Goldman Sachs/1mdb: bigamy and bribes
The bank formerly known as “the great vampire squid” is in the middle of a “front to back” review under squeaky clean new boss David Solomon – or “D-sol”, as he’s known to his fans on the DJ circuit. But one big stain on its legacy is proving hard to remove, said Laura Noonan in the FT. Last week, Solomon apologised to the “people of Malaysia” for “the role one of his top bankers played” in a massive embezzlement scandal at the country’s national investment fund, 1MDB, which US and Malaysian authorities allege was plundered to the tune of at least $4.5bn. But he insisted that “Goldman itself had done nothing wrong”.
Apology be damned, said The Straits Times. That won’t “cut it for Malaysia”, which filed criminal charges against Goldman last month. Finance minister Lim Guan Eng is holding out for about $7.5bn from the bank before he even considers whether to absolve it of blame. The £475m in fees that Goldman originally earned underwriting 1MDB’S bonds suddenly doesn’t look such a great deal.
“It is not unusual for companies to blame a scandal on a lone wolf,” said Lucy Burton in The Daily Telegraph. Yet Goldman has “gone to extreme lengths” to discredit its former partner Tim Leissner, who has pleaded guilty to US charges. The bank has compiled a sordid list of facts and insinuations against him, said The New York Times. “Bigamy. Secret religious conversions.” A doctorate from a mail-order firm. Affairs with powerful women. Goldman depicts Leissner as a master con man “so sneaky that even the retired military intelligence officers who work for the bank couldn’t sniff him out”. Such “scorched-earth tactics”, against someone who had been a “star banker”, surely “reflect just how worried Goldman is about the criminal investigations”.