(Aug 16): Andrea Vella was Goldman Sachs’s top dealmaker in Hong Kong. He had a nose for splashy trades, a fondness for the Bentley Continental, and a vague enough resemblance to George Clooney that there was even a joke among some bankers: “What would George do?”
That was almost a year ago. Then U.S. prosecutors dragged him into one of the biggest Wall Street scandals in a generation. Without charging him, they filed court documents tying Vella to the conspiracy that looted billions of dollars from the Malaysian investment fund known as 1MDB. The bank promptly put him on leave.
Now as the U.S. weighs how to handle Goldman Sachs, Vella is the mystery man to watch. If someone so powerful is found to have helped fuel the fiasco, it will be much harder for the bank to contain it by pinning blame on a rogue partner, Tim Leissner.
During confidential talks, the bank has been at odds with prosecutors over their description of Vella’s role in key moments of the 1MDB deals, according to people familiar with the discussions. Authorities have said that he dealt with the scandal’s alleged mastermind, Jho Low, and was aware of plans to bribe officials -- a narrative Goldman has been disputing.
There’s another reason Vella’s involvement strikes a nerve. He helped structure 1MDB’s fundraising, and after money went missing played a central role in Goldman’s initial review of what went wrong, one of the people said. When U.S. prosecutors in Brooklyn described his involvement in court filings last year, without naming him, it alarmed some members of Goldman’s board, who worried the claims might further taint the firm’s senior leadership, two people said.
In the months since, Vella has been lying low in Asia, training for a triathlon while collecting checks from the firm that doesn’t want him at the office. The charismatic banker has skirted scandals before, bouncing back at least twice after major deals in Greece and Libya went south.
This account of how Vella ended up in limbo is drawn from interviews with more than a dozen colleagues, friends and people involved in examining Goldman’s alleged role in the 1MDB scandal. Representatives for Vella and for the Brooklyn prosecutors declined to comment. “Goldman Sachs refused to confirm any of these details, but we are continuing to cooperate with the proper authorities,” bank spokeswoman Maeve DuVally said.
Money Maker
The Italian investment banker could have been a rocket scientist. Vella spent two years at the United World College of the Atlantic in Wales, then six more at the Sapienza in Rome, according to his LinkedIn profile. It says he graduated from the university, one of the oldest in Europe, in 1997 with a master’s in aeronautical engineering.
Instead he became a banker, working for JPMorgan Chase & Co. in a burgeoning new field, helping structure complex derivatives for clients. That business proved particularly lucrative, and Vella soon emerged as an important money maker at JPMorgan’s outpost in London. He came to be associated with some of the most elaborate products sold to clients in Southern Europe.
In 2007, Vella’s team at JPMorgan arranged a Greek bond deal that left the country’s pension funds feeling cheated. That triggered the labor minister’s ouster, a protest strike and questions about what executives knew. The bank ended up firing a sales executive, who claimed he was scapegoated by his bosses. JPMorgan denied his accusation at the time.
Vella jumped to Goldman Sachs months later, joining as a partner, the bank’s most senior rank -- a rare feat for an outsider. People who worked with him describe him as both macho and charming, at times riffing off his similarity to Clooney, especially when sporting a beard. Above all, he aggressively focused on making big sums of money for the firm.
Libyan Losses
Three months after joining Goldman he flew to Tripoli, where despot Moammar Qaddafi had started a $60 billion ($83.2 billion) sovereign wealth fund. At the time, Vella coached a colleague in an email about how to land such a big client: “Often they don’t know what they want or need, we need to interpret their confused words and show them the right things.”
The Libyans placed derivative bets with Goldman that blew up, costing them more than $1 billion ($1.4 billion). When they sued Goldman in London’s High Court, Vella was called as a witness. Asked about an allegation that a salesman on the deal used his own money to pay for two prostitutes during a trip with an official’s brother, Vella said “it’s inappropriate” but that it would be “more of a personal relationship at that point.” As for a claim that Vella got so mad as the deal was falling apart that he took off his shoe and pounded it on the table? That he didn’t recall. He wasn’t accused of wrongdoing.
