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U.K. Roundup

Is the U.K. Serious Fraud Office’s (“SFO”) active engagement policy a bit too active (and too private as well), is anyone left at the SFO to activley engage, the recent Mabey & Johnson individual sentences, and the U.K. anti-corruption champion calls out Bribery Act plc … its all here in a special U.K. Roundup.

Corporate Crime Reporter Questions SFO’s Active Engagement Policy

The SFO has a clear policy of active engagement when it comes to the Bribery Act and I have previously stated (here) that this policy ought to be modeled by other enforcement agencies.”

Corporate Crime Reporter (“CCR”), in a recent piece (here) titled “Behind Closed Doors, UK Anti-Corruption Chief Alderman Advises Corporations, Law Firms” questions whether this engagement approach has become too active and questions whether the engagement needs to take place behind closed doors.

Writes CCR – “You would never see a US federal prosecutor visit a private law firm to give private advice – behind closed doors – to the firm’s corporate defense lawyers and their clients. But the chief law anti-corruption law enforcement official of the UK says – no problem. Over the past couple of years, Alderman has been visiting American law firms regularly. Briefing the lawyers. Answering questions from corporate clients. All behind closed doors. All in secret. To the very same corporations that Alderman will prosecute if they engage in corruption overseas.”

Alderman is quoted as saying he is “an equal opportunity debriefer” and that he has met with, among others, U.K. anti-corruption public interest groups – like Corner House.

As I highlighted in this prior post, in September 2010, I was pleased to accept the invitation of the SFO to visit its offices and meet top-level personnel to discuss Bribery Act and other anti-corruption issues and topics.

Another SFO Departure

With all the recent SFO departures one might wonder whether there is anyone left at Elm House to actively engage.

Recent SFO departures have included Robert Amaee (former SFO Head of Anti-Corruption) who jointed Covington & Burling’s London office and Charlie Monteith (former SFO Head of Assurance) who jointed White & Case’s London office. (See here for the prior post).

Add Kathleen Harris (former head of the Fraud Business Group at the SFO) to the list. Arnold & Porter recently announced (here) that Harris will join the firm’s London office as a partner in June. Arnold & Porter Chair Thomas Milch said Harris “is especially well-positioned to help navigate the UK’s new Bribery Act and address the difficult investigatory, compliance, and defense challenges that companies face in a heightened global enforcement environment.”

As has been reported, Alderman is also looking to retire from the SFO in the next year.

Mabey & Johnson Individual Sentences

This prior post discussed the February 10th guilty verdicts of Charles Forsyth and David Mabey (two former directors of Mabey & Johnson Ltd.) for inflating the contract price for the supply of steel bridges in order to provide kickbacks to the Iraqi government of Saddam Hussein. Richard Gledhill, a Sales Manager for contracts in Iraq, previously pleaded guilty.

Recently, the SFO announced (here) the following sentences:

Forsyth – 21 months imprisonment, disqualified from acting as a company director for five years and ordered to pay prosecution costs of £75,000;

Mabey – eight months imprisonment, disqualified from acting as a company director for two years and ordered to pay prosecution costs of £125,000;

Gledhill – eight months imprisonment, suspended for two years.

As noted in the release:

“In passing sentence HHJ Rivlin QC said ‘The bare truth of this case is that Mr Forsyth bears the most culpability’. In relation to David Mabey, HHJ Rivlin QC said ‘When a director of a major company plays even a small part, he can expect to receive a custodial sentence. SFO Director Richard Alderman said ‘This shows that the SFO is determined to go after senior corporate executives who break the law. I am pleased with the result. It sends out a very strong message from the courts on this type of offending.'”

For additional analysis of the Mabey & Johnson individual sentences see this recent alert from Amaee and John Rupp of Covington & Burling. The authors note as follows. “It is clear that once the UK enacts its new Bribery Act, UK prosecutors will take a close look at the provisions contained in section 14 of the Bribery Act to deal with any Senior Officers of companies who can be said to have consented to or connived in the commission of bribery offences and that the courts will not shy away from imposing appropriate custodial sentences on those found guilty.”

As I noted in the prior post, in just its single Mabey & Johnson prosecution, the SFO would appear to have prosecuted (and now sentenced) more individuals than the U.S. has in its approximately 15 Iraqi Oil for Food corporate enforcement actions combined.

Kenneth Clarke’s Comments

It is not every day that a high-ranking government official lends credence to fear mongering (see here) and mass hysteria (see here) comments regarding a soon-to-be implemented law. But that is what Kenneth Clark, a U.K. Justice Secretary and the U.K’s international anti-corruption champion (see here), did in a recent appearance in the House of Commons. During a Q&A session (see here for the video – approximately the 1 minute 45 second mark) Clark stated as follows: “I hope to put out very clear guidance to save [businesses] from the fears that are sometimes aroused by the compliance industry, the consultants and lawyers who will, of course, try to persuade companies that millions of pounds must be spent on new systems that, in my opinion, no honest firm will require to comply with the Act.”


A good weekend to all.

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