Michael Gillard: The inner sanctum of the Bank of England was penetrated by a “powerful criminal network” linked to money laundering, terrorism, and contract killings, according to the police and MI5 investigation.
Detectives tapped the mobile phone of a Ferrari-driving businessman suspected of laundering money “on a vast scale” for organised crime gangs and reported hearing him receiving secrets from inside the Bank.
Although police warned senior bankers that a mole was passing inside information to a businessman connected to organized crime, the leaker was never identified, no one was sacked, and the businessman remains at large.
The Bank of England is now facing serious questions about how gangsters gleaned Britain’s most closely guarded financial secrets and how the public can be confident no such breach will occur again.
In 1998, detectives reported that they had eavesdropped on a high-rolling young stockmarket speculator receiving highly sensitive information about the bank’s monetary policy committee (MPC).
The committee meets in private each month to set Britain’s base rate of interest, which affects every aspect of the country’s economy, and the confidentiality of its deliberations is sacrosanct. Policymakers are made to sign a “declaration of secrecy” and are subject to “strict purdah rules” before decisions about interest rate changes are announced publicly. It is not suggested that the leak came from a member of the MPC.
But the businessman was believed to be exploiting a sexual relationship with the wife of a Bank of England insider to garner tip-offs about upcoming changes that could be used to gamble on the financial markets.
The threat to national security was deemed so severe that the investigation was swiftly taken over by spies at MI5, and the affair has remained a closely guarded secret for years.
A Bank of England source confirmed that in 1998 it was alerted to sensitive police intelligence that “two people were talking about inside access to the Bank’s information”.
Leaking monetary policy stuff would have been, and still is, a hanging offence,” and an immediate internal inquiry was launched. But it failed to identify where the leak was coming from, so no action was taken and the case was closed.
