How Goldman banker ‘haggled with call girl he’d hired for contact’
He ‘offered £140 and said: Bring good-looking pal’
A BANKER haggled with a prostitute and her ‘good-looking friend’ as he attempted to impress Libyan investors, it was revealed yesterday.
Goldman Sachs executive Youssef Kabbaj offered the women $200 (£140) each if they came to meet him and the Libyan contact he allegedly hoped would be the key to landing an £800million deal.
But the prostitute refused to meet the men at the five-star hotel in Dubai for less than $300 (£210). The investment banker told the woman, whom he called Michella: ‘OK. Come. You have a deal... Your friend has to be as good looking as you.’
A series of messages between Mr Kabbaj and the prostitute were revealed to the High Court as part of a high-profile legal action which threatens to embarrass senior officials at Goldman Sachs, the world’s most powerful investment bank.
The former executive, who no longer works for Goldman Sachs, had arranged an allexpenses-paid trip to Dubai in 2008 for Haitem Zarti, the younger brother of a senior official at the Libyan Investment Authority (LIA), which controlled the Gaddafi regime’s £46billion oil riches.
Goldman paid for the 25-year-old to fly business class and stay at the Ritz Carlton hotel, even though he did not work for the LIA. Lawyers for the fund claim it was part of an attempt to woo ‘naive and vulnerable’ officials to persuade them to invest more than £800million.
Mr Kabbaj, a Moroccan, contacted the prostitute offering her the same $200 he had paid the year before, messages retrieved from his BlackBerry revealed. He eventually agreed to pay $300 for each woman. Three days later he contacted Michella, again asking if she would meet him at ‘last year’s rate’.
When she insisted on $300 he refused, saying: ‘Nope. I don’t like it when you spend 30min and leave like last time.’ In any event when offered a second night with the prostitute Mr Zarti refused, saying he was ‘getting back to God’s way’ and wanted to sleep instead.
Weeks later, Mr Kabbaj helped to arrange a prestigious internship for Mr Zarti at Goldman, despite assessors saying the Libyan’s CV would not ordinarily have ‘made it past the first round’. Days later, the LIA agreed deals worth hundreds of millions of pounds and Mr Kabbaj was hailed as ‘a hero’ by his Goldman colleagues.
But the relationship soured when share prices crashed, leaving the deals almost worthless. At an angry meeting in Tripoli, Mr Zarti’s brother Mustafa accused the bank of having ‘screwed’ the LIA.
The Libyan fund is suing Goldman and wants it to repay $1.2billion (£ 846million) to cover its losses. Its lawyers say Goldman made ‘eyewatering’ profits of more than £200million for its role in the deals. The sum was so large that Goldman’s chief executive, Lloyd Blankfein, raised questions about it during a trip to Abu Dhabi in 2008, the court heard.
Roger Masefield QC, representing the LIA, said Goldman courted the fund and lavished corporate hospitality on its officials.
‘It is perfectly clear that Michella was a prostitute,’ he said. ‘Mr Kabbaj had procured her service and an unnamed but good-looking friend for the evening for him and Mr Zarti. It is about trying to influence Mustafa Zarti and make him more disposed to do as Goldman Sachs recommends.’
Mr Kabbaj is not due to be called as a witness in the case. He was said to have received a £3.1million payout from Goldman Sachs.
He told the Wall Street Journal he had not paid for or arranged prostitutes for Mr Zarti.
He declined to comment on whether he paid for a prostitute for himself, but said Goldman partners signed off all his expenses for the Libyan fund. Court papers filed for the LIA showed Mr Kabbaj claimed expenses of more than £22,000 for hotels and entertaining when he took other LIA employees on a trip to London, and he also arranged a ‘side trip’ to Morocco.
Internal emails showed senior executives at Goldman referred to ‘brain-washing’ officials at the LIA, and one partner warned they were ‘very unsophisticated’, adding: ‘Anyone could “rape” them.’
Other Goldman executives questioned if the Libyans understood the complex nature of the deals.
Goldman disputes the claim. It says the LIA had understood the risks and lost money because of unpredicted falls in stock markets during the 2008 financial crisis.
Robert Miles QC, for Goldman, said: ‘We say this truly is a case of buyer’s remorse.’
Legal documents filed on Goldman’s behalf included an email from Mr Kabbaj in which he said Mr Zarti had told him: ‘We are like pigeons, if you come after us we will fly away, if you walk away, we will s*** on your head.’
The case continues.