Bailing out Britain’s...
Barclays Bank
Sightings from The Catbird Seat
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From Wikipedia, the free encyclopedia
Barclays plc is a major global financial services provider operating in Europe, North America, the Middle East, Latin America, Australia, Asia and Africa. It is a holding company that is listed on the London, New York and Tokyo stock exchanges. It is also a constituent of the FTSE 100 Index. It operates through its subsidiary Barclays Bank plc.
Barclays PLC is ranked as the 25th largest company in the world according to Forbes Global 2000 (2008 list) and the fourth largest financial services provider in the world according to Tier 1 capital ($32.5 billion). It is the second largest bank in the United Kingdom based on asset size, although its share price of about 50p in January 2009 is considerably lower as a result of a fall in investor confidence....
The company also operates Barclays Bank of Delaware, which issues Juniper credit cards, one of the largest issuers of credit cards in the United States.
Financing
On 30 August 2007, Barclays was forced to borrow £1.6bn ($3.2bn) from the Bank of England sterling standby facility. This is made available as a last-resort when banks are unable to settle their debts to other banks at the end of daily trading. Despite rumours about liquidity at Barclays, the loan was necessary due to a technical problem with their computerised settlement network. A Barclays spokesman was quoted as saying "There are no liquidity issues in the U.K markets. Barclays itself is flush with liquidity."
On 9 November 2007, Barclays shares dropped 9% and were even temporarily suspended for a short period of time, due to rumours of a £4.8bn ($10bn) exposure to bad debts in the US. However, a Barclays spokesman denied the rumours. Subsequent write-downs at the bank were announced to be £1 billion ($1.9 billion), much less than feared.
In July 2008, Barclays attempted to raise £4.5bn through a non-traditional rights issue to shore up its weakened Tier 1 capital ratio, which involved a rights offer to existing shareholders and the sale of a stake to Sumitomo Mitsui Banking Corporation. Only 19% of shareholders took up their rights leaving investors China Development Bank and Qatar Investment Authority with increased holdings in the bank.
In 2008 Barclays bought the credit card brand Goldfish for $70 million gaining 1.7 million customers, and $3.9 billion in receivables. Barclays also bought a controlling stake in the Russian retail bank Expobank for $745 million. Later in the year Barclays commenced its Pakistan operations with initial funding of $100 million. Barclays Looks to Sell Asset Management Unit (March 16, 2009)
Lehman Brothers acquisition
On September 16, 2008, Barclays announced its agreement to purchase, subject to regulatory approval, the investment-banking and trading divisions of Lehman Brothers, a United States financial conglomerate that had filed for bankruptcy. In the deal, Barclays will also acquire the New York headquarters building of Lehman Brothers.
On September 20, 2008, a revised version of the deal, a $1.35 billion (£700 million) plan for Barclays plc to acquire the core business of Lehman Brothers (mainly Lehman's $960 million Lehman's Midtown Manhattan office skyscraper, with responsibility for 9,000 former employees), was approved.
Manhattan court bankruptcy Judge James Peck, after a 7 hour hearing, ruled: "I have to approve this transaction because it is the only available transaction. Lehman Brothers became a victim, in effect the only true icon to fall in a tsunami that has befallen the credit markets. This is the most momentous bankruptcy hearing I've ever sat through. It can never be deemed precedent for future cases. It's hard for me to imagine a similar emergency."
Luc Despins, the creditors committee counsel, said: "The reason we're not objecting is really based on the lack of a viable alternative. We did not support the transaction because there had not been enough time to properly review it." In the amended agreement, Barclays would absorb $47.4 billion in securities and assume $45.5 billion in trading liabilities. Lehman's attorney Harvey R. Miller of Weil, Gotshal & Manges, said "the purchase price for the real estate components of the deal would be $1.29 billion, including $960 million for Lehman's New York headquarters and $330 million for two New Jersey data centers. Lehman's original estimate valued its headquarters at $1.02 billion but an appraisal from CB Richard Ellis this week valued it at $900 million."...
Recent developments
Reuters later reported that the British government would inject £40 billion ($69 billion) into three banks including Barclays, which might seek over £7 billion. Barclays later confirmed that it rejected the Government’s offer and would instead raise £6.5 billion of new capital (£2 billion by cancellation of dividend and £4.5 billion from private investors).
In January 2009 the press reported that further capital may be required and that while the government might be willing to fund this, it may be unable to do so because the previous capital investment from the Qatari state was subject to a proviso that no third party might put in further money without the Qataris receiving compensation at the value the shares had commanded in October 2008.
