Billion Dollar Whale Quotes

Steal a little and they throw you in jail Steal a lot and they make you king. —Bob Dylan,

Mortality and aging cast a shadow across everyone’s life, but the überwealthy have a better chance of cheating death.

This is a fucking scam—anybody who does this has stolen money,” Belfort told Anne, as the music thumped. “You wouldn’t spend money you worked for like that.

Seemingly unperturbed by the lack of a beneficial owner’s name on such a large transfer—a glaring red flag—Wells Fargo let it through, just a tiny drop in the pool of trillions of dollars that U.S. correspondent banks process every day.

His was a scheme for the twenty-first century, a truly global endeavor that produced nothing—a shift of cash from a poorly controlled state fund in the developing world, diverting it into the opaque corners of an underpoliced financial system that’s all but broken.

The country’s best minds increasingly were leaving, preferring a life in New York or London over the struggles in Malaysia. It was the kind of brain drain that had stunted the growth of nations from India to Indonesia, whose most ambitious citizens gave up on their troubled homeland and sought a better life elsewhere.

Don't promote yourself as a country of constitutionality and compassion if you honestly believe that putting people in prison and treating them like animals is justified. Stop all the hype that we live in a free and democratic society. I used to ramble on about the same stuff. But now—are we really a country that believes in fairness and compassion? Are we really a country that treats people fairly? I've met good men—yes, good men—in prison who made mistakes out of stupidity or ignorance, greed, or just bad judgment, but they did not need to be sent to prison to be punished; eighteen months for catching too many fish; two years for inflating income on a mortgage application; three months for selling a whale's tooth on eBay; fifteen years for a first-time nonviolent drug conspiracy in which no drugs were found or seized. There are thousands of people like these in our prisons today, costing American taxpayers billions of dollars when these individuals could be punished in smarter, alternative ways. Our courts are overpunishing decent people who make mistakes, and our prisons have no rewards or incentives for good behavior. In this alone criminal justice and prison systems contradict their own mission statements (244).

Goldman colleagues noticed how Leissner had an uncanny ability to make clients feel like they had a deep, personal connection with him. He was a relationship banker, skilled at reeling in important executives through a kind of personal magnetesim, rather than a "structuring guy", one of the mathematical whizzes who priced and sold complex derivative products. p55

The grandfather had died, Low undoubtedly loved him, but he was not as wealthy, or such a philanthropist, as his grandson made out. Neither was Low himself so charitable; the Jynwel Foundation had done little through 2012, while Low was busy raiding the 1MDB fund, even during his own cancer scare. It was true that the Jynwel Foundation had pledged more than $100 million to charities, although it had actually paid out only a fraction of that amount. Its activity began to pick up only in late 2013, just as negative media stories about Low were snowballing, and more so in 2014. In order to change the narrative, Edelman counseled Low to publicize his charitable endeavors, including pledges of tens of millions of dollars to National Geographic’s Pristine Seas endeavor and to the United Nations to save its news service from closure. Low was even planning to donate to his alma mater. At his request, an architect drew up plans for a new building at Wharton to be called the Jynwel Institute for Sustainable Business. Low was planning to make a $150 million commitment to build and operate the institute over thirty years, a munificent gesture, redolent of a Rockefeller or a Carnegie.

On a simple level, derivatives are financial products whose value is linked to an underlying set of assets. Derivatives can help businesses smooth out price fluctuations. For example, if a company wants to protect itself from a fall in a commodity price, it could buy a kind of derivative called a forward contract, which allows it to sell at a fixed price in the future.

To avoid this, the fund’s management wanted to undertake some tricky accounting. The idea was to turn 1MDB’s investments in the joint venture with PetroSaudi into loans due in 2020, effectively kicking the can down the road. If it worked, the fund could promise future profits—and gain years before it actually had to produce them. Perhaps fearful of the whole scheme unraveling, Low and PetroSaudi had agreed to turn the initial $1 billion investment into a loan of $1.2 billion, and 1MDB wanted to book the difference as profit.

But Yak had stepped over the gray line that in private banking divides the merely unseemly from the illegal.

To build his connection to the White House, Low got involved with efforts to reelect Obama to a second four-year term. Pras Michél would be his conduit. In 2012, Low sent $20 million from an offshore company he controlled to two companies owned by Pras. The money was ostensibly a “gift,” but the musician used one of these firms to make a $1.2 million donation to a super PAC called Black Men Vote, which supported Obama’s campaign.

put clients first and regularly preached good governance. Yet Goldman had made hundreds of millions of dollars and 1MDB was in disarray, at a high cost to Malaysia’s people.

