Goldman's chief in 2009 met Low for talks on 1MDB

Mr Lloyd Blankfein stepped down as Goldman Sachs'CEO last month but still serves as chairman.
Mr Lloyd Blankfein stepped down as Goldman Sachs'CEO last month but still serves as chairman.

Blankfein said to be the unidentified top Goldman exec referenced in US court papers

NEW YORK • Years before Goldman Sachs Group arranged bond deals now at the heart of globe-spanning corruption probes, the firm's then chief executive officer Lloyd Blankfein personally helped forge ties with Malaysia and its new sovereign wealth fund, according to people with knowledge of the matter.

Mr Blankfein was the unidentified high-ranking Goldman Sachs executive referenced in US court documents who attended a 2009 meeting with then Malaysian Prime Minister Najib Razak, the sources said. The meeting was arranged with the help of men who are now tied to the scandal over the plundering of state fund 1Malaysia Development Berhad (1MDB), according to US court documents unsealed last week.

The meeting at the Four Seasons hotel in New York was set up and attended by two key figures in the 1MDB scandal, Malaysian businessman Jho Low and former Goldman partner Tim Leissner, one person with direct knowledge of the matter said, asking not to be identified as the information is not public.

The high-level gathering laid the groundwork for a relationship that would prove profitable for the investment bank. Since then, the use of the US$6.5 billion (S$9 billion) that Goldman Sachs raised for 1MDB has sparked investigations across several nations, and entangled the US bank in a high-profile corruption probe.

A spokesman for Goldman Sachs declined to comment on Mr Blankfein's behalf. The bank has said it believed proceeds of debt sales it underwrote were for development projects and that Leissner withheld information from the firm.

Low's presence at the meeting with Mr Blankfein, one of the most senior executives in global finance, illustrates the meteoric rise of a largely unknown financier who had managed to cultivate relationships with senior Malaysian government officials, including Najib.

By the time of the meeting, Low's lavish spending habits were New York tabloid fodder. Starting about two months before the meeting, according to the US filings, Leissner and another Goldman banker began a years-long effort to bring Low aboard as a client, a request that compliance workers at the firm consistently denied.

 
 

There is no indication that Mr Blankfein was aware of the internal assessments of Low, or knew the identities of all the people present at the meeting.

The documents filed by an FBI agent in June say there is evidence that Low was present at the meeting. The agenda for the November 2009 meeting was mapped out by Low and included a "debrief" with Najib and the "1MDB boys" after Goldman Sachs executives had left, the documents show.

The meeting offered Mr Blankfein a chance to speak with Najib in his first year as prime minister, and Najib's visit to New York included meetings with other business leaders and US investors. Low was closely involved in helping Goldman Sachs win the Malaysian business even as Leissner and at least one other lower-ranking banker were already working to shield his role from its compliance group to avoid additional scrutiny, according to federal filings.

Goldman Sachs went on to raise as much as US$6.5 billion for 1MDB in subsequent years, receiving about US$600 million in fees.

The US has since accused Low of teaming up with the Goldman Sachs bankers to pilfer money from 1MDB.

Leissner has pleaded guilty to conspiring to launder money and violating the Foreign Corrupt Practices Act by paying bribes.

Mr Blankfein, who stepped down as Goldman Sachs' CEO last month but still serves as chairman, said at a conference in New York last week that he was not aware of senior managers missing red flags in the 1MDB dealings. Instead, he said, the matter was an issue of a few employees dodging bank controls and lying about it.

The federal filings unsealed last week also place Najib and a "high-ranking executive" from the bank in a meeting with Leissner and Low in 2013 in New York. There is no indication that the executive from the later meeting is the same as the one from 2009.

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A version of this article appeared in the print edition of The Straits Times on November 10, 2018, with the headline 'Goldman's chief in 2009 met Low for talks on 1MDB'. Print Edition | Subscribe