By the time the court sided with Goldman Sachs, the dispute with the Libyans was already overshadowed by the firm’s work for Malaysia. At the time, Vella was one of two executives overseeing investment banking for all of Asia except Japan, making him one of the most powerful dealmakers outside the firm’s New York headquarters.
Goldman Sachs’s description of what happened in Malaysia goes like this: The bank didn’t know that much of the $6.5 billion ($9.0 billion) it raised for 1MDB in 2012 and 2013 would allegedly be steered out of the country. That’s because Goldman says it was tricked by Leissner, its chairman for Southeast Asia. Goldman made an eye-popping $593 million ($822.6 million) off those deals, which the firm has said was appropriate given the risk involved.
After the U.S. accused Leissner last year of bribing officials and helping to pilfer proceeds meant for the investment fund, he pleaded guilty to charges including conspiring to launder money. His former deputy, Roger Ng, was later extradited to the U.S. after spending time in a Malaysian jail. He’s fighting the charges and, according to his attorney, denies any complicity in wrongdoing or sharing information with Vella about bribes, as the U.S. has alleged.
‘Co-Conspirator #4’
Investigators in Asia and the U.S. have been trying to make the case that corruption at Goldman Sachs reached beyond Leissner and Ng. Last week, prosecutors in Malaysia ratcheted up their pressure on the bank by filing criminal charges against 17 current and former executives. Yet that move appeared to be technical -- adding directors and officers who can be held accountable for crimes under their watch. Vella wasn’t among them. Goldman called the expansion of that case “misdirected,” vowing to contest the claims.
The bigger fight is looming in the U.S., where Assistant Attorney General Brian Benczkowski has said prosecutors are preparing to hash out a settlement with the bank. Last year’s charging documents against Leissner show investigators believed problems reached up the chain to “Co-Conspirator #4.” He has since been identified as Vella.
In that account, authorities said Vella was briefed on a plan to pay bribes and kickbacks to ensure 1MDB’s fundraising proceeded, and that he, Leissner and others conspired to circumvent Goldman’s systems protecting against foreign corruption. Investigators say that at times Vella met with Low, yet failed to mention the middleman’s involvement to Goldman’s internal gatekeepers. Prosecutors didn’t accuse Vella of looting 1MDB.
Still, Goldman is sticking to its rogue-employee defense, telling investigators and regulators that none of its senior executives at the firm knew about the involvement of middlemen. In confidential talks with the government, the firm has said Vella didn’t know about money allegedly funneled to officials to smooth the deal’s path. After poring through Vella’s travel records, Goldman concluded he wasn’t in Malaysia at the time that prosecutors said he met Low and 1MDB officials, according to people familiar with the matter.
Also at issue is a March 2012 meeting in Abu Dhabi that prosecutors mentioned in court records last year. Goldman has determined that Vella met Low, but told prosecutors it had nothing to do with the 1MDB deal. The event was a dinner party with more than a dozen other people that included Low’s female companion, according to one person familiar with the matter.
In Limbo
The firm’s defense of Vella contrasts with the way Goldman has treated Leissner. David Solomon, who ran investment banking at the time of the Malaysian deal and now leads the firm, has called Leissner a criminal who lied to bosses.
Yet the firm stood by Vella. His involvement years ago in the bank’s initial postmortem of what went wrong in Malaysia rankled colleagues, according to a person with knowledge of the situation. Some subordinates were also heard griping about his ability to hold on to his role as the region’s banking chief when such a big deal was under scrutiny.
Then, in October of last year, the firm kicked him into the ceremonial role of co-chair. Days later, the Justice Department unsealed its accusations, prompting Vella’s leave -- and his limbo ever since.
From left to right: Jho Low, Andrea Vella, Tim Leissner
