After a DOJ indictment, why are there still so many questions about 1MDB’s finances?
A Malaysian financier once known for running up six-figure bar tabs at Manhattan clubs and dropping hundreds of millions of dollars on jewelry for dignitaries and his supermodel girlfriend is now the target of a multi-billion dollar international financial scandal currently under investigation by the Department of Justice.
Low Taek Jho—commonly known by the nickname “Jho Low”—was once said to have had access to more cash at one moment than any person in history, but now he’s on the run from both U.S. and Malaysian authorities. And though his whereabouts are unknown, recently filed documents show that two international law firms have been hired to burnish Low’s reputation in Washington.
But there’s a catch: No one knows who’s footing the bill, and that’s a problem.
The incomplete information in the documents, which are required to be filed under the Foreign Agents Registration Act (FARA), highlights how the current system of disclosure under FARA can allow key information to be hidden from the public.
This lack of disclosure has taken on new relevance now that recent court filings, unveiled late last month, show a previously unreported instance of money laundering related to Low’s case, containing details that appear to link one of President Donald Trump’s closest allies to the scandal.
First, some context: From 2009 to 2014, Jho Low allegedly masterminded a conspiracy to embezzle $4.5 billion from 1Malaysia Development Berhad (1MDB), a Malaysian government development fund. According to a series of previously released DOJ complaints and indictments, Low laundered much of this money into the United States by spending lavishly on New York real estate, fine art, and decadent, celebrity-filled parties. The scheme fell apart in 2015, and since 2017, Low has been a fugitive, wanted for arrest in both Malaysia and the United States.
Last month, a new set of DOJ court filings appeared to implicate Elliott Broidy, a vice chairman of President Trump’s 2016 campaign and inaugural committees, as a participant in a recent scheme to launder millions of dollars of Low’s money into the United States in order to influence the ongoing DOJ investigation against him.
According to the filings, in 2017, Broidy made an agreement with Low to “try to influence a potential nominee for a federal position that would have authority over the 1MDB forfeiture matters.” In return, Broidy’s wife’s law firm received at least $6 million from Low through a series of bank accounts and shell companies designed to disguise the funds’ true origins, with the promise of tens of millions of dollars of further compensation if the investigation was successfully resolved within a year due to Broidy’s actions.
This is scandalous in and of itself—but it also casts Low’s legal team’s FARA registrations, which were submitted to DOJ just over a month ago, in a new light.
In late October, Low drafted two international law firms, Schillings International and Kobre & Kim, into a public relations effort intended to suppress coverage of the ongoing legal proceedings against him. It is likely as a result of this PR campaign that on October 31, these two firms—the latter of which is also currently representing Low in “legal matters arising out of the 1MDB matter, which involve U.S. Department of Justice civil asset forfeiture proceedings”—registered under FARA as foreign agents of Low.
Typically, registered foreign agents, such as lobbyists and PR firms working for foreign governments, receive payment from the “foreign principals” they represent. FARA requires agents to disclose such payments on the registration and reporting statements that they submit to the DOJ. On their recently submitted statements, however, both Schillings and Kobre & Kim indicate that they have not technically received any payments from Low himself; instead, the two firms both state that they have received funds from another unnamed party “on behalf of” Low. As a result, Schillings and Kobre & Kim’s registration statements show the total amount of money they have received—$340,680 and $818,434, respectively—but not who has been paying them, or when these payments took place.
It is highly concerning that Low’s legal defense has been allowed to so blatantly conceal the sources of its funding, particularly in light of recent revelations about Low’s recent efforts to launder even more of his illicit funds into the U.S. financial system. Low’s connections to Broidy, an individual with access to the highest rungs of American society and politics, make it even more important for his legal team to operate with full transparency.
The Foreign Agent Registration Act exists to ensure that the government and the public are kept informed about foreign actors’ efforts to influence American politics and policy. As Low is a foreign national currently under indictment by the DOJ, and as his connections to the President and other politically powerful Americans continue to come to light, the law demands that his legal defenses’ sources of funding be publicly disclosed. Unless those additional disclosures are made, this case will be yet another example of how flawed the current FARA system is—and how much it could potentially be strengthened.