Examination of Witness (Questions 180-199)|
20 MAY 2003
Q180 Chairman: I can see that. What
about another clause where you say the language is so awful that
it cannot achieve anything?
Mr McKittrick: Clause 5(1) and
(2), because they are not using examples and even looking at the
guidance notes does not help
Q181 Chairman: Clause 5(1) and (2)
you may say are complex, but is the language so unclear that it
would not work?
Mr McKittrick: Yes, I think it
is. I think the point is that if somebody has got to read it through
heavily, use the guidance notes, they will probably just say,
"Forget it!" Now, I did take it out because a friend
convinced me to take it out because he said that if I put it in,
you probably would not read it, but my initial feeling of this
was that it would be made over-complex because possibly only lip-service
was being paid to trying to rid the place of corruption, so I
did take it out, but I will say it here, that I think it is over-complex
and that, to my mind, is a very, very bad situation to have.
Q182 Chairman: Well, it may be tough
on the person who cannot be quite sure what the language means,
but apart from the complex language, the awful language, what
else is wrong with this Bill? What other specific criticisms do
Mr McKittrick: That it is inconsistent
in giving examples. You cannot leave things as
Q183 Chairman: Forgive me, but does
that mean, as you say in your paper, that in the one case they
give an example and in another case they do not? Is that what
Mr McKittrick: Yes, indeed.
Q184 Chairman: Any other inconsistencies?
Mr McKittrick: I just find some
of the wording really quite unclear. If we go to clause 9(1),
"A person who obtains an advantage obtains it corruptly if(a)
he knows or believes that the person conferring it confers it
corruptly, and (b) he gives his express or implied consent to
obtaining it (in a case where he does not request it)", so
the explanation goes into it a little bit where it starts talking
about somebody wanting the job to be offered his son, her daughter
or whatever, whatever, whatever, and it begins to go down that
road, but when I am writing contracts in construction, in fact
I am not allowed to have explanatory notes. It has to be clear
within the contract, not within another set of non-contractual
Q185 Lord Waddington: I think you
make one statement with which hopefully we can all agree. You
say that you believe that the Corruption Bill should be clear,
simple and unambiguous.
Mr McKittrick: Correct.
Q186 Lord Waddington: And you say
that applying that test, you reckon that the Bill fails.
Mr McKittrick: I reckon it does
on that aspect, yes, I do.
Q187 Lord Waddington: And you do
actually make another criticism of the Bill in 4.2 that you object
very strongly to the idea of the Bill criminalising certain behaviour,
but the authorities indicating that in certain circumstances,
although the Bill criminalised that behaviour, discretion would
be exercised and no prosecution would be brought.
Mr McKittrick: Indeed.
Q188 Lord Waddington: So are you,
therefore, saying that where the Bill appears at first blush to
criminalise conduct which should not be criminalised, you would
like to see specific exemptions in the Bill spelling out clearly
where it would not be right to prosecute rather than leaving a
discretion? Is that what you are saying? Can I put it another
way. You have already agreed that you could under this Bill find
somebody being prosecuted for the payment of money quite openly
which nobody would consider corrupt. Is the way around it not,
therefore, to spell out in the Bill, having made the general prohibition,
Mr McKittrick: I am not sure I
actually said that. You gave me the example earlier of £10
Q189 Lord Waddington: I will give
you an example and I gave you one already. What if a person knows
that he is entitled to get a service when he gets to a foreign
country, but is led to believe that he is not going to get that
service unless he pays a small sum of moneyshould there
be a threshold?
Mr McKittrick: I think there should
be a threshold.
Q190 Chairman: What would you make
Mr McKittrick: Well, the Chancellor
has made a threshold in terms of tax breaks for entertaining staff
within business, and I think he raised it from £70 to £150.
Q191 Lord Carlisle of Bucklow: Is
that £150 for any function?
Mr McKittrick: No, it is within
any one year. I think, therefore, you may be able to connect a
gift from somebody to the financial figure below which would be
taken as accepted and would not be corrupt. I think that would
probably help if there were some specifics of that nature.
Q192 Mr Oaten: I want to go back
to one thing which I think you said earlier on which is that if
this were to work, there would need to be a period of years for
adjustment in business. Amnesty is one thing, I guess, where you
have everyone just being open about it, but, for example, a five-year
transitional period so that there were no prosecutions in that
period, but people were working towards knowing that in five years'
time there would be prosecutions, would that be something which
you think might help make this work in practice?
Mr McKittrick: I think it would
be probably the only way we could manage to convince people that
there was a way ahead, that people could plan to
Q193 Mr Oaten: Is five years the
kind of figure you would envisage?
