Earlier this year Sarawak Report warned that the UK/Swiss national, Patrick Mahony, who received a 6 year sentence for his part in the massive fraud against Malaysia’s controversial investment cum development fund, 1MDB (One Malaysia Development Berhad),  has been hanging out in Manilla pending his appeal.

Mahony, who was employed in the 2000’s by the asset management group Ashmore which made several investments in the Philippines, was known to retain well-connected contacts from that period, particularly the now deceased businessman Bobby Ongpin, a formidable political ally of  the Marcos family, for whom Mahony managed the Alphaland Corporation development (as a director) in Makati Place.

Separate sources have now relayed highly disturbing reports that, having been identified as the director of  a company that was at the centre of the massive Malaysian 1MDB scandal as early as 2015 and having been finally convicted of a leading role in that fraud by the Swiss courts in August last year, the same businessman is back in Manilla and actively engaging in business as he awaits his appeal.

Mahony was granted the right to travel by the Swiss courts, apparently on the grounds he was not a flight risk, given his family were based in Switzerland.  However, it emerges he has since moved his family over to Makati where he maintains an office and staff back in the Alpha Suites building.

Particularly troubling are the reports that he is frequently seen with the prominent Manilla businessman and senior politician, the former Speaker of the Parliament Martin Romualdez who is a first cousin of the current President and considered a powerful political player.

The Marcos family returned to the presidency in 2022 at which point Mahony, by then embroiled in numerous court cases related to 1MDB, became a regular fixture back in the Philippines say observers of the leading circles in Manilla.

Romualdez is known to have been one of the key movers behind one of the first key financial initiatives undertaken by the new President Marcos, namely the launch of the Philippines first national sovereign wealth fund, the Maharlika Wealth Fund or MWF.

As Speaker, Romualdez was a proposer of the fund to the Parliament  in November 2022, after which the new President gave the bill an unusual ‘Urgent’ status enabling it to be raced through into being early the following year.

At the time there was considerable concern expressed in financial circles, given the propensity for such a fund, involving the investment of huge sums of public money, to be vulnerable to corruption and vast theft from the public finances.

This was not least because there was no excess sovereign wealth in Philippines to beg the creation of such a fund. As with Malaysia’s 1MDB, the politically backed managers of the fund would seeking investment from holders of public finances, i.e. taxpayers cash.

To allay the worst fears during the passing of the bill it was agreed that the public pension fund could not be ‘forced’ to invest in the MWF, on the other hand it was ensured that this and other ‘protected’ funds could decide to do so if they chose.

Indeed, the similarities and parallels with 1MDB have been frequently alluded to by commentators  on the Maharlika Fund and not in a positive way. Like the MWF, 1MDB was heavily promoted and controlled by Malaysia’s most powerful man at the time, the newly installed prime minister, Najib Razak, from 2009.

Najib promoted 1MDB as a hybrid between an investment fund and a development fund which would enable huge sums of public money or borrowed money to be placed in potentially risky investments, whilst at the same time claiming that the prospective profits could benefit public projects.

MWF operates on a similar risky basis, say critics, and the concern has been that the outcome could become equally dubious ($6.5 billion was stolen from the fund resulting in more than double that sum in being lost to the public purse). As with Najib, the new President has promoted the fund as his ‘baby’, meaning that many fear transparency could become lost owing to political protection and manoeuvrings as occurred with 1MDB.

With the support of Najib, now found guilty of the world’s  largest recorded theft through 1MDB, the Malaysian fund and all its borrowed public money was hijacked from the start and then invested into bogus enterprises from which billions were stolen.

Role of Patrick Mahony 

The first key such enterprise was a so-called ‘Joint Venture’ investment with a fraudulent company named PetroSaudi which was advertising a bogus asset in the form of an oil field in the Caspian Sea, which PetroSaudi claimed it owned the rights to exploit but did not.

The Chief Investment Officer and later Director of that company was Patrick Mahony and a shocking sum of $1.83 billion was invested in the ‘PetroSaudi/1MDB  Joint Venture’ which then disappeared.

Mahony was exposed by this site as one of the key architects and brains behind that fraud and has now been found guilty of the same.  Yet, from the inception of the Maharlika Wealth Fund a decade later, the same super-crook has been back in the Philippines, publicly consorting with key figures associated with the promotion and management of that country’s own new identikit fund.

Sarawak Report has now been alerted to concerns that Mr Mahony has indeed been advising directly on the management and framework for the MWF.  One local source has claimed:

“Since 2023, Mr. Mahony has been employed as a consultant on various M&A projects. However, his main task has been to advise on legal frameworks and rules structure of the Philippines’ Maharlika Fund. This can be seen directly in the multiple changes of operating rules and regulations over the past two years within the Maharlika fund that mirror the structures present in the 1MDB Fund, which allowed for minimal oversight of fund transfer.”

Sarawak Report is also informed by various sources that Mahony has been seen often in public with the powerful Mr Romualdez.  As the same source has put it they “have been seen together frequently in meetings and social gatherings for the past few years, including in Manila Polo Club, Manila Golf (where Mr. Romualdez is Chairman), and Cork Wine Bar. They have also been heard in public discussing details of the Maharlika Fund governance structure and 1MDB,”

Given the shocking fraud in which Mahony has been exposed as a key player in the theft of public development money in Malaysia, this must surely be a matter for concern.

Mr Romualdez would do well to keep his distance from Patrick Mahony and ought to issue a statement that categorically denies the claims that the fraudster had entered his employment in any way as an advisor on any matter, least of all matters concerning the dispensing of public money or related to the MWF.

The concerns about the penetration of Patrick Mahony into influential circles in Manilla comes at a highly sensitive time given the huge protests sparked by other major corruption issues that have emerged over the disappearance of public money into eye-waveringly expensive projects that were never carried out (resulting in deaths that arguably could have been prevented this year).

Mr Romualdez himself was forced to step down last month during the fall out over the so-called flood control scandal as investigations have been launched to identify how the money went missing and where to.

His cousin, the President, has been recorded saying that he understands the public fury and would in other circumstances be down on the streets protesting with them.

Under such circumstances one must ask why is one of the world’s most infamous fraudsters and a key architect of a plan to purloin billions from another Southeast Asian ‘sovereign wealth/ development fund’ being allowed anywhere near decision-makers in Manilla?

The leniency and snails pace of the Swiss legal system has allowed for this convicted man to travel freely, pending his unpromising appeal, and that country also should pay better attention to its duties in allowing such an apparently unrepentant swindler free rein to travel back to distant places to ply his expertise against hard earned funds advertised for development.