Goldman Sachs exploited 1MDB, made it look legit, says comedian Hasan Minhaj

Screenshot of former PM Datuk Seri Najib Razak and Jho Low as seen on the ‘Patriot Act with Hasan Minhaj’ on Netflix as Minhaj discusses the 1MDB scandal and sovereign wealth funds.
Screenshot of former PM Datuk Seri Najib Razak and Jho Low as seen on the ‘Patriot Act with Hasan Minhaj’ on Netflix as Minhaj discusses the 1MDB scandal and sovereign wealth funds.

KUALA LUMPUR, June 3 — Goldman Sachs used its reputation to exploit sovereign wealth funds like 1Malaysia Development Berhad (1MDB) and to lend a veneer of legitimacy, a US comedian said.

Hasan Minhaj described how the US investment bank was similar to “leafy circles” accolades attributed on movie posters, where one usually doesn’t read them but trusts them when one sees it.

“Whether you like them or not, Goldman is synonymous with money, success and money again.

“Goldman helped 1MDB appear more legit than they actually were,” he said on his weekly show, Patriot Act with Hasan Minhaj, on Netflix.

Minhaj had earlier posed a question to the audience as to how fugitive Malaysian financier Jho Low — whom he described as the “kid from Up”, referencing the Asian child protagonist from the Pixar animation — and former prime minister Datuk Seri Najib Razak could have pulled the financial scheme off.

“He was this 27-year-old Malaysian financier, this gulab jamun with glasses got connected with Malaysia’s prime minister Najib Razak. Look at this, he somehow convinced the PM of the country to set up a sovereign wealth fund,” Minhaj said when introducing Low.

He also explained how sovereign wealth funds were giant pools of money owned and managed by a state that usually depended on a single resource, like petroleum, as a safety net for the economy in the event the oil trade collapsed.

Minhaj said in 2012, former Goldman bankers Roger Ng and Tim Leissner started helping 1MDB raise money from investors who were told that their money would help pay for power plants in order to help the sovereign wealth fund grow its money.

“The only problem was 1MDB had no credit rating, which made it harder to convince people to invest.

“So, to make their power plant deals looked better, Goldman used their credibility and paired 1MDB up with Abu Dhabi’s sovereign wealth fund International Petroleum Investment Company (IPIC) which had 70 billion in assets and solid credit,” he said, adding that investors then saw the package and subsequently bought in.

He then pointed out that over the next few years, Goldman raised US$6.5 billion for 1MDB but instead of going into power plants, Low allegedly siphoned off US$1.4 billion into a shell company. Goldman walked away with US$600 million in fees and revenues.

“Jho Low claimed 1MDB was supposed to help Malaysia build infrastructure and increase development and investors bought his sales pitch,” Minhaj added.

A video footage of Low during his speech made at the Jynwel Charitable Foundation Limited in 2014 as director was shown to the audience on Minhaj’s show.

“Let’s all think big. Let’s all be bold and lets really think about our place in this world and work together to create the world we truly want to live in,” Low was heard saying.

Shortly after, the video cued to Low in a fedora partying with US hotel heiress Paris Hilton and several others in an unidentified location after he exclaimed, “Bring out a 100 bottles of Cristal (champagne) for everyone!”.

Minhaj then took a jab at Najib, following the former Barisan Nasional (BN) leader’s alleged attempt to cover up the 1MDB scandal and his subsequent arrests by the authorities to face criminal charges.

“He cracked down on protesters, he fired officials investigating him and he even threw a concert with Psy to rally support for his political party BN. He insisted he was being framed.

“So he did what every wrongly accused man does to clear his name — he makes his own version of We are the World,” Minhaj said, before claiming the song “was so bad it created more world hunger”.

Najib had in January 2019 recorded a version of the 1970s hit soul ballad by The Manhattans, Kiss and Say Goodbye, translating the lyrics into Malay and adapting them in a bid to redeem his reputation among Malaysians.

In it, he laments losing the election in May, mocks the new Pakatan Harapan government, and professes his innocence over the corruption charges against him, claiming he has been the victim of an “agenda of revenge and slander”.

Despite a US Justice Department probe and the Malaysian government accusing Goldman of helping 1MDB steal billions of dollars from the country, Minhaj said Goldman has never once pleaded guilty in 150 years.

“Which is shocking when you look at all the shady shit they’ve been accused of, price manipulation, insider trading, gender discrimination, securities fraud, and those are just the name of their conference rooms,” he said.

He said for example, Goldman allegedly took advantage of Libya’s lack of financial sophistication to draw it into losing trades after the country set up a US$67 billion sovereign wealth fund in 2006.

Libya then filed a US$1.2 billion suit against Goldman to recoup funds claimed to have been lost through nine disputed trades conducted in 2008, but the court ruled in favour of the bank after the suit was thrown out.

“No question their expertise helped them profit from Libya’s ignorance and those tactics seemed to be part of Goldman’s overall culture and strategy,” Minhaj said.

While saying how sovereign wealth funds were not inherently bad, Minhaj said the lack of transparency and little oversight made it ripe for abuse, especially in autocratic governments or if they were in the wrong hands.

“No matter who’s running them, they want to make their pool of money bigger and that’s why they need investment banks like Goldman.

“That’s why the criminal case against Goldman is so important. It could help set precedents about how much we scrutinise these vast pools of money with little to no regulation. Until that changes, there are going to be more 1MDBs and Jho Lows,” he said.

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