapter Eleven: What We Learnt During Anwar’s Trial As I’ve noted elsewhere in this tale, Kuala Lumpur was once a very different place. It was dirtier, but it was in many ways more fun – easier to get a draught of beer, easier to find a way to discharge some of one’s wild youth under a clear sky. By 1998, KL was much like it is now, with the gleaming, new Petronas Towers dominating the landscape, and so much of Malaysia’s controlled vibrancy on display.

It was this way of course until Anwar’s trial began.

It is a bit hard to describe the tumult and chaos of those days, but perhaps this will suffice: I have seen reports that among the protesters and anarchists, the throngs gathered around to view history, and of course the legions of local and foreign reporters, camera crews, and aides, there was a witch doctor present.

As anyone who spent any time around that court house knows: Bollocks. There were three. Two worked in tandem, even exchanging their foul-smelling head dress as they changed shifts. I have no idea why they did what they did, but they felt it terribly important that at any time a Western reporter was present, so should be a witch doctor, and preferably the same one – to Western eyes.

It was the third one whom I found so very interesting. He just stood off to the side whilst every carried on, then stopped forward at odd moments to shake what I believe to be a rattle manufactured in Guangdong and chant incoherently.

Chapter Eleven: What We Learnt During Anwar’s Trial

After seeing him perform this little manoeuvre for three straight days, I finally approached him and asked what it was he was doing. He grinned at me with bright, white teeth and said in an accent that could have been right out of Sydney, “That bloke in there is the Devil. Completely starkers. Gotta send him off.”

This struck me as hilarious, and by the time I’d asked if he meant Anwar or someone else he was gone, suddenly pressed for interviews by American reporters who’d discovered a ‘local’ who could speak English.

I never knew if he meant Anwar or the presiding judge. Probably both.

I tell this tale not merely to provide you a glimpse of what the biggest trial of the decade (with the possible exception of the strangeness going on with America at the time) looked like from the sidewalks, but to illustrate the hundreds of small details lost in any momentous event unless one happens to be in exactly the right place or the right time. Most of us must spend small fortunes on information gleaned from dozens of sources, eliminating the chaff and getting pieces of data at a time.

During the event itself, without being in the midst of all of the action and chaos, one is largely left with the sorts of things everyone knows – or could know, if they only paid attention. This was the most turbulent time of all for the I-Files, as many of our usual sources were either in fear of police detention, in fear of Anwar, or in fear of Mahathir. What we were able to glean during the events was dearly-bought – very dearly.


For that reason, this installment and the next will not focus so much on what we all know – Anwar was duly charged with sodomy and corrupt practices in two separate trials, the Western world claimed the trial was a political sham, Anwar was convicted of both … the tale is welltold. Instead, I will attempt to focus on the details that our boys managed to acquire between September 1998 and Anwar’s conviction for sodomy in August 2000.

We will begin with notes.

By then, Anwar’s extensive press operation – the one he had managed to build and fund outside his extensive network in the regular press in Malaysia – was not well-known. Today, it is not only found in Soros-funded online operations in Malaysia but in nominally grassroots efforts in the Peninsular, Borneo, Australia, and the United States.

I noted before our surprise at the gorgeous press kits Anwar’s supporters provided the reporters, clearly bespeaking the involvement of slick designers and Western media advisers. It was a surprise to receive, in return for a little over ten thousand ringgits, a copy of a pre-draft of a press release prepared for Anwar’s review just after he was released from detention.

There were several edits in red ink and meticulously written in a bold hand. I was particularly struck by one edit in particular: the ghost writer, apparently knowing Anwar’s penchant for the Bard’s works, had included a paragraph with Anwar comparing himself to Richard III, and quoting from the famous soliloquy in that play. Anwar – or whoever made the edits, though I was given to understand that it was Anwar – had scratched out the section and written, RICHARD II in its place.


