Ex-Goldman Sachs chief Lloyd Blankfein reportedly met with the fugitive financier involved in a $6.5bn Malaysian wealth fund scandal

Former Goldman Sachs CEO Lloyd Blankfein.
Reuters
  • Goldman Sachs may still face “significant fines” for its role in financing 1MDB, $6.5 billion Malaysian wealth fund at the heart of a corruption probe.
  • Court documents in the US show an unidentified Goldman executive was involved in a 2009 meeting Malaysia’s Jho Low.
  • Low has been charged with money laundering and bribery by US authorities, and remains on the run.
  • Sources close to the matter told Bloomberg and the FT that the executive at the meeting was Blankfein, Goldman’s long-standing CEO who retired in September.

Investment bank Goldman Sachs remains embroiled in a scandal involving 1MDB, the $US6.5 billion Malaysian sovereign wealth fund which is now the subject of a global corruption probe.

Now, reports suggest that former Goldman CEO Lloyd Blankfein was present at a meeting in 2009, to help establish ties with Malaysian officials before the fund was set up.

According to US court documents, an unidentified Goldman executive attended the meeting with Malaysia’s Prime Minister at the time, Najib Razak.

Also present were Tim Leissner — a former managing director at Goldman — and Malaysian businessman Jho Low, both of whom are now directly implicated in a money laundering scandal tied to the fund.

Sources close to the matter told Bloomberg and the Financial Times that the executive in questions was Blankfein, Goldman’s long-standing CEO who stepped down in September.

Once the groundwork had been established, Goldman helped the 1MDB fund raise around $US6.5 billion in debt — a service for which it received around $US600 million in fees.

The US Department of Justice (DoJ) now alleges that around $US3.5 billion of that amount was misappropriated.

New York prosecutors have since charged Low — who remains on the run — with money laundering and violation of bribery laws.

Leissner was arrested in June and pleaded guilty to money laundering charges, the FT reports.

Another former Goldman director implicated in the scandal, Roger Ng, was recently arrested in Malaysia and is yet to enter a plea.

According to Bloomberg, Leissner worked for years to bring Low on board as a Goldman client, despite his applications repeatedly being denied by Goldman’s compliance department.

Blankfein had no advance knowledge that Mr Low would be attending the 2009 meeting, which was held at the Four Seasons hotel in New York where Najib was staying.

About a month after the meeting, Malaysia announced that Goldman Sachs would be setting up operations in the country.

The DoJ’s investigation remains ongoing, and Goldman said in its most recently quarterly filing that the bank could still face “significant fines” in connection with the probe.

There’s more at Bloomberg and the FT here.