SFO revisited

Investigation Halted

A fortnight ago the Monday article dealt with the SFO investigation of BAE Systems regarding a deal with Saudi Arabia from the late 1980’s. Thankfully Lord Goldsmith has taken the right decision to halt this investigation (as suggested in the earlier article). If the evidence already existed to give confidence in a successful prosecution then charges presumably would have already been brought. Moreover it would then have been impossible for Lord Goldsmith to suggest that he doubted there would be a successful prosecution. (He also did not think it clear that any charges would be brought in any event). The view of the SFO director Robert Wardle was, since there is never any guarantee charges will be brought until an investigation is completed, it could not at this stage be clear that no charges would be brought or that they would not succeed. However it must follow from that that the SFO was not suggesting that at the present time evidence existed to secure a conviction. Notwithstanding an investigation which has presently lasted two years.

Not retrospective

There would in any event have been likely to be an issue about the scope and application of the Act. The SFO were investigating activities which occurred before the Act was passed, let alone brought into force. Although the explanatory note to the Act would seem to have invited investigation of past dealings, that itself had no statutory force. Normally criminal statutes are not retrospective unless they clearly so state, and this one does not state in terms that it is retrospective. Imagine the SFO public relations disaster if a prosecution had been eventually mounted and failed on such grounds against the background of the economic and diplomatic problems occasioned by such a prosecution.

The OECD

The Organisation for Economic Co-operation and Development (OECD) has apparently expressed concern. Article 5 of the 1999 OECD Convention on Bribery of Public Officials in International Business Transactions says in relation to investigating or prosecuting bribing foreign public officials that such investigations or prosecutions "shall not be influenced by considerations of national economic interest, the potential effect upon relations with another state or the identity of the natural or legal persons involved.". The United Kingdom is a signatory to that treaty. However again this treaty was signed after the events being investigated. There is all the difference in the world between scrutinising events post-treaty, and those which had already occurred. (How far back in history do you go?). Also Article 5 cannot be an invitation to dispense with all common sense. This is not an investigation that was strangled at birth. Nor frustrating a prosecution with existing evidence giving grounds to suppose there was a reasonable prospect for success. After all, there had already been a 1989 National Audit Office probe into allegations of bribery regarding some of these dealings with Saudi Arabia. The report in 1992, had (according to the then Prime Minister John Major) found "no evidence of improper payments". An obligation not to stifle proper investigations or prosecutions for commercial or diplomatic reasons cannot and should not prevent the government stopping investigations which, after two years, have failed to produce evidence likely to secure a conviction, can offer no strong likelihood of doing so, and the continuing of which threatened substantial commercial and economic damage. Particularly when the new deals which are threatened are ones which have been entered into at a time when it is clear that, should there be any suggestion of bribery that will fall to be investigated under the new Act.

The 'National Interest'

Ironically the one thing which is giving any ammunition to those who seek to impugn this decision is the fact that the Prime Minister has gone out of his way to make it clear that he had to assess the national and strategic interest and report to the attorney general on that. No doubt the Prime Minister has spoken forthrightly about this in an attempt to support the attorney general. Such support risks having the opposite effect. It is common sense that the attorney general has to consider what the Prime Minister says about such matters, but he then has to undertake the balancing exercise. The more the Prime Minister seems to be "in the frame" for the decision, the more it will obscure the attorney general's decision on the prospects for a prosecution and himself balancing that against the national interest he has been advised upon. Sometimes the more a Prime Minister supports an attorney general, the more he risks undermining him. From now on the Prime Minister would support him best by saying that the person to ask about discontinuing the investigation would be the attorney general, since it was his decision. Otherwise the attorney's view that there was unlikely to be a successful prosecution will be lost sight of in all the talk about protecting the national interest.

The SFO Survive

Although it may not look like it at the moment, the SFO and the investigation of fraud are beneficiaries of this decision. An investigation that led to no charges, or a prosecution to an unsuccessful conviction, against the background of so much money and so many jobs having been lost through the investigation, would have been a mortal blow to both.

Michael J. Booth QC