
Malaysia seeks $7.5B in reparations from Goldman Sachs - lawrenceyan
https://www.reuters.com/article/us-malaysia-politics-1mdb-goldman/malaysia-seeks-7-5-billion-in-reparations-from-goldman-sachs-ft-idUSKCN1OK0GU
======
OliverJones
In case we forget: Here's Matt Taibbi's epic, and fact-checked, rant against
that investment bank.

[https://www.rollingstone.com/politics/politics-news/the-
grea...](https://www.rollingstone.com/politics/politics-news/the-great-
american-bubble-machine-195229/)

Taibbi's lede? "The first thing you need to know about Goldman Sachs is that
it’s everywhere. The world’s most powerful investment bank is a great vampire
squid wrapped around the face of humanity, relentlessly jamming its blood
funnel into anything that smells like money. "

~~~
robk
I've no intent on defending Goldman but taibbi is an idealogue not a
journalist. He belongs in a commentary page not given credit as a journalist

~~~
rayiner
Also a piece of trash human:
[https://www.chicagoreader.com/Bleader/archives/2017/10/27/tw...](https://www.chicagoreader.com/Bleader/archives/2017/10/27/twenty-
years-ago-in-moscow-matt-taibbi-was-a-misogynist-asshole-and-possibly-worse)

~~~
AndyMcConachie
They wrote that as fiction.

[https://twitter.com/onlxn/status/923966695554785280/photo/1](https://twitter.com/onlxn/status/923966695554785280/photo/1)

~~~
anigbrowl
'I was obviously joking' is the go-to defense of people who are acutely
embarrassed. I've lost count of the number of times I've seen that excuse
trotted out. As I always say when someone tries this in person 'if only one of
us is laughing it wasn't a joke.'

~~~
coolgeek
> 'I was obviously joking'

That's not at all reflective of the cited text.

First off, he never even implied 'obvious' \- which is used to blame the
reader/listener for not getting it.

Second, while he does refer to his view of the material (at the time) as
satire, his current view (at least in the cited text) is clearly, and solely,
regret.

------
Firebrand
1MDB is the most bizarre scandals I’ve ever heard. A 27-year-old convinces the
Prime Minister of Malaysia to let him manage country’s sovereign wealth fund,
and then he proceeds to fritter almost $2 billion away throwing multi-million
dollar parties and funding the Wolf of Wall Street. How did he get away with
all of it for so long?

~~~
arcanus
> How did he get away with all of it for so long?

Corruption. He fritter'ed a great deal of this money to precisely the same
Prime Minister who selected him.

This wasn't unique, either. This sort of corruption is much more pervasive
than most people believe. In China many of the top party officials are
billionaires. Vladimir Putin is widely believed to have massively enriched
himself during his reign.

Frankly, the biggest surprise is that the corruption in this case was caught.

~~~
stevehawk
"massively enriched" is a bit of an understatement. He's believed to be one of
the wealthiest people in the world and it's why Obama put those sanctions on
him and his buddies.

~~~
wnevets
He's been robbing his country blind to make him and his allies extremely rich.

~~~
sifoobar
Source?

As opposed to US politicians like the Bushes, Clintons and Obamas? Or any of
the countless corrupt puppet dictators that the US installed around the world?

Listen, I know they're pushing really hard for a war right now; but unless
you're right up there at the top of the pyramid, war is hell.

The only thing that will ever get us out of this hole is truth, and truth
starts with not spreading BS.

~~~
why_only_15
The Bushes/Clintons/Obamas make their money from because people want to hear
what they have to say (e.g. speeches, books), not because they steal money
from the public coffers.

~~~
sifoobar
Right :)

The Clinton's Uranium deal with Rosatom is a nice example of how this works;
of course you can't just give politicians piles of money, it needs to come
with a bedtime story for the voters.

~~~
dralley
You've done zero research about this, then.

A Canadian company owned uranium reserves and wanted to sell the ownership of
them to Rosatom. Not the physical resources, which cannot leave the country,
just the ownership.

