Maine news, sports, weather | Kennebec Journal, Augusta, Maine

July 14, 2012

Banker's local ties run deep

Colby College stands by scandal-tainted trustee chairman Robert Diamond

By Michael Shepherd mshepherd@mainetoday.com
Staff Writer

WATERVILLE — The banker at the center of an international interest rate-fixing scandal originating in Great Britain is the chairman of Colby College’s Board of Trustees, but that’s not all.

Robert E. Diamond Jr., the Massachusetts native and 1973 graduate, with a bachelor’s degree in economics, has been generous to his alma mater, pledging more than $14 million since 2003 to the private college through a private family foundation.

The college is sticking by Diamond, the former CEO of British bank Barclays who has been called one of the world’s richest bankers. He’s a Colby alumnus and benefactor, with a prominent building named after him, and has donated a lot of money to U.S. Sen. Olympia Snowe, R-Maine.

Notably, the foundation reported having more than $3.3 million invested in Barclays stock in 2010.
Diamond resigned from Barclays, Britain’s second-largest bank, on July 3 under company pressure. News reports said he had lost regulators’ confidence.

“Clearly it’s disappointing to find out that there may have been wrongdoing,” said Waterville Mayor Karen Heck, a 1974 Colby graduate, of the scandal. “At the same time, there’s no denying that his support has been critical to allowing thousands of students an education at a fine college here in Maine.”

The Economist said “damning evidence” has emerged that employees at Barclays and other banks rigged the London interbank offered rate, or LIBOR, the average interest rate estimated by London’s leading banks that they’d be charged if they had to borrow from other banks. The magazine said the bank has paid hundreds of millions in fines to American and British regulators, who said bank staff tried to manipulate LIBOR for profit “and to quell concerns about its own creditworthiness.”
A Colby spokesman said the college is “mindful” of Diamond’s situation.

“Nothing that’s emerged from these stories has changed Bob’s relationship with the college,” said Colby spokesman Michael Kiser. “He’s long, long been a valuable supporter and a great leader for the board of trustees,” which meets twice a year.

Kiser described Diamond, a Concord, Mass., native, as filling “a traditional chairman-of-the-board role.” He said Diamond doesn’t get paid for the job.

Colby spokeswoman Ruth Jacobs has said that Diamond got former British Prime Minister Tony Blair to be the college’s 2012 commencement speaker because he knows him personally.

And when Colby got big Diamond donations in 2003 and 2008, it put out releases detailing the amounts and purposes: $6 million toward construction of a $12 million building named for Diamond to house social science departments and $4 million to “support interdisciplinary study of the environment, energy policy, climate change and sustainability.”

Kiser, when asked to provide information on other gifts, cited Colby policy against disclosing gifts outside their public record.

He also said it wouldn’t be possible to reach Diamond for comment through Colby.

IRS records from 2008, 2009 and 2011 for the Robert and Jennifer Diamond Family Foundation, to which Diamond was the  only supporter, according to the forms, reveal more information about donations to Colby.

A 2011 form showed the foundation gave Colby $2.5 million to sponsor a Diamond chair in sustainable energy. It gave $1.5 million to sponsor a Diamond fellowship in environmental studies. Both gifts were pledged in 2010, to be paid over seven years.

A 2009 form showed the foundation pledged $100,000 to the school’s alumni fund in 2006. It was set to be paid over five years.

What does it mean?

Hundreds of trillions of dollars are underpinned by the LIBOR rate. Reuters has reported that Barclays is the only world bank to admit its traders profited from rate manipulation as far back as 2005.

(Continued on page 2)

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