The howls of protest have been theatrical. Bersatu’s Wan Saiful today thundered that any suggestion that money might have leaked from the rushed, cut-price 1MDB settlement with Goldman Sachs engineered by the PN government (allegedly RM500 million in dodgy fees and commissions) amounts to vile ‘slander’ and ‘character assassination’.

“I vehemently deny this slander. No agents were appointed. No commissions were received. This is not the culture in Bersatu.”

The rebel party-hopper continued to somewhat growing amusement:

“The party was formed to fight for integrity and transparent governance. Our commitment is to ensure that the 1MDB case is resolved promptly, all those guilty receive justice, and the plundered state funds are returned for the benefit of the people,”

Malaysians who have spent the past year as the unfortunate spectators of one of the most blatantly corrupted exercises in political power grabbing, divisions of spoils, conflicts of interest, parcelling of projects and sheer abandonment of the principles of the constitution will largely disagree.

However, Wan Saiful plainly is an interested party and may not see things as others do. So that he may prove his points, we therefore invite this self-proclaimed intellectual to exercise his advanced understanding of the precepts of democracy and foundations of the rule of law to adopt a simple solution.

State Secret!

All he needs to do is urge his party to handle the matter by the book – as he says himself, transparently. Then the nasty insinuations that are indeed circling in KL about the siphoning of huge amounts of money into party coffers will fall away.

If PN have nothing to hide, for goodness sake, why are they hiding it?

Why is it that there has been no scrutiny allowed of the terms and conditions of the 1MDB reparations, thanks to special secrecy clauses introduced to prevent parliamentary oversight and normal auditing?

A growing number of people clearly believe they know why. On Friday it emerged that a police report has been lodged by PN’s political opponents demanding investigations into ‘viral rumours’ that RM500 million has been siphoned out of the secretive settlement reached with the bank last year – money that Bersatu insiders are alleged to have described as being destined for the party’s election war chest.

If so, it represents an almost identical manoeuvre to that of Najib (the present PM’s then immediate party boss) as he siphoned the money out of 1MDB to splash political largesse at GE13.

The total settlement in cash was advertised to have been $US2.5 billion at the time, which was regarded as a relative snitch for Goldman Sachs to pay, since it had been facing far higher demands from the former elected PH government before it was overthrown in a political coup orchestrated by those who had lost power in the GE14 election.

The allegation being made, which Sarawak Report has also received from authoritative sources, is that a staggering 5% commission was awarded to key negotiators appointed by the Malaysian government of the total amount secured from Goldman. If true, the fee achieved from the $2.5 billion would indeed amount to just over RM500 million (with the ringgit standing at just over .24 to the dollar).

One can understand why any government would wish such an arrangement to be classified a non-disclosable secret given it has been seeking to assure the public that, in Wan Saiful’s words, “the plundered state funds are [being] returned for the benefit of the people”.

Such reports have renewed the concern expressed at the time of the settlement announcement in November about the confidentiality that has kept the detail of the agreement firmly under wraps, paving the way for just such a misappropriation.

PN’s then excuse, made in response to queries from both the former prime minister Dr Mahathir and PKR’s financial spokesmen about the secrecy surrounding the terms of the deal, implied that it was forced on the Malaysian government by a so-called Non-Disclosure Agreement (NDA) demanded by the bank.

PAS ‘Law Minister’, Takyuddin Hassan claimed that the government had agreed to the secrecy in order to comply:

De facto law minister Takiyuddin Hassan had said the specifics in the deal with Goldman could not be revealed to avoid any legal action against the government due to a non-disclosure clause. [True Net]

It was an excuse that provoked a formal complaint against the Malaysian government by the NGO Transparency International amongst many others. So much for Wan Saiful’s protestations about ‘transparent governance’!

And it has also caused a questioning finger to point firmly back at the US bank once more as a potential repeat offender in the foreign corrupt official bribery stakes. Because, if the secrecy was primarily used to cover up illicit fees and the bank agreed to sign up to or even initiate NDA demands in return for a swift and cut price settlement the matter is clearly immeasurably serious.

So far, Goldman Sachs has not commented on the concerns over the secrecy clause or the Malaysian government’s apparent claim that it was initiated by the bank. Instead, CEO David Soloman headed back to his home in the Hamptons the weekend the deal was sealed and celebrated the cheap escape (and the dropping of charges against 17 Goldman Sachs personnel) with a large party where he played DJ to his guests.

However, Sarawak Report is informed by those close to the discussions at the time that when potential settlement negotiations first opened under the previous elected PH government Goldman Sachs had readily agreed to the PH stipulation that ANY outcome should include full transparency. So, how come the change of tune?

It is on record that prior to the PN settlement the previous PH government was looking for a far greater $7.5 billion payment by Goldman Sachs towards the humungous losses endured from 1MDB, thanks largely to the duplicity and fraud conducted by the bank. PN’s eventual secret settlement only required a cash injection of $2.5 billion plus a commitment to underwrite another $1.4 billion for the sale of recovered stolen assets.

That makes for a plain motive for the bank to accept changed terms. But if the secrecy clause  has in return made it possible for huge fees and commissions to be siphoned out of the deal on the government side, Goldman would once again have been complicit in the corruption of PEPs (politically exposed persons) in Malaysia for the bank’s own benefit – a repeat of the very same act for which it has already admitted its previous guilt.

The PN government, presently protected from Parliament by the Malaysian King by an ’emergency’ decree, may consider themselves once again immune from the threat of accountability.

However, the US bank ought not to be.  The deferred prosecution agreement of last year warns that any misdeed at all by Goldman Sachs, let alone a repeat of the very same pattern of behaviour with the very same actors, could trigger the re-opening of the US Department Of Justice’s case against the bank.

With the representatives of Malaysia’s democratically elected former government now demanding explanations in the light of blatant coup mongering and concerns about corruption around this deal it is time for scrutiny to be applied back in the United States where the bank is regulated.

As one senior compliance expert who has examined the situation has confirmed to Sarawak Report that not only are due diligence and money laundering requirements at issue for the bank, so are the rights of shareholders with regard to appropriate transparency:

If the funds are being paid under a cloak of secrecy then how can Goldman Sachs know with confidence they are not being used for illegitimate purposes? It puts Goldman Sachs right back in the frame for facilitating crime. It is outrageous there is no transparency around this

There are two issues here. Is the NDA (non disclosure agreement) a breach of shareholders rights/market transparency. Under EU Market Abuse rules there is an obligation to disclose facts that could have an impact on its share price

From the Official Secrets Act angle it seems to me that Goldman Sachs is knowingly committing a crime if they are making a payment that they have reasonable knowledge will not be used for the purposes they are purported to be.

These are genuine concerns that could be immediately lifted were Wan Saiful’s government to practice the transparency he preaches.

For as long as PN refuses and Goldman Sachs remains complicit in this otherwise seemingly unaccountable secrecy around the deal, then opposition lawmakers are not only entitled but duty bound to report concerns to the police if there have been allegations of inappropriate fees against the public interest.

This is all the more the case as further concerns have now arisen over the subsequent (less generous) settlements that are currently being imposed on local institutions, such as AmBank, for the same reasons of secrecy and similar allegations about potential percentage fees paid to negotiators.

And as the last major IPIC deal is touted to be imminent with Abu Dhabi, there are fears that another PN money spinner will be equally shrouded in mystery and potential fraud.