In March 2009 it was reported that in 2008, Barclays received billions of dollars from its insurance arrangements with AIG, including $8.5bn from funds provided by the United States taxpayers to bail out AIG.
On 16 March 2009 Barclays confirmed that it was planning to sell its exchange traded fund business iShares It is expected that the sale will earn the bank £4 billion.
Controversy
Involvement with South Africa under apartheid
Barclays bank was known by many in the 1980s as 'Boerclaysbank', due to its continued involvement in South Africa during the Apartheid regime. A student boycott of the bank led to a drop in its share of the UK student market from 27 per cent to 15 per cent by the time it pulled out in 1986.
In 2006 a South African activist group, the Jubilee South Africa backed Khulumani Support Group, sought reparations from Barclays in addition to Citigroup, BP, Royal Dutch Shell, Ford, GM, and Deutsche Bank for their roles indirectly supporting the apartheid government in South Africa during the 1970s and 1980s. The legal proceedings are being heard at the Second Circuit Court of Appeals in New York, and the South African Ministry of Justice is seeking dismissal of the case on the grounds that it undermines its national sovereignty.
Financial support for the Mugabe regime in Zimbabwe
Barclays helps to fund President Robert Mugabe's regime in Zimbabwe. The most controversial of a set of loans provided by Barclays is the £30m it gives to help sustain land reforms that saw Mugabe seize white-owned farmland and drive more than 100,000 black workers from their homes. Opponents have called the bank's involvement a 'disgrace' and an 'insult' to the millions who have suffered human rights abuses. Barclays spokesmen say the bank has had customers in Zimbabwe for decades and abandoning them now would make matters worse, 'We are committed to continuing to provide a service to those customers in what is clearly a difficult operating environment".
Barclays also provides two of Mugabe’s associates with bank accounts, ignoring European Union sanctions on Zimbabwe. The men are Elliot Manyika and minister of public service Nicholas Goche. Barclays has defended its position by insisting that the EU rules do not apply to its 67%-owned Zimbabwean subsidiary because it was incorporated outside the EU.
Accusations of money laundering
In March 2009, Barclays was accused of violating international anti-money laundering laws. According to the NGO Global Witness, the Paris branch of Barclays held the account of Equatorial Guinean President Teodoro Obiang's son, Teodorin Obiang, even after evidence that Obiang had siphoned oil revenues from government funds emerged in 2004. According to Global Witness, Obiang purchased a Ferrari and maintains a mansion in Malibu with the funds from this account.
Senior management bonuses
Robert Diamond, a US-born banker on the board of Barclays, was set to receive a £14.8m bonus in 2008 even though the subprime mortgage crisis in the US forced his group to take a £1.6bn hit in 2007.
Tax avoidance
In March 2009 Barclays obtained an injunction against The Guardian to remove from its website confidential leaked documents describing how SCM, Barclays' structured capital markets division, planned to use more than £11bn of loans to create hundreds of millions of pounds of tax benefits, via "an elaborate circuit of Cayman Islands companies, US partnerships and Luxembourg subsidiaries". In an editorial on the issue, the Guardian pointed out that due to the mismatch of resources tax-collectors (HMRC) have now to rely on websites such as Wikileaks to obtain such documents, and indeed the documents in question have now appeared on Wikileaks. Separately, another Barclays whistleblower revealed several days later that the SCM transactions had produced between £900m and £1bn in tax avoidance in one year, adding that "The deals start with tax and then commercial purpose is added to them."
Links to the arms trade
In December 2008 the British anti-poverty charity War on Want released a report documenting the extent to which Barclays and other UK commercial banks invest in, provide banking services for and make loans to arms companies. The charity writes in its report that Barclays is the world's largest arms investor, holding £7.3 billion in shares in the arms manufacturers. The report also details Barclays' dealings with known producers of cluster munitions and depleted uranium.
http://en.wikipedia.org/wiki/Barclays
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January 16, 2009
PRESS RELEASE
The Federal Reserve Bank of New York announced today, with the full support of the Treasury Department, the formation of the AIG Credit Facility Trust. The Trust is being established for the sole benefit of the United States Treasury to hold the 77.9 percent equity interest in American International Group, Inc. (AIG) that will be issued in connection with the previously announced credit facility extended to AIG.
Three independent trustees have been selected by the New York Fed, in close consultation with the Treasury Department, to oversee this equity interest in the best interests of the U.S. Treasury. They are Jill M. Considine, former chairman of the Depository Trust & Clearing Corporation; Chester B. Feldberg, former chairman of Barclays Americas; and Douglas L. Foshee, president and chief executive officer of El Paso Corporation.
