There was a double-header overnight for fans of the now years-long show, the collapse of the integrity of British public life. Bob Diamond, the now ex-CEO of Barclays, appeared before a Commons select committee to try to explain the multibillion interest-rate fixing scandal. And in court, Glenn Mulcaire, the “private detective” at the heart of the phone-hacking scandal, was ordered to divulge the identity of News of the World editors who had instructed him to hack phones.
To the banking scandal first. Diamond’s appearance came at the end of a bizarre 48 hours, which began with the resignation of Barclays chair Marcus Agius, was followed the next day by Diamond’s resignation, which was then followed by the reinstatement of Agius as executive chair. In the interim, Diamond gained a new public support — his daughter Nell, a 23-year-old analyst at Deutsche Bank, who tweeted how proud she was of her dad, for building up the bank over 16 years. She then invited Labour leader Ed Miliband and Chancellor George Osborne to #HMD, or “hold my dick”, one of those twentysomething girl reverse masculisations that suggest second-wave feminism has either triumphed utterly, or failed beyond all measure. Photos then surfaced of Nell and Bob at a Kanye concert, doing the “Diamond Rock” sign, and yup, no daddy issues there.
Diamond’s appearance before the committee was less spectacular. Indeed there was widespread dismay that the assembled MPs couldn’t or wouldn’t work together and co-ordinate their questions. There were a few general questions swirling around about the necessity of trust and integrity to banking, and of the values of the Quakers, who set up the bank in the first place. Diamond told the committee that he felt “physically ill” when he heard about the manipulation of the Libor rate. But he was not so vomitous as to choke on the “goodbye” payment he is technically entitled to — that, he would be pursuing.
The central issue for the committee to interrogate was the “Tucker” letter — a communication from Bank of England deputy governor Paul Tucker, noting that “senior figures” in the government had commented that Barclays applications for Libor were too high, and that they should come down; Diamond says he passed the advice down to operations officer Jerry del Messier, with a vague comment about a phone call he had with Tucker and that the rate may be a little high. Del Messier –who has also resigned from Barclays — acted on the letter, but there’s no clear understanding of whether he was given a direct instruction by Diamond.
The release of the letter by Barclays before Diamond’s appearance has turned the banking scandal into a political scandal — and one that draws Labour in, since the note to Barclays was delivered in 2008, when Labour was desperate to get a post-recession recovery under way.
Now George Osborne has used the day’s events to turn the attack back on Labour, saying that it has questions to answer. But the veracity of this evidence was never really tested.
Furthermore, none of the MPs seemed to have the forensic skill to burrow into the scandal — which chiefly involved the breach of Chinese walls between investment banking traders and the bank’s compliance officers, who were making the bank’s daily submissions on the Libor (the interbank offered rate is set from an average of different bank submissions).
Did Diamond know that this widespread collusion was occurring? No, he knew nothing, he says, of course. Physically sick, remember? But if so, why did he not notice that Barclays’ Libor requests were higher than other banks? Why was such a comprehensive and well-documented process capable of being conducted for years under his benign lack of interest? It’s the old play — effectively plead incompetence to get out of trouble, then take the performance bonus anyway. There was widespread impatience with the self-serving incompetence of the MPs, with BBC leftie Paul Mason tweeting that they could at least watch an episode of Rumpole of the Bailey, to learn a few tricks.
The Libor scandal is shaping up to be the least satisfying of all the many scandals to be revealed in the ongoing slow collapse of ruling-class legitimacy. Boring in detail, obviously corrupt but lacking visible victims, impenetrable in detail but unrewarding to study, and meeting with public apathy, it will end with the rich still being rich, and none in prison.
Meanwhile, phone-hacking, hitherto bogged down in the marshy fields of the Leveson inquiry, was kicked back into touch with the failure of Mulcaire to persuade the court to protect him from disclosing the names of the editors who ordered him to hack mobile phone message banks. Five Supreme Court judges have unanimously rejected Mulcaire’s appeal — which has been running for 20 months now, based on a claim of resisting self-incrimination — and he will now be called back to answer the question in the civil phone-hacking case being brought by publicist Max Clifford’s assistant.
Mulcaire is desperate to limit the damage to himself from the court process, but he is also desperate not to make enemies of News International, who will then throw him to the wolves. To that end, he may well take his case to the European Court of Human Rights.
If he fails, and names names, then another part of the arch is completed, from which Andy Coulson and Rebekah Brooks will eventually be hanged. Now that’s how you do scandals. Barclays, take note.
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