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Cohn playing coy on giving Goldman Sachs back his 1MDB money

Cohn playing coy on giving Goldman Sachs back his 1MDB money

It has been six weeks since Goldman Sachs clawed back millions of dollars from top executives over the company’s involvement in the Malaysian corruption scandal — but one high-profile holdout remains.

Former Goldman president and operating chief Gary Cohn — who left the firm in 2017 to join the White House for a stint as President Trump’s top economic adviser — still stubbornly refuses to say whether he’ll pay back his share of the $174 million his old firm is collecting from current and former leadership who profited from the megabank’s Malaysian misadventure.

Executives who are ponying up include Chief Executive David Solomon and his predecessor Lloyd Blankfein. But 60-year-old Cohn — who pocketed more than $100 million in cash and stock awards when he left the firm — is playing coy as Goldman is looking to claw back an estimated $10 million, sources told The Post.

A spokeswoman for Cohn declined to comment on Wednesday. In an interview with Bloomberg this week, Cohn would only say that he is “having very constructive conversations with Goldman Sachs on that.”

Cohn’s nine-digit payout in early 2017 was made to cut ties between Goldman’s performance and Cohn’s personal wealth, avoiding any possible conflict of interest during what turned out to be a 15-month government gig. It also severed a financial connection with the bank that still exists between the other former execs in the wake of Goldman’s $2.9 billion 1MDB settlement.

Having risen in the ranks over a decade to become the No. 2 exec at the megabank, Cohn was at his most powerful in late 2015 and early 2016 when Blankfein was being treated for lymphoma. That was also when Goldman’s role in the 1MDB scandal — in which fraudsters siphoned away billions of dollars that were meant to develop Malaysia’s economy — first started getting probed by anti-corruption officials in Malaysia and US law enforcement.

Cohn has not been personally accused of any wrongdoing in the scandal.

Cohn’s dithering over whether to pay the money back has confounded Wall Street and Goldman insiders who assumed he would want to put the mess behind him as he charts a new career chapter. Cohn recently launched a $600 million blank-check company, or SPAC, with investor Cliff Robbins.

“What is he doing?” asked one Wall Street insider familiar with Cohn. “He doesn’t want to talk about this, clearly, so why is he talking to Bloomberg and expecting no one to ask him about it? If he just cuts a deal for a few million, this will all be over for everybody.”

Current Goldman chief Solomon, operating chief John Waldron, and Chief Financial Officer Stephen Scherr have all agreed to take a pay cut for 2020 that will return $31 million to the bank’s coffers. The bank is also planning to claw back a combined $67 million from Blankfein, retired CFO David Viniar and Cohn. Blankfein and Viniar have paid back their share.

Goldman declined to comment on the situation but a source close to the bank said that Cohn’s reluctance to pay has left Goldman’s decision makers feeling “disappointed and confused.”

“He must be delusional,” a former Goldman insider said of Cohn. “Maybe he thinks he can cut a better deal if he lets this go on, but I would think he’d be looking to focus on his SPAC.” 

Another investment banker who knows Cohn guessed that he may believe he has nothing to lose at this point, and that he might be testing Goldman’s resolve on how long it wants the 1MDB scandal to stay in the news.

“There is real value in making this go away for both sides,” said the banker. “It looks bad for Gary now, but if we’re still talking about 1MDB in a few months, that won’t look great fo Goldman either.” 

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Steve Murphy

Steve Murphy has handled various businesses throughout his career and has a deep domain knowledge. He founded Report Door in an attempt to bring the latest news to its readers. He is glued to the stock market most of the times and just loves being in touch with the developments in the business world.

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