The lawyers never seem to get the fact that some things just aren’t that interesting until they try to force people not to talk about them. And that’s certainly the case with London headquartered Barclays bank, which has fought the UK newspaper The Guardian all week over the publication of internal Barclays Bank documents alleged to detail huge tax avoidance schemes by the company that total more than $16 billion.
Last Wednesday a UK judge, in an emergency 2 AM session, granted an emergency temporary injunction requiring the documents to be removed from The Guardian website. The order was complied with, and yesterday the ban was upheld.
The problem, of course, is that the documents have already spread around the Internet, and they are certainly no longer confidential. And now that we aren’t supposed to be reading them, they become infinitely more interesting.
As of the time of the ban the documents had been accessed by just 127 people. Now, two days after the legal ban, a website that continues to host the documents, Wikileaks, has been overloaded with traffic. And we’re publishing them here as well.
The seven documents highlight Barclays structured finance deals that use a variety of complicated finance vehicles to move profits to low tax countries and generally away from the UK. Parts of the documents were disclosed to the UK tax authority. But portions of the documents containing legal advice on the risk of challenge to aspects of their schemes were removed before disclosure. A 2007 scheme called Project Knight proposed to avoid taxes by structuring more than $16 billion in loans through an elaborate offshore network involving entities in the Cayman Islands, Luxembourg and the U.S.
As to why we’re publishing them, I agree with The Guardian’s editor Alan Rusbridger that the precedent being set by this UK court has a chilling effect on free speech and public debate. Courts should understand that the purpose of the press is precisely to uncover issues like these, and that trying to gag the press will only spread the information more efficiently. And I also have the opinion that if you believe in something, you need to stand shoulder-to-shoulder with the guys fighting on your side, or not complain when the same thing happens to you.
The Guardian’s editor, Alan Rusbridger, told the court in a witness statement: “I considered these documents to be of the highest significance in the debate about tax avoidance. They revealed at first hand the processes involved in structuring extremely complex and artificial tax avoidance vehicles; how lawyers and accountants worked together to exploit loopholes in government legislation; and the degree to which they are sanctioned at the highest levels within Barclays.
“My decision was taken on the day the chancellor, Alastair Darling, intervened in the debate on this issue, telling parliament: ‘I have asked HM Revenue & Customs to publish shortly a draft code of practice on taxation for the banking sector – so that banks will comply not just with the letter but the spirit of the law.’ ”
The Rusbridger statement quoted one reader’s online posting yesterday, which said: “I was lucky enough to read through the first of the Barclays documents at 1:30am last night. I will say it was absolutely breathtaking, extraordinary. The depth of deceit, connivance and deliberate, artificial avoidance stunned me.”
Rusbridger said: “This incipient debate has been choked off – doubtless intentionally – by the injunction from Barclays, thus chilling free expression on a matter of public importance.”
The full documents are below:
BarclaysLux
BarclaysKnight
BarclaysValiha
BarclaysBrazil
BarclaysBerry
BarclaysFaber
BarclaysBrontos
Michael
This is excellent. Your posts since your got back from vacation have been truly stellar. You seems to have been recharged and reinvigorated from the time off. Welcome back once again, and thanks for taking this stance.
I would just suggest that you do be careful. Working in publishing myself and having interacted often with publishing industry partners in the UK, I know personally that many of the UK laws are rather messed up to say the least. So you should try to make sure that someone Techcrunch UK is not adversely affect by this.
From India
Anjali Sen
Well said Anjali [it is me] – Yes, I am homosexual, what is wrong with that?
Ubewe/Anjali
CPO RJ Garbowicz was asked what is YourNight.com, he responded, “Picture this; you get home from work in the evenings and you turn on your PC, what do you do . . . answer email . . . browse your social networking or dating site . . . play online games . . . search videos and music . . . shop online . . . peruse job listings . . . check out local events . . . search for a business . . . go to your online banking . . . well you get the point, YourNight.com affords you all of this, and much, much more – all within one colossal, user-friendly portal . . . that’s all I can say for now, since we are still in stealth mode . . . however, as soon as we complete our Series A capital raise of $10 million our purpose and presence will be known.”
For more information, please contact:
RJ Garbowicz President/CPO Extreme Enterprises, Inc.
Phone:727.289.5522
Email:RJ@eeihq.com
PO Box 49271
St Petersburg, FL 33743
Well said Anjali – you are outdoing yourself….
Expert and free quality advice from Delhi. I does not ge better than that…. way to go!
From Lagos, Nigeria
{I am Anjali Sen}
Can you stop writing “From India” and just represent yourself? We don’t care where you are from.
r u afraid of India?
be afraid… very afraid…
Be afraid, be afraid my friend – we could bring intriguing odors and funny English to your neighborhood plus express nonsensical, firm statements about *everything* like that idiot “Anjali” from Delhi….
A good job well done Mike.
Welcome to the UK!
http://tweetzi.....php?q=barclays
I agree; well done and thank you.
Damn good show. A round of applause for TechCrunch.
