By late January, Tim Leissner was irritated.
Irritated that Goldman wouldn’t support his move to Los Angeles to be with his famous wife Kimora Lee, irritated that the firm wouldn’t let him give an internship to the son of a shadowy, as-yet-unnamed go-between in a deal to finance a controlling stake in an Indonesian copper mine, and especially irritated that the bank seemed to be looking a lot harder at the deals he was working on in Southeast Asia in the wake of the 1MDB scandal.
And why shouldn't he be frustrated? After all, Leissner built Goldman’s SE Asia operation. Who is the executive committee to tell him he can’t pass out internships as bribes on the way to financing Indonesian copper mines? And as far as 1MDB goes, Leissner didn’t recall anyone in New York complaining when the bank raked in hundreds of millions in underwriting fees for the deals that helped finance Najib’s slush fund (for more on the origins of the 1MDB scandal you can read here, here, and here).
“It’s not my fault Najib messed the whole thing up,” Leissner must have been thinking.
(Leissner and Kimora)
Be that as it may, Goldman had seen enough by the start of 2016.
Leissner, once the crown banker jewel in the Squid’s Asian tentacle, had become a liability. Investigations into 1MDB were underway in the U.S., Singapore, Switzerland, Hong Kong and Abu Dhabi. Someone, somewhere, was going to get to the bottom of how this disastrously indebted “development bank” got itself into dire straits and at the end of the rabbit hole there’s going to a giant Vampire Squid.
So what did Goldman do? Well, they cooked up an excuse to cut a critical loose end.
"Goldman placed Tim Leissner, the firm’s Southeast Asia chairman, on leave after a review of his email found that he had allegedly sent an unauthorized reference letter on behalf of an individual to another financial firm in 2015,” WSJ wrote this morning. “The letter also included statements that Goldman believes to be inaccurate.”
That review led to Leissner’s previously reported “mystery” leave. As we wrote at the time, "whether or not Leissner's leave and decision to high tail it out of Singapore has anything to do with the 1MDB scandal is an open question, but the timing certainly looks curious." Although no one knew it then, Leissner had already resigned by the time news of his "vacation" hit the wires.
“The email review also came as Goldman [questioned] a potentially lucrative mining deal in Indonesia being led by Mr. Leissner because of the involvement of someone in the deal who the bank believed could hurt the firm’s reputation,” WSJ goes on to detail. “Bank investigators found that Mr. Leissner had offered an internship to a child of the individual.”
Ultimately, Goldman backed out of the deal. Leissner was incensed. At $50 million, it would have been the biggest deal for Goldman in the region since the 1MDB bond offerings.
It seems fairly obvious that Goldman saw the writing on the wall here and simply ordered the firm's investigators to scour Leissner's e-mail for an excuse to fire him ahead of revelations about 1MDB. Now, some possibly make-believe person of questionable repute and a possibly make-believe internship Leissner was set to give this anonymous individual's son will be trotted out as the reason the most important banker in SE Asia just had to go.
You know, because Goldman wouldn't want to damage its sterling reputation.
“?After leaving Goldman, Mr. Leissner took on an advisory role with Wildcat Capital Management, the family office of private-equity giant David Bonderman” with whose TPG Capital Leissner is close, WSJ says, in closing. “A person familiar with the matter said Mr. Leissner was no longer an adviser to his firm. It is unclear why he ended his relationship with the family office.”
Yes, it’s “unclear why he ended his relationship with the family office,” but one possibility is that Wildcat didn’t want anything to do with the looming 1MBD investigation by US authorities. As WSJ also reported early this morning, US investigators have subpoenaed Leissner in connection with the ongoing FBI and DoJ probe.
So, sorry Tim. The world is a collection of "fair weather fans," so to speak. You find out who your real friends are when the chips are down and for you, Lloyd Blankfein apparently isn't one of them.