Shakespeare’s Richard III was of course the story of the vicious, unnatural and monstrous tyrant thwarted before he could consolidate power. Richard II was a tale of a weak man who was unable to stand for himself in the end.

I do not understand why Anwar bothered keeping either. Henry IV would have been better, and at any rate had more appropriate speeches.

There were also notes about the compatibility of Islam and democracy – ironic from Anwar of all people – and a pre-emptive declaration that the courts which Anwar as DPM and Finance Minister had spent the past decade praising and defending were now too biased to provide a fair trial.

Although it appears that the fellow who procured this for me was a bit too anxious – the exact text as written never made it into Anwar’s diatribes – it was a useful preview of what was to come.

Bundled with that speech were a handful of ink-jet printed pages with talking points. I chuckled as I saw COMPARISONS and beneath it SAKHAROV, GANDHI, MARTIN LUTHER KING JUNIOR. Added in red ink were SUU KYI and MANDELA. Beneath that was a section titled CORE MESSAGES, which I reproduce below, with the notations and strikethroughs included.

And yes, I noted the American spellings as well.


THE CHARGES AGAINST ME ARE POLITICALLY MOTIVATED. Mahathir’s afraid that his corrupt practises are finally catching up to him. I have bravely exposed his system of favoritism and cronyism and am paying the price for it.

I REPRESENT A NEW REFORM MOVEMENT. Much as in Indonesia, the old tyrants are falling before democracy people power democratic reforms. I worked to bring free market and democratic reforms to Malaysian society and have been fired sacked, tortured and imprisoned for it.

SODOMY IS NOT A CRIME. The law under which I have been charged is a relic of Malaysia’s colonial past, and modern nations recognize that relations between two men should not be a crime.

I AM INNOCENT OF THE CHARGES AGAINST ME. I am a devout Muslim, and I have never engaged in adultery, let alone this sort of act. My former driver has been threatened, bribed and intimidated into lying about me and my stepbrother. Even Malaysia’s biased judiciary will recognize this. This is clearly a plot by the Government to hide my status as a political prisoner.

I did not know it then, but of course these would become Anwar’s talking points for the next fourteen years.


I thumbed through these pages and noted a single point, one that would recur with frequency for years to come. Anwar’s most vociferous denials were always about the sodomy, but the corruption allegations seemed almost irrelevant at times. At that point, in November 1998, with the corruption trial just getting underway, I was struck by this contrast.

I considered the report Philip had delivered to me the week before. An informant had managed to somehow acquire firsthand knowledge of Anwar’s last chance to redeem himself before Mahathir and the Umno Supreme Council.

There, Anwar had argued that his moral weaknesses were not unique, and that others in the Cabinet were guilty of the same thing. He compounded this error by refusing to admit that he’d moved for a succession too quickly, and instead demanded that Mahathir step down as a “relic” who was out of touch with Malaysia. He also suggested that he knew of indiscretions on Mahathir’s part, and that those could come to light as well.

Mahathir had demanded that Anwar leave immediately. The rest was history.

Why was sodomy so much worse than corruption?

I would never learn the answer to that question, but as time went by and Anwar angrily responded to every allegation made against him with vociferous – and apparently well-paid-for – press releases; as the Free Anwar movement was born a mix of well-intentioned souls believing Anwar’s ridiculous claims, well-intentioned souls not particularly caring about Anwar’s claims, and of course Anwar’s cronies, desperate for another day in the sun; and as Malaysia slowly returned to its more pacific ways, we were able to secure more information by turns.


One was a stack of internal memoranda from foreign intelligence services’ in-country shops.

Almost all of it was concerned with four essential questions: Firstly, did Anwar do it? Secondly, what would he do next? Thirdly, what would the effect on Malaysia’s opposition parties be? And fourthly, would Mahathir tolerate a new political party formed around Anwar?

The American Embassy worked to quash this investigation from its intelligence services – especially the first part – for reasons that were never altogether clear to us. However, after personnel changes at the Embassy in December 1998, the investigation apparently took off as Embassy opposition ended. Despite these suggestive facts, we have never been able to determine if the change in the Embassy stance was innocent or not.