This still requires government oversight, so 8 different agencies had to sign
off on it. All agencies did, including the state department. Hillary was not
involved in the decision to approve the sale, apart from in charge of one of
the many departments overseeing it.

~~~
mikeyouse
One last bit that people ignore -- The Clinton Foundation Initiative is a
Public Charity (as opposed to a private foundation like the DJT Foundation)
managed by a team of professionals subject to regular audits. Everyone one of
their financial reports is posted on their website (by law), it would be
public knowledge and it would be illegal if the Clintons benefitted
financially in any way from the activities of the charity. They didn't. There
are reams of pages of IRS guidance around private inurement in 501c groups
(aka what was going on at the Trump Family Foundation -- a different type of
nonprofit charity).

You can safely ignore anyone who claims that the Clintons took money from
anyone if they're claiming that money donated to their charity ends up in
their pockets. They don't know what they're talking about.

~~~
sifoobar
Right :) I do hope they pay you well.

Basically everyone outside of their little communist bubble know what the
Clintons are all about. More power, at any cost. But it's ending any second
now, mark my words. The stuff that's been trickling out so far is the tip of
the iceberg.

------
jarym
The commenters saying GS could just withdraw from Malaysia to sidestep any
repercussions are mistaken.

First, US prosecutors are also investigating this (and ironically so is the
Federal Reserve). Now US banks might get soft glove treatment in their home
country but so far the American authorities have shown some teeth in this
scandal.

Second, GS executives are personally named in law suits. Malaysia has foreign
assistance treaties in other countries where GS operates so that'd be sticky.

Finally, the reputation damage from GS withdrawing from a country to avoid a
lawsuit would be hugely damaging.

~~~
blackstrips
GS already has a rotten reputation. I don’t think they care.

As for the executives, they will probably hide behind limited liability.
Getting the US to hand them over will not be easy.

~~~
mruts
Why do you say that GS has a rotten reputation? They are probably the most
respected bank on Wall St.

Also, I know for a fact that they really care about their reputation, and that
internally, they are stressing about this.

~~~
snarfy
On main street, GS is known as the "great vampire squid wrapped around the
face of humanity, relentlessly jamming its blood funnel into anything that
smells like money"

~~~
Mvandenbergh
Their reputation "on main street" is largely irrelevant to them.

~~~
gammateam
> irrelevant

And so is Malaysia

~~~
TomMarius
Why does anyone care then?

~~~
komali2
Some people take the ferengi viewpoint - if you made a profit and got away
with it, you are successful HARD STOP.

------
m0zg
As much as I dislike GS, I find their interpretation of the story to be far
more believable. US government is a paragon of honesty and virtue compared to
a lot of foreign governments. Stealing government money is the main goal of
those who "serve" in those governments, with the actual job description coming
in a distant second or third. GS should have known this would backfire, it's
not like they didn't know the money would immediately disappear into the
pockets of government officials. They probably counted on those officials not
being quite so brazen as to turn around and sue GS.

~~~
taherchhabra
Malaysia was a single party democracy since it's independence, the probability
of new party coming into power was very very low since all the democratic
institutions like election commission, judiciary were almost destroyed by the
previous regime, so based on this GS would have done their risk/reward
calculation. But this May, another party came to power and currently the
previous prime Minister and lot of officials are charged for corruption in
1MDB.

~~~
drharby
I did not know that their was a changing of the guard.

That explains more

------
buyx
Concerned South Africans fought Bell Pottinger, a UK PR firm that was known
for spreading nastiness around the world; driving it to bankruptcy, after it
tried to destabilise the country, as party of a programme of looting being
carried out by its clients in South Africa.[1] KPMG has suffered extensive
reputational damage for similar reasons, and its international parent had to
intervene to contain the contagion.

Malaysia is taking on Goldman Sachs, going where faint-hearted and fearful
first-world regulators fear to tread.

Perhaps we'll see more justice coming from unexpected sources.

[1] I don't think Bell Pottinger's erstwhile members have stopped interfering
with South Africa but that's a conspiracy theory for another day.

~~~
nroets
We (South Africa) are not (yet) bankrupt.

