The prime minister of Malaysia had a message for the crowd at the Grand Hyatt San Francisco in September 2013. ‘We cannot have an egalitarian society – it’s impossible to have an egalitarian society,’ Najib Razak said. ‘But certainly we can achieve a more equitable society.’
Tim Leissner, one of Goldman Sachs Group Inc.’s star bankers, enjoyed the festivities that night with model Kimora Lee Simmons, who’s now his wife. In snapshots she posted to Twitter, she’s sitting next to Najib’s wife, and then standing between him and Leissner. Everyone smiled.
The good times didn’t last. At least $681 million landed in the prime minister’s personal bank accounts that year, money his government has said was a gift from the Saudi royal family. The windfall triggered turmoil for him, investigations into the state fund he oversees and trouble for Goldman Sachs, which helped it raise $6.5 billion. Leissner, the firm’s Southeast Asia chairman, left last month after questions about the fund, his work on an Indonesian mining deal and an allegedly inaccurate reference letter.
Few corporations have mastered the mix of money and power like New York-based Goldman Sachs, whose alumni have become U. S. lawmakers, Treasury secretaries and central bankers. Leissner’s rise and fall shows how lucrative and fraught it can be when the bank exports that recipe worldwide. In 2002, when the firm made him head of investment banking in Singapore, it had just cleaned up a mess there after offending powerful families. It took only a few years before the networking maestro was helping the bank soar in Southeast Asia – culminating in billion-dollar deals with state fund 1Malaysia Development Bhd., also known as 1MDB. But if his links to the rich and powerful fueled his Goldman career, they also helped end it.
This post was published at David Stockmans Contra Corner on April 1, 2016.
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