Report exposes Maldives ‘orgy of corruption’ ahead of election

An investigation has uncovered new details about Maldives government corruption days before a presidential election and weeks after the European Union moved to sanction its leaders.

Published on Tuesday, the research finds that at least 50 of the nation’s prized tropical island leases were obtained at hugely discounted prices without public tender, and – according to the country’s top auditor – were illegal.

President Abdulla Yameen, who is hoping to secure a second term on Sunday, intervened to help clear at least 24 deals to lease islands to tourism companies, the report says.

The president was also personally involved in direct discussions about at least one of those deals, according to the report.

Leaked chat logs and other documents reportedly show one of Singapore’s richest men, Ong Beng Seng, offering luxury hotel rooms to the president and former vice president.

The hotel tycoon, who runs a number of Maldives resorts, did so at a time when he and his company, Hotel Properties Limited (HPL), were seeking islands in the Maldives.

Shortly afterwards, Ong sealed a deal for two uninhabited islands without public tender, one for $5m and one for free, the report says.

At the time of publication, neither the billionaire nor the president had responded to the researchers’ request for comment.

Bags of cash

President Yameen has faced corruption allegations since 2016 when Al Jazeera released its award-winning investigation, Stealing Paradise.

Revealing widespread corruption for the first time, it included testimony from men who said they had carried bags of cash to the president, details of an international plot to launder $1.5bn, along with wholesale bribery and embezzlement in the island deals.

Initially, the government did not respond. However, since the investigation’s release, President Yameen has made a qualified concession that he received cash at home.

His presidency has been marked by efforts to crush dissent, imposing a 45-day state of emergency and jailing or forcing into exile many political opponents.

Those actions, plus a crackdown on the political opposition, media and human rights, have led the EU to move towards sanctioning the nation’s leaders.

It has put in place what it calls a “framework” that will allow it to impose travel bans and asset freezes on senior officials if it decides they have undermined democracy and the rule of law or seriously violated human rights.

‘An orgy of corruption’

With a presidential election just days away, specialist corruption and organised crime reporters have released new details of government graft, describing it as “an orgy of corruption”.

The Organised Crime and Corruption Reporting Project (OCCRP) exposes how ministers and officials began a fire sale of the nation’s prized tropical islands to tourism companies,  illegally leasing around 50 of them and embezzling much of the proceeds.

That was a huge increase. Previously, the Maldives had only around 100 resorts that had been slowly constructed over four decades. But after Yameen’s election, at least 50 more were approved in just a few years.

The OCCRP’s work is based upon data obtained by Al Jazeera that formed the basis of the 2016 investigation Stealing Paradise, an exposé that revealed massive government corruption for the first time.

Reporters looked at data obtained from three golden iPhones belonging to former tourism minister and vice president, Ahmed Adeeb.

They analysed the information and cross-referenced it with other leaked paperwork, bank and government records, court documents, and the Paradise Papers leak from offshore services firms in Bermuda and Singapore.

Big business

The research gives a full picture of the pillaging of the Maldives and allows researchers to understand which businessmen secured leases and what has been built on the islands and lagoons.

Former tourism minister and vice president, Ahmed Adeeb, was at the centre of the scandal but has not been able to enjoy his ill-gotten gains.

Arrested in late 2015, he was later convicted of a plot to assassinate President Yameen and of corruption linked to the island lease schemes. He is serving a decades-long sentence.

His friend and co-conspirator, Abdulla Ziyath, was also jailed for his role in the corruption and is serving eight years.

Ziyath was the head of the Maldives Marketing & Public Relations Corporation (MMPRC), an organisation that was set up in 2009 to promote the nation’s tourist industry abroad but which morphed into the central authority on new island leases.

From early 2012, the two men worked closely to lease islands, soliciting bribes and embezzling payments.

Two years into their schemes, they found a lucrative loophole. In order to get around a legal requirement that all leases up to 50 years go through an open bidding process, they instead entered the government into joint ventures with private companies.

In the years afterwards, the government would walk away, leaving the business to do what it wanted without government oversight, having avoided an open tender process.

