eye.gif (5286 bytes) Point of VIEW.

A purely analytical perception...


 

 

The 56-year-old Sultan of Brunei, Hassanal Bokiah, a man that is known in these parts only as "His Majesty" rules the country both benevolently but with an iron fist. His yearly income from oil produced in this tiny country, which is located on the Island of Borneo, is almost incomprehensible and shows no particular signs of slowing down as oil prices have recently gone through the roof. His family has been ruling this Delaware sized country of about 300,000, for six centuries, and is thus probably the longest reigning dynasty on earth. The country is so small that it does not even have a central bank but that hardly seemed necessary when the royal family kept most of their assets in cash.

The fact that today, Brunei is only a blip on the map, in the 15th,16th and 17th centuries, the country's control extended over large parts of Borneo and the southern Philippines. However, this moment of glory was short-lived. The country was divided in half in after the British took over in 1888 and in that year made the country a protectorate. It took almost a century for the country to gain its independence but this occurred in 1984 after several false starts.  The natives were becoming restless and in 1962 instead of the British plan to make Brunei part of the Malaysian Federation, they opted for revolution. The cagey Sultan suspended the constitution and opted for independence.

The country today is a tad smaller than the U.S. State of Delaware, making it almost unnoticeable. Agriculture is not a big thing in this country as there are only about 7 square miles of arable land. The country from an ethnic point of view is primarily Malaysian with Chinese and other groups making up a small minority of the primarily Muslim population. The King's father, His Majesty Sultan Haji Hassanal Bolkiah Mu'izzaddin Waddaulah, the Sultan and Yang Di-Pertuan of Brunei Darussalam abdicated the thrown on October 5th, 1967. His eldest son, the Crown Prince became King in his stead. Haji Jr. had gone to school at the Sandhurst Royal Military Academy and was a Captain in the British Army when summoned back to run the country.

The Government of Brunei depicts the King as having kryptonite running through his veins, "His Majesty takes great interest ion sports, including polo in which he has excelled in matches against international teams both locally and outside of the State. One of His Majesty's remarkable achievements was the setting up of the Sultan Haji Hassanal Bolkiah foundation in 1992. The foundation is a gift of His Majesty to his people and is devoted to among other things, financing research-related works particularly in the fields of knowledge. (Whatever all that means) His Majesty is married to Her Majesty Raja Isteri Pengiran Anak Hajjah Salenha and Her Royal Highness Pengiran Isteri Hajjah Mariam. He has ten children - four princes and six princesses." This is indeed a special person.

The country does not allow the drinking of alcohol by the population nor anyone else for that matter, at least most of the time. However, there have been rumors to the effect that liquor has been known to flow rather  freely when the King, His Majesty Sultan Haji Hassanal Bolkiah Mu'izzaddin Waddaulah, the Sultan and Yang Di-Pertun of Brunei Darussalam,  throws one of his regularly scheduled sex  parties. Whilst there is little nightlife in the entire country, the Brunei Palace has been known to really start to rumble when the chartered planes land, more often than not, bringing in the willing lovely ones from  abroad. However, the fact that there is virtually no nightlife here and that sexual and alcoholic high jinks are reserved for a chosen few, is not necessary all the fat lady wrote. There are no income tax or in reality, taxes of any kind in this country. The standard of living is obscenely high and downtown Brunei looks like the vision of Alice In Wonderland with a series of magnificent structures hyphenating the city's beauty. 

Moreover, in exchange for sticking to their knitting and not getting any ideas of voting for the other party, the populace receives free healthcare, education, high wages, cheap loans and numerous other perks. In other words, there is nothing to do here, nowhere to go or nothing you can do about it, but what is left can be done with a certain panache. Nowhere in the world can you do so little so cheaply.

The government is supposed to be a constitutional monarchy but that is hardly the case. While "His Majesty" is not a bad sort, he suspended the country’s legislature in 1962 because of revolutionary fears and neither the legislature nor the country's constitution has ever shown the slightest sign of reappearing in the four decades since.

Because of this suspension of various governmental activities, the overworked Sultan of Brunei has had to take on new responsibilities on a regular basis. When one of his lieutenants dies, there is no government in place to a name a successor and naturally, the job falls on the broad shoulders of Hassanal himself. "He has become the self-appointed prime minister, finance minister, defense minister, police superintendent and chancellor of the national university. However, autocracy has been good to Bruneians. They pay no income tax. Education and health care are virtually free. And despite its generosity, Brunei’s government has no debt." () This is an amazing statistic when you add to that, the fact that fully one-half of the employed people of Brunei work for the government.

