1MDB case: Witness tells of meeting to get jobs for Najib's kids

NEW YORK • The star witness in the bribery trial of former Goldman Sachs banker Roger Ng testified that former Goldman chief Lloyd Blankfein met the Malaysian prime minister in 2009 ahead of US$6.5 billion (S$8.7 billion) in bond deals for the country's wealth fund - and that the meeting came with an agenda.

In return for the lucrative business, Goldman was to get then Prime Minister Najib Razak's three children jobs at the bank, its former South-east Asia chairman Tim Leissner told the jury on Tuesday about the 1MDB scheme.

Leissner, 52, was describing the lengths he said he and his subordinate Ng went to in helping Malaysian financier Low Taek Jho loot billions of dollars from the Malaysian fund.

"Just met PM's three children with Jho at his apartment," Leissner read to the jurors, in a federal court in Brooklyn, New York, from an e-mail Ng had sent him. "We'll work on getting them to join GS."

Leissner replied to Ng: "Sounds good, my friend. Get them in."

In the end, he told the jury, he just helped get Najib's daughter, Ms Nooryana Najwa Najib, a job at private equity firm TPG.

Najib said yesterday none of his children had ever worked at or been offered jobs at Goldman Sachs.

"While the headlines in local media hinted that I was bribed by Goldman Sachs with offers to (get) my children work at the bank, what former South-East Asia chairman Tim Leissner described was their attempt to bribe me," he posted on his Facebook page. "This didn't happen and none of my children was ever offered a job at Goldman Sachs and had never worked at that US bank."

He said Leissner made the introductions for his daughter to apply for a job at TPG Capital in Hong Kong, which has nothing to do with Goldman. "The position was not even high - just as an investor relations professional," he said.

It was Leissner's second day of testimony in the trial of Ng, the bank's former head of investment banking in Malaysia. Ng, 49, is charged with conspiring with Leissner and Low to launder money embezzled from 1MDB, or 1Malaysia Development Berhad, and violate US anti-bribery laws. He is the only former Goldman banker to go on trial in the scandal.

The case against Ng, whom Leissner described as the "relationship banker" who introduced him and Goldman colleagues to Low, focuses on Goldman's fund-raising work in 2012 and 2013 for 1MDB. Ng has argued he was the first to inform Goldman compliance about Low, sending "red flag warnings" not to do business with him.

Leissner has pleaded guilty to money laundering and bribery of foreign officials and is cooperating with the United States for leniency at his sentencing. Low is a fugitive.

Leissner testified on Tuesday that Ng told him Najib was coming to New York to visit his children in the US for the Thanksgiving holiday and that Low thought it would be a good chance for Mr Blankfein and the premier to meet and promote the bond transactions.

The meeting, at the Four Seasons Hotel, went ahead even after a New York Post report circulated among Goldman bankers, describing Low as a "20-something Wharton grad from Malaysia who has burned through hundreds of thousands of dollars at the city's hottest nightspots".

To obscure the role of Low in their fund-raising efforts for 1MDB, Leissner testified, he and Ng came up with code names for him, including "Friend" and "PMO" (for the Malaysian Prime Minister's Office). He told the court that he and Ng - along with senior Goldman officials, including former co-head of investment banking in Asia Andrea Vella - used the code names to conceal the extent of Low's involvement in the fund-raising projects from others at the bank.

"Had we raised his name in his true capacity, we would not have been approved" by Goldman oversight officials, Leissner said. "It was a red flag that would have stopped the transaction."

Low was "essential" in helping Goldman win business in Malaysia because he was not only the "key decision-maker" in advising Malaysia's King during the establishment of TIA, 1MDB's predecessor, but also secretly fed Goldman bankers inside information about how the fund was choosing a bank to advise it, Leissner told the jury.

Goldman was competing for the business - which earned it at least US$100 million - with JPMorgan Chase, UBS and other big banks, Leissner said. Prosecutor Drew Rolle asked if it was like having the answers to a test ahead of time.

"Yes," Leissner said. "Because we wrote them."

BLOOMBERG, THE STAR/ASIA NEWS NETWORK