It's Sunday

 

Christians love to see themselves as victims.  Makes them feel closer to Jesus, I guess.

Goldman sucks

Goldman Sachs, which has survived and thrived despite countless scandals over the years, may have finally stepped in a pile of trouble too deep to escape.

[...]

Goldman has survived many scandals in recent years. The bank paid $550 million to settle the infamous “Abacus” affair, in which Goldman helped hedge fund investors create a born-to-lose mortgage investment product to bet against.

Then they agreed to pay another $5 billion to settle claims of improper “packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities” between 2005 and 2007.

[...]

There’s even a Donald Trump angle to this latest great financial mess, but the outlines of that subplot – in a case that has countless – remains vague. The bank itself is in the most immediate danger.

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In the 1MDB scheme [which is currently under investigation, with criminal charges filed against Goldman], actors tied to former Malaysian Prime Minister Najib Razak allegedly siphoned mountains of cash out of a state investment fund. The misrouted money went to lavish parties with celebrity guests like Alicia Keys, a $35 million jet, works by Monet and Van Gogh, property in New York, Los Angeles and London, and (ironically) the funding of the movie The Wolf of Wall Street.

[...]

Najib lost re-election in May, ending a 61-year reign for his party. National anger over 1MDB was a major reason for his downfall. The prime minister was allegedly central to the scam, which involved luring investors to national development projects that mostly never took place.

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Malaysian authorities filed criminal charges [...] seeking a stunning $7.5 billion in reparations for the bank’s role in the scandal. Singapore authorities also announced they were expanding their own 1MDB probe to include Goldman.

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The cash for this mother of all bacchanals originally came from bonds issued by Goldman, which earned a whopping $600 million from the Malaysians. The bank charged prices for its bond issuance that analysts believe were suspiciously high – like a massage price that suggests you’re probably getting more than a massage.

[...]

Najib was one of the first world leaders to congratulate Donald Trump on his win in 2016. At least at one time, the two men were pals. [...] Trump hosted Najib at the White House last year, thanking the soon-to-be-ousted leader for “all the investment you’ve made in the United States.”

[...]

On November 30th of this year, the Justice Department filed a civil forfeiture suit targeting more than $73 million funneled into the country by 1MDB players. There is email evidence the money may have been intended to help influence the Trump administration to drop the case.

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[Najib's electoral loss] completely reversed the situation,” says John Pang, a former policy adviser to the prime minister’s office in Malaysia. “Before, you essentially had the victim saying there was no crime. Now, you had the Justice Department meeting with a 1MDB task force in Kuala Lumpur.”

  Matt Taibbi

All this reinforcing for Trump, being in a similar corrupt position, the fact that he can't lose office or his goose is cooked.

In addition to the Malaysian action seeking $7.5 billion, the company is facing two more class-action lawsuits filed by investors, and a significant amount of negative press.

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At year’s end, Goldman is known to be under investigation in the U.S., Singapore and Malaysia, while 1MDB probes are ongoing in at least 10 countries.

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What was in it for the bank? About $600 million in fees [...] “two hundred times the typical fee.”

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Clare Brown of the Sarawak Report, who broke many of the early stories about 1MDB, was writing about Goldman’s pricing a long time ago. In one story in 2013, she noted that when the bank earned $196 million in one transaction, that represented “around 8.8% of the issue’s total nominal value rather than the normal rates, which might be expected to amount to around 0.25%, according to traders.”

Reached by email this week, Brown said recent events only bring what was obvious some time ago into greater focus. “Basically, anyone with any knowledge of the markets and banking could see this deal was fishy as hell,” she says, adding, “What is absolutely clear is there is no way the bosses of the bank could have failed to see what a mere onlooker like myself was calling out back in 2013. They ALL HAD TO KNOW.”

[...]

The scandal showed that all it takes is a corrupt official and a morally flexible bank office to generate billions in public losses.

Continue reading.

 ...but hey, do what you want...you will anyway.

Surprise! Goldman Sachs-related charges filed

U.S. federal prosecutors brought charges of bribery and money laundering in connection with 1Malaysia Development Berhad, an investment development fund affiliated with the Malaysian government. The 1MDB story is wild — there’s a good book about it — but the short version is (allegedly!):

1. A guy named Jho Low convinced senior Malaysian government officials to set up a development fund.
2. The fund raised money by selling billions of dollars’ worth of bonds.
3. Low stole most of the money.
4. He used a lot of it to pay huge bribes to the government officials so they’d keep letting him do this.

[...]

While Goldman now likes to present itself to the public as a tech company run by a beat-dropping DJ, or a champion of the consumer with its Marcus digital bank, the U.S. Department of Justice painted a very different picture on Thursday. It filed criminal charges against two ex-bankers for their alleged role in a money-laundering operation that lined the pockets of Malaysian government officials, their financiers and others.

The U.S. charge sheet outlined a culture of greed — and not just the “long-term greedy” once favored by senior partner Gus Levy in the 1970s. The bank, which arranged $6.5 billion of 1MDB bond offerings that netted it $600 million in fees, is described as being so focused on deals at times that compliance came second. Internal controls were allegedly “easily circumvented” by bankers helping to divert the proceeds for illicit purposes.

Prosecutors’ version of events depicts not one but several senior bankers — including Tim Leissner, who pleaded guilty — colluding to cover up bribes and kickbacks.

[...]

The firm has said previously it raised money for 1MDB without knowing it would be diverted from the development projects. The bank is far from the only one touched by probes into 1MDB around the world. Singapore has fined eight banks and sent four people to jail over the scandal, for instance.

But the seniority of the Goldman employees being implicated by the U.S. authorities is especially troubling. It makes it harder for the bank to dismiss the allegations as the actions of a lone staffer gone rogue.

