Joint Committee on the Draft Corruption Bill Memoranda


Memorandum from the Serious Fraud Office (DCB 13)

  The Serious Fraud Office may investigate and prosecute offences involving serious or complex fraud. Our criterion for accepting cases and the factors we take into account are attached at Annex 1.

  Often such fraud will involve the payment of bribes.

  The SFO both investigates and prosecutes domestic cases of corruption which amount to such fraud and affords mutual legal assistance to other countries. Our experience is that in England and Wales the corruption is taken seriously. We have had a comprehensive law on corruption for approximately one hundred years. Second, we have a law that criminalises both public and private sector corruption. Third, we are prepared to extradite our own nationals.

  Since 1988 the SFO has investigated and prosecuted seven cases where corruption was a charge and we have a further three cases currently under investigation. A recent example was the case of R v Stephen Hinchcliffe, who was sentenced to five years imprisonment for bribing a bank official. Our Mutual Legal Assistance Unit has conducted many high profile investigations for foreign authorities, several of which have involved corrupting high level politicians. An example of this is the extensive work that we carried out for the Federal Republic of Nigeria, in its efforts to investigate the extent to which the late General Sani Abacha abused his position as Head of State.

  Those statistics are not a reliable indication of the extent to which corruption is being investigated and deterred through the work of the SFO. Corruption is very often just one aspect of the dishonest conduct of an enterprise. Thus it is very often the case that charges such as fraudulent trading or conspiracy to defraud will be selected in preference to corruption , because they will represent more fully the full extent of the damage that has been done to a business or to the public at large. Similar considerations apply to overseas investigations. For example, although the case concerning the late Genera Abacha involved corruption and the abuse of public office it was primarily an investigation into allegations of theft and money laundering.

  The SFO has been closely involved in the extensive consultation carried out by the Law Commission and the Home Office.

  We particularly welcome the fact that the Bill proposes one broadly based and general offence of corruption. In our experience, this approach is preferable to attempting to define and categorise numerous types of corrupt conduct. It is the approach we took in advocating a broadly based single offence of fraud. We believe that such broadly based offences reduce the risk that technical loopholes can be found and exploited. They also allow the law to keep pace with fast changing business practices.

  Nevertheless the criminal law should be clearly expressed and it must also comply with the emphasis in the Human Rights Convention on "fair warning." We would assert that the proper use of prosecutorial discretion is one important way of ensuring that the line is correctly drawn between morally questionable behaviour and criminal conduct. However, we consider that clause 5, which requires that the conduct of the person who is bribed be "primarily" influenced by the bribe serves the purpose of ensuring that only unequivocally corrupt acts are brought within the ambit of the criminal law.

  We also support the rationale of the definition of corruption being based on the subornation of the loyalty owed by a principal to his agent and we consider that clause 7(1)(a) is the appropriate response to the position of public servants. In our view it correctly affirms the principle that a public servant is the agent of and is answerable to the public, so that the defence of the consent of the principle should not apply.

  We acknowledged that the case for the statutory presumption that currently applies in public sector cases carried little force. The distinction between the public and private sector has become increasingly blurred and the increase in privatisation and public/ private joint ventures has greatly reduced the relevance of the distinction. Furthermore we do not believe that there is a sufficiently strong argument that corruption is uniquely or significantly harder to investigate and prosecute than other forms of serious crime and fraud.

  We welcome the Bill and acknowledge that , by modernising and streamlining the existing law of corruption into one Act of Parliament there will be a considerable benefit to prosecutors and the police and a better understanding by the public and juries of the offence.

Annex 1

SFO CRITERIA FOR ACCEPTANCE

  The key criterion should be that the suspected fraud was such that the direction of the investigation should be in the hands of those who would be responsible for the prosecution.

  The factors that would need to be taken into account include:-

    1.  Cases in the order of at least £1 million (this is simply an objective and recognisable signpost of seriousness and likely public concern rather than the main indicator of suitability).

    2.  Cases likely to give rise to national publicity and widespread public concern. These include those involving Government Departments, public bodies, the Governments of other countries and commercial cases of public interest.

    3.  Cases requiring a highly specialist knowledge of, for example, Stock Exchange practices or Regulated Markets.

    4.  Cases in which there is a significant international dimension.

    5.  Cases where legal, accountancy and investigative skills need to be brought together.

    6.  Cases which appear to be complex and in which the use of Section 2 powers might be appropriate.

Memorandum from the Crown Prosecution Service (DCB 15)

  As in many countries few "private to private" corruption cases are prosecuted in the UK. The bulk of public to private corruption cases which come before the courts currently are prosecuted under other offences (such as fraud). The present framework of offences in the area of corruption is workable. However, from time to time, there can be confusion over the ambit of an offence. A rationalisation of the law in this area could be beneficial.

