6th Annual European Forum on Anti-Corruption

26 Mehefin, 2012 | Areithiau

David Green CB QC, Director, at the 6th Annual European Forum on Anti-Corruption, The Bloomsbury Hotel, London.

I am delighted to have this opportunity to talk about some very topical issues to such a distinguished audience.

I took up my appointment as Director on 23 April.  This is clearly a challenging but exciting time for the SFO.

The Bribery Act has been in force for nearly one year;

• The SFO has come in for some trenchant criticism (both fair and unfair) in the courts and in the media;
• The SFO’s current role and purpose is unclear to some and needs restating.

I would like to address some aspects of that. First of all, I am convinced that the SFO must focus on top level fraud.  By that, I mean:

• Cases which undermine confidence in UK Financial plc in general, and the City of London in particular;
• Cases which compromise the level playing field to which investors are entitled;
• Serious bribery and corruption, national or international;
• Other cases which have a particularly strong public interest dimension, or which represent a striking new species of travel.

The SFO is here to use its unique set-up and capability to carry out the most difficult and serious investigations and (where appropriate) prosecutions, that others cannot do.  The SFO is here to stay but, like others, we must prove ourselves.

By ‘set-up’ I mean that we have lawyers, investigators, forensic accountants, state-of-the-art digital forensics capable of sifting terabytes of data, and a sophisticated evidential graphics capability, all working together under one roof, with any other necessary expertise commissioned and bought in as a service.

The SFO must resist any dilution of its brand. 

We cannot shrink from undertaking the most difficult or complex cases by chasing eye-catching quick results or by taking short cuts.  Obviously, when resources are under pressure, we must concentrate our forces on targets of strategic value, where our actions will have maximum positive impact.

Some sections of the media seem to think that the SFO has a stark choice between doing long investigations and big, ‘set piece’ prosecutions on the one hand, or agreeing civil settlements and no prosecution on the other.

That is nonsense.

When prosecuting, the SFO will strive to be surgical in its approach, resisting the urge to lay a vast and detailed canvas before the jury.  Instead, we must focus on the core of the criminal conduct and indict it.

Just because an SFO investigation may not result in a criminal prosecution does not mean it is a ‘failed investigation’.

I am fully supportive, in the appropriate circumstances, of Deferred Prosecution Agreements and I welcome and encourage self-reporting by corporates.  Civil settlements will also have their place in our approach.

Generally, like any prosecution authority grappling with top level fraud, bribery and corruption, we will strive for access to the broadest possible range of prosecutorial tools.  It is vital that we are not at risk of being outgunned by the opposition.

The SFO has been criticised recently for not conducting enough (what are breathlessly described as) ‘dawn raids’ or for not following up leads and tips provided to our SFO Confidential e-mail account.  I have broad shoulders and a sense of humour and I appreciate the need to drum up work, but steady on!

‘Dawn raids’ are not the only means available to the SFO to obtain evidence or build a case.  Their exact number is not a barometer of our activity.

And I am only interested in the sort of cases I believe the SFO is here to do – not, for instance, in crooks overcharging for roof repairs or tarmacing driveways.  Many matters reported to us (undoubtedly very serious to victims) are passed to those better placed to deal with them, such as the police.  They are not necessarily for us.

In fairness, much of the criticism of the SFO comes from those who genuinely believe in the SFO and want to see it working at its best.  So do I.

That is why I am reorganising the SFO’s structure into four  casework Divisions (two dealing with fraud, two with bribery and corruption) each led by a Senior Civil Servant.  Each Division will comprise mixed teams of lawyers and investigators.

Layers of quality control will be built in.

In addition to the Divisional Heads, we are recruiting a General Counsel to shape and critique investigations from inception to point of charge, and another specialist adviser working to sharpen the focus of our prosecutions and to advise on the appropriateness of civil settlements and Deferred Prosecution Agreements (as and when those arise).

I will also expand and concentrate our intelligence capability, concentrating on the gathering and analysis of open source material, and working that up and blending it with intelligence from a variety of other sources including Suspicious Activity Reports, whistleblowers and more exotic forms of intelligence obtained by others.  A really effective intelligence capability will extend our reach and encourage and increase self-reporting by corporates.

Another piece of the jigsaw is recruitment.  I intend to target the junior ranks of the bar and solicitors in private practice to bring lawyers into SFO in permanent positions or on secondment.  I want to foster and encourage the ‘revolving door’ between private and public sectors.  That same approach can and will be applied to investigators and to those with accountancy or IT skills.

From a strategic perspective:

For the first time (with plans for the National Crime Agency and its Economic Crime Command) we are seeing the emergence of a strategic approach to the problems of fraud, bribery and corruption.

The SFO will play a full part in that new co-operative landscape.  We will do that by undertaking those cases which call for our specialist skills and capabilities and by acting in concert with others, where appropriate.

