What’s the Deal, Zahid Hamidi?

by John R. Malott@www.malaysiakini.com

COMMENT: Whenever there is an American angle to the news inMalaysia, I become very interested.

So when I read last Saturday that Home Affairs Minister Ahmad Zahid Hamidi had sent a letter to the Federal Bureau of Investigation (FBI) asserting that Paul Phua, a Malaysian citizen who is under US federal indictment in Las Vegas for allegedly running an illegal gambling ring, is someone who has been performing services “on behalf of Malaysia’s national security,” I could not help but be curious.

The Malaysian press and websites have been focusing almost exclusively on whether Phua is a member of the 14K triad. Personally, I don’t care whether he is or not, because it is irrelevant to the real issue. The real issue is that a Malaysian citizen is allegedly involved in major – let’s put that in capital letters, MAJOR – illegal sports gambling operations in Macau and Las Vegas, activities that led to his arrest this year in both cities.

The South China Morning Post says that the raid on the gambling operations in Macau involving Phua was the largest in its history. As for the US, the FBI has carefully documented the scope of Phua’s sports betting operation in Las Vegas, which reached into tens of millions of US dollars.

Phua, Who?

The Wall Street Journal recently ran a major article on Phua and his involvement in the growing global problem of illegal online sports betting. Yet despite all the news on what Phua has been up to in Macau and the US, Zahid says that Malaysia would welcome Phua back with open arms.

In 2013, Zahid told Malaysians who were unhappy with the country’s policies to “leave the country.” Senior Malaysian leaders such as Khairy Jamaluddin have told dissidents “good riddance.”

What’s the Link to Phua?

Yet Zahid says that gambling kingpins who have violated the laws of my country, the US, are to be eagerly welcomed back home to Malaysia.

Phua’s Malaysian lawyer Muhammad Shafee Abdullah, who is often called “UMNO’s lawyer,” said that what Phua did was merely a revenue offence, as he was undertaking gambling activities without a licence.

“His offence is not a big deal,” Shafee said, adding offenders normally received a slap on the wrist with a fine. Shafee should know better. What Phua allegedly has done is a major criminal offence in both Macau and America, not a tax dodge, and Phua could spend many years in jail for it.

Why the letter, Zahid?

Like everyone in Malaysia, I wondered why in the world Zahid wrote that letter. In his letter to the FBI, Zahid never explained the contradiction between his assertions and the information that the Royal Malaysian Police (RMP) gave the FBI eight years ago.

To make matters worse, Zahid dug himself in even deeper by claiming to the FBI that the gambling kingpin had provided services to “projects” involving Malaysia’s national security.

This caused many people from Malaysia to Hong Kong to the US to ask the question, what national security projects has Phua been involved with?

In his letter to the FBI, Zahid wrote, “Based on our information, Mr Phua is neither a member nor is he associated with the 14K Triad.” Yet six years earlier, the Malaysian Police informed the FBI that Phua in fact was a member of the infamous triad.

To explain the contradiction, Phua’s lawyer Muhammad Shafee Abdullah said that the RMP had made a “very big” mistake. He said the police were “wrong.”

But Zahid never said in his letter that the police were “wrong.” He never told the FBI why the Malaysian government had declared Phua a triad member in 2008 but now had changed its mind.

Asked to explain the discrepancy between the 2008 report and Zahid’s 2014 letter, the Inspector-General of Police Khalid Abu Bakar took a pass. He declined to comment. By refusing to back up his boss and agree that the RMP were wrong in their 2008 assessment, Khalid left his boss Zahid hanging out to dry.

Why does it matter whether the FBI’s 2008 memo was right or wrong? Now we get into the Hollywood movie or the ‘MI-5′ part of the story – and also a description of the American judicial process.

According to many Las Vegas and gambling news websites, Phua’s American attorneys are trying to get the case thrown out on civil liberties grounds.