1.  WHETHER PROPOSED DEFINITIONS ARE WORKABLE AND SUFFICIENT:

1.1  A.  Whether they will be readily understood by police, prosecutors, jurors, the public etc.

  We anticipate that the following definitions could be problematic and give rise to some uncertainty as to their ambit:

    —  Clause 1 (corruptly conferring an advantage) and clause 2 (corruptly obtaining an advantage) are on the face of it very wide offences which are only qualified in limited circumstances by later exception clauses (clauses 6 and 7): how wide are they intended; problems of proof in non-pecuniary advantage.

    —  "Clause 3": a person commits an offence if he performs his functions as an agent corruptly even if does not receive any reward. Therefore even if he performs his function in expectation of or hope of a reward he will come under this clause.

    —  "Functions": What exactly is a function?

    —  "Clause 11" (meaning of agent and principal): this could be either public or private.

    —  "Clause 7" (principal's consent to no corruption): a private principal can consent to something which would otherwise be corrupt but where functions are of a public nature the principals consent cannot exonerate. This could give rise to problems where the public/private functions are blurred.

1.2  B.  Whether specific offences should have been proposed for specific situations

  No, we favour a more elastic approach with a general framework rather than rigid charges to reduce the risk of cases falling through the net.

1.3  C.  The effect of not making the new offences retrospective

  We do not envisage any significant problems with this.

1.4  D.  The effect of removing the presumption of corruption

  The CPS supports this change. The distinction between private and public has become increasingly unclear. The increase in privatisation and the public/private partnerships has removed any relevant distinction. There will be no practical effect as we have rarely prosecuted a case in recent years in which we relied on the presumption.

1.5  E.  Whether the agent/principal analogy is still relevant, in particular in the case of public acts

  We support the reasoning behind the definition of corruption in the Bill based on the agent/principal analogy.

1.6  F.  The treatment of facilitation payments

  It is hard to envisage circumstances where the CPS would prosecute a case involving a small payment made as a result of extortion

1.7  G.  Should there be a public interest defence?

  The CPS is not in favour of a public interest defence as it could open the door to all sorts of spurious defences.

  For instance a public interest defence might allow a defendant to say "I bribed X because I wanted to prevent the criminal Y from getting the contract etc. And it could be argued that the defendant should not have to rely on the Crown to decide whether he has a defence or not .............."

2.  OMISSION FROM THE DRAFT BILL OF MISUSE OF PUBLIC OFFICE AND TRADING IN INFLUENCE

  2.1  The common law offence of misconduct in public office is now being used more frequently. It is particularly useful in dealing with the behaviour of police officers when their conduct has been broadly corrupt. There is certainly some confusion as to the elements of the offence (indeed a potential reference is being considered by the Attorney). However further consideration and consultation is recommended on the matter.

  2.2  "Trading in Influence": we considered this potential offence and comparable European legislation eg a similar offence in France. However although the French provision is called "Trading in Influence" it is actually corruption in the sense that we understand it.

  The scope of what we understood "Trading in Influence" to be would have been very wide ranging without the agent/principal analogy. It would have been problematic when applied to the activities of some groups such as lobbyists.

3.  WAIVER OF PARLIAMENTARY PRIVILEGE IN CASES INVOLVING PEERS AND MPS

3.1  A.  Attorney's consent to prosecution

  The CPS view is that the Attorney General's consent is not necessary. The CPS was a member of the interdepartmental working group set up by the Home Office to consider the Law Commission's proposals on the reform of the law of corruption. The working group agreed with the Law Commission recommendations to remove the consent provisions in the 1889 and 1906 Acts. It was pointed out that no consent was needed for the common law offence of bribery. When deciding to give consent to the commencement of criminal proceedings the Law Officers apply the criteria set out in the Code for Crown Prosecutors and take into account the advice of the Crown Prosecution Service.

  The consent of the DPP could act as a necessary check against private prosecutions which are not in the public interest. If reduced to the DPP's consent alone that would mean an individual prosecutor could take the decision under the Director's delegated authority.

  PLEASE NOTE THAT the views in relation to the Attorney General's consent are solely those of the Director of Public prosecutions and the CPS. The Attorney General has stated that he wishes to reserve his judgement on this point; and that he will make his views known when he appears before the Committee in June.

May 2003




 
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