Regardless of all that, the intelligence services’ verdicts appeared to be that Anwar had indeed partaken of numerous corrupt practices during his time in Government, but that although Anwar may have engaged in sodomy at some points in time, the specific allegations against him for this sodomy trial were likely not true. There was a conflict on the latter point, and many of the reports simply suggested that in the absence of definitive proof, they would presume innocence.

What Anwar would do next appeared to be a sort of chaotic, shambolic rush from one idea to the next. With his corruption trial underway and Mahathir promising a Royal Commission of Inquiry on the abuse Anwar claimed to have suffered in detention, Anwar was in the weakest position of his political life. His abuse was the subject of a gold-standard review, and the crimes he was least prepared to deny were coming to a head.


The Opposition was, as usual, in a bit of a mess. Just a few months before, Mat Sabu had offered his unsolicited opinion that Anwar would be a worse prime minister than Mahathir. Karpal Singh, as I noted before, had denounced Anwar as a homosexual. The distaste that Lim Kit Siang had for Anwar would be hard to express in mere words. I am reliably informed that Nik Aziz thought Anwar beneath contempt.

Intelligence reports suggested a flurry of calls from Anwar to his former enemies, calls promptly placed on ice. A second flurry of calls went between the men who had been Malaysia’s opposition for decades as they worked to decide whether to accept into their midst a man who had spent over a decade and a half not merely opposing them, but working to undermine them and attack them at every turn.

For PAS, this was no great decision; politics and allegations of homosexuality notwithstanding, Anwar had been their sort of chap for years before joining Government, and once safely ensconced there, had shown a satisfying tendency toward the sorts of policies PAS always held dear.

DAP presented a dilemma, one which even the famously opportunistic leadership of that party had a hard time abandoning. Anwar had ruthlessly worked not merely to hold the status quo on bumiputra favouritism, he had worked relentlessly to undermine the Chinese and any Christians in Malaysia. To embrace Anwar was to embrace one of their worst enemies, better only than Mahathir. It was to betray their voters and their party rank-and-file.

Naturally they were the first to reach out to Anwar and welcome him into Opposition.


The question of what Anwar would do next and how Mahathir reacted would be answered just before the first verdict against Anwar was handed down.

By the end of March 1999, Anwar’s corruption trial was clearly drawing to a close. Informants from inside the government informed us that the general elections would not be held until at least this verdict was complete, as Mahathir had spent the last several months working unsuccessfully to combat Anwar’s public relations machine in the West and at home. The old man clearly wanted to be able to say that if Anwar was cleared of corruption charges – to his mind, the worse offences Anwar had committed – then he would be able to stand for election.

The so-called Reformasi movement had fairly obviously been intended as a political vehicle since Anwar launched it at the end of the prior year, and many of us were surprised that it had not simply started life as a political party. While we understood – better than most – that success often involves preparing the ground early, Anwar’s self-made role as martyr was such that he could have launched the movement and formed the party at the same time.

One might be inclined to offer him the benefit of the doubt, as he had a great deal on his mind at the time; but as time has passed, I’ve come to see that Anwar’s great skill in rising the ranks at Umno was either a gift he had lost or a gift he’d borrowed from those around him. Without a surrounding cast of cronies and enablers situated to aid him, Anwar’s skill with politics seemed meagre indeed.


Nevertheless, in April 1999, after months of staged difficulties in registering as a political party, at Anwar’s behest Wan Azizah executed what can only charitably be called a leveraged buyout of a tiny regional party and re-named it Parti Keadilan Nasional, apparently because Anwar has no sense of irony. It was great theatre: denied a chance to challenge the evil Barisan Nasional, the plucky rebels take on an existing party and transform it into a vehicle for Justice.

The problem with this narrative of course was that even though PKN would face the same challenges that had allegedly forestalled the creation of a separate party, its registration sailed through.

