The Goldman Sachs Settlement A Burning Issue And A Smokescreen

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The deferred prosecution agreement states that Goldman Sachs had conspired to corruptly pay out US$1.6077 billion to, or for the benefit of, foreign officials and their relatives, including several unnamed high-ranking Malaysian government officials and 1MDB officers. It naturally follows that if the US government knows how much was paid out, they must also know who the recipients of these illegal payments were. Is the Malaysian government not interested to know who they are? Is that the reason for the confidentiality clause in the settlement agreement?
(FMT) – Despite loud chest-thumping on the issue, recent developments in the never-ending 1MDB saga have raised questions as to whether the Perikatan Nasional (PN) government is serious about rooting out corruption in Malaysia.
Events over the last week have seen both ex-prime minister Najib Razak and former Goldman Sachs banker Roger Ng Kok Wah complain that the US government was withholding evidence that could help them in their respective cases.
Whether this is true and whether it is being done deliberately to stifle their cases, as Najib and Ng claim, is left to be seen.
Apart from the cases against Najib and Ng, there is a much larger dimension to what is going on.
On Nov 1, 2018, the US Department of Justice (DoJ) announced that fugitive businessman, Low Taek Jho, a.k.a. Jho Low, along with Ng, had been indicted for conspiring to launder billions of dollars in 1MDB funds, and had paid millions of dollars in bribes in connection with that fraudulent scheme.
According to the DoJ, another ex-Goldman Sachs banker, US citizen Tim Leissner, had already pleaded guilty to a similar charge.
Then in December 2018, the then Pakatan Harapan (PH) government brought criminal charges against Goldman Sachs’ Malaysian subsidiary as well as Leissner and Ng for various securities law violations.
At around the same time, then finance minister Lim Guan Eng said the government’s intention was to pursue a US$7.5 billion civil suit against Goldman Sachs, claiming it was what the country deserved for the “agony” and “trauma” suffered.
On May 6, 2019, then attorney-general Tommy Thomas announced that he had “temporarily surrendered” Ng to US authorities to face a 1MDB-related charge there. Under the deal, Ng would be “returned” to Malaysia “to face our charges as soon as the proceedings in the US are concluded,” Thomas said.
Thomas also brought charges against three other Goldman Sachs entities and 17 executives, including Goldman Sachs International’s CEO Richard Gnodde, and John Michael Evans, a former partner in the bank.
However, by August last year, some five months after PN came into power, information leaked to the media that a settlement agreement had been finalised involving the bank paying the Malaysian government US$2.5 billion in cash and guaranteeing the return of US$1.4 billion of 1MDB assets seized by authorities around the world.
This was in exchange for Malaysia dropping charges against the bank. However, Muhyiddin Yassin’s government remained mum at the time.
Fast forward to October 2020, and the US DoJ announced its own settlement with Goldman Sachs involving a deferred prosecution agreement, a US$2.9 billion settlement payment and a plea of guilt by its Malaysian subsidiary in a New York court to one count of conspiracy to violate the US’s anti-bribery law.
Back home, the PN government was steadfastly refusing to divulge details of the settlement it had reached with Goldman Sachs. As late as Nov 17 last year, law minister Takiyuddin Hassan told Parliament that a confidentiality clause in the agreement prevented the disclosure.
That seems weird. Surely, the government ought to have been in a dominant position in the settlement. For one, they were dealing with a rogue bank which had admitted responsibility for its part in a scandal which had shaken up the world’s financial systems.
Secondly, both the bank and its employees were the subject of multiple criminal proceedings.
Why did they have to concede confidentiality? Did it have anything to do with the quantum of compensation? How did a government bent on recovering a “reasonable” sum of US$7.5 billion for the nation’s “agony” and “trauma” agree to receive only one-third of that sum – and with a confidentiality clause, to boot!
It is worth noting that, Goldman Sachs’ purported guarantee that assets seized by various authorities around the world will be returned seems nothing more than a smokescreen.
If those assets have already been seized by agencies of various other national governments, what added value would Goldman Sachs bring to their recovery? Our government can recover the assets back from the governments that seized them.
Why did Malaysia surrender the prosecution of all Goldman Sachs employees (except Roger Ng) as part of such a meagre settlement?
Why, in particular, did Tim Leissner get off so easily? Leissner was the first to admit his guilt in the US and in the course of doing so admitted that some US$18.1 million in bribes had been paid out via his personal bank account.
Why did Malaysia not insist that Leissner be “temporarily surrendered” in exchange for Roger Ng?
Why are we not seeking to secure Leissner’s electronic devices? We know that Leissner was in close communication with Jho Low. Are we not interested to know the extent of their communications? Are we content to allow Goldman Sachs to retain these important evidential repositories? Are we no longer in pursuit of Jho Low?
These are all questions that need to be answered.
The deferred prosecution agreement states that Goldman Sachs had conspired to corruptly pay out US$1.6077 billion to, or for the benefit of, foreign officials and their relatives, including several unnamed high-ranking Malaysian government officials and 1MDB officers.
It naturally follows that if the US government knows how much was paid out, they must also know who the recipients of these illegal payments were.
Is the Malaysian government not interested to know who they are?
Is that the reason for the confidentiality clause in the settlement agreement? Is that the reason for the relatively low settlement sum agreed upon?
Is that the reason for the “get out of jail free” card being issued to Goldman Sachs and its employees?
Are Najib and Roger Ng the only ones who are going to be brought to book?
Will the US government’s unusual intervention in Najib’s US discovery suit mean that they will not get a fair trial?
And is all the chest-thumping about the rule of law and the National Anti-Corruption Plan nothing more than politically-driven noise?

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