Bell Pottinger cannot be blamed for our problems. The problem is pure and
simple that the state is spending too much money on civil servants and
inefficient state owned companies.

~~~
buyx
You're correct, Bell Pottinger is not to blame for the structural problems in
the South African economy, and I never said otherwise. However, many of these
issues date back decades (apart from a period of economic liberalisation from
the late 80s to early 2000s, South African governments have favoured a large
degree of state control over the economy). My comment was referring to the
bankruptcy of Bell Pottinger, not South Africa.

What Bell Pottinger did, is provide cover for a state capture programme, that,
over a short period, funneled money from state owned companies and other parts
of the state to the Gupta and Zuma families, and in doing so tried to foment a
race war.

------
gg82
Probably not a bad thing for Malaysia if GS didn't operate in their country.

~~~
gcb0
what would be most scary is if they for some reason pay the fine to continue
to operate there.

~~~
johnchristopher
Isn't scary now if we entertain the idea that Malaysia wouldn't had done that
if they had nothing to gain in some form or another from it ?

~~~
erikpukinskis
The allegation is that people in the Malaysian government criminally
contracted GS. Of course the criminals profited. There’s no reason to assume
Malaysia did.

------
theosp
Anyone can shed light on Goldman's chances to get fair trial from the
Malaysian courts?

7.5b is more than 10 times the fee collected by Goldman, why stop there?

~~~
baybal2
10 fold punishments for proceeds of crime are not that rare, why stop there?

~~~
Theodores
10x was legit in Babylon, circa 1754 BC, with the oldest written law
concerning this:

Ex. Law #265: "If a herdsman, to whose care cattle or sheep have been
entrusted, be guilty of fraud and make false returns of the natural increase,
or sell them for money, then shall he be convicted and pay the owner ten times
the loss.

[https://en.wikipedia.org/wiki/Code_of_Hammurabi](https://en.wikipedia.org/wiki/Code_of_Hammurabi)

Innocent until proven guilty was also in the Code of Hammurabi, not sure about
the 'eye for an eye' bit or the treatment of slaves though. Nonetheless the
precedent of 10x is there.

~~~
chucksmash
The eye for an eye bit was in there[1], but apparently only for men of the
same class:

> 196\. If a superior man should blind the eye of another superior man, they
> shall blind his eye.

> 198\. If he should blind the eye [...] of a commoner, he shall weigh and
> deliver 60 shekels of silver.

> 199\. If he should blind the eye of a slave of a superior man [...], he
> shall weigh and deliver one half of the slave's value (in silver).

[1]: From page 106 of "Sapiens: A Brief History of Humankind" which I was just
coincidentally reading on the bus and would def recommend.

~~~
Theodores
Thanks for the tip, I will go for the YouTube talk before investing in the
book.

baybal2 - sibling comment - was correct and unfairly modded down. A well known
leader referenced the Law of Hammurabi the other day.

Coincidentally I was listening to this press conference whilst procrastinating
on HN, to come across this story. New to the Law of Hammurabi, I had to check
out the Wikipedia page, to read the 'ten times' bit, enabling me to
conveniently cut 'n' paste the above comment.

Despite going to school I had not ever heard of Law of Hammurabi before. I
have not read it in depth but just that small bit of knowledge regarding the
history of written laws has changed how I see and understand the world.

------
setgree
Key question about this, to me: who has more credibility, Goldman Sachs or the
Malaysian government?

I think the answer is Goldman Sachs. That's not praise for them. If it were
Singapore filing charges -- and the article suggests they are looking into it
-- then I"d believe Singapore.

But the scandal itself tells you a lot about the Malaysian government's
credibility and honesty.

~~~
karmasimida
I would say Malaysian government, since they need to be responsible for 10s of
millions of people's life.

~~~
antidesitter
> I would say Malaysian government, since they need to be responsible for 10s
> of millions of people's life.

This is very funny. It’s like saying Stalin or Mao commanded superior
credibility because they were responsible for tens of millions of lives.

~~~
karmasimida
I didn't see it that way. Malaysian government is elected democratically, so
unlike Stalin/Mao, they are bestowed with power to fulfill the will of the
people.

~~~
antidesitter
Replace with any corrupt elected government then.

> they are bestowed with power to fulfill the will of the people

Bestowed with power != using it properly.