In another dodgy bit of trouble for Anwar’s story, the RCI concluded that Anwar had been abused and that Inspector-General of Police Rahim Noor should receive the blame for that abuse. The story of the lawless country run amok at the hands of the tyrant was weakened.

All of this was on my mind when I received a call on 14 April to tell me that Anwar had been convicted of corrupt practices.

Much of the rest of this part of Anwar’s tale is well-known. Anwar was sentenced to six years’ imprisonment, a verdict that would ultimately be largely upheld but for a single count being reversed. PKN formed a strategic alliance with DAP, PAS, and PRM to form an Opposition alliance that would make it through the general elections and then promptly fall apart over the eternal issue of hudud law.


Anwar’s sodomy trial picked up steam in June as the government prosecutors and Anwar’s defence team entered into an informal competition to see who could bungle the entire thing worse. From my vantage, it was a draw.

Anwar would write to his old Islamist chums extensively from prison, some of which became available to us. In 1999, Anwar wrote from prison to one of his co-founders at the IIIT: “In the quiet solitude of prison, I’m able to recollect vividly our meetings in Riyadh beginning more than 20 years ago. In spite our shared ideals, we were always engaged in heated debates on the issues of wasilah and fiqh awlawiyyat. Unfamiliar as I was with loud Arab rhetoric, I had to force a readjustment of my subdued mannerisms – in other words, my Malayness – just so I could be heard. But, each time, it was the diplomatic mastery of Dr Ahmad Totonji that brought about an amicable end to our debates.”

Totonji, of course, was the Iraqi fellow who had helped Anwar join up with the Saudi backers on whom he would rely for the rest of his life. But he was also so much more.

It is with the sodomy trial and the world’s reaction to it – and the things the world neither learned nor cared to learn – that the next chapter will concern itself.

End of Chapter Eleven: What We Learnt During Anwar’s Trial

Chapter Twelve: Sodomy, Money and Spin I do not mean to digress overmuch – a sin of which I am already guilty – and I appreciate your patience as I indulge my proclivity for drama and for narrative. But I assure you that all of my writings concern real events, and I ask that you bear with me again as we step out of the chronology into which we have settled as we turn to our subject’s trial for sodomy – and more importantly, what we learned during those tumultuous days.

I would like to return to two topics that saw perhaps their greatest change at the time: Anwar’s public relations machine, and Anwar’s money machine.

Let us begin with the public relations.

Few Malaysians are aware that most Westerners are unaware that Anwar Ibrahim was tried twice after his fall from grace, once for corruption, once for sodomy. Indeed, most Westerners who know of Anwar are convinced that he was tried for sodomy only, and that his trial was part of a political manoeuvre by Mahathir Mohamad to dispose of his reforming deputy prime minister once and for all.

One might credit this to a number of things, not least being that Western society is vaguely obsessed with sexual intercourse of every kind; that then-American President Clinton was being tried in Congress for lies about sex under oath, and so sex, so to speak, was in the air; or that the majority of Western reporters are liberals on sexual matters, and so were horrified that anyone could be tried for sodomy anywhere and quite lost the thread over the whole thing.

Chapter Twelve: Sodomy, Money and Spin

All of these things are true. But they are not the truth. The truth is that Anwar, whatever his failings, is a devilishly clever practitioner of public image control, and he mobilised his considerable resources toward the goals of enhancing his image abroad, and in turn using that to create a perception of inevitability at home.

I have remarked before that the ruthlessly competent Anwar who had worked his way from Youth and Sports to Education to Finance to Deputy Prime Minister had disappeared on being cashiered. In his place was a man one might reasonably mistake for an uninhibited Ego, who so believed in the power of his foreign backers and his carefully-crafted image that he believed street protests would bring down Mahathir Mohamad as they had the Indonesian dictator Suharto, a miscalculation of both Indonesia’s political culture and Malaysia’s.

