WASHINGTON (AP): A subsidiary of Goldman Sachs pleaded guilty on Thursday (Oct 22) and agreed to pay more than US$2bil in a foreign corruption probe tied to the Malaysian 1MDB sovereign wealth fund, which was looted of billions of dollars in a corruption scandal.
The company, Goldman Sachs Malaysia, entered the plea in federal court in Brooklyn. As part of its plea, the company admitted that it "knowingly and willfully” conspired to violate US anti-bribery laws.
Malaysian and US prosecutors had alleged that bond sales organised by Goldman Sachs provided one of the means for associates of former prime minister Datuk Seri Najib Razak to steal billions over several years from a fund that was ostensibly set up to accelerate Malaysia’s economic development.
In July, Malaysia’s government said it had reached a US$3.9bil settlement with Goldman Sachs in exchange for dropping criminal charges against the bank over bond sales that raised money for the fund.
In court on Thursday, Goldman Sachs’ general counsel Karen Seymour said that agents and employees of Goldman Sachs Malaysia had violated the US Foreign Corrupt Practices Act by "corruptly promising and paying bribes to foreign officials in order to obtain and retain business for Goldman Sachs".
The fund, 1Malaysia Development Berhad, was set up in 2009 by Najib to promote economic development. It relied primarily on debt to fund investment and economic development projects and was overseen by senior Malaysian government officials, according to court records.
Najib set up 1MDB when he took office in 2009, but it accumulated billions in debts, and US investigators alleged at least US$4.5bil was stolen from the fund and laundered by his associates.
Public anger over the corruption allegations contributed to the shocking election defeat of Najib’s long-ruling coalition in May 2018. - AP
