(Bloomberg) — Jes Staley stayed in contact with Jeffrey Epstein behind the back of Barclays Plc’s (BARC.L) head of communications while the bank dealt with questions about its incoming boss’ links to the late sex offender a decade ago.
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Appearing as the first witness in Staley’s legal fight with British regulators, Stephen Doherty said he’d only become aware of his former boss’ emails with Epstein years later, after UK authorities announced their own findings on the matter.
In October 2015, the bank was preparing to announce Staley’s appointment as chief executive officer and was concerned that media articles about his friendship with Epstein might damage its reputation. Doherty said he’d thought that Staley was being truthful in his conversations with him, only to discover that the executive was also communicating directly with Epstein at the same time.
Staley appeared to be “entirely candid about his relationship with Mr. Epstein and appeared to understand the value in being so candid,” Doherty said in a witness statement. “The clear impression I had was that they were not in current contact about his role at Barclays.”
Documents disclosed by the Financial Conduct Authority showed that Epstein and Staley discussed the upcoming press articles around the time of his appointment. In one email, Staley said to Epstein “Don’t worry. We will be fine.”
A day later he wrote: “Let me know if they say something else. But stay away from them. I’m fine.”
The FCA fined and banned Staley from the industry in 2023 after finding he acted recklessly by letting Barclays downplay the extent of his relationship with Epstein. Staley is challenging that decision, in the most high-profile legal battle between the watchdog and any executive in recent years.
The dispute revolves around a letter Barclays sent to the FCA in 2019 that was intended to reassure the authority but would instead prompt the investigation. The letter set out the extent and timing of the pair’s interaction, stating that Staley confirmed to the bank he “did not have a close relationship” with Epstein and he ceased contact “well before he joined Barclays in 2015.”
On Tuesday, documents disclosed in court appeared to show that Epstein also had the inside track on Barclays’ CEO search in 2012, when Staley was a frontrunner but ultimately lost out to Antony Jenkins. In a series of emails, Epstein highlighted the shortlist of various candidates including the former Goldman Sachs Group Inc. (GS) executive Gary Cohn.