The following year, Low had arranged for $170 million from the Goldman-prepared power-plant bonds to fill Najib’s account. To avoid questions, Cheah and Low had seen to it the account was marked as one used for internal bank transfers, meaning it would not be visible to compliance staff. The Australian and New Zealand Banking Group, known as ANZ, owned a minority stake in AmBank, giving it the right to appoint executives and board members. But ANZ’s management had no idea about this secret account’s existence. Joanna Yu, a middle-level AmBank executive, was tasked with taking instructions from Low about incoming wires and outgoing checks. Najib had used most of the initial infusion to pay off crony politicians, as well as on jewelry and a $56,000 expense at Signature Exotic Cars, a high-end car dealership in Kuala Lumpur. Now, with the elections approaching, the account was about to become a lot more active.

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The deal seemed favorable to Tanjong, especially given that its power-sale agreement with the Malaysian state would soon run out, handing the government leverage to achieve a bargain price. Lazard believed the whole deal smelled of political corruption. It was common in Malaysia for the government to award sweetheart deals to companies in return for kickbacks and political financing; that was what Lazard thought was going on, and so it pulled out. With no other choice, Goldman instead became an adviser to 1MDB on the purchase, as well as helping the fund raise the capital. The bank provided a valuation range that justified 1MDB paying $2.7 billion for the plants. Leissner was at his most charming as he tried to cajole members of 1MDB’s board of directors to accept Goldman’s terms for selling the bonds. Sitting opposite the Goldman banker in a room at the fund’s downtown Kuala Lumpur offices, just a few weeks after Leissner’s meeting in Abu Dhabi, some of the board members looked skeptical. Goldman was preparing to launch what it internally dubbed Project Magnolia, a plan to sell $1.75 billion in ten-year bonds for the 1MDB fund. But some board members were alarmed by what Leissner had informed them: Goldman would likely make $190 million from its part in the deal, or 11 percent of the bond’s value. This was an outrageous sum, even more than Goldman had made on the Sarawak transaction the year before, and way above the normal fee of $1 million for such work. The banker defended Goldman’s profit by pointing out that 1MDB would make big returns in a future IPO of the power assets, all without putting down any money of its own. “Look at your number, not at our number,” he said cajolingly.

Even at Goldman, some bankers, including David Ryan, considered the bank’s likely profit excessive. Alex Turnbull, a Hong Kong–based Goldman banker whose father, Malcolm Turnbull, would later become Australia’s prime minister, also raised concerns internally. Turnbull wasn’t involved in the deal, but he knew how bond markets worked, and he sent an email to colleagues expressing disbelief about Goldman’s profits. The email led to a reprimand from Goldman’s compliance department, while Turnbull’s boss told him to keep his mouth shut if he ever wanted to get promoted. He left the bank almost two years later for reasons unrelated to 1MDB.

Five months later, Goldman launched Project Maximus, buying another $1.75 billion in bonds to finance 1MDB’s acquisition of power plants from the Malaysian casino-and-plantations conglomerate Genting Group. Again, the fund paid a high price, and, like Tanjong, Genting made payments to a Najib-linked charity. This time, $790.3 million disappeared into the look-alike Aabar. David Ryan, president of Goldman’s Asia operations, argued to lower the fee on the second bond, given how easy it had been to sell the first round. But he was overruled by senior executives, including Gary Cohn. While Goldman was working on the deal, Ryan was effectively sidelined; the bank brought in a veteran banker, Mark Schwartz, a proponent of the 1MDB business, as chairman in Asia, a post senior to Ryan’s. Goldman earned a little less than the first deal, making $114 million—still an enormous windfall. For bringing in the business, Leissner was paid a salary and bonuses in 2012 of more than $10 million, making him one of the bank’s top-remunerated employees. But that was just the tip of the iceberg. Unknown to his bosses at Goldman, and three months after the first bond, millions of dollars began to flow into a British Virgin Islands shell company controlled by Leissner, some of which he shared with Roger Ng, according to Department of Justice filings. Millions of dollars more moved through Leissner’s shell company to pay bribes to 1MDB officials. Over the next two years, more than $200 million in 1MDB money, raised by Goldman, would flow through accounts controlled by Leissner and his relatives. He could have taken his hefty Goldman salary and disavowed knowledge of the bribery carried out by Low and others. Perhaps he would have gotten away with it, as many Wall Street bankers do in countries far from headquarters. But he decided to take a risk by becoming a direct accomplice in the fraud, rather than just greasing its wheels. He had seen the kind of life Low was leading, and he must have thought that a mere $10 million wasn’t going to cut it, not if he wanted to buy super yachts and host parties himself. Soon he would be doing just that.

