KUALA LUMPUR, March 1 ― Former Goldman Sachs banker Tim Leissner told a US federal court last week that neither he nor his ex-colleague Roger Ng received kickbacks from the third bond they raised for 1MDB worth US$3 billion (RM12.9 billion), despite having collected millions in kickbacks from the two previous bonds raised.
Leissner said he was instead informed by Low Taek Jho ― popularly known as Jho Low ― that the money from the third bond was to be used to fund Malaysia’s general election at that time, which was in 2013, news portal Malaysiakini reported today based on the US court transcripts.
“He [Low] said to both Roger and me that there was an election in Malaysia coming and that all monies coming from Project Catalyze needed to be utilised for that election, for election purposes.
“And there was no space, no room, for getting kickbacks as a result of, you know, needing to pay, needing to fund that election out of Project Catalyze,” Leissner was quoted telling US prosecutor Drew Rolle.
Project Catalyze was a codename for the third 1MDB bond.
“So, buying an election in this context meant to me that some of the money that Project Catalyze was raising was going to be used to effectively pay some of those handouts that I had knowledge of that happened in Malaysia,” Leissner was quoted as saying.
He added that he understood it was a “common practice” in Malaysia to give “handouts” prior to an election.
Leissner is said to be the prosecution’s star witness in the ongoing 1MDB trial of Malaysian Ng who was charged with violating US anti-bribery laws and money laundering in a US federal court in New York.
According to the news report, Leissner added that he did not know if money from Project Catalyze would “personally” go to Malaysia’s then prime minister Datuk Seri Najib Abdul Razak.
“Personally, because of course the election funding that I mentioned was geared and aimed towards supporting his winning the election again to be prime minister. So when you're asking about him, I was referring to him personally,” Leissner told the US court when asked to clarify on the term “personally”.
Malaysiakini also reported that Leissner had testified on the same day that he and Ng previously received US$17.5 million (RM73.48 million) each in kickbacks for their involvement in the first 1MDB bond worth US$1.75 billion (RM7.34 million).
Leissner added that they also received kickbacks for the second 1MDB bond, without specifying the amount.
Leissner was at that time Goldman’s Asia head of investment banking while Ng was the US investment bank’s Malaysian head. Goldman was in charge of underwriting the 1MDB bonds.
During the trial, Leissner said that two of Najib’s former secretaries had been involved in the third 1MDB bond, worth US$3 (RM12.9 billion) billion.
He named them as the late Datuk Azlin Alias who was at that time Najib’s principal private secretary, and the other as Datuk Amhari Efendi Nazaruddin.
In his testimony, Leissner said he had meetings with Azlin and Amhari as well as officials in Malaysia’s Finance Ministry because he needed the government’s letter of support for the third 1MDB bond to raise US$3 (RM12.9 billion) billion instead of a guarantee from International Petroleum Investment Company (Ipic), Abu Dhabi’s sovereign wealth fund, which had been the case for the first two bonds.
“This time, again, because it wasn't with Ipic, we had to do the work to get signed up on the letter of support with the Finance Ministry, the Treasury of the Finance Ministry and get them to approve the letter, to work on the letter and to approve the letter in its final version for Najib to sign.
“And then also they need to work on ratings calls for this issue. Azlin personally jumped on the Standard & Poors and Moody's calls, too, on this transaction,” Leissner was quoted as saying.
According to Leissner, Azlin was also involved later on when Goldman sought to dispose of US$700 million (RM2.9 billion) in the third 1MDB bonds on its balance sheet that it had failed to sell earlier.
He added that he met Najib in the latter’s Putrajaya office to get the letter of support signed.
Leissner told the US court that he had been concerned about the negative press attention on the 1MDB bonds at that time because he knew he had been “part of an illegal scheme to make them happen”.
“Also equally we had gotten at Goldman Sachs excessive fees that weren't normal for transactions of this kind.
“I drew some comfort at the time from the fact that prime minister Najib had won the election post-Project Catalyze and that comfort sort of outweighed the concerns of the press,” he said.
Najib is currently on trial in Malaysia over his role in the misappropriation of 1MDB.
He had been earlier tried and found guilty of criminal, money laundering and power abuse charges in connection with a former 1MDB subsidiary SRC International Sdn Bhd, but is currently appealing the conviction.
His defence team maintains that Najib had no knowledge of any wrongdoing despite being the prime minister and the finance minister at that time.
