Imagine you ran a too-big-to-fail bank under criminal investigation by US prosecutors. Now ask yourself this: how much of your company’s money would you pay to have the Justice Department inoculate you personally against the prospect of any government charges?

If you said “the sky’s the limit”, you’re not alone. Prosecutors often settle claims against corporations in exchange for fines, while letting the executives off scot-free. This brings us to the $160 million (R1.3 billion) non-prosecution agreement that Barclays reached last month with the Justice Department, a week before Robert Diamond resigned as its chief executive.

In essence, although it didn’t mention him by name, the Justice Department publicly cleared Diamond of wrongdoing over the way he responded to a pivotal phone call from Paul Tucker, the Bank of England’s deputy governor, on October 29, 2008, during one of the worst moments of the financial crisis.

Here’s the crucial sentence from the “statement of facts” that the Justice Department and Barclays agreed were “true and accurate”, as part of their settlement: “As the substance of the conversation was passed to other Barclays employees, certain Barclays managers formed the understanding that they had been instructed by the Bank of England to lower Barclays’ London interbank offered rate (Libor) submissions, and instructed the Barclays dollar and sterling Libor submitters to do so, even though that was not the understanding of the senior Barclays individual who had the call with the Bank of England official,” the June 26 document said.

We know that Diamond was the Barclays person referred to at the end of that sentence and that Tucker was the Bank of England official, thanks to documents released by UK legislators. There are conflicting, unresolved accounts of what Diamond’s understanding actually was.

Libor is the interest rate benchmark used in hundreds of trillions of dollars of financial contracts, based on daily surveys of large banks about their borrowing costs. Barclays admitted manipulating Libor submissions as far back as 2005. Other big banks are under investigation, too. Barclays was just the first to settle.

Last week, former Barclays chief operating officer Jerry del Missier contradicted Diamond’s version of events, and the Justice Department’s, during testimony before the UK parliament’s treasury committee. He said Diamond told him during an October 29, 2008, phone call to lower the bank’s Libor submissions, and that Diamond told him the instruction came from Tucker during their conversation earlier that day. At the time, Diamond was head of Barclays’ investment-banking business, where Del Missier also was a senior executive. Del Missier said he responded by relaying the order to the head of Barclays’ money market desk, who then followed through on it.

Diamond told the same panel on July 4 that he didn’t believe he had received an instruction from Tucker, and that Del Missier misunderstood him. So far, it has been Del Missier’s word against Diamond’s. Treasury committee members have said they don’t know whom to believe. Tucker, for his part, told the committee last week that he wasn’t nudging Barclays to underreport its Libor submissions. His credibility came under attack, too.

So how did the Justice Department determine what Diamond’s understanding was? And how could it be so sure? A Justice Department spokeswoman, Alisa Finelli, declined to comment. We may never know, because the government’s case against the company is not going to court.

Jonathan Weil is a Bloomberg columnist. The opinions expressed are his own.