But for all of the loss of his talent in politics, his gift for presenting the best face possible to the world never waned. Indeed, it seemed to blossom in a way it never had before. And so Anwar found the right notes to sing, and the right speed at which to play them, for his most fervent and gullible audience: foreign reporters.

It was with wry amusement that I read in the Wall Street Journal in late 1998 and early 1999 that Anwar Ibrahim, the reforming Deputy Prime Minister of Malaysia, had been tortured, thrown into prison, and charged with sodomy as part of the autocratic Mahathir Mohamad’s attempt to stop Anwar’s reforms once and for all, with the whole sodomy bit being a mere façade.


Oh, Mahathir was certainly an autocrat, and if the Royal Commission was to be believed, Anwar was certainly beaten, and he had certainly been charged with sodomy. Indeed, the truth or lack thereof of those assertions, made over the course of weeks, was not where the humour lay.

It was instead in the way the story built over the course of days and weeks in the Journal, the Economist, and other publications – those with whom Anwar had once been intimately familiar as Finance Minister, and with whom certain boutique consultancies in New York and London had close ties and easy access.

Having used and counseled some of those same consultancies, I recognised their fingerprints. The first, breathless revelations; the sudden twists and turns that have been known in-country for weeks; and the relentless messaging in friendly outlets. Whatever else may be said of Anwar Ibrahim, he pays for the best public relations experts, and he gets them.

Anwar’s opponents were not so well-prepared. Mahathir did himself no favours with his management of the situation. Years of unchallenged power, the Team A/Team B fiasco long behind him and even the King essentially reduced to a raw figurehead, the ease with which he had vanquished Anwar’s uprising – all of these things left the Prime Minister, who was generally disinclined to explain himself overmuch anyway, absolutely unprepared for what was coming.

Complicating the matter was the Government’s prosecution of Anwar’s sodomy charge, which might charitably be called incompetent. I refer not merely to the horrific state of the alleged physical evidence, but to the preparation of the witnesses.


I distinctly recall shaking my head when reading that Azizan Abu Bakar had testified that he had been repeatedly sodomised, roughly a dozen times, between 1992 and 1993. The attempts to explain away poor evidence handling and contradictory testimony obscured what many with any real knowledge of Anwar believed to be an entirely accurate charge.

Anwar’s public relations teams feasted on the chaos. Foreign reporters no longer needed to come to Kuala Lumpur for live updates on the case and every Government misstep. Mahathir of course made it worse.

At some point, he took it on himself to assert the judiciary’s independence to any foreign questioner. One would expect no less, but he chose as his crucial proof the Team A/Team B matter. This became his stock response to queries from journalists, writers, and foreign leaders.

It did not take them long to uncover Mahathir’s reaction to the courts’ decisions in the Umno schism, or the subsequent moves in Parliament to permanently cow the judiciary. They found it particularly easy to discover this when Anwar’s public relations teams practically deluged them with the relevant clippings, constitutional changes, and photographs.

I know this, because many of the largest public relations firms are desperate to place copy far and wide, and even a poor facsimile of a real publication can receive their material on a simple request. I therefore received the same media packages in my capacity as principal of The New Bahasa Times, a publication with a mailing address at my father-in-law’s home and a total circulation of my group of ex-pat chums.


We duly sent thank-you notes.

These same consultants would form the nucleus of his public relations team through his time in prison (paid for out of Anwar’s and his Saudi masters’ funds) – but we shall return to their work in a later chapter. What was particularly impressive was the level of co-ordination Anwar managed with his financial and public relations teams whilst in prison, a particularly spectacular feat given the government’s surveillance of his correspondence.

Would that he had put half this much élan and daring into his coup attempt.

At home, with the domestic press largely foreclosed to him, Anwar needed alternative channels for his messages. Funds funneled through George Soros’s Open Society organisation allowed the creation of several online ventures, some of which remain today, whose slavish devotion to Anwar’s gospel made at least one of those public relations experts, whom I later hired, blanche. Soros, of course, needed no encouragement to accuse Mahathir of every crime imaginable, and so made it a point to maintain a steady flow of his own and Anwar’s (well-disguised) funds into Opposition media for over a decade.

