Impact of LIBOR rigging on Cleveland PFI contracts?

Joel Benjamin made this Rhyddid Gwybodaeth request to Cleveland Police

This request has been closed to new correspondence from the public body. Contact us if you think it ought be re-opened.

Roedd y cais yn llwyddiannus.

Dear Cleveland Police,

On 31/03/2005, Cleveland Police signed up to a £29m Rationalised Custody "Private Finance Initiative" (PFI) contract with Bank of Scotland and John Laing.

In July 2012 it emerged Barclays and other UK and global banks (including Lloyds who now own Bank of Scotland) had been complicit in rigging the London Inter-bank Offered Rate since at least 2005, which sets the rates
of borrowing money and is pegged to swaps and derivatives products
referenced within PFI contracts.

Bank of Scotland (now Lloyds) is one of the 18 LIBOR setting panel banks
currently under investigation by US, UK and EU authorities for
rigging the LIBOR rate.

http://www.telegraph.co.uk/finance/libor...

Please provide:

1. The original 'Rationalised Custody' PFI business case, and contract(s) including full details of swaps (ISDA) and derivatives applied to this PFI deal.

2. Copies of internal or external financial and legal advice Cleveland has received in relation to LIBOR, and its actual or potential impacts on Cleveland, and specifically PFI contract finances.

Yours faithfully,

Joel Benjamin

Cleveland Police

Dear Mr Benjamin,

Enquiry Ref : 2013/5173

I acknowledge receipt of your enquiry dated 01.12.2013 received by this office 02.12.2013 requesting information concerning PFI LIBOR rigging.

As set out by the Freedom of Information Act it will be our aim to respond to your request by 02 January 2014. In some cases, however, we may be unable to achieve this deadline and I would hope to contact you should this be the case.

If you have any questions regarding your request please contact this office.

Yours sincerely,

A.W. McDougall
Freedom Of Information Decision Maker,
Cleveland Police, Shared Service Centre,
Ash House, III Acre,
Princeton Drive,
Stockton-on-Tees
TS17 6AJ

Cleveland Police

Dear Mr Benjamin,

Enquiry Ref : 2013/5173

I acknowledge receipt of your letter dated 02 December 2013 requesting information concerning PFI Contract.

To help us identify the information you require I would be grateful if you would provide me with the following information relating to question 1.

1. The original 'Rationalised Custody' PFI business case, and contract(s) including full details of swaps (ISDA) and derivatives applied to this PFI deal.

The Department concerned has forwarded me the following questions to ask you:

·The swap rate is known, would this be sufficient. The derivatives element would need to be further investigated.

·The contract documents are based on SOPC3, and therefore wouldn’t add much value, is there particular elements they want to focus on e.g. output specification?

· The financial model may be commercially sensitive and subject to exemptions, so other than SWAP and derivative, is there an area of particular interest?

· The documents in their entirety are significant and vast in scale, so a review to see if redaction is required may take some considerable time.

Point 4 may exceed the time limit which is 18 hours, to review and collate. If you can refine your request it would assist.

To enable us to respond to your request please provide the details requested above or alternatively indicate how we may otherwise assist you. Unfortunately we are unable to respond to your request until we have received this information.

If you would like to discuss this matter please do not hesitate to contact me.

Yours sincerely,

A.W. McDougall
Freedom Of Information Decision Maker,
Cleveland Police, Shared Service Centre,
Ash House, III Acre,
Princeton Drive,
Stockton-on-Tees
TS17 6AJ

Cleveland Police

Dear Mr Benjamin,

Enquiry Ref : 2013/5173

I write in connection with your request for information dated 02 December 2013 concerning:
On 31/03/2005, Cleveland Police signed up to a £29m Rationalised Custody "Private Finance Initiative" (PFI) contract with Bank of Scotland and John Laing.
In July 2012 it emerged Barclays and other UK and global banks (including Lloyds who now own Bank of Scotland) had been complicit in rigging the London Inter-bank Offered Rate since at least 2005, which sets the rates of borrowing money and is pegged to swaps and derivatives products referenced within PFI contracts.
Bank of Scotland (now Lloyds) is one of the 18 LIBOR setting panel banks currently under investigation by US, UK and EU authorities for rigging the LIBOR rate.
http://www.telegraph.co.uk/finance/libor...
Please provide:
1. The original 'Rationalised Custody' PFI business case, and contract(s) including full details of swaps (ISDA) and derivatives applied to this PFI deal.
2. Copies of internal or external financial and legal advice Cleveland has received in relation to LIBOR, and its actual or potential impacts on Cleveland, and specifically PFI contract finances.

