US probe of 1MDB focuses on rap star’s donations to Obama's re-election campaign

-A +A

(Nov 29): The US Department of Justice is investigating rap star Pras Michel who had donated more than US$1 million during the 2012 presidential re-election campaign after it was discovered that he had received US$20 million in gifts around the same time from Malaysian financier Jho Low, the Wall Street Journal reported.

The DOJ investigators want to find out if there was an agreement between former hip-hop group Fugees member Michel and Jho Low to back the re-election of President Barack Obama.

The Wall Street Journal said that donating money to a candidate on behalf of another person or company is a violation of federal campaign-finance laws that may be punishable by jail time and/or fines.

The investigation is ongoing, and there is no allegation of wrongdoing against either man regarding the political contributions, WSJ reported.

WSJ had contacted Michel's lawyer, Kit Pierson, who declined to comment on any money received by Michel, his political donations or his relationship with Low, except to say that a “false narrative about Mr. Michel is in place.”

“Both the predicates for your article and the conclusions you are reaching or implying are fundamentally mistaken,” Pierson said.

A spokeswoman for Obama also declined to comment when contacted by WSJ.

Jho Low is fighting civil-asset forfeiture suits by the DOJ in relation to the Malaysian scandal probe, WSJ reported.

The DOJ alleges in the lawsuits that Jho Low was the mastermind of a US$4.5 billion fraud that involved siphoning money from 1Malaysian Development Bhd (1MDB).

WSJ reported that the money was allegedly used by Jho Low and others for a variety of purposes, including to buy luxurious homes, artwork and to fund the production of films including “The Wolf of Wall Street.”

It is unclear when  Michel first got to know Jho Low, but documents reviewed by The Wall Street Journal show Jho Low paid US$20 million in 2012 to two limited-liability companies controlled by Michel.

Those payments, made from offshore companies cited by the Justice Department as being controlled by Low in their civil complaints, were a “gift to Pras,” the documents say, WSJ reported.

During 2012, Michel became a major donor to organizations that supported Obama’s campaign. Over September and October of 2012, he donated more than US$1.3 million, including US$1,225,000 to a super PAC called Black Men Vote. The donation to Black Men Vote was sent by one of the same LLCs that received funds from the offshore companies, the documents show. Together with personal contributions from Michel, they provided the majority of the Black Men Vote budget in 2012, records show.

Black Men Vote didn’t respond to requests for comment, WSJ reported.

Michel was also a co-founder of DuSable Capital Management LLC along with entrepreneur Frank White Jr, one of Obama’s biggest fundraisers. DuSable’s biggest deal to date was a solar-power project in Malaysia with 1MDB. 1MDB bought DuSable’s stake in the deal in 2015 for US$69 million but never completed the project, WSJ reported.

A spokesman for White and DuSable previously denied wrongdoing with respect to the solar-power deal and said the dealings with 1MDB were “intended to provide renewable energy in Malaysia, create jobs in the United States and earn support for Malaysia in the United States.”