But Anwar’s greatest work was in the Western press as a lever for domestic consumption.

The core message pushed out to Western reporters was, I thought, brilliant: Appeal to their sexual liberalism, their desire to champion the weak against the strong (even when the weak are wrong and the strong correct), and their belief in their own indispensability.


Continue the Shakespeare allusions and bring them back to their days at university where they imagined themselves as literate in every field as the specialists. Provide them “exclusive” copy so that they felt wanted and appreciated. Wine, dine, and in an industry already frightened of what the internet would do to their livelihoods, help them live well.

I chuckled to myself as I looked through some notes on Anwar’s press contacts at Time, Newsweek, The Financial Times, The Economist, and the Wall Street Journal. I decided to set up a bit of an office game to see how each publication would work to convince its readers that Keadilan’s latest manouevre or Anwar’s latest tribulation was somehow important to their lives.

Amongst ourselves, we were only curious as to where what we were beginning to realise was his astronomical financial empire had gone. It was August 1999, and we largely believed Anwar a spent force.

We were, broadly, mistaken.

As Anwar’s sodomy trial ground on, and our investigations into his financial resources continued – as I discussed before – one of our overarching questions was not merely, How much does he have? but also Where did it go?

Mahathir had discerned quickly – through the use of open and covert pressure – part of Bank Negara’s role in Anwar’s money machine, and as a spigot for the funds to enter Malaysia, the institution’s days were over. Hong Leong was similarly largely separated from Anwar’s financial dealings as a security risk, though over time they would be welcomed back into the fold. The entirety of Anwar’s carefully-controlled crony network was unceremoniously seized, bullied, or dissolved.


Al Baraka Bank would remain a centre for Anwar’s dealings, because with the importance of the House of Saud to the Hajj, Mahathir was unwilling to completely dismiss Riyadh from Malaysia, an entirely rational move that would nevertheless allow Anwar to pour funds into Keadilan and his other in-country ventures as needed.

One of the details Mahathir’s investigators came across were the International Institute of Islamic Thought transfers amongst the Bank Negara records – hence the notations in Murad Khalid’s statutory declaration – and so Mahathir demanded that the United States close the institute or at least freeze its funds until the investigation was complete.

The Clinton Administration was long since irrevocably opposed to Mahathir and more than slightly in favour of Anwar, and so categorically refused. When Mahathir personally rang President Clinton to note that the IIIT was apparently channeling funds to known terrorist organisations, the line of communication was simply cut altogether. The IIIT would serve as a vital conduit and safe house for Anwar’s finances until a new President took office – and ironically swept in the neoconservatives, who were Anwar’s implacable allies but never placed in domestic policy.

With Hong Leong and Bank Negara essentially closed to Anwar’s funds, Al Baraka’s importance grew. Contacts in Riyadh passed along data to those of us growing the I-Files that the House of Saud was so invested in Anwar that they gladly recouped Al Baraka’s losses from Anwar’s inactivity, and helped re-create the financial empire with their man out of commission and his crony network broken.


Gone, obviously, were the front companies with names of variations of ‘black rock.’ Instead, new funds came into existence with names like ‘Independence’, ‘Liberty’, ‘Freedom,’ ‘Reformed’, and others in a similar vein, with offerings made to Anwar’s foreign backers (who generally could not otherwise afford the subscription fee) and invested in growth areas such as China, Turkey, the United States, and Brazil. It took the better part of a year for the entire operation to come fully into effect, but by the time the chaps in Riyadh and the fellows from the ruins of BCCI in Lahore completed their handiwork, the entire operation was fully functional again, albeit along different channels than before.

All told, Anwar had lost something on the order of over 1 billion US Dollars – a not trivial portion of his wealth – but the Saudis had plugged the leak and repaired much of the damage.