Between October 2009 and June 2010—a period of only eight months—Low and his entourage spent $85 million on alcohol, gambling in Vegas, private jets, renting superyachts, and to pay Playmates and Hollywood celebrities to hang out with them.

It was common in Malaysia for the government to award sweetheart deals to companies in return for kickbacks and political financing;

the bill, even though most producers would have insisted on a replica for such purposes.

For an evening’s work, Swizz Beatz, Low’s producer friend and husband of Alicia Keys, received $800,000 from a shell company funded from the stolen money.

When corrupt organizations take over a country’s apparatus, whether in Russia, China, or Malaysia, its members feel emboldened. They are not common criminals but an elite, shielded by privilege from the normal reaches of justice.

Global Financial Integrity, a Washington-based anticorruption group, estimated that $1 trillion was drained from developing economies in 2012 alone, especially poorly regulated places like Brazil, China, India, and Russia.

The money he took, by and large, was not stolen directly from Malaysia’s treasury or through padded government contracts. Instead, it was cash that 1MDB borrowed on international financial markets with the help of Goldman Sachs.

Billions of dollars in Malaysian government money, raised with the help of Goldman Sachs, has disappeared into a byzantine labyrinth of bank accounts, offshore companies, and other complex financial structures.

hypochondriac,

10. What books would you recommend to an aspiring entrepreneur? Some quick favorites: The 22 Immutable Laws of Marketing: Violate Them at Your Own Risk! by Al Ries and Jack Trout The 48 Laws of Power by Robert Greene The 33 Strategies of War by Robert Greene Antifragile: Things That Gain from Disorder by Nassim Nicholas Taleb The Fish That Ate the Whale: The Life and Times of America’s Banana King by Rich Cohen Wikinomics: How Mass Collaboration Changes Everything by Don Tapscott and Anthony D. Williams Contagious: Why Things Catch On by Jonah Berger The Pirate’s Dilemma: How Youth Culture Is Reinventing Capitalism by Matt Mason Rules for Radicals: A Pragmatic Primer for Realistic Radicals by Saul D. Alinsky The New New Thing: A Silicon Valley Story by Michael Lewis Here Comes Everybody: The Power of Organizing Without Organizations by Clay Shirky Purple Cow: Transform Your Business by Being Remarkable by Seth Godin Eleven Rings: The Soul of Success by Phil Jackson and Hugh Delehanty Billion Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last 25 Years by Paul B. Carroll and Chunka Mui Gonzo Marketing: Winning Through Worst Practices by Christopher Locke

And then there were fears that kleptocracy—the word is from the Greek and means “rule by thieves”—would lead to a less stable world order, in which failed states like Afghanistan and Syria harbor terrorists.

The Justice Department set up the Kleptocracy Asset Recovery Initiative in 2010 to coordinate the work of FBI investigators and prosecutors to seize the U.S. and global assets of corrupt foreign officials. If those kleptocrats were no longer in power, Washington would transfer the proceeds back to the countries.

In the space of a month, since Prince Turki had written Najib with his proposal in late August, a multi-billion-dollar joint-venture agreement had been completed. Such a time frame—to complete due diligence, asset valuations, and other legal checks—was virtually without parallel.

Prime Minister Najib boasted the country would attain developed-world living standards by 2020. But the leaders of the country, as they enriched themselves, were failing to achieve this. With national income of $ 10,000 per person, a fifth of the United States’s level, Malaysia was stuck in the middle-income trap, no longer poor but not yet rich.

Then, in a cascade of bad luck, taking all of ten minutes, he lost $2 million. The stunned entourage couldn’t compute the way he parted with money—seemingly without breaking a sweat—and some began to whisper about this guy, and how he acted like the cash wasn’t his own.

In late April, as Goldman prepared 1MDB’s first bond issue, some one hundred thousand anticorruption protesters poured out into the streets of Kuala Lumpur. From the sky, the city center was awashed in yellow—the color of the demonstrator’s T-shirts.

As Low amassed his art collection, he paid no heed to the 60 percent of Malaysian households who lived on less than $1,600 a month.

Between October 2009 and June 2010—a period of only eight months—Low and his entourage spent $ 85 million on alcohol, gambling in Vegas, private jets, renting superyachts, and to pay Playmates and Hollywood celebrities to hang out with them.