Goldman Sachs must open its books on the 1MDB settlement as concerns deepen in KL

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Opposition lawmakers are not only entitled but duty-bound to report concerns to the police if there have been allegations of inappropriate fees against the public interest.

The howls of protest have been theatrical. Bersatu’s Wan Saiful today thundered that any suggestion that money might have leaked from the rushed, cut-price 1MDB settlement with Goldman Sachs engineered by the PN government (allegedly RM500 million in dodgy fees and commissions) amounts to vile ‘slander’ and ‘character assassination’.

“I vehemently deny this slander. No agents were appointed. No commissions were received. This is not the culture in Bersatu.”

The rebel party-hopper continued to somewhat growing amusement:

“The party was formed to fight for integrity and transparent governance. Our commitment is to ensure that the 1MDB case is resolved promptly, all those guilty receive justice, and the plundered state funds are returned for the benefit of the people,”

Malaysians who have spent the past year as the unfortunate spectators of one of the most blatantly corrupted exercises in political power-grabbing, divisions of spoils, conflicts of interest, parcelling of projects and sheer abandonment of the principles of the constitution will largely disagree.

However, Wan Saiful plainly is an interested party and may not see things as others do. So that he may prove his points, we invite this self-proclaimed intellectual to exercise his advanced understanding of the precepts of democracy and foundations of the rule of law to adopt a simple solution.

All he needs to do is urge his party to do things properly and by the book – as he says himself, transparently. Then the nasty insinuations that are indeed circling in KL about the siphoning of huge amounts of money into party coffers will fall away.

If PN have nothing to hide, for goodness’ sake, why are they hiding it?

Why is it that there has been no scrutiny allowed of the terms and conditions of the 1MDB reparations, and why to the contrary has the Goldman Sachs deal in particular been consigned as an Official Secret?

Official Secret!

On Friday a police report was lodged by PN’s political opponents demanding investigations into ‘viral rumours’ that RM500 million has been siphoned out of the secretive settlement reached last year with Goldman Sachs – money that Bersatu insiders are alleged to have described as being destined for the party’s election war chest.

The total settlement in cash was advertised to have been $US2.5 billion at the time, which was regarded as a relative snitch by the bank which had been facing far higher demands from the former elected PH government before it was overthrown in a political coup orchestrated by those who had lost power in the GE14 election.

The allegation, which Sarawak Report has also received from authoritative sources, is that a staggering 5% commission was awarded to key negotiators appointed for the Malaysian government side of any amount secured from the Goldman side – negotiators who are said to be close to Bersatu. If true, the fee would indeed amount to just over RM500 million (with the ringgit standing at just over .24 to the dollar).

One can understand why any government would wish that to be classified an official secret when it has been seeking to assure the public, in Wan Saiful’s words, that “the plundered state funds are returned for the benefit of the people”.

However, PN have already prepared their excuse on this matter, which is why the finger is now starting to point firmly back at Goldman Sachs once more as a potential repeat offender in the foreign corrupt official bribery stakes. If true, the matter is immeasurably serious.

PN’s excuse, made last year in response to queries about the secrecy from both the former prime minister Dr Mahathir and PKR’s financial spokesmen, is that it was forced on the Malaysian government by a so-called Non-Disclosure Agreement (NDA) demanded by the bank as part of the terms of the settlement.

So far, Goldman Sachs has not commented on this claim. Instead, CEO David Soloman headed back to his home in the Hamptons the weekend the deal was sealed and celebrated his cheap escape (and the dropping of charges against 17 Goldman Sachs personnel) with a large party where he played DJ to his guests.

However, Sarawak Report is informed by those close to the negotiations at the time that when potential settlement negotiations first opened under the previously elected PH government, Goldman Sachs had readily agreed to the PH stipulation that ANY outcome must include full transparency.

It is on record that PH were looking for $7.5 billion at the time towards the humongous losses endured from 1MDB thanks largely to the duplicity and fraud conducted by the bank. The eventual secret settlement only required a cash injection of $2.5 billion-plus commitments towards another $1.4 billion in the return of assets.

That makes for a plain motive for the bank to accept changed terms.

However, if an agreement to demand secrecy has made it possible for huge fees and commissions to be siphoned out of the deal, Goldman would once again have been complicit in the bribery of foreign officials for the bank’s own benefit – the very same act for which it has already earlier admitted guilt in its previous relations with Malaysian politically exposed persons (PEPs).

The PN government, presently protected by the Malaysian King at present by an ’emergency’ decree, may consider themselves immune from accountability.

However, the US bank ought not to be. The deferred prosecution agreement warns that any misdeed at all by Goldman Sachs, let alone a repeat of the very same pattern of behaviour with the very same actors, could trigger the re-opening of the Department Of Justice’s case against the bank.


With the representatives of Malaysia’s democratically elected former government now demanding accountability in the light of blatant coup mongering and corruption around this deal, it is time for questions to be asked and scrutiny applied.

As one senior compliance expert confirmed to Sarawak Report, not only are due diligence and money laundering requirements at issue for the bank, so are the rights of shareholders with regards to appropriate transparency:

If the funds are being paid under a cloak of secrecy, then how can Goldman Sachs know with confidence they are not being used for illegitimate purposes? It puts Goldman Sachs right back in the frame for facilitating crime. It is outrageous, there is no transparency around this.

There are two issues here. Is the NDA (non-disclosure agreement) a breach of shareholders’ rights/market transparency? Under EU Market Abuse rules there is an obligation to disclose facts that could have an impact on its share price.

From the Official Secrets Act angle, it seems to me that Goldman Sachs is knowingly committing a crime if they are making a payment that they have reasonable knowledge will not be used for the purposes they are purported to be.

These are genuine concerns that could be immediately lifted were Wan Saiful’s government to practise the transparency he preaches.

For as long as PN refuses and Goldman Sachs remains complicit in this otherwise seemingly unaccountable secrecy around the deal, then opposition lawmakers are not only entitled but duty-bound to report concerns to the police if there have been allegations of inappropriate fees against the public interest.

All the more so as further concerns arise over the other (less generous) settlements currently being imposed on local institutions, such as AmBank, for the same reasons of secrecy and alleged fees tied to the settlement amounts.

And as the IPIC deal is touted to be imminent with Abu Dhabi, there are fears that another PN cop-out will be equally shrouded in mystery as to where any of the actual money is ending up. – Sarawak Report