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The allegations in this case have been reviewed at length by our courts, which say that the three individuals should stand trial in the United States. The men want their trial to take place in the UK, if trial there is to be. In dismissing their case, the High Court found that their argument was wholly unsustainable
and that the extradition was lawful and in accordance with their human rights. The Serious Fraud Office has declined to prosecute
The Serious Fraud Office has declined to prosecute the case in the United Kingdom for a range of reasons, including the fact that no complaint has been made in this country and because the main evidence, in the form of the alleged conspiracy and the witnesses, is in the United States, where the case is well advanced. That is where the alleged conspiracy took place. The three individuals are British citizens resident in the UK. They were employees of a UK bank responsible for a number of bank clients, including a subsidiary of Enron in the United States. Enrons headquarters are in Houston, Texas. [ Interruption. ] They were in Houston, Texas. Its bank had offices there, as well as in London. Some of the key witnesses, including Mr. Michael Kopper, the managing director at Enron, and Mr. Andrew Fastow, Enrons chief financial director, are in the United States.
A crucial meeting is alleged to have taken place in Houston on 22 February, attended by the defendants, which US lawyers say played a central part in the case. The US prosecution alleges that it was a secret meeting with Enrons chief financial officer, Mr. Andrew Fastow. The allegation is that the three individuals had access to information that enabled them to let their bank undertake certain financial transactions.
I will not go into the list of transactions, which are complex, but the prosecution alleges that the defendants conspired with US co-conspirators to deceive Enron into parting with $20 million, and that both Enron and NatWest were defrauded. It is alleged that the defendants got $7.3 million, which derived from Enron and represented the sale of the banks interest in a company called Swap Sub.
On 14 January 2004, Mr. Fastow pleaded guilty on two counts, including conspiracy to wire fraud. There was also a plea agreement entered into with Mr. Kopper. In this, it became clear that allegations had been made, including this claim by Mr. Fastow:
In...February 2000, I and others, including three bankers employed by NatWest, participated in a scheme to extract...increased value by defrauding Enron and NatWest.
Enron paid $30 million for the Swap Sub buyout. That price was based on my misleading representation to Enron that the limited partners of Swap Sub had agreed to sell their interests in Swap Sub for $20 million and $10 million, respectively. In fact, NatWest had agreed to sell its interest for only $1 million, not $20 million. I knew that the NatWest bankers induced NatWest to sell its interests in Swap Sub for $1 million at a time they knew the interest was worth significantly more.
In summary, the SFO took the view that the case involved an allegation that UK-based employees conspired with US Enron executives. The main evidence was in the USAthat is, the co-conspirators. As the conspiracy took place there, no complaint has been received in the United Kingdom. The fraud could not have occurred without the complicity of the Enron executives, some of whom were key witnesses. The case was well advanced in the USA, and it was thought that in the overall interests of justice it would be best dealt with by one court in the USA.
The reality is that were the SFO to commence an investigation, then, by the time they were ready to launch a prosecution, there would be defence submissions inviting the court to stay the prosecution as an abuse because of what by then would be considerable delay. Additionally and crucially, Kopper and Fastow are important witnesses for the prosecution. They are readily available to give evidence in the States and not in the UK.
Mr. Boris Johnson: Nothing that the Solicitor-General has said contradicts the central fact that these are UK citizens who, if they committed any crime, committed it against a UK company in the UK. Everything that he has said is completely irrelevant next to the central point that under American jurisdiction they would be able to challenge in an American court the stream of allegations that he has made against them before they were extradited to this country. Under the arrangements that his Government have entered into, it is not possible for them to have the allegations that he has made in this House tested before a court in this country before they are sent for trial in America. That is the point of this debate.
The Solicitor-General: The point of this debate is to deal with the issue of whether there is an imbalance between the various requirements of the treaty and the Extradition Act 2003. When the hon. Member for Sheffield, Hallam put his case, he seemed to be arguing about the Act, not the treaty. The Act enables people against whom there is a reasonable suspicion of having committed serious offences imprisonable for more than one year to be extradited to another country. The Liberal Democrats seem to want to suspend that provision in relation to the United States in particular.
It will be interesting to discover what the Conservative position is. Yesterday, we had the bizarre situation whereby Baroness Thatcher went into the Lobby in another place to vote to deny to the United States the sort of provisions that are currently available to Russia, Azerbaijan, Albania and a whole range of other countries with which we have a similar provisions.
