It’s hard to play hardball when you’ve already admitted you did everything wrong. But you can play for time. So when Malaysia started to get a bit uppity towards the bank that allegedly helped bilk it out of $4.5 billion through the malign workings of a guy they didn’t do very a good job of vetting but made partner anyway, earning a cool $600 million for itself, Goldman walked away from the negotiating table. Given what Malaysia was asking for, it seemed like it couldn’t hurt, since you never know what time might bring.
In Malaysia’s case, it brought a regime change that, based on the Wikipedia article I just skimmed, seems unrelated to Goldman and 1MDB. And that meant that the attorney general whose starting offer was $9 billion, a guilty plea and everyone goes to jail was not attorney general anymore, and the new prime minister was the former deputy prime minister to the fried-rice loving indicted prime minister, and all of a sudden the Malaysians were sounding quite reasonable to Goldman’s ear.
The deal includes a $2.5 billion cash payout by Goldman and a guarantee by the bank to return at least $1.4 billion in proceeds from assets linked to sovereign wealth fund 1Malaysia Development Bhd (1MDB), the two sides said…. “We are confident that we are securing more money from Goldman Sachs compared to previous attempts, which were far below expectations,” Finance Minister Tengku Zafrul Aziz said in a statement.
“We are also glad to be able to resolve this outside the court system, which would have cost a lot of time, money and resources,” he said, adding that the deal would resolve all outstanding charges and claims against Goldman.
We’ll bet your boss is, Mr. Zarful.
The Goldman deal could give a much needed boost to Muhyiddin’s administration, which has a slim majority in parliament. The opposition is gearing up for snap elections./Muhyiddin came to power in March after forming an alliance with Najib’s party which raised questions about whether that would affect several corruption cases against Najib.
And, in spite of the huge price tag, we’re sure Goldman is, too, given that the money has bought the dropping of criminal charges against itself and everyone associated with it not named Tim Leissner or Roger Ng. Now if only Goldman’s own country could be as reasonable.
“Unfortunately, (Goldman) will still have to settle with the DOJ to move on completely and if past major foreign corrupt practice cases are a good indicator (which we think they are), the DOJ settlement could wipe out most of the great second quarter they just put up.”