The royal family’s fortunes had a major uptick when oil was discovered here in 1929. Since that date, the flow of approximately 207,000 barrels of oil a day () has been unceasing and many had believed that it would continue forever. This will certainly not be the case, and as time runs out, alternatives are hurriedly being sought to replace that dependence. However, the Sultan has seen to it that his people have been benevolently taken care of from the substantial amount of oil that the country’s wells are still producing. With that kind of income, if a little slips through the cracks now and then is not a major concern. A wise ruler knows there is always plenty more behind that and what’s the big deal about some falling between the cracks every now and then? The oil riches provided the good life for the king as well as his polo playing, loyal brother Jefri and their families -- and when we say the good life, we really, really mean the good life. The brothers are not beyond importing top Hollywood female stars, models and actors like Michael Jackson for semi-private sessions, both for bedroom and ballroom activities.

Among other recent sexual imports was a former Miss USA who was flown in along with a cadre of other pretties, each better looking than the next. However, it appears that they were not told what they would be doing in Brunei and whom they would be doing it for. Apparently, these unsuspecting girls believed that they were being flown to Brunei and were going to be paid fantastic salaries for their sterling abilities at the art of conversation. Officials who were paying the ladies the big bucks expected that they understood the fact that they would be performing various forms of sexual gymnastics for both the Sultan and his brother, however, those facts got lost in the fine print in the contract and the American girls promptly filed a lawsuit on returning to this country, charging that they were being held in Brunei as sex slaves. The lawsuit was naturally dismissed because all of the named parties claimed diplomatic immunity. Beside his regular assortment of beautiful imports, the Sultan has two wives, each with a magnificent castle to keep them warm on nights when "His Majesty" is out with the boys or the girls as the case may be. One of the castles is a small item of 1,788 rooms that is larger than the Vatican.

Beautiful women were not the only substantive import that regularly arrived in Brunei. Argentina had created a literal shuttle of magnificently expensive polo ponies that seemed to satisfy the royal families taste for the best in everything including their love of the that game. The Jerudong Park Polo Club with its immaculate landscape, its exotic stables and magnificent clubhouse looked more like a castle than a playing field. The six hundred-room hotel that is located within the Jerudong complex cost a cool billion dollars to build and the gold leaf that is on its wall is the real McCoy. Other odds and ends that adorn the polo complex are a massive saltwater lagoon; a Jack Nicklaus designed gold course and one of the highest-tech amusement parks on earth. All-important toys for the Sultan when he needs a change of pace from his busy schedule.

Moreover, the country has an infrastructure that just does not stop. You see, the King’s loyal brother owned this construction company, Amedeo and that company employs nearly 10% of the people in the country all by itself, and it built and built and built without any sign of slowing down. But hark, the King has closed the company, leaving unpaid bills of almost $1 billion and unfinished construction of nearly $3 billion. Worst of all, the people who were once working for the King’s brother are now out of work, which takes Brunei from the nation with the lowest unemployment up to the level of the socialized Europeans, like Germany and France, in one fell swoop. Moreover, Royal Brother Jefri, the First Brother who had always been so loyal and built the infrastructure, well, nobody has heard from him for a long time. Then there are the ugly rumors that, having stolen about $30 billion; he had taken off to start his own country. It’s just a business. (It is interesting to note that it is now illegal in the Democratic State of Brunei to discuss how much the country lost because of first brother Jefri. The crime can be punished with death.

Recently it came to light that in addition to the almost $4 billion hole in the dike at Amedeo, there is also a short fall of somewhere between $3 and $4 billion dollars at the Brunei Investment Agency and another $5 billion loss on the family’s investments in Asia. These companies were also under the aegis of the good prince Jefri. The First Brother also helped out various regional governments in what appears to be a non-refundable loan of $2 billion and oversaw Brunei’s foolhardy attempt to stabilize local currencies, including those of Malaysia, Thailand, Indonesia and Singapore, with almost kamikaze like tenacity.

Today it appears that on each plane arriving in Brunei, the only ones getting off the airplanes are accountants carrying their ever present black bags that contain ominous accoutrements such as paper, pencils and adding machines. They have been hired y the king to access the damage cause by the noble "First Brother." The have uncovered Brunei it seems, also has another mysterious company whose workings were unknown to the general public. This company was known was the Brunei Investment Agency, (BIA) which is in charge of investing the money from the country’s oil income and run by the King’s loyal brother, Jefri who was also in charge at Amedeo Development. While the Sultan may have enjoyed Jefri company at sexual festivities, as a person anointed to handle the country’s finances, Jefri was an unmitigated disaster and much of Brunei’s oil income mysteriously found its way in his pockets.