Perhaps the Solicitor-General could take this opportunity to clarify a matter around which there
is a degree of muddle. We talk about part 2 territories, which include the United States and Russia. Will the Solicitor-General identify which part 2 territories have been given special privileges under section 84(7) of the 2003 Act, which enables extradition to take place without the submission of prima facie evidence?
The Solicitor-General: The hon. Gentleman knows perfectly well that we are applying a similar test to the United States as we apply to a range of other countries, including South Africa, Azerbaijan, Russia, Australia and New Zealand. Is he seriously saying, on behalf of the Conservative Opposition, that the US legal system has inadequate safeguards for defendants and cannot be trusted to deal properly with cases such as these, compared with a whole range of other countries from Russia to Albania? If the Conservative Opposition are getting themselves into that position, they are digging a very deep hole indeed.
I remember that when the right hon. and learned Member for Folkestone and Hythe was Leader of the Opposition, he managed to become involved in something of a fracas with the United States. The hon. Member for Sheffield, Hallam asked whether we should be concerned that our economy could be affected by damaging our relationship with the United States. It is important that we have a relationship with the United States that pays respect to a legal system that may have diverged from ours to some extent 200 years ago, but which still has substantial safeguards for defendants in its courts. We should respect that. Some might decide not to do so, and if the Conservatives decide to put themselves in the position of saying that the US courts cannot be trusted, they are going to get themselves into a very difficult position.
Mr. Howard: The answer to the entirely spurious point that the Solicitor-General is making is that the arrangements that we have with all the other countries to which he has referred are entirely reciprocal. The objection that is being made from this side of the House to our arrangements with the United States is, as Baroness Scotland acknowledged in another place in December 2003, that they are not reciprocal. That is the key question; that is the distinction. Why does the Solicitor-General keep referring to those other countries in this thoroughly misleading way?
The United States has always required extradition on the basis of probable cause. Indeed, under its Bill of Rights, all criminal cases are determined in that way. The probable cause requirement is an evidential test that is enshrined in its Bill of Rights. The United States is not going to change that requirement, and we are not going to ask it to.
Parliament has decidedcorrectly, in my viewthat a probable cause standard of evidence, involving
information which would justify the issue of a warrant for the arrest of a person,
should be required of countries such as Canada, Australia, New Zealand, the USA and others. Parliament considered the extradition treaty and ensured that it had robust safeguards against unfairness, to protect individuals. Those safeguards were dealt with in the courts. There was a lengthy process that dealt with the three individuals, who were able to go before the court and argue their case.
Individuals may only be extradited for conduct that is also criminal in the UK. This is a dual criminality test which has to be established before a district judge in the UK and can be challenged on appeal.
Keith Vaz: I am most grateful to my hon. and learned Friend. I am following his arguments closely. What concerns the public and the families of the accusedwhether we call them the Enron three or the NatWest threeis the issue of bail. They will be travelling all the way to the United States and staying there for months, or possibly years. We heard from the Prime Minister at Prime Ministers questions that the Attorney-General had spoken to the United States Justice Department. What new information does the Solicitor-General have for the House that will reassure the public and the families of those concerned that the three might be granted bail?
The Solicitor-General: I can tell my hon. Friend that discussions have taken place between our Attorney-General and the United States Attorney-General, Alberto Gonzales, who has indicated that the US prosecution will not oppose bail. It will of course be a matter for the court to set the appropriate conditions, and it will be a matter for the defendants to agree to those conditions. I hope that that will provide some reassurance.
The Solicitor-General: No, I have taken a lot of interventions. I have great respect for the hon. Gentleman, who is a close neighbour of mine, but I have now been speaking for 25 minutes without managing to reach some of the core arguments that I want to put before the House.
The Solicitor-General: No, I will not give way. I respect the hon. Gentleman and I apologise to him, but I must make some progress. I do not propose to stay on my feet for much longer, as there are many others who wish to speak in the debate.