Pursuant to the terms of the Trust Agreement, the trustees will have absolute discretion and control over the AIG stock, subject only to the terms of the Trust Agreement, and will exercise all rights, powers and privileges of a shareholder of AIG. The trustees will not sit on the board of directors of AIG. Day-to-day management of AIG will remain with the persons charged with such management.
To avoid possible conflicts with the New York Fed’s supervisory and monetary policy functions, the Trust has been structured so that the New York Fed cannot exercise any discretion or control over the voting and consent rights associated with the equity interest in AIG. The New York Fed will, however, continue to monitor closely the financial operations of AIG in connection with its role as lender....
Calvin A. Mitchell III
(212) 720-6136
(646) 720-6136
calvin.mitchell@ny.frb.org
www.newyorkfed.org/newsevents/news/markets/2009/an090116.html
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Jill M. Considine
Jill Considine served as senior advisor of The Depository Trust & Clearing Corporation (DTCC) and its subsidiaries (securities depository and clearing house) from August 2007 to May 2008, having served as chairman since August 2006, and as both chairman and chief executive officer from January 1999 to August 2006.
Prior to joining DTCC, Ms. Considine served as the president of the New York Clearing House Association, L.L.C. from 1993 to 1998. Ms. Considine served as a managing director, chief administrative officer and as a member of the Board of Directors of American Express Bank Ltd., from 1991 to 1993. Prior to that, Ms. Considine served as the New York State Superintendent of Banks from 1985 to 1991. Ms. Considine also serves as a director of the Atlantic Mutual Insurance Companies, The Interpublic Group of Companies, Inc., Ambac Financial Group, Inc. and is chairman of Butterfield FulcrumGroup, Limited.
Ms. Considine recently completed a six-year term as a member of the Board of the Federal Reserve Bank of New York where she served as chairman of the Audit and Operational Risk Committee.Ms. Considine is a member of the Council on Foreign Relations and the Economics Club of New York. She served on the Group of Thirty Steering Committee on global clearance and settlement and as a member and speaker at the World Economic Forum in Davos. Ms. Considine was a Presidential appointee to the Advisory Committee for Trade Policy and Negotiations from 2003-2004. She was named Six Sigma CEO of the Year Award in 2006 and one of Crain’s New York Business 100 Most Influential Women in Business.
Ms. Considine earned a Bachelor of Science degree, with honors, from St. John’s University and a Master of Business Administration degree, with honors, from Columbia University. She also attended Bryn Mawr College.
Chester B. (Chet) Feldberg
Chester B. Feldberg served as Chairman of Barclays Americas from 2000 until his retirement in 2008. Prior to joining Barclays Americas, Mr. Feldberg had been executive vice president in charge of the Bank Supervision Group at the Federal Reserve Bank of New York from 1991 through 2000. In total, Mr. Feldberg was an employee of the New York Fed for 36 years, starting as a lawyer in the Bank’s Legal Department before moving to the Credit and Capital Markets Group and then the Bank Supervision Group. He was also a member of the Basle Committee on Banking Supervision from 1993 through 2000.
Mr. Feldberg serves on the Board of Directors and Audit Committee of Mizuho Securities USA, a subsidiary of the Mizuho Financial Group. Mr. Feldberg earned a Bachelor of Laws degree in 1963 from the Harvard Law School and a Bachelor of Arts degree in economics in 1960 from Union College. He also attended the advanced management program at the Harvard Business School in 1974.
Douglas L. Foshee
Douglas L. Foshee is president, chief executive officer and a director of El Paso Corporation, which owns North America’s largest natural gas pipeline system and one of North America’s largest natural gas producers.
Prior to joining El Paso in 2003, Mr. Foshee served as executive vice president and chief operating officer for Halliburton. He joined Halliburton in 2001 as executive vice president and chief financial officer. Prior to that, Mr. Foshee was president, chief executive officer and chairman of the board at Nuevo Energy Company. From 1993 to 1997, Mr. Foshee served Torch Energy Advisors Inc. in various capacities, including chief operating officer and chief executive officer. He held various positions in finance and new business ventures with ARCO International Oil and Gas Company and spent seven years in commercial banking, primarily as an energy lender.
Mr. Foshee earned a Master of Business Administration degree from the Jesse H. Jones School at Rice University in 1992 and a Bachelor of Business Administration degree from Southwest Texas State University in 1982. He is also a graduate of the Southwestern Graduate School of Banking and Southern Methodist University.