Moreover, Jefri had indeed been making a bunch or really bad investments while simultaneously pocketing a substantial amount of large green. However, eventually the men with the black bags were able to determine where the money had gone and when his big brother got the appalling news, he was told that the party was at end. A deal was eventually worked out between the brothers that Jefri would give back all of the money he had slipped into his pockets in a reasonably constructed exchange for a combination of not being executed and the small allowance of $300,000 per month. A big comedown for the hard charging Jefri, but on the other hand, the alternative would have been even worse.

Business Week in their April 3, 2000 issue described the ensuing battle in detail. "On February 21, the government sued Jefri in Brunei High Court for the funds he allegedly "misappropriated." Government lawyers then filed injunctions-- in Brunei and London --freezing Jefri's assets. Now, both sides are drawing battle lines across the U.S. and Europe to fight what place watchers in Bandar Seri Begawan, Brunei's humid capital, are calling "the mother of all legal battles."

"Jefri's three brothers, says Jefri is accused of making of with $9 billion. John M. Callagy, a lawyer at Kelley Drye & Warren LLP in New York, says it's $40 billion -- and that the charges are false. Kelley Drye represents Amedeo Hotels Ltd., one of the 68 companies the government contends Jefri controls."

These acts are estimated by the accountants with their black bags to have cost a country that many of them had never even heard of, something on the order of tens of billions of dollars. Add to that, the futile cost of the peg that the Brunei was continuing to protect, between Brunei’s currency and the Singapore dollar. As Senator Everett Dirkson said many years ago about the U.S. budget, "A billion here and billion there, and soon you are talking about real money." When the accountants finally gave the Sultan, the news of how bad things had gotten, he was literally reduced to tears, but naturally, he was unwilling to give up none of his toys and certainly cannot be blamed for that. Instead, he came up with the fabulous idea of giving tourists rides on his fabled polo ponies for $20 a pop.

This, he indicated would replace the treasury’s shortfall in no time at all. (The Sultan obviously never studied mathematics economics. When the accountants explained to him that it would take upwards of three-thousand millennia to balance the country’s books with that scheme, he wondered out loud that if also allowed them to have tours of the palace, the polo grounds, and the castles, maybe this would make ends meet. Worst of all, the country was forced to issue bonds for the first time in its history along with allowing tourists to play golf at Sultan’s own fabled Jack Nicklaus course and take in the rides at the Sultan’s personal amusement park.

"His Majesty" believed that the world had come to an end and blamed his brother for the whole catastrophe. The Sultan had come to the conclusion that tourism was a viable alternative to the black gold that the country had been pumping for over 70-years. After all, the Sultan said, we are right next door to the Borneo Rain Forests and after the tourists get all wet trumping through the mud, they will want to relax in our billion-dollar hotel and play golf on our first-class Jack Nicklaus Gold Course. "Not so fast," said the tourism consultants. First of all, the prices here in Brunei are sky high, this country can certainly not be sold as a bargain resort and in the meantime, what about the fact liquor is totally banned in this country, which probably eliminates any chance of attracting a substantial number of the world alcoholics, a significant population in itself.

It was further pointed out, that the country was probably 17 hours by plane from any location on the American continent, a long drink of water not to be able to at least get a glass of wine. One of the tourism consultants suggested that if the King wanted to provide sex shows to visitors, the country could become a sexual Disney Land. This suggestion was immediately quashed because of Muslim law, which bans this type of activity. Another idea that was immediately vetoed was to tell the world of a delicacy that can only be found in Borneo. This extraordinary dish consists of "Sago worms (actually big fat beetle larvae)…These larvae are creamy white and usually fried so that they are crispy outside and creamy soft inside." () Although the Sultan found it hard to believe, his public relations people indicated that tourists would not be enthusiastic to know that the Sago worms were considered tasty in Borneo. Another idea of the Sultans that was rejected equally out of hand was the fact that Brunei restaurants serve the best Monitor Lizard soufflé on the entire island of Borneo.

A trove of other formerly inconceivable concepts were put on the drawing board. These included a massive series of privatizations including the country’s telephone system and airport. This proposal although seemingly logical was temporarily dismissed because the country has no facility to act as a sales agent for such a grandiose scheme. It was pointed out that first, however, Brunei has to develop its own stock market to facilitate these transactions. Discussion had reached the point to frenzy and an unheard of concept, toll roads was put on the table and unanimously accepted by the planning board. In spite of many roads not going very fair and leading nowhere, construction of the nation’s first is expected to be started soon.

