The Guardian has reported:
Barclays Bank obtained a court order early today banning the Guardian from publishing documents which showed how the bank set up companies to avoid hundreds of millions of pounds in tax.
The gagging order was granted by Mr Justice Ouseley after Barclays complained about seven documents on the Guardian's website which had been leaked to the Liberal Democrats' deputy leader, Vince Cable.
The internal Barclays memos — leaked by a Barclays whistleblower — showed executives from SCM, Barclays's structured capital markets division, seeking approval for a 2007 plan to sink more than $16bn (£11.4bn) into US loans.
Tax benefits were to be generated by an elaborate circuit of Cayman islands companies, US partnerships and Luxembourg subsidiaries.
The documents had been leaked to Cable by a former employee of the bank, who wrote a long account of how the bank works.
They also note:
Barclays's lawyers, Freshfields, worked into the early hours to force the Guardian to remove the documents from the website. They argued that the documents were the property of Barclays and could only have been leaked by someone who acquired them wrongfully and in breach of confidentiality agreements.
The Guardian's solicitor, Geraldine Proudler, was woken by the judge at 2am and asked to argue the Guardian's case by telephone. Around 2.31am, Mr Justice Ouseley issued an order for the documents to be removed from the Guardian's website.
A Guardian spokesman said this morning that the paper would appeal against the order. "Tax avoidance is a matter of high public and political interest. These documents showed for the first time how major banks set up artificial schemes with the aim of earning hundreds of millions in tax-free money, which is why the Barclays whistleblower leaked them.
"All decisions about tax are taken in secret, hidden from public view. It is not right for a judge to prevent daylight from shining on the few documents ever to have emerged which graphically demonstrate what HMRC is up against."
I find this simply staggering.
I also await my gagging order. I have all the documents.
Some are also now on Wikileaks — and therefore in the public domain. I did not put them there.
But what does Barclays think it can achieve? It is simply pouring petrol on the inferno that its own abuse created.
This bank is abusing tax havens to abuse the British tax payer. That is the beginning and end of it. It is why bank regulation needs to be much tougher. It is why Gordon brown must deliver on his promise to outlaw tax havens — which we call secrecy jurisdictions, which term provides a more accurate description of what we want to eliminate:
Secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain that is designed to undermine the legislation or regulation of another jurisdiction and that, in addition, create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.
Barclays could not have made the case for reform for me more clearly however hard I tried.
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Richard – can you explain what exactly Barclays has done please?
How clear is the trail?
I note that Barclays has this week entered into discussions with the Treasury about using the asset protection programme which it’s avoided so far. That would change the complexion of it’s defence.
Crumbs… if Barclays has nothing to hide then why do they need to tie themselves in knots and wake people up in the middle of the night to keep them quiet?
Youch.
M
Louise, I don’t think there can be an doubt about what Barclays have done – the leaked documents are damning. Varley has tried to claim that Barclays don’t practice tax avoidance and yet the documents make it crystal clear that the motivation for the transactions was tax avoidance, and, for example, how Barclays proposed to split the tax savings with the counterparty. The motivation for these tranactions is clear.