Mr. Foshee serves on the boards of Cameron International Corporation, Children’s Museum of Houston, Texas Business Hall of Fame Foundation and Greater Houston Partnership. He also chairs the board of directors of the Federal Reserve Bank of Dallas, Houston Branch, and Central Houston, Inc. He is a member of the Independent Petroleum Association of America, Houston Producers’ Forum, 25 Year Club of the Petroleum Industry, National Petroleum Council, the Council of Overseers for the Jesse H. Jones Graduate School of Management at Rice University, Rice University’s board of trustees and KIPP’s board of trustees. Mr. Foshee is a recipient of the 2007 Ellis Island Medal of Honor for his commitment to helping children succeed and his leadership role in the business community.
In 2008, Mr. Foshee was named Distinguished Alumni at Texas State University.
www.newyorkfed.org/newsevents/news/markets/2009/an090116.pdf
April 8, 2009
Treasury says some insurers
qualify for TARP
By David Lawder
WASHINGTON (Reuters) – The U.S. Treasury said on Wednesday some life insurers have met requirements for government capital investments under an existing rescue plan, and their applications for funds are now being considered.
"There are a number of life insurers that have met requirements for the Capital Purchase Program because of their bank holding company status," said Treasury spokesman Andrew Williams. "These are among the hundreds of financial institutions in the CPP pipeline that will be reviewed and funded as appropriate on a rolling basis."
The statement was made in response to a Wall Street Journal story published late on Tuesday saying the Treasury would extend its $700 billion financial bailout program to certain life insurers and would make an announcement in coming days.
Williams said any capital investments in insurers that have bank holding company status would not constitute a new rescue program for the insurance sector.
The Treasury clarification caused stocks to pare gains, particularly the major insurers who were viewed as the likely benefactors of a widening of the Treasury's financial bailouts. Prudential Financial Inc shares had climbed more than 12 percent at one point in early trade, but by mid-morning were up 6.3 percent at $23.50, while MetLife's earlier 10 percent gain was chopped back to about 3.4 percent at $24.98.
In recent months, some insurance companies have received approval to acquire banks, paving the way for them to participate in the Capital Purchase Program, which the Treasury has estimated will top out at $218 billion.
As of Tuesday, the program had $198.5 billion invested, leaving $19.5 billion in available funds, according to Treasury documents. A Treasury official said only a small number of life insurers have met the qualifications for the program.
Reuters reported in February that the Treasury was actively considering applications for capital injections from about a dozen insurance companies.
In addition to Met Life and Prudential, other insurers that now have bank holding company status include the Hartford Financial Services Group Inc and Lincoln Financial....
http://news.yahoo.com/s/nm/20090408/bs_nm/us_financial_bailout_insurers
March 15, 2009
AIG payments to banks
stoke bailout rage
WASHINGTON/NEW YORK (Reuters) - Goldman Sachs Group Inc and a parade of European banks were the major beneficiaries of $93 billion in payments from AIG -- more than half of the U.S. taxpayer money spent to rescue the massive insurer.
The revelation on Sunday by American International Group Inc was another potential public relations nightmare, coming on the same weekend that the Obama administration expressed outrage over AIG's plan to pay massive bonuses to the people in the very division that destroyed the company by issuing billions of dollars in derivatives insuring risky assets.
The size of the payments also illustrates how seriously a potential collapse of AIG was viewed by the regulatory authorities. U.S. Federal Reserve Chairman Ben Bernanke said in an interview with CBS news magazine "60 Minutes" that the failure of AIG would have brought down the financial system.
AIG, an embattled insurance giant that has received federal bailouts totaling $173 billion and is now paying $165 million in employee bonuses, is at the heart of a global financial crisis that President Barack Obama is trying to address with plans for trillions of dollars in spending.
As part of those efforts, Obama will announce steps on Monday to make it easier for small business owners to borrow money, officials said.
But the revelations that billions of U.S. taxpayer dollars were funneled through AIG to Goldman Sachs -- one of Wall Street's most politically connected firms -- and to European banks including Deutsche Bank, France's Societe Generale and the UK's Barclays could stoke further outrage at the entire U.S. bank bailout.
FINANCIAL SYSTEM AT STAKE?
The fact that billions of dollars given to prop up giant insurer AIG were then transferred to European banks and Wall Street investment houses could raise new doubts about whether the rescue was really economically necessary.