Well done for taking a stand.
Good to see Techcrunch supporting The Guardian on this issue. It’s sickening to see what banks get up to behind the scenes.
Make the most of actually knowing what goes on behind the scenes as the UK government is creating a new law that bypasses the freedom of information act so the public won’t even know when they have messed up – on the one hand this rule may do good in that crime figures and civil unrest goes UP when the pillars of society appear to be crumbling on the other hand it’s also pretty big censorship – bit like the internet youtube music being banned in UK – yet we can still get all the porno – go figure that one out!
Not only they mess it all up, also want bailout money from helpless govt.
Wait a couple of months more and you will start learning bit by bit what are the sources of this money they are all playing with!
It will be much more fun.
In particular you will start learning what are those ’sovereign wealth funds’ – the piles of money accumulated by dictatorships and slave-labor regimes like China; you will find out how the oil money converts into weapons, then into human blood, then is returned with a huge profits, laundered through ‘our men on Wall Street’ like Madoff and hidden back in the exotic jurisdictions.
Most of you, people, have no idea how ‘wealth’ is circulating in this world and who owns it.
I’m not a conspiracy theorist, just I happen to know a bit about it all.
Barclays are cock suckers in this story. You need to learn from Vatican, guys! Look at them – hundreds of years of dirty finance and not a single leak!
Alex, I wonder have extensive is your experience with China. It may be an overstatement to term her as a slave-labor regime.
Alex I think we all actually know by now about slave labor, oil,weapons guns greed, most of the banks were built on the funds/blood money made by selling African people as products – i.e the black slave trade – people crammed into boats with their ankles shackled made the banks so great – so what should we expect ?
We also all know what is done in the name of money – kids are used by adults as prostitutes in places like Thailand, women and illegal immigrants are trafficked, as are drugs and porn across the world all for power and CASH- people are stabbing and killing over money
All of this dirty cash is probably mingled together in a big pot called – an off-shore bank – the very places where most of the wealthy are keeping their stash of cash hidden along with the banks that haven’t gone bust.
It is all so big and HORRID that I think sometimes it is easier to switch off the TV, close the paper and give the mind a rest
- we KNOW –
I mean if I know all this stuff you can bet just about everyone else on this planet with a TV or a town crier of some kind KNOWS it.
Watcha gonna do ? – have a revolution – all live in hippy utopia share out stuff equally – well it won’t happen – their will always be a runt of the pack and a piggy that gets fat.
I don’t know what the answer is – we will probably be hit by a meteorite at some point and fried in our own juices.
Until that day I am gonna try to make some of this stinking money to keep the beasts off my back – it’s called survival.
Good for you TechCrunch for standing up for free speech.
And good for Barclay’s for attempting to avoid the onerous regulations imposed by the state.
Nice post! Also check out my blog/podcast at http://macmaniapodcast.com.
god damn you are annoying. Your blog sucks, and your spam is freaking irritating.
Good on you Techcrunch, its not just Barclays but the culture of tax avoidance you are fighting here.
Good for you for publishing these, just wondering so if a court on your country bans something, you’ll do it anyway if you believe they are wrong ?
Jim Crow laws, segregation, slavery, the Whiskey Rebellion, the Boston Tea Party, the American Revolution…
So, the answer is yes.
Sorry Michael but I have to disagree.
I have yet to hear how this information was obtained. I’m all for transparency but not when it involves losing the right to privacy.
If we could somehow obtain internal discussions from Techcrunch (through a breach of trust or just plain hacking), would it be fair to post them to the world? No, it would violate your right to privacy.
I’m not one for politics, but it’s no surprise this was picked up by the Guardian. They don’t exactly have a pro-business record.
Finally, I don’t see anything wrong with the intent of these documents; tax avoidance is not illegal. Every major bank offers tax planning services to minimise their client’s tax burden. But in this climate the public want a witch-hunt, someone they can blame for all their problems, & the media is willing to indulge them.
Grab your pitchforks…
Steven did you not read the article? It goes against the spirit of the law.
If its news worthy about TechCrunch you can post it.
Hahaha I feel sorry for anybody who lives in the UK. They’re becoming worst than China with all of their restrictions and big brother’ish laws.
I agree. Between them and Australia they would give China a run for its money for spying on their citizens. lol
This is recollection, so forgive lack of precision. The recent publication of where TARP funds went re: offshore showed something like “Caribbean Banking Entities” as the third highest recipient.
Made me chuckle because there’s really only one reason for so much banking to be done in the Caribbean. TARP reimbursing tax avoidance schemes
Iceberg. Tip. What we’ll never know.
so without making me read through tons of legalese gibberish that perhaps turns on our dear Michael but not me, how much money would they have made/make deploying their little plan?
Micheal, thank you for the stand and a site like your will carry the message. Even though I get only a few visitors, I published about your post.
