The Saudis, Malaysia and Goldman Sachs

28 January 2016 1:29 pm

The bottom line is that Saudi Arabia funded the election of Malaysian Prime Minister Najib Razak in 2013 in what has to be a shonky deal involving the country’s debt-laden state fund 1MDB

A Malaysian investigating body has found that the $700 million was a “gift” from the Saudi royal family and therefore not illegal. All but $61 million of the $681 million transferred in March of that year was returned to the Saudis five months later.

The Malaysian Anti-Corruption Commission subsequently announced it would seek a review of this ruling.

Not surprisingly Goldman Sachs has been behind this, pocketing a 10 percent fee or RM1.5 billion for raising RM15.2 billiion in bonds for 1MDB in 2012 and 2013.

The deal with the Saudis raises a whole lot of questions. Who specifically donated the money? Why was it donated? And what happened to the money that wasn’t returned? And why would the Saudi ‘royals’ would ‘donate’ hundreds of millions of dollars to a foreign leader, as opposed to a government institution?

But why should the Saudis care about an election in a non-Arab country more than 6,000 km away? According to the BBC, the answer lies in their concerns over the rising power of the Muslim Brotherhood, which they consider a terrorist organisation.

Of course, we have to remember that Saudi Arabia was quick to support the overthrow of the pro Muslim Brotherhood Mr Morsi in Egypt, providing the military-backed government with billions of dollars in aid and loans.

So where does that leave Goldman Sachs?

According to Bloomberg, the guy behind the deal Tim Leissner has relocated to Los Angeles and is on personal leave. Funny that.

That makes sense. Goldman Sachs has made a fortune out of this dodgy deal. The whiff of corruption is just business as usual.