As I’ve said, the Saudis play the long game. Anwar never faced death for his crimes, and using his funds and theirs had quickly placed himself back in the political game, this time as the martyr for the Opposition. While PAS was hardly an idea vehicle for the Saudi agenda – PAS tend to have the subtlety of a tsunami with none of the visual appeal – Anwar’s path to political power, though diverted, was not permanently foreclosed. Anwar and his backers therefore dug in, certain that the street rallies and political unrest would give Anwar his opportunity sooner than later.


They were of course incorrect, but no one knew it then, and in the wake of Barisan Nasional’s poor showing at the Tenth General Election, many things seemed possible.

In early August 2000, I met with a couple of old chums, fellow compilers of the I-Files, to discuss the things decent men start to discuss as they age – family, investments, taxes, luxury automobiles, and women with whom they would never cheat on their spouses, though they sometimes almost wish they could. We were in Singapore, the air was alive with the raw energy of the place, and it was with no small amount of fear and awe that we discussed the cost of sending our various offspring to university.

We turned after a time to Anwar’s sodomy trial, which had just concluded the month before. I confess that by this time I was beginning to centre my operations elsewhere, and I had therefore begun to pay smaller amounts of attention to the day-to-day of Malaysian politics than had been true for most of two decades. Nevertheless, the whole, over-100-day-long affair had finally come to a conclusion, and so we discussed the likely outcome.

After expounding on the entire matter and the shoddy nature of the Government case, the Irishman to my left knocked back his Dewar’s and sagely said, “Oh, he did it. And they’ll doubtless convict him, though I’m not sure I would. What a fooking mess.”


I nodded at the last. “To think, it took over 100 days to arrive! Gentlemen, we missed our calling. We should have been lawyers.” A round of drinks followed that as we toyed with that. We were turning to sport – well, truthfully, we were turning to another round of drinks and perhaps a wobbly trip up to our separate rooms to sleep off the effects of too much alcohol and too much age – when our fourth companion showed up, impolitely sober.

“Anwar has been found guilty,” he said, and we all toasted each other for no reason at all other than being on the wrong side of drunk. Our sober friend gave us all an odd look, but by that point, none of us cared, or even knew exactly why we were toasting.

Anwar was of course convicted of sodomising his driver, a defeat he quickly turned into yet another public relations coup. He was imprisoned, politically neutralised for a time, and clearly biding his time.

Over the next several months, we would compile the data I have provided here and in earlier chapters on his financial empire as we worked to reconstruct how this man who started with relatively little came so very close to success, and to the status of ultra-rich by any national measure.

But the story of his political resurrection – a story on which I have only touched briefly – will be the story of the next couple of chapters. End of Chapter Twelve: Sodomy, Money and Spin

“I have always had a lurking admiration for those who could keep their lies straight. It’s a deucedly hard thing to do, so I’ve generally left it to others. I have had the advantage, in both government and private work, of being disbelieved by many with whom I interact by the nature of my job for most of my life, so I’ve been free to be honest to a fault. Just by being honest, others keep better track of what I say than I do.” - Jonathan Smith

Chapter One: The Man Without A Face Chapter Two: The Man Without A Face Puts On A New One Chapter Three: Anwar The Islamist Takes Over Education Chapter Four: The Family Firm Is Launched; Or Anwar, Bhd Chapter Five: Beyond Murad Khalid: The Real Story Of Anwar, Bank Negara And The Money Machine Chapter Six: Inside Anwar’s Money Machine Chapter Seven: The Turkish Connection Chapter Eight: The Man Who Would Be King Chapter Nine: The Fall Chapter Ten: Anwar In Free Fall Chapter Eleven: What We Learnt During Anwar’s Trial Chapter Twelve: Sodomy, Money and Spin

A twelve-chapter treatise on a likely politician by a likely pseudonym

Reproduced (without permission) by Tommy Peters

the "i" files • a politician's tale • jonathan smith

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