US senator Elizabeth Warren has called for urgent answers from Barclays over what she claimed was its “apparent failure to meaningfully investigate” ties between the bank’s former boss, Jes Staley, and the late sex offender Jeffrey Epstein.
In a letter sent privately to Barclays’s chair, Nigel Higgins, and seen by the Guardian, Warren – the most senior Democrat on the US senate banking committee – said it was “deeply unclear how Barclays, supposedly investigating Staley’s connection to Epstein, failed to uncover this decades-long relationship”.
Lawmakers demand answers
The letter, sent also on behalf of the Congress members Ro Khanna and Raja Krishnamoorthi, gave Barclays two weeks to answer a series of questions about how they handled information on the links between its former chief executive and Epstein, who died while awaiting trial on child sex trafficking charges in 2019.
The questions included whether the bank conducted any reviews into “deficiencies” in its executive hiring process, which had “allowed the board to hire a CEO who held extensive professional and personal ties to a convicted sex offender”.
Concerns over board's due diligence
The US lawmakers raised a string of concerns about information arising from a UK court hearing last year, in which Staley unsuccessfully tried to overturn the regulator’s decision to ban him from the British banking industry, four years after he was forced to step down as boss of Barclays.
Those concerns included Higgins’s admission that he had not asked Staley about his last contact with Epstein before Higgins’s declaration to the Financial Conduct Authority that the last contact had been “well before” the CEO joined Barclays.
“It appears that neither you nor any other member of the board conducted any deeper due diligence to verify Staley’s claims and simply took him at his word,” the letter said, referring to exchanges between the executive and board members during Staley’s tenure. “It is unclear what specific actions, if any, Barclays took to investigate Staley and Epstein’s personal ties.”
Governance questions
The US lawmakers said the episode sparked questions about how the bank was managed. “Barclays’s apparent failure to meaningfully investigate or address Staley’s relationship with Epstein raises significant governance questions regarding the bank’s ability to hold senior executives accountable for wrongdoing,” the letter said.
The signatories also warned that it was a “privilege” to hold local banking licences and operate in the US, where the bank had “extensive” operations and held about $200bn (£150bn) in assets. That privilege “is contingent on the ongoing character and fitness of management and the ability of the firm to conduct its operations in a safe and sound manner”.
Background on Staley and Epstein
The letter was sent hours before Staley was due to be grilled in a closed-doors hearing by the House Oversight Committee, on which the letter’s co-signatories, Khanna and Krishnamoorthi, both sit.
Staley originally met Epstein in 2000 after he became head of JP Morgan’s private bank, where Epstein was a client. He later took over as chief executive of Barclays in 2015, but was forced to step down in 2021, after City regulators launched an investigation into the nature of the relationship between the two men.
Staley was eventually banned from taking any job in the UK’s financial sector for playing down those ties, which Barclays vouched for in its letter to the Financial Conduct Authority in 2019.
In the former Barclays boss’s failed attempt last year to overturn his banking ban, the court battle revealed intimate details of the men’s friendship. Staley also lost out on £18m worth of pay and bonuses from Barclays as a result of the ruling.
A spokesperson for Barclays said: “The UK regulator concluded that Barclays was misled by Jes Staley. We conducted an investigation based on the information that was available to us at the time. Since then, new information has emerged that was not available to Barclays that demonstrates Mr Staley misled Barclays and many others as to the nature of the relationship with Epstein. That information relates to activities that predated his employment at Barclays.”