------
known
GS is offering $1.8 billion

    
    
       “Their figure is $1.8 billion. Ours is $7.5 billion,” Lim said.

~~~
theosp
As far as I understand it, he refers to Goldman's maximum assumed losses from
_all_ the litigations they are involved in, not just 1mdb.

So, no, gs are offering nothing at the moment.

From Goldman's q3 report: 'As of the date hereof, the firm has estimated the
upper end of the range of reasonably possible aggregate loss for such matters
and for any other matters described below where management has been able to
estimate a range of reasonably possible aggregate loss to be approximately
$1.8 billion in excess of the aggregate reserves for such matters.'

------
blackstrips
I take it GS will just walk away. It might not be worth to pay that much to
operate in Malaysia.

Not to mention, people could just start a separate company if they absolutely
need to do business in Malaysia.

~~~
denzil_correa
Singapore and US are also investigating GS. There will most likely not be a
"walk away".

> Singapore’s widened probe opens a potential new battle front for Goldman
> less than a week after Malaysia filed the first criminal charges against the
> firm over a relationship that spawned one of the biggest scandals in its
> history. Singapore is coordinating closely with the U.S. Justice Department,
> which is also investigating Goldman and has filed criminal charges against
> two former senior bankers at the firm, the people said.

[https://www.bloomberg.com/news/articles/2018-12-21/singapore...](https://www.bloomberg.com/news/articles/2018-12-21/singapore-
said-to-expand-1mdb-criminal-probe-to-include-goldman)

~~~
blackstrips
They might get nailed in the US but I don’t think Malaysia is going to see any
of that 7.5B they are asking for.

~~~
wbl
They very well may. SDNY isn't going to let customers get screwed when
settling with a bank.

------
cbg0
Most likely they'll settle for a lower sum if they want to continue to operate
there, otherwise it might be simpler and cheaper to just pull out of Malaysia.

------
jijji
its damages not "reparations", inflammatory no?

------
darawk
Am currently reading the book about this scandal "Billion Dollar Whale". Am
about 1/3 of the way through it, but thus far i'd put the entirety of the
blame here on the Malaysian prime minister, Jho Low, and the willfully
incompetent executives hired to stage-manage the 1MDB fund. I don't see any
reason to blame GS given what I know so far, though that may change as I make
my way through the book.

~~~
samstave
Id blame GS because they arent idiots and would have been fully aware it was
fraud, thus are accomplisses and complicit.

------
gaius
_In China many of the top party officials are billionaires. Vladimir Putin is
widely believed to have massively enriched himself during his reign._

Even in the US many politicians are far, far wealthier than their official
salaries would suggest is plausible.

Update: By the downvoting I know that you all know I mean the Clintons.

~~~
seanmcdirmid
Chinese too officials are billionaires, American top officials are
millionaires at best unless they have money coming in before. You can only
make so much on speaking fees and book royalties, while red families like Xi’s
own and control significant portions of the Chinese economy.

Just reporting on such issues is why most western newspapers have been
blocked. They don’t even bother trying to refute it, because princeling
dominance of the economy an open dirty secret. It also puts better into
perspective how the economy is managed in favor of their own interests.

~~~
withhighprod
Chinese officials are not at billionaires level, millionaires at most. It’ll
be a huge risk to their political life if they and their families possess
billions. It’s very likely they could control multiple billionaires though

~~~
seanmcdirmid
No it isn't. You simply shutdown all discussion about it.

[https://www.smh.com.au/world/chinese-leaders-family-
worth-a-...](https://www.smh.com.au/world/chinese-leaders-family-worth-a-
billion-20120629-218qi.html)

[https://www.nytimes.com/2014/06/18/world/asia/chinas-
preside...](https://www.nytimes.com/2014/06/18/world/asia/chinas-president-xi-
jinping-investments.html)

And do you remember that discussion about Wen Jiabao's mom controlling a good
chunk of China's jewelry industry that got the new york times banned:

[https://www.nytimes.com/2012/10/26/business/global/family-
of...](https://www.nytimes.com/2012/10/26/business/global/family-of-wen-
jiabao-holds-a-hidden-fortune-in-china.html)

I think Chinese officials are genuinely surprised in how poor western
politicians are and how many of them even lack xiaosans.