Mr McKittrick: I think five years
is probably a fair one because a lot of overseas contracts are
for several years and hence you would be saying to somebody, "Don't
get involved in new jobs from here on in, but we can accept that
those which are running need to run their course".
Q194 Mr Shepherd: I am sorry, but
I am still uncertain how any audit trail would throw up a commissioned
agent who acts on behalf of a British company abroad and takes
15 per cent commission, and it is declared and all the rest of
it. If a British company maintains that that is the commercial
going rate in Saudi Arabia or wherever it is, but in fact 12 per
cent of that is paid to individuals the other side, that, we know,
is corrupt, but from the British company's point of view or the
German company's point of view or the Italian company's point
of view, they are doing what has been a traditional, normal transaction.
They have a commissioned agent who is working on their behalf
to take over their contracts. How do we identify that and in what
language would you express in the Bill the impropriety of this?
Mr McKittrick: The slight difference
with the Middle East is that generally the agents do actually
facilitate, they do some consultancy, they have some consultants
working with them and they are doing something for it. I think
that stage is probably the least of our worries. If you look at
last week's Times, Kellogg Brown & Root, a major US
firm, have admitted paying a bribe of US$2.6 million recently
a to Nigerian company, and that is the same Brown & Root which
the American, Dick Cheney, was Chairman of. Now, I have a problem.
My firm has a big job with them in the UK and I am now asking
them what is meant there, so we have it happening here and that
was picked up by an audit trail. Their auditor picked that up,
it was not somebody else. It has been suggested that it was an
aggrieved Nigerian who suggested to the auditor that he look deeper
into the books, but that was picked up through an audit trail.
Q195 Chairman: The division prevented
you from answering Mr Shepherd's earlier question. Is there anything
you want to add on the question he put just before we broke?
Mr McKittrick: The Middle East
one is exceedingly difficult because it is recognised by Middle
Eastern governments, and it is accepted by most governments around
the world, that there will be an agreed figure of agency fees.
I do not have an answer to that one, I am afraid.
Q196 Chairman: One possibility to
make the Bill more precise might be, as I think you yourself were
indicating, to have some exemptions with a threshold for facilitation
payments, as we have just mentioned. Would it, in your view, be
better to approach the whole topic differently, so instead of
drafting a general crime of corruption, they have a list of specific
crimes? It has been suggested to us that trading in influence
could be a separate crime, that misfeasance in a public office
could be a separate crime, and you could go on adding different
crimes to those like fraud and bribery which exist already. Would
you approach it in that way rather than in this general way?
Mr McKittrick: I really do not
know because I do not know the breadth of what has come up. I
know what happens in my own industry and profession.
Q197 Chairman: I am thinking about
somebody like you who is very concerned about corruption on the
ground. What is the best way of tackling it if this is not the
Mr McKittrick: I think the best
way probably is putting financial limits on what is acceptable
and, beyond that, absolutely nothing is acceptable, so as not
to have grey areas and to have a complete watershed. "Facilitation"
is a horrid word, it is a very difficult one to decide how far
one would go. We have talked of what might be the amount of somebody
accepting an invite to Henley or whatever, but that is quite different
from being able to determine a limit on a facilitation payment.
That is another issue.
Q198 Lord Waddington: I know this
is a terribly difficult question, but what, in your mind, makes
a payment corrupt? Is it deceit? Is it betrayal of trust? Is it
the clandestine nature of the transaction? Is it the failure to
disclose to your principal what you are up to or the failure of
the recipient to tell his principal what he is up to? There must
be something, some moral element in this surely to differentiate
the sort of payment to the baggage handler that I mentioned earlier
and the sort of payment you are obviously worried about, and rightly
worried about, the prevalence of under-hand payments to agents
overseas to win business which otherwise you would not get. I
am just wondering what is the moral element in your mind which
differentiates one from the another? Is it dishonesty?
Mr McKittrick: It is pulling the
wool over your competitors' eyes, which is part of it. It is taking
work away from somebody who is better suited to doing that work
by paying a bribe so that the client is suffering and the country
into which the money is going is suffering because it is not getting
the best value, the appropriate value if someone else is siphoning
Q199 Lord Carlisle of Bucklow: To
get something which you otherwise would not have got?
Mr McKittrick: Well, that is the
phrase I tried to use earlier, but somebody picked me up on it,
but it is. It is denying the end user of getting the best value
for money because if there was bribery of £150,000 in a million,
that means that the end user is failing to achieve the value of
that £150,000. They have probably got quite good value at
£850,000, but they have lost £150,000.