On the 5th December 2013 I sent you the following e mail. To date we have not received a response, or clarification.

The Department concerned has forwarded me the following questions to ask you:

A) The swap rate is known, would this be sufficient? The derivatives element would need to be further investigated.

B) The contract documents are based on SOPC3, and therefore wouldn’t add much value, is there particular elements they want to focus on e.g. output specification?

C) The financial model may be commercially sensitive and subject to exemptions, so other than SWAP and derivative, is there an area of particular interest?

E) The documents in their entirety are significant and vast in scale, so a review to see if redaction is required may take some considerable time.

Point E may exceed the time limit which is 18 hours, to review and collate. If you can refine your request it would assist.

To enable us to respond to your request please provide the details requested above or alternatively indicate how we may otherwise assist you. Unfortunately we are unable to respond to your request until we have received this information.

2. Copies of internal or external financial and legal advice Cleveland has received in relation to LIBOR, and its actual or potential impacts on Cleveland, and specifically PFI contract finances.
a) Following enquiries with the force I can advise you that Cleveland Police have not asked for or received any such advice. Therefore my answer, on this occasion, must be no

We have received no such reply for clarification or refining your request.

This request will now be closed. If you wish to make a further request please bear in mind the questions we asked you in the last e mail.(copied above)

If you are not satisfied with the actions taken in dealing with your request you have the right to ask that we review your case under our review procedure (copy enclosed). If you decide to ask for such a review to be undertaken and following this process you are still dissatisfied, you then have the right to direct your complaint to the Information Commissioner who will consider it.

If I can be of any further assistance please do not hesitate to contact me.

Yours sincerely,

A.W. McDougall
Freedom Of Information Decision Maker,
Cleveland Police, Shared Service Centre,
Ash House, III Acre,
Princeton Drive,
Stockton-on-Tees
TS17 6AJ

Dear Cleveland Police,

Apologies for the delay in response over the Christmas period.

In terms of clarifying the points requested.

A) Please provide swaps, AND derivatives information where available

B) I have no idea what "SOPC3" if there is a "bible" or register of contract documentation to peruse that would be a very good start.

C) No other area of interest aside from swaps & derivatives/ LIBOR details, including any subsequent revision of contract terms.

D) References to/ details of Swaps/ Derivatives/ LIBOR rate only.

Regards

Yours faithfully,

Joel Benjamin

Cleveland Police

Dear Mr Benjamin,
Enquiry Ref : 2014/5225

I acknowledge receipt of your revised enquiry dated and received by this office 03.01.2014 requesting information concerning PFI, LIBOR.

As set out by the Freedom of Information Act it will be our aim to respond to your request by 31 January 2014. In some cases, however, we may be unable to achieve this deadline and I would hope to contact you should this be the case.

If you have any questions regarding your request please contact this office.

Yours sincerely,

A.W. McDougall
Freedom Of Information Decision Maker,
Cleveland Police, Shared Service Centre,
Ash House, III Acre,
Princeton Drive,
Stockton-on-Tees
TS17 6AJ

Cleveland Police

1 Atodiad

Dear Mr Benjamin,

Enquiry Ref : 2014/5225

I write in response to your clarified request for information dated 3rd January 2014

CLARIFICATION FROM REQUESTER
A) Please provide swaps, AND derivatives information where available

B) I have no idea what "SOPC3" if there is a "bible" or register of contract documentation to peruse that would be a very good start.

C) No other area of interest aside from swaps & derivatives/ LIBOR details, including any subsequent revision of contract terms.

D) References to/ details of Swaps/ Derivatives/ LIBOR rate only.

RESPONSE
Please see attached index of contract documentation.

• RPI SWAP Rate 2.5%
• LIBOR Rate 4.02%

If you are not satisfied with this response or any actions taken in dealing with your request you have the right to request that we review your case under our review procedure.

If we can be of any further assistance please do not hesitate to contact this office.

Yours sincerely,

A.W. McDougall
Freedom Of Information Decision Maker,
Cleveland Police, Shared Service Centre,
Ash House, III Acre,
Princeton Drive,
Stockton-on-Tees
TS17 6AJ