Federal Investigators Are Now Probing 1MDB's Connection To The White House

It is believed that money embezzled from the Malaysian state fund was paid for lobbying seeking closer U.S.-Malaysian relations, according to a report in the WSJ.


The scandal-ridden 1MDB refuses to stop giving up new shocks

After being connected to a Hollywood studio, high-end U.S. real estate, the 1Malaysia Development Bhd., known as 1MDB, is now linked to the White House.

According to the Wall Street Journal, US Federal investigators are now probing whether money improperly obtained from the 1MDB was paid to a US entrepreneur, who later arranged a White House visit for relatives of PM Najib Razak.

The entrepreneur in question is Frank White Jr. He, the WSJ reports, helped start an investment firm called DuSable Capital Management LLC. He has also raised funds for US President Barack Obama and presidential candidate Hillary Clinton.

The US entrepreneur, whose sister is married to a cousin of US First Lady Michelle Obama, had arranged a White House visit back in December 2013 for a delegation that included the son and stepson of PM Najib, the Oval Office's visitor records show.

Even actor Leonardo DiCaprio and director Martin Scorsese had accompanied them to present Obama a copy of "The Wolf of Wall Street", a film which PM Najib’s stepson Riza Aziz co-produced, the US financial daily reported 13 October.

Najib's stepson Riza Aziz and US entrepreneur Frank White Jr.

Image via Dusable Capital Management

Investigators believe that USD10 million allegedly embezzled from 1MDB indirectly flowed to Frank White Jr. in a business deal. Additionally, 1MDB had also paid USD69 million to buy a DuSable unit out of a deal they had agreed on to build solar power plants.

Below we list down the timeline of the dealings, as reported by The WSJ:

In 2012, Frank White was paid about USD10 million by a company called MB Consulting LLC. It was owned by an Abu Dhabi business partner of Jho Low.

According to US prosecutors, in their July 2016 lawsuits, part of that money, allegedly embezzled from 1MDB, was sent to MB Consulting.

In May 2013, Frank White formed DuSable Capital with Shomik Dutta. He happens to be a former White House special assistant and 2012 Obama fundraiser.

Later in 2013, Frank White registered DuSable as a lobbyist for 1MDB.

On 18 December 2013, Frank White escorted PM Najib's family members on their Oval Office visit, where they met President Obama.

In April 2014, a DuSable unit agreed with 1MDB to jointly develop the solar-power project. President Obama arrived in Malaysia on 26 April 2014.

Four months later, 1MDB moved to buy the DuSable unit out of the project, which had seen no construction, to prepare 1MDB’s energy assets for a public offering.

PM Najib signed a resolution to pay DuSable USD95 million for its interest in the solar project. The price was, however, renegotiated and 1MDB paid USD69 million, according to a 1MDB/DuSable joint statement last year.

Although, there is no indication that President Obama or the White House were aware of any 1MDB links with the US entrepreneur Frank White, or of any issue with the movie's financing

While Frank White and DuSable have provided information to investigators, the investigation hasn’t resulted in any allegations of wrongdoing against White or DuSable.

Erik Smith, a spokesperson for White and DuSable, said they were not aware of any allegations that 1MDB was the "victim of theft" when they had dealings with it.

Their dealings with 1MDB, Erik added, were "intended to provide renewable energy in Malaysia, create jobs in the United States and earn support for Malaysia in the US"

Check out the list of assets allegedly bought with money that was misappropriated from 1MDB:

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