The other five people arrested in Las Vegas with Phua have all confessed and cooperated with law enforcement. They admitted what was going on. There is no doubt; by all accounts, Phua is guilty.

His activities were witnessed and videoed by the FBI and confirmed by these five other people, his associates. The FBI also found evidence on the laptops and cell phones that were seized.

So the only way to win is procedural. You have to prove, not that Phua is innocent, but that the FBI acted wrongly and violated Phua’s civil rights. Think about that – a Malaysian citizen who violated American law now wants to be protected by the American constitution.

So Phua’s attorneys are pushing the argument that the search of the hotel villas and also the arrest warrant for Phua were not valid. They want the judge to throw the case out of court on procedural grounds.

The Hollywood movie version

Based on all the reporting from Las Vegas, here is what happened, in a Hollywood-style movie script.

After Phua and his associates were arrested in Macau, they hopped on a plane – his private US$48 million plane – to Las Vegas. They wanted to continue their illegal online sports gambling operations on the World Cup.

They checked into Caesar’s Palace into five high roller “villas,” and were given US$90 million in credit. They then demanded that the hotel staff install all kinds of Internet connections in their villas.

The hotel staff became suspicious and went to hotel security, which in turn concluded that an illegal online gambling operation was going on. Hotel security then contacted the FBI.

The FBI checked the names of the high-rollers in those suites, and “Bingo!” They found the name of Paul Phua, who only one week before had been arrested in Macau in the biggest illegal gambling raid in Macau history. And they also found that in a 2008 FBI memo, the RMP officially had fingered Phua as a member of a Chinese triad.

What happened next was even more Hollywood. The FBI disabled the Internet connection to Phua’s suites, where the illegal sports gambling operation was being conducted. With the Internet down, and Phua losing money and desperate to restore connectivity, the FBI agents then posed as Internet repairmen.

They entered the villas (allegedly without a search warrant), and then secretly witnessed and videoed what was going on. They confiscated laptops and cell phones, and it was all over. Phua’s attorneys say that because there was no search warrant, the search was illegal.

The US government no doubt will argue in response that there was “reasonable cause” to believe that illegal activity was taking place, given the fact that Phua had just been arrested in Macau for illegal sports gambling before he came to Las Vegas and because he had requested an inordinate amount of Internet connection equipment for the hotel suites.

Back to RMP report on Phua

According to various Las Vegas news websites, Phua’s attorneys say that the judge issued the arrest warrant for Phua only because the FBI:

1. hid the fact that there was no search warrant, and

2. told the judge that according to the FBI’s information from the RMP, Phua was a known member of the 14K triad.

They say that in submitting that Police report from Malaysia that Phua was a member of a triad, the FBI poisoned the judge’s mind and led him to issue the arrest warrant.

That is why it seems the US lawyers went to Shafee to get something from Zahid – to challenge the old Malaysian police report and argue that the judge had been led astray by the FBI.

But it doesn’t matter. Zahid’s letter was all for nothing. What matters is what the FBI knew at the time they went to the judge. At that point they had official Malaysian Police information from 2008 about Phua, which they shared with the judge. That is what they knew to be the truth at that time.

The fact that months later, Zahid would – for whatever reason – write something else does not matter. What matters is what the FBI believed to be true when they went to the judge for the arrest warrant. And what they had was the RMP’s 2008 memo.

So Zahid’s memo, written five months after Phua was “caught in the act,” is worthless and not worth the paper it is printed on.

And all that leads back to the basic questions – why did Zahid write his letter to the FBI? And how has Phua contributed to Malaysia’s national security?

Addendum: After this was written, Malaysiakini reported that Zahid’s letter to the FBI “has been withdrawn from the Nevada District Court after Putrajaya objected to it being used for the defence” of the alleged gambling kingpin.

So now it is not just the Ppolice Chief who has left Zahid hanging, it is the government as well. It is good to see that the powers-that-be in Putrajaya have better judgment than Zahid.

JOHN R MALOTT is former United States ambassador to Malaysia.