“One thing led to another before the Egyptian trickster was appointed the MMC’s de facto advisor on tin trade. That bothered the GTF immensely. A third wiretap revealed that Hamzah was tasked by the Prime Minister himself to intensify the smuggling of tin through Southeast Asian markets with the help of Zaidner. Now, before I go any further, I dare Mahathir to publically deny this or sue me”
THE THIRD FORCE
On the 30th of August 1977, the United States (US) Department of State received a cable warning it that three Malaysian Ministers were slated to partake in discussions pertaining the (then proposed) Common Fund for Commodities (CFC), a vestige of the New International Economic Order. A tap of that cable revealed that the said ministers were a “dominating influence in any cabinet established by the Government of Malaysia (GoM) and needed to be further surveilled.” The ministers named were as follows:
- Dr Mahathir Mohamad – Deputy Prime Minister
- Musa Hitam – Minister of Primary Industries
- Tengku Razaleigh Hamzah – Minister of Finance
- Hamzah Samah – Minister of Trade and Industry
The tap further revealed that the ministers were under surveillance by the CIA since 1976 through the GoM Task Force (GTF), a special unit put together to keep a tab on their movements. The main purpose of the GTF was to monitor their positions on the proposed CFC which was then a matter of great concern for the London Metal Exchange (LME). The CFC was eventually set up in 1980 and agreed upon by the GoM, which taps reveal were based on recommendations by both Razaleigh and the late Tan Sri Hamzah Abu Samah.
A year later, Mahathir was announced the fourth Prime Minister of Malaysia. The CIA intensified its surveillance on the GoM and discovered numerous backdoor discussions the then premier had with Hamzah (who was no longer a minister). One of these discussions pertained the regulation of tin prices at the London Exchange, which Mahathir contended was “being manipulated by the US and the UK (United Kingdom) through excessive speculation” of the futures market.
“They are stockpiling on tin and have unrealistic delivery dates which they know we cannot comply,” said Mahathir.
Around then, the International Tin Council (ITC) played a major role in managing fluctuations of tin prices by presenting guidelines on the sale of the commodity to participating nations. But the CIA was wary of Mahathir’s advances and were constantly keeping a tab on him. On the 20th of March 1981, another wiretap revealed that the Prime Minister sought the establishment of an RM2 company with intent “to purchase tin futures contracts and stockpile on the commodity.”
The trading concern eventually came into existence in June 1981, barely a month ahead of Mahathir’s appointment as Prime Minister. A CIA insider then leading the GTF alerted president Ronald Regan that plans were afoot to “buoy tin prices through manipulation of the futures market.” But Regan ignored the alert. According to him, no amount of stockpile could “match America’s buffer stock by any measure.” When the agent spoke of plans to artificially inflate a “tin bubble,” Regan had this to say:
“What? You’re telling me that some joker from Malaysia is gonna give us rope to hang?”
The US president was relying more on data provided by insiders from the LME suggesting that the volume of tin entering the market, then at a reasonable high, was expected to increase. But the head of Central Intelligence, William J. Casey, warned that the increase was due in part to large quantities of tin smugglers were releasing “in gushes” through the Asian market. According to Casey, the amount was “sufficient to exert pressure to the floor of the ITC’s target band.”
Still, Regan decided to wait and see what Mahathir was up to. In January 1982, the head of the GTF informed the president that the Prime Minister “was soaking up tin as if it were water.” According to him, the GoM was colluding with David Zaidner to “intensify the smuggling of tin through Southeast Asian markets.”
And this is true.
Back then, Zaidner was already on the CIA’s shit list for his role in spiriting ill-gotten wealth through the US and the UK. The Egyptian confidence trickster was a well-known extortionist who blackmailed directors of UK and Hong Kong based tin establishments he was complicit with to smuggle tin into Asia. One of these directors – who is the chairperson of the Hong Kong Exchanges and Clearing – had quite an influence over the way tin futures were traded.
Unbeknown to many, Zaidner was well acquainted with the late Tan Sri Hamzah Abu Samah. He assured the former Minister of Trade and Industry that the GoM could make “tons and tons of money” if he were assured more contracts from the Malaysian Mining Corporation Bhd (MMC). But the director of the MMC, Abdul Rahim Aki, had a better idea – he brought Zaidner straight into Mahathir’s office.
One thing led to another before the Egyptian trickster was appointed the MMC’s de facto advisor on tin trade. That bothered the GTF immensely. A third wiretap revealed that Hamzah was tasked by the Prime Minister himself to intensify the smuggling of tin through Southeast Asian markets with the help of Zaidner. Now, before I go any further, I dare Mahathir to publically deny this or even sue me.
I dare him to deny that Maminco made some RM500 million out of the illegal trade. In December 1981, Mahathir tasked Tengku Razaleigh Hamzah with getting Bank Bumiputra Malaysia Berhad (BBMB) to approve borrowings worth over RM1 billion through two offshore subsidiaries of the bank – one in Bahrain, and another, in London. Some of these transactions do not appear on paper, though further wiretaps reveal that the transfers were confirmed by all officials concerned. The Hong Kong based Bumiputra Malaysia Finance was later involved with another transaction to the tune of RM200 million.
Most, if not all the money was committed to the purchase of 60,000 tons of physical tin and another 30,000 tons in futures contracts. What Regan did next was never reported in documented history. On the 2nd of February 1982, the US president got the Bolivian and UK governments to each release a fraction of its stockpiles while the Asian market ‘slept’. The sudden flooding of tin supply whacked Zaidner’s team stupid as Regan got a huge portion of the supply – including that from the US – to flow beneath the radars of scrutiny through non-ITC member nations at unbelievably low prices.
But that’s not all.
The very next day, the president undertook with leaders of both the Bolivian and British governments to establish a ‘mini-council’ of sorts with key members of the LME. Thereafter, Casey (the then head of Central Intelligence) delivered the current chairperson of the Hong Kong Exchanges and Clearing an ultimatum to reveal all he knew about Zaidner. Two days later, the governments of Bolivia and the UK began speculating in futures contracts through several trade companies hinged on the inside info they received and gradually crashed the tin market. And what did that leave the GoM?
A RM1.5 billion debt (both documented and ‘undocumented’) which it couldn’t repay.
Note: It should be put on record that Hamzah Samah was a well revered person. But I never lie. I think there may be another side to him we were unaware of. I prefer that either Dr M or Ku Li comment on this.
Coming up – the Makuwasa scandal followed by a 10-15-part series on the BMF scandal revealing all (with documents provided).