Borneo’s Logging Barons Turn Profits into Overseas Assets

For years, environmental and indigenous rights advocates in the forested Malaysian state of Sarawak, on the island of Borneo, have struggled against the rampant logging destroying their homes. Deforestation for timber and industrial palm oil, they say, is theft of the state’s natural heritage and betrayal of its most vulnerable citizens. Adding insult to injury, much of the money made by timber and palm oil barons, as well as by the Malaysian politicians they have corrupted, is not invested in the local economy, nor is it taxed; it’s exported.

Much of the ill-gotten gains from massive logging are hidden in plain sight as real estate holdings. An investigation by an international network including The Borneo Project has uncovered a chain of destruction and deception in which loggers and their political patrons have acquired real estate empires stretching from the United States to Great Britain, from Australia to Canada.

The Yaw family – whose fortune is based in Samling, one of Sarawak’s most notorious logging companies – appears to have used American properties as a kickback to the First Minister of Sarawak, Abdul Taib Mahmud, a possible quid pro quo for granting their vast logging concessions. In the early 1990s, the Taibs acquired two Seattle mansions from holding companies owned by the American branch of the Yaw family, founders of Samling Global, which has logged vast areas of rainforest licensed to them by Chief Minister Taib. The Seattle houses – together valued at nearly $10 million according to 2008 tax records – came to the Taibs through a shady sleight-of-hand as a gift, not a sale, and thus the Seattle houses appear to be kickbacks to the Taibs from the Yaw family, which went undetected in Malaysia.

The Taib family holdings stretch far beyond a pair of Seattle homes. Taib family holding companies also own a downtown Seattle building that houses the FBI’s northwest regional headquarters, and an office building in San Francisco with a Citibank branch as its major tenant. These office buildings were valued at more than $50 million before the 2008 real estate crash. A private agreement indicates that Chief Minister Taib actually owned a majority share in Sakti International and Wallyson’s, the companies that own the office buildings through subsidiaries, which are now managed by SAKTO, the Canadian company of Taib’s daughter and son-in-law, with its own multimillion-dollar portfolio.

The muckraking blog Sarawak Report has spearheaded the global investigation of assets owned by Sarawak’s political leaders and apparently used to spirit money out of Malaysia. Sarawak Report has traced a staggering collection of properties throughout the world, much of it through painstaking review of publicly available business data.

The Borneo Project’s research into the Taibs’ North American property was prompted by pleas for help by Ross Boyert, former COO of Sakti International and Wallyson’s. In 2007, Boyert filed a lawsuit to recover his own investments in the companies’ properties after he was fired when the Chief Minister’s Canadian son-in-law took over their management. Boyert reported a campaign of intimidation against him after he sued Sakti and Wallyson’s, including break-ins, threats, and professional defamation, which he believed were carried out by agents hired by the Taibs. Facing bankruptcy, foreclosure on his home, and fear of escalating harassment, Boyert dropped his lawsuit in 2008. Broke and depressed, he died tragically in October 2010, apparently of a suicide.