Wikileaks is still overloaded
Great post Arrington but you now stand a good chance of being held in contempt in the UK. Still, assuming you’re willing to risk it it’d be an interesting case: can a US lawyer knowingly ignore a court order of a judge in a foreign, albeit friendly, jurisdiction by publishing information in their native jurisdiction they know is accessible in the jurisdiction the original court order applies to? I doubt even if the answer is yes that you’d be disbarred but, depending on how cranky the CA Bar is, they might suspend you for a week or so…
Maybe a classic case of ‘nulla poena sine lege’ but if the poms have something to this regard our boyo Mikey is truly foked; can just picture his next landing at Heathrow for a tech crunch something and ole Bill dragging him off to the Tower, shackled. Furthermore it is very interesting how the Internet voids presumptions of territoriality. Empowerment of a world without Borders. Finally!
Great story about technology. Why don’t you publish Paris Hilton’s sex tapes next. Heard her right to privacy also dealt a chilling blow to free speech.
Yes, great post. But the Journal of British Tax Law just scooped you on the release of the iPhone 6G
Great post Mike, ever since you have been back they keep getting better.
“…is precisely to uncover issues like these”
And what exactly is the issue with them using the same tax schemes every other company uses?
Have they broken the law? Not as far as I can see.
anon that’s exactly the kind of ‘logic’ cash gifting scammers use in their web copy to con people into thinking it is legal to avoid tax as long as you are doing in ‘within the law’
Also what has this got to do with technology???
Are you just jumping on the Reddit “The UK is a police state” bandwagon?
barclays sucks
Publication laws in the UK are so screwed up.
How true … messed up UK laws are also why there are so many ” ” in the headlines of UK newspapers.
Without them, many of the newspapers can easily get sued for defamation and libel, as UK has some of the most ridiculous defamation and libel laws in the world.
oky thanks arkadaşlar
Thank you, Michael. Good work.
Banks control money, and they aren’t regulated because they CONTROL MONEY. If you control the monetary system you can beat it, this post may point out the odacious behavior, but they will not pay for their crime.
You can’t beat banks because cash is becoming archaic. Everything will be digitalized, and you will have to have a bank. The problem is they can make retarded ammounts of money from their schemes.
Interest rates should be nothing, but debt = money for banks. So if you want money you need to pay for it and then some. Not that big a deal, but they never seem to drop interest rates very much. Why would they it equals more profit for them.
Overdraft fees. Even if you put the money in the same day the bank gives you no timeframe or notice that your funds have depleted. They do this on purpose because if you overdraft that equals loads of money for them. In fact they hope you never pay your overdraft fee so they can take out an overdraft fee for not paying your fee. It is a catch-22 cycle that drives people crazy. But who can you get made at? The government is socialist and borrows from the banks themselves.
Account service fees, these are my favorite. You get charged for simply having an account. As if they aren’t making enough having a surplus of your cash, you need to pay for extra savings accounts. They will even charge you if you transfer too much money from savings to checking and vise-versa. How is transferring your money costing them a dime? Do we need to pay for their webhosting?
Currency converting fees… They have an automated calculator that does this for them when it enters the banking system. However it charges you for it because well, why not? Any chance they get to tax on a little fee to your account is BIG $$ for them.
So am I surprised a bank is trying to create loopholes to not pay tax? No. However I am outraged, and demand our monetary system be converted back to clams.
I don’t understand a word you are saying and I am not sure where your comments are meant to go.
Good Article Michael,
Newspaper publications are also a different story regarding UK publication Law on and offline,
But also note its a thin line to walk.
Fleet Street has been well and truly dead since the 90’s not only from advertising lost to the web but severe censorship, upholding free speech on the net is a must for any news media site.
Those guys at Barclays really earned their money. Look at how complicated these stuff are. I bet you do have to be smart to think up some schemes like that and it’s all legal anyway.
This information is completely irrelevent to techcrunch. The shark was jumped. Nice job, Fonz.
Achieving tax efficiencies is a very important aspect of financial services. The omission of the bank’s risk assessment, although on the surface appearing deceptive, was done so to protect the firm’s intellectual capital as they would not be capable of generating profit in a business that competitors fully understand and can participate in.
It is through Barclay’s intimate knowledge of tax laws and legal loopholes of governments as well as an apparently intimate knowledge of how the governments would potentially challenge such tax efficiency strategies that makes Barclay’s business viable.
Maybe its about time we started to question how transparent the ‘free world’ econonmies actually are.
Working in small fast moving tech firrms we all become a bit blase about assuming that everyone else values the strength that comes with honesty and transparency. When in fact the biggest pillars of our economy have become geared up precisely to obscure and confuse the situation,
Its precisely the ‘avoidance’ of scrutiny mentality that has led to the laughing stock that the finance sector has become. Perhaps rather than chasing the Guardian they should take a long hard look at what has become accepted practice in their industry.
Excellent post.
Welcome to the US^^
Seams that http://www.docstoc.com/ is inaccessible, technical problems, legal problems or denegation attack???
Every time I see the current Barclays “where’s the money?” tv ad…
http://www.yout...h?v=jY4ecFSLDCg
I think of their tax schemes.
ROFLMAO!