Umno’s Ponzi scheme


Mariam Mokhtar
Malaysiakini
Dec 3, 2012

Malaysians need not fear that we will become like Afghanistan because Afghanistan has learnt from us and has become like us.

A New York Times report headlined ‘Audit says Kabul Bank began as Ponzi scheme’ bears a striking resemblance to the way Umno runs this country.

Investigators have claimed that the Kabul Bank has been fraudulently obtaining hundreds of millions of dollars and siphoning it off to a few individuals connected to President Hamid Karzai (left).

The war-torn country is trying to get to grips with the concepts of western democracy and banking, but public trust and confidence in the government has been shattered by the revelations of crony capitalism and corruption on a massive scale.

Governments around the world are shocked at the Kabul Bank scandal but are turning a blind eye to similar events in Malaysia, where institutions routinely siphon off money to Umno and its cronies.

An audit by the Kroll investigative firm has revealed that the Kabul Bank’s financial duplicity was mired in controversy and cover up. There was a political conspiracy involving those at the very top of government to stall the investigations.

This is no different from Malaysia. Recent cases are the political interference concerning Tajuddin Ramli’s involvement in the Malaysia Airlines scandal, the Sabah Umno and Michael Chia fiasco and the National Feedlot Corporation case.

The Kroll report also revealed that official stamps had been issued to fake companies so that forged papers could be made to look legitimate. The bank kept two sets of books to dupe auditors and loans were issued in the names of the owner’s friends, relatives and even domestic servants.

Sherkhan Farnood, the bank’s founder and chairperson, stashed the loot in Dubai. It is also claimed that money was smuggled out of Kabul via an airline belonging to shareholders linked to the bank. Kharzai’s brothers, who were implicated, have claimed innocence and escaped prosecution. No one appears accountable or has taken responsibility for the alleged fraud.

Last week, Umno held its 66th general assembly. It was laced with theatrics, its members reduced to tears by a song, and a former premier wielded more influence than the incumbent. All these are signs that the country, not just the party, is in trouble.

The way Umno operates is similar to a Ponzi scheme but instead of making a financial contribution, Malaysians have had to pawn their livelihood and their children’s future, just to keep people at the top of the scheme in power and wealth.

Charles Ponzi, Bernie Madoff, and Kautilya Pruthi, the British equivalent of Madoff, had conned people out of their life savings but were eventually caught and jailed. In what is known as a Ponzi scheme, people were lured into investing their hard-earned cash with con merchants who offered them in the short-term, higher returns than any other investments could provide.

Change from within

Umno’s Ponzi scheme is destined to fail. With the increase in Umno warlords, greater demands are exerted on the kitty, which is financed by the taxpayer. Those who are more senior in Umno want a greater share. The VVIPs and their children have to be appeased. The fickle-minded, untrustworthy party ‘frogs’ also need feeding.

An Umno member would find willing victims to become party members, force them to swear allegiance to be a true member and get them to find fresh recruits.

Like any pyramid scheme, only those at the top of the pyramid reap the benefits. For instance, Umno divisional heads are given incentives to keep them happy. It is alleged that they can demand government projects of a certain fiscal value, to pass on to their cronies and members.

In some cases, divisional heads are alleged to be given hundreds if not thousands of taxi permits as inducement.

With each taxi driver being obliged to pay about RM30 to the company per day, it is not difficult to work out how many millions of ringgit some people can make per month.

Why does Kuala Lumpur need 35,000 taxi drivers? When there is a glut of drivers, there is depressed income from fares and more drivers sinking into debt.

The Ponzi-type scheme Umno operates also uses religion and affirmative action policies to keep the Malays under control, but Malays need to understand one thing – they do not owe the government a living.

A student on a Mara loan or scholarship should be beholden to the taxpayer for funding his studies. When the government is guilty of corruption or injustice, the student should not keep quiet because he thinks he is beholden to the government for his education. He is not.

Sadly, many Malays refrain from criticising the government because they feel indebted to the government when in truth, they should be grateful to the taxpayer. The Malays know that Umno does not represent them, but they have been brainwashed to keep silent, with tiny inducements and the fear of God to keep them in check.

The government should give every Malaysian child a decent standard of education and equal opportunities, but even the privileged are cheated.

The method with which Umno rules the country dwarfs the Kabul Bank Ponzi scheme. The west does not give a damn what happens in Malaysia just as Umno does not care at all what it is doing to Malaysians.

The west wants to please the government so that the Employees Provident Fund can continue to buy up properties abroad, a refugee swap deal can proceed smoothly, Malaysian taxpayers can purchase the latest weaponry or that a rare-earths refining plant can be built.

The rakyat cannot rely on the west for help, so any changes have to come from within Malaysia.

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MARIAM MOKHTAR is a non-conformist traditionalist from Perak, a bucket chemist and an armchair eco-warrior. In ‘real-speak’, this translates into that she comes from Ipoh, values change but respects culture, is a petroleum chemist and also an environmental pollution-control scientist.

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  1. #1 by Bigjoe on Tuesday, 4 December 2012 - 7:25 am

    Yup. Its a Ponzi scheme allright but the problem is the mastermind AND STILL IS – Mahathir – not a half bad conman. Just in case some still don’t know and to prove the point – he kept pretty good company – the Genneva Gold scheme that took in supposedly RM10b.

    No way Najib can still survive and maintain discipline without Mahathir proactively managing the discontent and challenges for him. Its clear Najib’s plan is meaningless and would have fallen apart without Mahathir actually working the local leaders for him…

    You vote UMNO/BN and you vote Mahathir and his old ways including his increasing monopoly of businesses through proxies..

  2. #2 by lee tai king (previously dagen) on Tuesday, 4 December 2012 - 8:45 am

    Yup, that’s it. Umno’s actively exporting corruption cara-umno to the world.

  3. #3 by rahmanwang on Tuesday, 4 December 2012 - 10:07 am

    I think Malaysia’s Employee Provident Fund (EPF) is also a Ponzi scheme.

  4. #4 by sheriff singh on Tuesday, 4 December 2012 - 12:00 pm

    I thought the local equivalent and jargon is ‘Pak Telor’ or something like that. The ‘telor’ multiplies but no chick ever comes out of it.

  5. #5 by cseng on Tuesday, 4 December 2012 - 1:09 pm

    By the time Umno ponzi scheme discovered, M’sia will be well in financial distress.

    You don’t find ponzi during happy days, it only discovered during crisis.

    In short term (during happy day), is called ‘privileges’, called ‘supermacy’ scheme. In long term (during crisis), is a curse, called Ponzi scheme.

    It is product of system / process abuses.

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