"It doesn't to me seem fair that the American taxpayer has got to bear the 100 percent of the downside," said Campbell Harvey, a finance professor at Duke University.
"A hedge is not a hedge if you did not factor in the counterparty risk. And the U.S. taxpayer should not be obligated to make people whole for hedges that were not properly executed."
Goldman Sachs, formerly led by Henry Paulson who was treasury secretary at the time of the original AIG bailout, said, as it has in the past, that its AIG positions were "collateralized and hedged."
Deutsche Bank and Barclays declined to comment. Societe Generale was not available for comment.
As it seeks to ease the credit crunch that was the original target of the Troubled Assets Relief Program (TARP), the Treasury will also offer more details this week about the workings of proposed public-private partnerships to take toxic assets off banks' books, including a timeframe, a senior department official said on Saturday.
"No taxpayer in these arrangements is going to lose money until the investor who put up the money has lost 100 percent," said Chief White House economic adviser Lawrence Summers.
Treasury officials have said the fund, or funds, would be a vehicle to provide as much as $1 trillion in financing for buying bad assets -- particularly mortgages gone bad as a result of the U.S. housing bust. The Federal Reserve and Federal Deposit Insurance Corp would participate.
STILL INCOMPLETE
As more Americans lose their jobs and homes, Obama's new administration is under heavy pressure to show that the rescue plan for AIG and major banks is working to free up lending and rein in the riskier excesses of Wall Street.
The payments to AIG counterparties include the provision of collateral to back up credit default swaps, a form of financial insurance that AIG's London office was writing; the purchase of the collateralized default obligations, a type of complex debt security that underlay that insurance; and payments to counterparties of a securities lending program.
Through three separate types of transactions, Goldman received an aggregate $12.9 billion. Among European banks, SocGen was the biggest recipient at $11.9 billion, Deutsche got $11.8 billion and Barclays was paid $8.5 billion.
The AIG disclosures are still incomplete in that they do not include payments to the banks since December 31.
The list of counterparties was made public by AIG amid growing pressure on the insurer to come clean about the true beneficiaries of the bailout ahead of a congressional hearing on Wednesday at which AIG chief executive Edward Liddy is slated to testify.
Democratic Congressman Paul Kanjorski, whose committee will quiz Liddy, said the counterparties and bonuses would both be topics for investigation at the hearing.
Summers -- speaking before the payments to banks were made public -- called the AIG bonuses "outrageous" but said contracts must be honored, even though Treasury Secretary Timothy Geithner had "negotiated very forcefully" with AIG and done all that was "legally permissible" to limit the payments.
"We're not a country where contacts just get abrogated willy nilly," Summers, a former treasury secretary, said on CBS's "Face the Nation" program. "What the lesson is, is this: We don't really have a satisfactory regulatory regime in place."
HELP FOR BIG AND SMALL
To help small businesses, officials said Obama intends to provide $730 million from the congressionally approved $787 billion economic stimulus program to cut lending fees, boost loan guarantees and expand other programs.
"We know that small businesses are the engine of growth," Christina Romer, who chairs the White House Council of Economic Advisers, said on NBC's "Meet the Press."
"We absolutely want to do things to help them."
As part of the financial rescue, the Obama administration expects private investors to bolster government funds to help cleanse the banking system of bad assets, said Austan Goolsbee, a member of the Council of Economic Advisers.
"It's better to do this jointly with private capital," Goolsbee told "Fox News Sunday." "I believe there is a reasonable expectation that people will participate."
The idea of offering financing support from the government for private investors willing to buy the toxic assets was first put forward by Geithner in February but the lack of detail has disappointed financial markets.
CHECKING AIG CONTRACTS
AIG's Liddy said in a letter to Geithner the giant insurer was legally obligated to make 2008 employee retention payments but had agreed to revamp its system for future bonuses after the Obama administration objected.
"There are a lot of terrible things that have happened in the last 18 months, but what's happened at AIG is the most outrageous," Summers said.
Representative Barney Frank, the Democratic chairman of the powerful House of Representatives Financial Services Committee, said the government must see if the bonuses can be recovered, adding that the timing of AIG's commitment was important.
"We can't just violate law, legal obligations," Frank told Fox. "I understand that. But I do want to find out at what point these illegal obligations were incurred."
Mitch McConnell, the Republican minority leader in the Senate, called the AIG situation an "outrage" and said the nature of the contracts needed to be checked.
While the news that AIG bailout money went to foreign banks could further stoke political outrage, some experts said the alternative could have been worse.
