The Malaysian Job

How Wall Street enabled a global financial scandal.

By Andrew Cockburn and cross-posted from Harpers magazine.

This past January, Goldman Sachs CEO and chairman David Solomon strode onto a stage at the bank’s lower Manhattan headquarters to launch the first “Investor Day” in the famously secretive institution’s one-hundred-and-fifty-year history. The celebration was promoted as an inspiring review of Goldman’s “strategic road map and goals,” and the presentations were replete with pledges of “transparency” and “sustainability,” though the overall performance was unkindly summarized by bank analyst Christopher Whalen as “investment bankster BS.” Early in his opening address, Solomon expounded the “core values” of the firm he had headed since October 2018. After “Partnership” and “Client Service” came “Integrity.” Solomon stressed that he was “laser-focused” on this last term, emphasizing that the company “must always have an unrelenting commitment to doing the right thing, always.” There followed, however, a glancing reference to a singular black cloud hovering over the proceedings. “In the wake of our experience with Malaysia,” he said, “I am keenly aware of how the actions of a few can harm our reputation, our brand, and our performance as a firm.” With that brief mention, he moved on to a fourth core Goldman value: “Excellence.”

Everyone in the room had recognized the allusion. “Malaysia” was shorthand for a gigantic fraud—possibly the largest in financial history—in which, beginning in 2009, billions of dollars were diverted from a Malaysian sovereign-wealth fund called 1Malaysia Development Berhad (1MDB) into covert campaign-finance accounts, U.S. political campaigns, Hollywood movies, and the pockets of innumerable other recipients. The “few” Solomon referred to were those Goldman executives whose active participation in the scam’s bribery and money laundering had since become undeniable.

Despite efforts by Solomon and other senior employees to plead innocence by reason of ignorance, Goldman’s pivotal role in the heist has exposed another obvious, if unspoken, core value: greed. But years of diligent investigation into 1MDB by courageous journalists and law-enforcement officials have revealed a network that extends far beyond Wall Street. Like the veins and arteries of a patient highlighted by an angiogram, the money’s crooked pathways illuminated the bloodstream of a corrupt world and the lengths to which its beneficiaries were prepared to go to protect themselves and their gains. A Swiss whistleblower who leaked damning evidence of the scheme to the media was arrested in 2015 by Thai police on trumped-up charges. He signed a forced confession and spent eighteen months in jail. At least one Malaysian official investigating the crime was murdered, his body stuffed into an oil barrel and encased in concrete. Well-remunerated international legal and PR firms worked to suppress public knowledge of their clients’ misdeeds by lying to the media and threatening litigation. Coursing across the globe, the money reached many distant corners, including both the Obama and Trump campaigns. Former British prime minister Tony Blair was on the payroll of one of the conspirators for $65,000 a month.1 Jamal Khashoggi, the late, murdered Washington Post columnist, was paid $100,000 to conduct a friendly interview for a Saudi newspaper with the scam’s most prominent protagonist.

The scheme laid bare the dark underbelly of globalization. A racket concocted in far-off Malaysia came to involve people and institutions all across the world, owing to a system of elite networks seemingly fine-tuned for criminal enterprise. “Using prestigious, brand-name gatekeepers is often the key to pulling off complex financial crimes,” Dennis Kelleher, CEO of the financial watchdog group Better Markets, told me. “They effectively sell their credibility and imprimatur, which criminals use to overcome their victims’ skepticism. When they get caught, the enriched gatekeepers that made it all possible claim no knowledge or liability for the billions of dollars in damage done. The corruption of the enablers and their lack of accountability is what makes people so angry”

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