[ by Melanie Gretchen ] Manipulation of the Libor rate was recently first brought to the public's attention late last year, if we recall correctly.  But it may surprise many people that the story actually broke about 4 years earlier.  Bloomberg Television discussed manipulation in a 2008 interview with Tim Bond, a strategist at Barclays Capital.  That same day, the Wall Street Journal ran a story about possible manipulation involving several large banks, including Citigroup and JPMorgan Chase. First on the Scene. In 2008, Barclays Plc, the U.K.'s third-biggest bank, quoted 3-month dollar rates to the British Bankers' Association that were, on average, 7 basis points more than those of their rivals in the first week of September, according to Bloomberg in a 5/29/08 story. In his interview with Bloomberg, Mr. Bond attributed the activity in order for the bank to avoid the perception the banks faced difficulty raising funds as credit markets seized up.  The bank succeeded in drawing attention away from its problems, Mr. Bond said:

"The rates the banks were posting to the BBA became a little bit divorced from reality.  We had one week in September where our treasurer, who takes his responsibilities pretty seriously, said: 'right, I've had enough of this, I'm going to quote the right rates.' All we got for our pains was a series of media articles saying that we were having difficulty financing."

The Light of Today. To the misfortune of Robert Diamond Jr., history has come back to bite Barclays, specifically at a July 4 hearing where the former Barclays CEO testified to a U.K. parliamentary panel.  Jesse Norman, a member of the Treasury Select Committee, posed some questions after reading aloud from the Bloomberg article. Mr. Norman: So in May 2008 you have a strategist in your own organization who is stating that these borrowing costs have been misstated.  How could it be possible that you couldn't have been aware of it at that time and indeed actively under some internal obligation to launch an investigation? Mr. Diamond: This isn't just Barclays, and you keep coming back to Barclays. Mr. Norman: Well, that's the institution for which you were responsible. Mr. Diamond: I'm not excusing that behavior. But I think it's also appropriate for the committee to step back and say that it was a financial crisis and that there are broader industry implications. And all I'm saying is look at the behavior of Barclays in the context of what we did about it once we found out. At the hearing, the former CEO said that he only found out last month about e-mails showing that his bank had made false submissions on interest rates used to set Libor. CI Note: Mr. Norman wasn't satisfied and neither are we.  A few questions: First, does Mr. Diamond not read the paper or keep up with his firm?  Also: Are Barclays departments that isolated or has the bank retained a culture of non-transparency to protect its senior members?  Does Mr. Diamond have any answers or is he (blissfully) ignorant?  What has Barclays done or not done to find itself at the forefront of the Libor scandal, which, so far, Citigroup and JPMorgan have successfully avoided? For further details, go to [Bloomberg, 7/6/12].