"The nationality of the bank should not matter," said Peter Morici, professor at the Smith School of Business, University of Maryland. "We have an inter-related financial system. You do something to mess with that and all bets are off the table."
http://news.moneycentral.msn.com/newscenter/newscenter.aspx
March 14, 2009
BARCLAYS DEMO IN GLASGOW
At 12pm on Saturday 14th March, around 9 activists set up outside of Barclays in Glasgow city center.
Luckily, being a busy area there were plenty people to see what we were doing and to get the message regarding exactly what Barclays were financing. We had a stall set up with piles of information sheets with the undercover investigation information and photographs, a banner which read "Barclays kills" and hundreds of leaflets letting people know what they would be supporting if they banked with Barclays. We lined up visual placards along the walls of the bank.
Many people stopped for information throughout the day, unaware and disgusted that Barclays continued to support Huntington life sciences, even after being made aware of the horrendous abuse and violation that they carry out inside their wall of lies.
People showed their support, saying that they would not bank with Barclays - a woman said she'd been considering it but would now not be. The bank may have tried to act unresponsive to our demonstration, although we know they knew we were there, and they know that more people now know what they support and how ignorant they are.
We will be back again.
http://www.shac.net/news/2009/march/14.html
February 9, 2009
U.S. Delays Bank Bailout to Focus on Stimulus
Posted by: Andy Reinhardt
The Obama Administration is postponing the announcement of its highly-anticipated proposal to aid the financial services sector until Tuesday, Feb. 10 to keep lawmakers, the press, and the public focused on passage of the massive economic stimulus plan now working its way through Congress.
When the bank bailout plan is announced Tuesday, it is expected to include a proposal whereby the Federal government will partner with the private sector to buy bad debt from banks. The plan also will likely offer fresh cash injections into banks, help for up to 2.5 million homeowners, and the expansion of a Federal Reserve Bank program to jump-start consumer lending.
Source: Washington Post, Wall Street Journal
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Barclays Beats Forecasts, Cuts Bonuses
Barclays bank reported 2008 profits of £6.1 billion ($9.1 billion), ahead of analyst estimates but down 14% from the previous year. The company also reported £8.1 billion ($12 billion) in writedowns, scrapped its dividend, and said that it will cancel bonus payments to its executive directors.
Source: Times of London
WANT TO SPOT MORE OF THE BILLIONAIRE CLUBS GETTING BAILED OUT WITH U.S. TAXPAYERS’ DOLLARS???
Barclay’s Global Investors, UK
...with many more to come
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From The *** CENSORED *** Seat - Part II:
Barclay’s Bank - Barclays PLC is a UK-based financial services group engaged primarily in banking and investment banking businesses.
From Conspirators’ Hierarchy: . . . Banks large and small in the thousands are in the Committee of 300 network, including ... Barclays Bank . . .
Eagle Star is more than a major “front” for MI6, it is also a Front for major British banks, including Hill-Samuels, N.M. Rothschild and Sons (one of the gold price “fixers”who meet daily in London), and Barclays Bank (one of the funders of the African National Congress - ANC).
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From The Laundrymen: . . .
BRINKS-MAT MELTDOWN. Shortly before dawn on Saturday morning, Nov 26, 1983, armed hoodlums broke into the heavily fortressed Brinks-Mat warehouse at Unit 7 of the International Trading Estate. . . .
With great expertise, they neutralized the guards ... Then, with gruesome brutality, they terrorized the guards— pistol whipping them, pouring gasoline over them, and holding lit matches close enough to make them believe they were going to be torched.
The gang threatened carnage unless the guards barked out the combinations for the locks that would open the underground vaults.
One hour and forty-five minutes later, the gang was gone. With them went 6,500 gold bars. Three and a half tons worth.
The price of gold on the London market had closed the night before at about $357 an ounce, valuing the booty at just under $40 million. The following morning, when word of the size of the haul got out, gold prices jumped $18, giving the thieves an additional paper profit of $2 million.
Although Scotland Yard never established whether there were six men in the gang or eight, it arrested four of them within two weeks.
A year later, three of those four were in jail. One was Mickey McAvoy, a 38-year-old professional thug ... Another was 41-year-old Brian Robinson, a professional criminal ... As the reputed masterminds, and for the depth of their barbarity, they were both sent away for 25 years.
The only thing they had to look forward to was the gold.
A year after the largest heist in British history, the police still hadn’t found a single ounce.