The Brunei Government, employer of last resort, has given up that role and has frozen hiring. "The government has replaced its pension plan with a national fund that applies to non-government workers as well, all to encourage more civil servants to take the plunge to the private market. In another move intended to bring the country some independence from oil, the government is pushing shrimp and poultry farms along with dot-coms and pharmaceutical research, according to Matdana Jaafar, director of the ministry’s planning and industrial promotion department." () The Sultan indicated that the people of Brunei were both industrious and highly educated, and if fired from their jobs with no unemployment insurance available, they would be resourceful and start building private industries, which would eventually become meaningful.

However, in spite of everyone's best efforts, there was just not enough money to go around and other sources of revenue had to be discovered. Prince Jefri Bolkiah had literally had spent his way into oblivion and the kingdom was tottering under the weight of his excesses. The King had hired the once prestigious accounting firm of Arthur Andersen to sort out the mess. However, somewhere along the way, Andersen seems to have gone over the deep end on this and other matters straining the credibility of the end-product.

However, eventually, the accountants had finished their work, and the king was given the bad news was that unless there was a lot more than just a lot of belt tightening, the country could fail. Moreover, it turns out that Jefri had purchased everything that he thought he would need for himself for the period to last well into the middle of the twenty-fifth century, and in many cases beyond it. That was not the whole problem though, it was that he had not only bought the top of the line, but when he determined what he wanted he had most of it made to his specs, increasing the price by three-fold again.  Besides everything Jefri bought that had been apparent, there was much that wasn’t readily visible, and gradually as an inventory was made, the extent of the problem became obvious.  

Apparently, the economically challenged prince was concerned that certain morsels that were far from necessities would never escape his spending pallet, and when no one was watching he stocked up on those items with a reckless abandon.  For example, Jefri had been told that there was this immense quantity of exquisite  marble that was available, however if it was ever sold to another purchaser, the 8,000 tons could not be replaced. While we will be the first to admit that the marble was unquestionably first class material, whoever Jefri had absolutely no need for it at the time. However, while he couldn’t see a present need for any additional marble he became extremely worried, a lack of it could be a disaster. Having made that determination, he purchased the trove of marble and put it in storage, in spite of the fact that he might never even view it again. The shipping and storage costs of the marble would have supported the average city palatially for a lifetime, a consideration that  Jefri did not take into account.  

However, the marble was not Jefri’s only purchase that was made just in case. He became extremely enamored with the company that was Britain’s jeweler to the royal family, Asprey. His fervor rose to such a pitch that he determined that in order to first call on all of its designs and finished products he would buy the company. Jefri paid a cool $300 million for Asprey a company that at best may have gone for $100 in the open market with a less dedicated purchaser. There was no question that the Prince was spending as though he felt that the black gold that was coming out of the ground would never end. This is in spite of the consistent reports by Royal Dutch geologists that the oil reserves were falling dangerously low.  

In his psychotic state It turns out that Prince Jefri was still on a binge when his brother at the suggestion of the accountants and consultants shut him down at a time that many of the bills for purchases he had made had still never been paid. The accountants then suggested that a gigantic auction be held and all of the excess goods that the prince had purchased, be sold in a sale that would last as long as there was still unneeded merchandise to unload. With ten-thousand lots to get rid of, this was indeed a prodigious task however in this way, at least the country would get some idea of the market price of the items as opposed to what the prince had been charged and there still were 300 unpaid creditors to deal with.  

The consultants felt that in the case where the prince had been grossly overcharged, there may be some wiggle room available to the county relative to those creditors and if nothing else, possibly a negotiated settlement could be worked out over a period of time. The auction was held with great fan fare and the people came from all over the world if for no other reason to gawk at the Jefri museum of overindulgence. In spite of achieving a substantial attendance, it was difficult to find buyers at any price for some of the prince’s excesses and he often indulged by the gross. Some buyers possible could have been found for one or two of an item but when there were hundreds of identical copies of the same thing all inlaid in gold and jewels.   

For example, it was not readily apparent what to do with the matching pair of Mercedes-Benz fire trucks that were considered such luxuries they it did not bring one bid. That along with hundreds of other vehicles (Jefri during his purchased thousands of vehicles over his spending career) was left in the plaster factory warehouse where the auction was held with agents scratching their heads trying to figure out what to do with the magnificent monstrosity when the bidding had ended. For a country of only a tad over 300,000 people, this vehicle seemed to be strange to say the least. Some said that it was personally available should a fire break out in any on of the prince’s residences and he had many. After all, the man had no less than thirty-five children by a mixture of numerous wives, concubines, mistresses and girl friends.  

