Friday, September 14, 2012

The Culture of Cheating: Nets/arena CEO Yormark says "what I'm most proud of is the cultural fit for Barclays" (unmentioned: the LIBOR scandal)

An exchange in a 9/11/12 Billboard Q&A, Barclays Center CEO Brett Yormark on the Brooklyn Brand, Jay-Z, $1 Billion Building, has some unintended resonance regarding the "culture of cheating" and the elephant in the room: dishonest behavior by Barclays.

A big part of this project is the 20-year naming rights deal with Barclays. How much did it mean to you to get that deal done?
That's a great question, because when I look back on my career, it's probably one of those top two or three highlights... There were a lot of doubters, but they weren't doubting my ability, they were doubting because of all the planned new buildings in the market... They're like, "you're the last one to get yours, so you're probably going to need some help." They doubted the project, the merits of Brooklyn, lots of different things. And we nailed it. For me, what I'm most proud of is the cultural fit for Barclays.
(Emphasis added)

Tell me about that, it just seems so unlikely.
You can either do it for the money or you can do it for the partnerships, and thankfully, in our case we did it for both reasons. Financially, they made a very appealing offer to us, but more important than the financials is, we just believed in Barclays and Barclays believed in us, and that goes to the highest levels.

Of course, Yormark was talking about commerce, about branding Brooklyn, about mutual promotion.

Photo Tom Kaminski/WCBS
But think about it: "the cultural fit for Barclays."

If Atlantic Yards, as I've contended, represents the "culture of cheating," then isn't Barclays a perfect fit? 

Barclays is an admitted cheater, paying $450 million to settle charges of interest rate manipulation.

The executive who negotiated the naming rights agreement, Bob Diamond, resigned in disgrace. (He's a "friend" of Mayor Mike Bloomberg.)

That roof logo

And, as I've reported, there was never any explicit permission to put the Barclays Center name/logo on the arena roof because, when the Atlantic Yards Design Guidelines were approved, there was supposed to be a green roof. Nor were the plans ever explicitly explained.

It's not a violation, but it sure looks like cheating.

How Barclays lied and cheated

How did Barclays cheat?  Christopher Matthews explained in TIME:
LIBOR is an acronym for the London interbank offered rate, and it is the average interest rate the world’s largest banks pay when they borrow money. And this figure (or figures, as different LIBORs are calculated for different loan maturities and currencies) is used to price hundreds of trillions of dollars worth of financial instruments, from high-yield corporate debt to student loans.
Considering the importance of this benchmark rate and the financial industry’s recent track record, it is no wonder that many in the press are up in arms about Barclays’ recent admission that it intentionally submitted false rates in order to manipulate LIBOR for its own gain. Barclays has been fined more than $450 million by British and American regulators, but it is by no means the only bank thought to have deceptively tried to influence LIBOR — thus the outrage expressed this past week in the media.
...So why did traders at Barclays submit false LIBOR figures? There are two ways in which Barclays and other large banks could have benefited. The first is confidence.... because of the public nature of the submissions, there is a danger that a bank will understate its LIBOR submissions in order to boost markets’ confidence in the institution. This prospect became more likely during the financial crisis, when a bank reporting high borrowing costs could have dire and perhaps fatal effects.
The more pernicious charge is that derivatives traders Barclays, along with several other as-yet-unnamed banks, colluded to influence LIBOR, not so that investors would have confidence in them, but so that they could reap profits on derivatives trades.
The scandal is still unfolding--and, as Michael D.D. White points out, may be ventilated by various agencies suing Barclays. But we know enough to know that the name Barclays will long have an asterisk, even if most in the sports world ignore it.

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