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Brian Perry ran a minicab agency in east London . . . John Lloyd ... lived with an archetypal gangster’s moll— a woman named Jeannie Savage . . . They were the ones McAvoy trusted to make sure his share would be waiting for him when he got out.
To help, Perry and Lloyd brought in a crony of theirs called Kenneth Noye . . . most of the time he dealt in watches and jewelry, and, unlike Perry and Lloyd, did have a record— for receiving stolen goods, shoplifting, assaulting a police officer, and gun licensing violations.
One of his pals was John Palmer, a 34-year old jeweler who some years before set up a gold bullion dealership in Bristol called Scadlynn Ltd. Noye brought Palmer in to use Scadlynn.
Now [Noye] began transporting McAvoy’s gold to Scadlynn— taking exactly eleven resmelted bars per journey . . .
Scadlynn, meanwhile, sold the resmelted gold at the going scrap rate, plus a valued-added tax (VAT), which stood at 15%. For its trouble, it would keep the undeclared VAT. The money from the scrap was deposited at a local branch of Barclays Bank, then withdrawn as cash, stuffed into black garbage bags, and trucked to London. Over the next five months, Scadlynn paid Noye, Perry, and Lloyd in excess of $15 million.
Using a false passport bearing the name Sydney Harris, Noye deposited his share at a Bank of Ireland office in south London, where it was wired immediately to a Dublin branch. McAvoy’s girlfriend, Kathy Meacock, did the same thing on alternate days. So did Jeannie Savage.
If anyone at Barclays or the Bank of Ireland was in the least suspicious, they apparently weren’t troubled enough to tell the police about it.
* * *
Brian Perry also had a buddy named Gordon John Parry . . . Parry in turn brought in Michael Relton, a crooked lawyer who’d defended him on a drug trafficking charge. . . .
With Relton’s help, Parry deposited $1,190,250 from Scadlynn into a Bank of Ireland branch in southwest London. The money was then wired offshore to the bank’s office in Douglas, on the Isle of Man. Next, Parry convinced his wife’s cousin to help, and she used the bank to send $750,000 to the Isle of Man.
Other deposits followed, bringing the total washed through that branch to $2.25 million. To confuse anyone who might attempt to follow the paper trail, Parry brought some of the money back from the Isle of Man, redeposited it, and sent it offshore to yet another bank. And all this time, Noye continued to deliver gold to Scadlynn— eleven bars per journey— while Scadlynn kept melting it down, selling it as scrap, and sending cash to London.
* * *
In early August 1984, Relton helped Parry open an account at the Hong Kong and Shanghai Bank in Zurich. Although they later claimed it was nothing more than coincidence, each of them opened accounts at the same branch of the Hong Kong and Shanghai Bank. Between them, they deposited a total of $735,000, bringing their Zurich holdings to just under $1.5 million.
* * *
Scadlynn was proving to be a cash cow beyond anyone’s wildest imagination. It got to the point where they were moving so much money that Barclays had to bring in extra tellers just to deal with Scadlynn’s business. . . .
* * *
Tipped off by the Jersey police, Scotland Yard put Noye under surveillance. After observing him in the frequent company of Brian Reader— a wanted criminal whom they’d believed had been hiding in Spain— they brought in C-11, a specialist unit used exclusively for top-secret, close-target reconnaissance.
On a cold and dark Saturday evening in Jan 1985, two officers scaled the perimeter wall of Noye’s house and positioned themselves to spend the night on the grounds. One of those officers was John Fordham, a nine-year veteran of C-11. One of Noye’s rottweillers discovered Fordham. Two more dogs joined the commotion. That’s when Noye arrived, possibly with Reader, carrying a four-inch knife.
Fordham’s body was recovered with eleven stab wounds, mostly in his back.
Noye was immediately arrested, Reader was picked up a few miles away, and the two were charged with murder. Noye pleaded self-defense. Reader claimed he wasn’t involved at all. To the utter astonishment of the police, ten months later a jury acquitted both of them.
However, a small cache of gold bars was found at Noye’s house— enough to link them with the Brinks-Mat gold. Noye and Reader were charged with conspiracy to handle stolen goods. Within three days, the police also arrested Palmer and moved in on Scadlynn. . . .