Then there was the case of the 12-foot high rocking horse. Although it made up only one of the more than 10,000 items that would be disposed of by the auctioneer’s hammer, the item seemed to be shrouded in mystery. What would one do with a rocking horse that big, it was impossible to mount and even it one could get on the wooden beast, falling off would have resulted in severe internal injuries. Moreover, this certainly was not a plaything as it would have been certainly too dangerous for children and it the lumbering animal figure was not finely carved enough to be a work of art. What then was this thing? Not a work of art, not a toy and certainly not a statue with all of its moving parts? Those at the auction called it a Jefrimobile. It didn’t go anywhere, it wasn’t pretty to look at, it took up substantial space and cost a lot of money to maintain. Undoubtedly, the prince’s alter-ego.  

Then there were the in-home flight simulators for both a Comanche attack helicopter and an Airbus A340 commercial plane. Naturally everybody can use a multi-million dollar full service flight simulator which came equipped with all of the technical personnel needed to make the thing work. These folks had to be brought over from the factory and housed in hotel while they waited for the day that the prince would use his toy. We are led to believe that the day never came. Although the prince made no public excuse for any of  his purchases, when asked why he needed the contraption, he replied that he had a number of planes and needed to maintain his razor sharp reflexes and while that statement made some sense when you consider that the under-privileged prince had 17 airplanes, none of which had anything to do with the aircraft which the simulator was designed for. 

There were other abominations in the prince’s collection, the couch shaped like a Cadillac automobile and the set of gold-plated toilet-bowl brushes. Not only did someone see him coming but they were able to convince the lad that he really needed this stuff. However you really can’t blame him, when you have nothing to do all day but spend money, you can run out of things to buy fairly quickly. The prince’s spending on non-essential items was estimated by the accountants at a cool $750,000 per day over a period of 10-years. Jefri supposedly looked at spending the money in the country’s treasury as his manifest destiny, and often worked in dedicated fashion at his job morning, noon and night. After all, why on earth would any one person need multiple professional bowling alley machines? We can certainly understand someone that had everything wanting their own bowling alley, but to have dozens of these toys for one’s personal use seems certainly to be pushing the envelope a tad too far.   

I guess the same questions could be asked about the multiple purchases of grand pianos by this non-musically inclined champion global class spender. Or the confluence of pizza ovens that showed up when the accountants began their inventory. These were of the quality that would have done any world class pizza franchise proud.  While those seem to be excesses under almost any set of circumstances we can certainly understand the fact that the prince had multiple snooker tables and his own professional film processing laboratory. These are critically important possessions for someone attempting to prove that he is the greatest spender on things that he will never use. And if anyone had the audacity to ask why, they were skating on really thin ice, because of the fact that it is considered a criminal offense in Brunei for anyone to disclose anything about the way the royal family spends its money.  

For whatever reason, the country was in a constantly declared “state of emergency” which had been in place for decades. Why this tiny kingdom needed to be “on the ready” for over 20-years no one has been able to determine. However, because of this fact, the king was able to meet out harsh treatment to those that did not toe the line in his kingdom and talking about royal spending was included in this bill of particulars reality to things that were just not talked about. It is interesting that they played such hardball relative to how the fortune was spent as Jefri often was known to say that he was not spending any more money than anyone else would should they be at his station in life. However, Jefri could never name anyone that was at his station. The auction brought a tad over $7 million and many believe that it cost twice that amount to advertise, catalogue and bring off. The end result was the Brunei allowed itself to be held to public ridicule. In addition, the paltry sum that was received was estimated be less than 10% of its original cost  

Recessions and theft are things that sometimes occur at the worst of all times, this all happened during a period that the oil market was about as low as it had been since before the Ten Day War. The country was already called a "Shellfare State," after the Western oil company that was so important in bringing so much bacon home to Brunei, Shell Oil Company. Maybe now the Sultan will sell the Plaza Hotel in New York, the Beverly Hills Hotel in Los Angeles or better yet the Dorchester in London, and use the money to bail out the country. However, at last report, while tourism has laid an egg, oil prices have risen substantially and many of these projects have been put on hold.

The Sultan and his advisors are still trying to make sense out of investments such as the Hotel Bel-Aire in Los Angeles, the New York Palace Hotel, the Dorchester Hotel in London, Datastream, a telecommunications company and Asprey Plc, the Jeweler to Britain's royal family. While Jefri's investments made have lacked substantial logic, they certainly reeked of  good taste. After all, what is money for if not to be spent on items that please.

 

 

 

Top


©2005 Chapman, Spira & Carson, LLC
111 Broadway. New York, NY. 10006 Tel: 212.425.6100 - Fax: 212.425.6229

Terms of Use  |  Privacy Policy  |  Email