So there will be a new and clear focus for the SFO, and a reorganised structure to support that.

I see I am billed to address the SFO’s anti-bribery priorities.

The SFO has been the designated lead UK agency for overseas bribery and corruption since 2004.  That activity remains a priority.

We maintain the national register for overseas corruption allegations.  We either accept those allegations for investigation or pass them on to other law enforcement agencies.  The OECD has commended this model.

The SFO has membership of the Politically Exposed Persons Strategic Group (with DfID, FCO, Home Office and HM Treasury) aimed at reducing money laundering through UK by such individuals.

Effective policing and prosecution of international corruption depends on national inter-agency and international co-operation.  In furtherance of that, we sit on the International Corruption Working Group, and make increasing use of JITs (Joint Investigation Teams) against suspects operating in more than one jurisdiction.  We have solid co-operation with agencies overseas.

We continue to bring cases under the old bribery legislation.  Four defendants were convicted of bribery in a commercial context in January; four more were sentenced for corruption offences in Belfast in March; and two senior executives have now pleaded guilty in the Innospec litigation.

As things stand, our intelligence unit work includes (in stages before any formal decision to investigate):

• 4 self-referrals;
• 11 cases being proactively developed (the majority of these relate to bribery and corruption.)

I recognise that interested parties are wondering when they will see a Bribery Act prosecution.  We will take the right cases at the right time.  We will not exchange solid prosecutorial action for easy headlines.

A number of subjects seem to make regular appearances (for obvious reasons) in bribery and related discussions.  Let me touch on some of them.

SFO prosecutors apply the Code Test in accordance with the Code for Crown Prosecutors.  We consider relevant published guidance on the Bribery Act and on corporate prosecutions.

In any case where there is a realistic prospect of conviction and it is in the public interest to prosecute, the SFO will prosecute, whether the defendant is an individual or a corporate.

The SFO will focus on the most serious cases of international corruption with roots in or connections back to UK plc.  We will not be looking to act in a compliance role, nor will we penalise otherwise well-run corporates for relatively minor infractions.

On self-reporting by corporates, at present we are in a no man’s land.  The prosecutors’ role is circumscribed by the Innospec judgment, pending the clarity afforded by the legislation introducing Deferred Prosecution Agreements.

A corporate which self-reports cannot be given a guarantee in advance that they will not face prosecution.  No reasonable prosecutor could do that.  But the fact of self-reporting is plainly a factor to be recognised in the assessment of the public interest element of the Code test applied in deciding whether or not to prosecute.

If prosecution is NOT in the public interest, then (prior to DPAs) the SFO will likely seek a civil settlement.

Given the potential of focussed and improved intelligence in the hands of the SFO, a corporate which chooses not to self-report can expect little sympathy.

The SFO will respond to OECD’s pressure for maximum possible transparency and explanation where we agree to civil settlements.

As far as other tools are concerned, the SFO will continue to enter into immunity agreements under the Serious Organised Crime and Police Act 2005, where appropriate.  In proper contexts it will enter into plea discussions subject to the Attorney General’s guidelines.

I fully support DPAs. In appropriate circumstances, they will provide a constructive option for prosecutors dealing with corporates. They are more flexible than the present blunt instruments of fines or winding up, or (worst of all) doing nothing.

The SFO encourages information from whistleblowers and reports from ethical UK corporates disadvantaged by bribery committed by competitors.  We would welcome a debate on whether bona fide whistleblowers should be rewarded for the information they provide.

We welcome the development of case law and we will bring test cases where possible.

As for the meaning of adequate in “adequate procedures” in s7(2) of the Bribery Act, it cannot mean procedures which will always prevent bribery, but surely requires a proportionate approach.

We will also be looking to address the precise meaning of ‘carries on a business or a part of a business in any part of the UK’ in s7(5) of the Act.  (We would argue against any overly technical interpretation).

We would also like to see the meaning of ‘associated persons’ in Sections 7 and 8 clarified.

Concerning facilitation or ‘grease’ payments, the SFO’s aim is that corporates should be genuinely working towards a zero tolerance policy on the making of such payments.  Supported by OECD, we will actively consider prosecution where there is plainly no intention of ceasing such payments.

As regards hospitality, the inference that hospitality falls outside what is reasonable and proportionate (and in truth constitutes a bribe) will be the stronger where there are unjustifiable ‘add-ons’ and expenditure can be related in time to some actual or anticipated business to the recipient.

As with top level fraud, so with bribery and corruption.  I want to focus the SFO’s expenditure of blood and treasure on those cases where our impact will be greatest.  By doing this, the SFO will be making the contribution for which it was designed and which its many supporters rightly expect. That is all I have to say. 

Thank you for your patient attention.