Why did Goldman Sachs ignore compliance warnings about Jho Low?

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Goldman Sachs CEO Met with Jho Low Despite Compliance Red Flags

Goldman Sachs CEO Lloyd Blankfein met privately with financier Jho Low in December 2012 at the bank's New York headquarters, a meeting that occurred despite repeated warnings from Goldman's own compliance staff to avoid Low due to concerns about the origins of his wealth. Tim Leissner, the former Southeast Asia chief for Goldman, facilitated this private meeting. Leissner later admitted in his plea deal that he disregarded the bank's compliance warnings regarding Low and misled Goldman officials about Low's involvement in negotiating bond transactions for 1Malaysia Development Berhad (1MDB).
Compliance Staff Raised Concerns About Jho Low

Prior to the December 2012 meeting between Blankfein and Low, Goldman Sachs' compliance department had consistently rejected Low's attempts to become a client. These rejections were based on the inability to verify the source of his substantial wealth. Court documents cited by The New York Times indicated that Goldman's internal compliance team had specifically identified Low as an individual the bank should not engage with concerning 1MDB transactions.
Leissner Facilitated Meeting Amidst Warnings

Tim Leissner, a key figure in Goldman's dealings with 1MDB, played an instrumental role in arranging the private meeting between CEO Lloyd Blankfein and Jho Low. Leissner himself subsequently pleaded guilty to bribery and money-laundering charges related to the 1MDB scandal. In his plea agreement, Leissner acknowledged that Low served as a crucial intermediary in negotiating the 1MDB bond deals with Goldman Sachs.
Internal Acknowledgment of 1MDB's Dubious Nature

The problematic nature of 1MDB was not a secret within circles involved in the transactions. John Pang, who served as an advisor on the deal and previously worked within Najib Razak's administration, reportedly described 1MDB as "dodgy from the beginning." He further stated that it was an "open secret" that the fund was connected to Najib's political patronage and election planning, suggesting a lack of due diligence regarding the fund's associations and purposes.

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Why did Goldman Sachs ignore compliance warnings about Jho Low?

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