  Bloomberg

And believe it, they would if they could.

Goldman has faced reputational hits before, such as the Securities and Exchange Commission’s 2010 lawsuit over the sale of mortgage-backed securities before the financial crisis. That triggered much soul-searching at the firm and the creation of a standards committee to review its operations.

Obviously not enough soul-searching.

The 1MDB scandal is more recent, it touches public funds rather than sophisticated hedge funds, and it is escalating at a time when Goldman is under new leadership and steering deeper into newer, consumer-facing businesses.

[...]

Leissner, a former Goldman partner, has pleaded guilty and agreed to forfeit $43.7 million, which sounds like a lot until you read that more than $200 million of the stolen 1MDB money was transferred to accounts controlled by Leissner and a relative of his. (Another Goldman partner, Andrea Vella, is not charged with anything but is alleged to have known about the bribery; he was put on leave at Goldman.)

The swamp is constantly restocked

Check out Charlie Pierce's post on Elliott Broidy, wherein Charlie puzzles why Old Lard Ass "can't find himself a good lawyer." 

...but hey, do what you want...you will anyway.

Goldman Sachs Still Corrupt

What else can you expect when you bail out a corrupt player but more corruption?

Goldman Sachs (GS) received $5.55 billion from the government in fall of 2008 as payment for then-worthless securities it held in AIG. Goldman had already hedged its risk that the securities would go bad. It had entered into agreements to spread the risk with the 32 entities named in Friday's report.

Overall, Goldman Sachs received a $12.9 billion payout from the government's bailout of AIG, which was at one time the world's largest insurance company.

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The initial $85 billion to bail out AIG was supplemented by an additional $49.1 billion from the Troubled Asset Relief Program, known as TARP, as well as additional funds from the Federal Reserve. AIG's debt to U.S. taxpayers totals $133.3 billion outstanding.

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AIG received the bailout of $85 billion at the discretion of the Federal Reserve Bank of New York, which was led at the time by Timothy Geithner [who was thereafter appointed by the Obama administration as Secretary of the US Treasury].

  USA Today

Less than three years after receiving $10 billion in bailout money from American taxpayers, Goldman Sachs informed its employees [in 2011] that it [would] fire 1,000 workers in the United States and elsewhere, shifting their jobs to the cheaper Singaporean labor market.

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Goldman is firing American workers at a time of record profits for the company, which raked in $2.7 billion in profits in the first three months of 2011 alone.

Goldman’s plan is helped by conservatives in Washington who have prevented Congress from discouraging corporations from outsourcing.

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Many conservatives justify outsourcing by arguing that not only would companies be more profitable by shifting low-skilled work to developing countries, but laid-off American workers would be forced to re-educate themselves for new, high-paying industries.

  Think Progress

Tell me again; where are they getting the money to do that?

Fast forward to the present:

Tim Leissner, chairman of Goldman Sachs Southeast Asia’s operations, has taken a “personal leave” amidst corruption scandals associated with Malaysia’s state-owned 1MDB fund, with which Goldman worked closely.

President of Goldman’s Singapore operations since 2006 and chairman of its Southeast Asia operations since 2014, Leissner [...] was seen as a “key player” in cultivating the bank’s very profitable relationships with Kuala’ Lumpur’s banking and government elite, including Malaysian Prime Minister Najib Razak [who chairs the state-owned investment and development company, 1Malaysia Development Berhad (1MDB)].

[...]

Goldman orchestrated the $6.5 billion sale of three 1MDB bonds in 2012 and 2013, from which the bank earned $593 million in fees and expenses. The deal has raised questions, as such fees in Malaysia are usually much lower.

It has since emerged that Razak received a $681 million “donation” to his personal bank account.

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It was discovered this week that Leissner has moved from Singapore to his Los Angeles home, calling it a “personal leave.”

  RT

Smart move. He's at much less risk of consequences in Los Angeles.

...but hey, do what you want...you will anyway.

Another Correction That Won't Matter

The West’s case blaming Russia for the shoot-down of a Malaysia Airlines plane over Ukraine last July appears to be crumbling as the German foreign intelligence agency has concluded that the anti-aircraft missile battery involved came from a Ukrainian military base, according to a report by the German newsmagazine Der Spiegel.

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The Russians denied providing the rebels with the weapon and the rebels denied shooting down the plane. But the tragedy gave the U.S. State Department the emotional leverage to get the European Union to impose tougher economic sanctions on Russia, touching off a trade war that has edged Europe toward a new recession.

Robert Parry: Consortium News

Mission accomplished.

Business, As Usual

A range of mainstream American publications printed paid propaganda for the government of Malaysia, much of it focused on the campaign against a pro-democracy figure there.

The payments to conservative American opinion writers — whose work appeared in outlets from the Huffington Post and San Francisco Examiner to the Washington Times to National Review and RedState — emerged in a filing this week to the Department of Justice. The filing under the Foreign Agent Registration Act outlines a campaign spanning May 2008 to April 2011 and led by Joshua Trevino, a conservative pundit, who received $389,724.70 under the contract and paid smaller sums to a series of conservative writers.

Trevino lost his column at the Guardian last year after allegations that his relationship with Malaysian business interests wasn't being disclosed in columns dealing with Malaysia.

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Trevino acknowledged that he shouldn't have lied to BuzzFeed editor Ben Smith, then at Politico, when this first came up in 2011.

"When Ben Smith contacted me in July 2011, I ought to have come clean with him at the time," he said.

As for why he waited until five years after the fact to register with FARA, Trevino said he didn't know he was supposed to have registered until recently.

[...]

Trevino terminated his relationship with Malaysian interests when he joined the Texas Public Policy Foundation, he said.

  Buzzfeed

Oh, hell, yeah. We'll take him. This is Texas.