* * *
[Some catcalls: And where did the money go from Barclays Bank? Of course only royalty and Robert Rubin may really know, but — Barclays Bank is the 4th largest institutional investor in Goldman Sachs; the 4th largest in Marsh & McLennan; the 6th in Chubb Group; the 2nd in Citigroup; the 6th in Lockheed Martin; the 4th in Raytheon Company; the 5th in Columbia/HCA; the 2nd in Merrill Lynch; the 4th in Riscorp, Inc.; the 3rd in Conseco, Inc.; the 6th in Trump Hotel/ Casino; the 7th in Mirage Resorts, Inc.; the 5th in Boyd Gaming Corp.; the 6th in Harrah’s Enterprises; the 2nd in Bank of America; the 4th in American Express; the 3rd in CBS Corp; the 2nd in America Online, Inc; the 4th in Time Warner, Inc.; the 5th in Wilmington Trust; the 3rd in PNC Bank; the 3rd in Allstate Insurance; the 2nd in American International Group (AIG); the 4th in Xerox Corp; and the #1 institutional investor in The Walt Disney Company — just to name a few possibilities.]
* * *
The sixth largest institutional investor in Barclays is Citigroup, Inc. The tenth largest is Bank of America.
November 27, 2007
Wall Street leads surge in
corporate political giving
By Kevin Drawbaugh
Big business is shoveling more money than ever into U.S. political campaigns, with Wall Street donations way up, a watchdog group said on Tuesday.
The securities and investment industry -- which includes brokerages, hedge funds and private equity firms -- registered the sharpest increase in giving since 2004 among all industry sectors studied by the Center for Responsive Politics.
Record-breaking contributions from the nation's biggest political givers are the result of a wide-open race for the White House and last year's power shift in Congress, said Sheila Krumholz, the nonpartisan center's executive director.
"There is an intensity to the fund raising for 2008 that we've never seen before, which means the candidates and parties will be all the more beholden" to big donors, she said.
The nonprofit center analyzes campaign finance and lobbying records at the Federal Election Commission (FEC), a government agency that enforces U.S. campaign finance law.
The analysis includes contributions to federal candidates and parties from individuals working in an industry and from associated political action committees.
In both presidential and congressional contests, Democrats are benefiting more than Republicans from the surge in business donations, with 57 percent of giving from typical big donors going to Democrats versus 43 percent in 2006 and 2004.
More money is coming in from lawyers than from any other sector, as usual. But the biggest increase in giving since 2004 is coming from financiers, whose donations are up 91 percent.
Steep increases are also coming from the real estate industry, Hollywood, healthcare professionals and insurers....
Wall Street's favorite presidential candidate, based on the latest FEC disclosures from October 29, was Democratic New York Sen. Hillary Clinton. Close behind her in donations from financiers were Republican former New York Mayor Rudolph Giuliani and Democratic Illinois Sen. Barack Obama.
Next were Republican former Massachusetts Gov. Mitt Romney, Democratic Sen. Christopher Dodd of Connecticut, Republican Sen. John McCain from Arizona, Democratic former North Carolina Sen. John Edwards and Democratic New Mexico Gov. Bill Richardson.
The biggest donors in the securities and investment sector, as of October 29, were the brokerage firms Goldman Sachs, Morgan Stanley, UBS, Merrill Lynch, Lehman Brothers and Credit Suisse.
Also among the sector's top contributors were hedge funds and private equity firms Bain Capital, SAC Capital Advisers, Fortress Investment Group and Blackstone Group.
"There's no question that hedge funds and private equity firms have ramped up their political giving in the last couple of years as Congress looks seriously at raising their taxes," said Massie Ritsch, spokesman for the Center for Responsive Politics.
Lawmakers are considering proposals to more than double the tax rate on the "carried interest" gains of senior partners at private equity firms that buy and sell businesses.
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FOR MORE BAILOUT BUZZARDS OF A FEATHER, GO TO
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THE EAGLE HOODED: THE 9-11 COVERUP
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AIG: THE UN-AMERICAN INSURANCE GROUP
THE BANKRUPTCY BUZZARDS OF ORANGE COUNTY
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CITIGROUP: VAMPIRES IN THE CITY
CONFESSIONS OF A WHISTLEBLOWER
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DIRTY MONEY, DIRTY POLITICS & BISHOP ESTATE
Part I - Part II - Part III - Part IV - Part V - Part VI - Part VII
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MARSH & McLENNAN: THE MARSH BIRDS
MERRILL LYNCH: BEWARE THIS BULL IS FOR THE BIRDS
OFFICE OF U.S. TRUSTEE vs. HARMON
THE EAGLE HOODED: THE 9-11 COVERUP
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THE BANKRUPTCY BUZZARDS OF ORANGE COUNTY
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Originally posted January 17, 2008
Last Updated on May 23, 2009 by The Catbird