Starting in mid-2014, interested investors simply approached Adeeb or Ziyath, often via a middleman, negotiated a price, signed a contract, and paid the MMPRC by cheque or bank transfer.

“Those who benefitted were the ones who had a direct line to the minister,” a businessman who acted as a middleman on at least one deal, told OCCRP on the condition of anonymity, citing fear of reprisals. “It was all done in the open.”

“Some foreigners flew in just to sign the deals,” the source said. “They must all have known it was all illegal.”

The money paid for the deals was often then transferred to private bank accounts. Some of the cheques were simply rerouted and paid into different accounts using friendly contacts in the banks.

Some of the money was then reportedly handed by bagmen to the president or his allies, as covered in Stealing Paradise.

The president’s orders

Current and former government officials have told OCCRP that President Yameen was central to the operation of the scam.

From prison, Adeeb has claimed he was tasked with running the country while the president “counted the cash.”

A government official with direct knowledge of the deals, who spoke anonymously for fear of retribution, told OCCRP it was the president who ordered Adeeb’s tourism ministry to lease islands without tender via joint ventures run by the MMPRC.

Under Maldives law, uninhabited islands are managed by the Ministry of Fisheries and Agriculture. In order to lease them out for development, Adeeb routinely sought — and received — orders from the president to bring the islands under the Tourism Ministry that Adeeb led, according to the official.

“For 90 percent of the islands, I can say [Adeeb] wrote to the president’s office and requested the president hand those islands over to the tourism ministry,” he said.

“Obviously the president knew.”

According to the OCCRP, messages from Adeeb’s phone show the president knew about at least one MMPRC island deal from its outset. On June 30, 2014, Yameen messaged the tourism minister to ask about Mathiveri Finolhu, an island in the Alif Alif Atoll. Seven minutes later, Adeeb replied: “Today will Hand over sir, sorry for the delay.”

Adeeb’s phone messages also show that Yameen apparently had at least one meeting with Ong Beng Seng, the Singaporean hotelier. Ong’s company received two island leases shortly after.

The president has previously denied he was fully aware of the corruption.

At the time of publication, OCCRP had not received a response from his office or that of Ong Beng Seng.

Whistle-blower fled

A 2016 audit found that just shy of $80m due to the MMPRC was either never paid, paid in part, or went missing. Some islands were also found to have been given out at clear discounts.

Another audit, submitted two years earlier, had raised the issue of the corrupt scheme for the first time. Then-Auditor General, Niyaz Ibrahim, produced a report detailing how the MMPRC had made millions of dollars in suspicious foreign currency transactions and exposing payments to a company linked to Adeeb.

Niyaz suspected corruption and says he brought his concerns directly to President Yameen, who had him removed from his position.

“I briefed the findings to the president in a one-on-one meeting,” Niyaz told OCCRP. “He accused me of unprofessionalism, and of being biased against his government.”

This is a gross violation of law, these islands have to come back to the state.

Niyaz Ibrahim, Auditor General

Niyaz continued to live in the Maldives until 2016 when Stealing Paradise was broadcast.

It featured an interview with him reacting to the revelation that he had been placed under surveillance by Adeeb, who had instructed special operations police officers to “blast that place” where he had been.

Niyaz says he faced threats and fled to exile in Sri Lanka a day before the documentary was aired.

Of the corrupt deals, he says, “they’ve been doing this for ages, so they know there is no way for the public to hold these criminals accountable. They take Maldives law as a joke.”

He is now calling for the government to seize the islands that were subject to illegal lease agreements.

“This is a gross violation of law, these islands have to come back to the state.”

International hotel brands did not participate directly in the illegal leasing of the islands. Instead, they later signed management or licensing contracts with middlemen and developers and profited from those agreements.

Niyaz believes they should have conducted better due diligence.

“If they are associated with corruption, that will not be good for business,” he said. “There may be no direct legal responsibility, but they have an ethical and social responsibility to the Maldivian public.”

In 2016, the president’s loyalists passed an amendment to the tourism law that removed the requirement for public tenders. Opposition politicians denounced the move as a measure that effectively “legalises corruption“.