Top Goldman Execs Aware of Massive 1MDB Bribes
Lax controls enabled US$1.6 billion in backhanders
By: Toh Han Shih
In May 2013, a Goldman Sachs managing director called an unnamed senior Goldman executive with what he thought was a disturbing report about Project Catalyze, a US$3 billion bond offer arranged by the giant investment bank for the state-backed 1Malaysia Development Bhd. (1MDB), which would later collapse into a US$4.6 billion river of red ink.
“The main reason for the delay for (International Petroleum Investment Company) not having funded their three billion into the JV (joint venture) with 1MDB is (Khadem al-Qubaisi) is trying to get something on the side in his pocket,” the unnamed managing director said. “I think it’s quite disturbing to have come across this piece of information . . . .”
“What’s disturbing about that? It’s nothing new, is it?” asked the senior Goldman executive. In response, the managing director agreed that the situation was nothing new and Project Catalyze went ahead.
The ostensible purpose of raising US$3 billion from Project Catalyze was to finance this joint venture between a subsidiary of International Petroleum Investment Company (IPIC), an Abu Dhabi sovereign wealth fund, and 1MDB. IPIC has since been merged into Mubadala Investment Company, a current Abu Dhabi sovereign wealth fund. Al-Qubaisi was a managing director of IPIC in 2013 and is now serving a 15-year jail sentence in Abu Dhabi.