Alaco

19.04.2013 | The SFO shows its teeth

David Green is unlikely to celebrate with a birthday cake. Exactly one year since being appointed as the head of the UK Serious Fraud Office Mr Green has seen the body’s reputation questioned by Parliament, attacked by the judiciary and trashed by the media.

The debacle over the failed investigation into property entrepreneurs Robert and Vincent Tchenguiz led to a senior high court judge branding the agency “incompetent”. This was followed by a Parliamentary Select Committee investigating huge severance pay offs to former staff members calling the agency “a circus”. The media has had a field day.

As if this wasn’t enough, the SFO still hasn’t brought a prosecution under the much vaunted Bribery Act. The legislation is one of the most powerful anti-corruption laws ever written. It can reach out around the world putting companies, their agents, directors and employees in the dock on criminal charges.  So far the only individuals to feel the force of the new law are a court clerk in east London and a Manchester taxi driver for accepting or offering bribes worth less than £1000 – hardly international crime rings.

It has not been an easy 12 months for Mr Green. The problems facing him are time consuming, intellectually demanding and potentially politically damaging. It was only two years ago Home Secretary Theresa May tried to subsume the SFO into the Crown Prosecution Service and the police. Anymore slip-ups and the future of the SFO could once more be called into question.

The administrative headaches Mr Green inherited when he took over on April 23 would be more than enough to fill the time of a chief executive of a private organisation.  All the more commendable then, that in amongst the fire-fighting he has found time to get on with his day job – catching crooks.

Instead of using problems largely created by his predecessor, Richard Alderman, as a smoke screen Mr Green has been putting in place a regime that, he claims, will shortly produce results.

At a recent legal symposium on fraud the Director set out the changes he had put in place and how he plans to use them to go after white collar criminals. Listing ten “fundamental changes” that have taken place in the year he’s been in charge, he:

• Restated SFO’s focus on serious complex fraud, bribery and corruption
• Refocused on difficult and complex cases
• Restructured the SFO in response to criticism flowing from the Tchenguiz investigation
• Appointed a new senior management team
• Reviewed caseload, dropping investigations including Tchenguiz and taking up cases including Libor
• Introduced a toughened-up approach to self-reporting of financial crime – no inherent promise of civil rather than criminal prosecution for companies that come forward to report wrongdoing
• Opened a new line of ring-fenced Treasury funding for larger, one off cases such as Libor
• Moved towards statutory inspection of SFO by Government officials
• Improved intelligence contacts
• Moved into new offices in Cockspur Street

Outlining the changes Mr Green said:  “I do not pretend that all our problems are solved.  They are not.  But we are firmly set on an upward trajectory…. Like any Government department we have to prove our worth. What the SFO needs is results. It has enjoyed a number in 2012 and this year. It will achieve more.”

The speech was described as a “watershed” by leading white collar crime lawyer Barry Vitou of Pinsent Masons. He said it was a statement of intent that the SFO was now ready to go into battle against financial criminals. “While change is evolutional and more work remains, the Director has put down a marker that many of the changes he announced on arrival in office have been actioned,” said Mr Vitou. “The proof of the pudding will now be in the eating. Anticipate news.”

This could come sooner than many people expect. The SFO’s investigation into the alleged manipulation of the interbank lending rate, Libor, has taken over from the Tchenguiz case as the most high profile work the agency has on its books. But where the investigation into the Tchenguiz brothers took three years and got nowhere, in just six months the SFO has moved Libor from preliminary enquiries, to opening a full investigation to first arrests. The progress is lightning quick.

At the symposium last month Mr Green was in bullish mood about the case. He was, he said, on the brink of announcing “significant progress”.

If that progress amounts to more Libor arrests it will be headline-catching but little more. What would really get people’s attention is if the Director charges anyone. If he manages to pull off that trick – after just one year in charge of the SFO - he would be putting down a real marker about which way the agency was going.

Who knows? An arrest under the Bribery Act could just be next.