Goldman Deal: Parliament Erupts over Thomas’ Letter

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Heated arguments broke out in the Dewan Rakyat today over the Perikatan Nasional (PN) government’s settlement deal with Goldman Sachs.

It started when Finance Minister Tengku Zafrul Abdul Aziz fired back at former attorney-general (AG) Tommy Thomas, citing a Feb 11 letter where the latter allegedly wanted to agree to a settlement of just US$1.75 billion (RM4.2 billion).

The PN government’s deal with Goldman, for US$2.5 billion in cash and US$1.4 billion guarantee on the recovery of assets acquired using stolen 1MDB funds, had been criticised by Thomas, who argued the government could have obtained a better deal.

Responding to this in Parliament, Tengku Zafrul said that on Feb 11, Thomas had actually written to then prime minister Dr Mahathir Mohamad, saying Goldman had agreed to raise their settlement offer to US$1.75 billion.

This included US$164 million in taxes, and the return of US$576 million in fees paid to Goldman by the government for the 1MDB deal.

“The recommendation made by the former AG, was to find a settlement outside of court.

“At all material times, the former AG was also seeking a settlement with Goldman. It is therefore disingenuous of him to say we should not have done what he wanted to do in the first place,” Tengku Zafrul said.

Opposition MPs stood up to refute Tengku Zafrul’s claims.

Tony Pua (Damansara-PH), who was in the Finance Ministry during the Pakatan Harapan administration, said Thomas had never stopped the government from pursuing an out of court settlement.

“That is also disingenuous (for you to say),” said Pua.

“What Thomas said was to let the case go to court to obtain the maximum leverage for the highest compensation from Goldman Sachs.”

He added that to his knowledge, the Pakatan Harapan government had rejected Goldman’s US$1.75 billion offer.

Tengku Zafrul shot back at Pua, stating that during Thomas’ tenure as AG, the criminal charges against Goldman and its executives never went beyond the filing stage.

“To this day, no one has been brought to court,” the finance minister said.

He added that to get the Goldman executives in court would require an extradition process that was also not initiated.

Shortly after, Lim questioned whether the US$3.9 billion settlement deal had received the cabinet’s approval.

Azhar, however, interjected by saying: “This is the Finance Ministry’s decision, it must have been brought to cabinet.”

Tengku Zafrul responded by stating that the cabinet had empowered AG Idrus Harun – who is Azhar’s brother – and his team to negotiate and find a solution.

Lim shouted back that this was extraordinary, and that the deal should have been approved by the cabinet.

He was met by heckling from Azeez Abdul Rahim (BN-Baling) and Noh Omar (BN-Tanjung Karang), among others.

Lim continued voicing his objection, drawing parallels to the 1MDB case.

“You’re talking about more than RM10 billion, it should be approved by the cabinet. This is like the 1MDB case and other cases in court where one person made a decision.

“This should have been approved by the cabinet. Why wasn’t it? This is an issue of accountability and transparency, it should not just be left at that,” he said.

Azhar jumped in again to respond for the government.

“The negotiating team has been given the mandate by the cabinet, when something has been achieved, the cabinet would surely ratify it,” the speaker said.

After a brief commotion, Azhar repeated his explanation.

When Lim further protested that this meant the cabinet had not approved the deal, Azhar replied: “This is normal procedure.”

Tengku Zafrul then claimed that Lim’s decision to zero-rate the GST was also not brought to cabinet.

Lim did not get an opportunity to rebut.

Tengku Zafrul took another shot at Lim, saying that the Public Accounts Committee (PAC) had in 2019 found that there were “no missing revenue from GST collection”, triggering more shouting on both sides of the aisle.

Lim had previously claimed that the BN government had “robbed” GST refunds.

The PAC, however, found that no monies were lost. But it did say that the BN administration had breached the law by funnelling money meant for GST refunds into the consolidated revenue account.