The first myth is that the Extradition Act 2003 is intended solely to deal with terrorists. We heard that from Conservative Back Benchers. In fact, the Act covers all manner of crimes serious enough to attract a maximum sentence of more than 12 months imprisonment. That was clear throughout the passage of the legislation. It was not drafted in response to 9/11, as has also been suggested. Its origins lay in the early development of the European arrest warrant in 1999, and it was intended to update an extradition system that dated back to Gladstonian times. The Home Office published a review in March 2001I emphasise the month, because it was well before Septemberto set out the basics of what was to become the Act. Although much was made of fraud cases, the majority of cases brought under the Act are likely to include murder, rape, drugs, money laundering, child pornography and robbery. It will also help to extradite people accused of terrorism, but the basis of the Act predates 9/11 and it is a myth that that is not the case.
A further myth is that the US needs to provide us with more information when making a request. Indeed, I heard the hon. Member for Sheffield, Hallam on Radio 4 this morning saying that the US needed only to prove the identity and whereabouts of a defendant, and not much else. That is not the case. In order to meet our information requirement, the United States needs to supply information that will provide a reasonable basis to believe that the person sought has committed the offence for which extradition is being requested. Based on the evidence that the courts have heard, it has achieved that in the case of these three individuals.
Mr. Grieve: I appreciate that the Solicitor-General is dealing particularly with the case of Mr. Bermingham, Mr. Darby and Mr. Mulgrew, but will he confirm that other extradition cases are pending? Because those cases post-date the implementation of the 2003 Act, the kind of material that establishes a prima facie case is simply not being delivered. In the Morgan Crucible case, for example, the documents are very scanty indeed, yet they are still sufficient to give a basis for extradition.
Exact reciprocity between different legal systems is probably impossible. The US and UK legal systems diverged 200 years ago, and it is our view that probable cause and the UKs information requirement are the nearest rough and ready parity that we are reasonably likely to be able to achieve in any
reasonable circumstances. It is clear that the arrangements that existed before the Extradition Act 2003 were grossly unfair to the United States, because they required a much higher level of proof to extradite someone from the UK to the United States than the other way round. It often took 30 months to extradite someone. In one case, it took 10 years. The US system of probable cause is a lower test, and those we seek to extradite are normally removed to this country within about five months. We do not want to go back to a situationas Opposition Members seem to want toin which it takes 10 years to extradite someone.
We have modernised our extradition system to recognise the nature of global crime, and we do not want to send it back to the Victorian era. Exact reciprocity between two legal systems is almost impossible to achieve. We have been asked to look at the particular question of reciprocity many times since it was first raised during the passage of the 2003 Act, when we thought that probable cause might be a slightly higher test than others. We have gone into that in great detail. We have discussed the matter with the US, and we are entirely satisfied that it interprets the phrase that I have just usedsuch information as would provide a reasonable basis to believe that a person sought to commit the offence for which that extradition is requestedin a way that is broadly equivalent to our approach. That is our view, and I hope that Opposition Members will accept that there is such a viewthat although the approaches are not entirely equivalent, they are broadly so, in a rough and ready manner. It may well be the case that probable cause is a slightly higher test than information, but we must remember that there is a two-door scenario going both ways. The test has to be proved to a probable-cause standard going both ways; that test is in the US courts. What we want is the treaty ratified, in order to ensure that other procedural benefits are put in place to make those whole procedures much faster and to ensure that we are able to extradite those persons who ought properly to be extradited.
The three individuals in this case face very serious allegations. Their case has been reviewed at length in the UK courts. It is a myth that this matter is all about events in the UK alone; that is pure myth. They are innocent until proved guilty, as are all accused. But we must remember that Enron was the biggest fraud in US history, and the US authorities are very concerned about any issues relating to it. The balance in the test for extradition that exists between the two countries is not identical but it is very similar. We believe that the treaty that we have entered into is the right one, and we also believe that about the Extradition Act 2003.
That Act is the real focus, not the treaty. This debate is all about that Act; it is about whether an Act that this House passedthat this House voted foris the right Act. Those Opposition Members who will shortly speak need to decide what their position is on that; they were prepared to acknowledge the importance of dealing with these issues on a previous occasion, but are they still prepared to do so, or are they going to put themselves on course for another confrontation with the United States?
What we need is fairness. We have a broad level of fairness in the Extradition Act. We want to ensure that we keep that level of fairness, and that the Acts of
Parliament passed by this HouseActs which were the right ones when they were passed, and which are the right ones noware the Acts on which our courts are able fairly to decide cases.
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