News & what's on - Written by on Thursday, November 29, 2012 0:01 - 0 Comments

It’s all about the money: SFO Director on why the SFO will NEVER turn down investigation because SFO doesn’t have enough money

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“Of course, the SFO can never refuse to conduct an investigation on the ground that we cannot afford it, nor will I do that.”

said David Green CB QC and SFO Director speaking to the House of Commons Justice Committee.

The statement jars with much which has been written about SFO funding by commentators who have claimed there isn’t enough.  Indeed, Barry wrote a column which had it as its central thesis in a London paper back in the summer.

Misleading numbers

Answering questions about the cut in SFO budget from its high point in 2008/09 when it reportedly stood at £53 million to its present level of £31 million and next years budget of £30 million Mr. Green clarified the position:

“I would put a slight health warning on those stark figures, just in this respect. First, the larger sum of £53.3 million in 2008-09 included £9.2 million in blockbuster funding. Thus, it was not a permanent addition to the balance sheet.”

Later he added:

“…we have to an extent benefited from receipts under ARIS—the Asset Recovery Incentivisation Scheme—whereby prosecutors, investigators and other actors get a cut, if you like, of amounts that have been confiscated. I would like to dispense with ARIS funding as a part of our budget. I think that £2.3 million in ARIS receipts is assumed to be part of our bottom line, and I would like to do away with that. I hope to consolidate our budget, for the following reasons. First, as has been pointed out, the SFO does a small number of cases. Therefore, there is not the turnover of confiscation. Secondly, a lot of the money that we recover goes in compensation to victims, rather than confiscation, of which we get a share, with the balance going elsewhere. Thirdly, I know that elements among the judiciary, for very good reason, are concerned about the possibility of conflicts of interest being perceived when a prosecutor receives money from confiscated assets.”

Just when you thought it was safe…the Return of Blockbuster funding

It’s fair to say that David Green disagrees with the suggestion the SFO does not have enough money.  He’s told us in person.

In the nicest possible way.

On the other hand of course, £40 million down to £31 million is still…a lot – and reasonable people can disagree.

The Director’s answer to that is that the £31 million budget is far from the whole story and to be fair he has a point.

Speaking to the Justice Committee Mr. Green elaborated:

“…When I took on the job, and as of today, I am happy and content that the existing resource is sufficient for what I might call our day-to-day work. That does not mean to belittle any of our cases, all of which are extremely challenging. The existing resource is sufficient, as well, to maintain, as it were, a core staff of around 300. The problem comes when one or more exceptional cases come along. LIBOR is a very good example…

…We therefore need what I suppose would fashionably be called a surge capacity. LIBOR is a good example of that. I am very grateful that the Treasury has underwritten us up to £3.5 million, should we fail to absorb those costs, in order to cover LIBOR. That is in a sense, I hope, the new model—obviously, to be developed. If you like, it is a return to what used to be called blockbuster funding** or something like it…”

Late last month Dominic Grieve QC MP Attorney General also gave evidence to the Justice Committee and was quizzed about the funding of the SFO and in particular in relation to LIBOR – the example used by the Director. The Attorney General told the Committee:

“The Government have indicated that if more resources are required they will be provided. If the director of the SFO feels that that time has come, or he needs it, he will come and see me about it.”

Asked by a member of the Committee: “If he does have to come and see you about it, to quote your words, what will your response be?”

Mr Grieve said:

“My response would undoubtedly be to go and see the Treasury to discuss the matter with them. The Treasury are aware of the importance of this. That is my duty; that is one of my roles as superintending Minister for the SFO and CPS. Of course I have to be alive to the realities of spending, but this is a very important issue. London as a financial centre is of immense importance to the United Kingdom. In order for it to continue to be so we have to show that the regulators and the criminal justice system have teeth.” [our emphasis]

Cross examined by the Committee David Green on Mr. Grieve’s comments about SFO funding he concurred:

“Exactly right. I have given LIBOR as an example, where we are underwritten to the tune of £3.5 million if we cannot pay it ourselves. The Treasury has done that…”

The public interest (with a lower case p and i)

“…If I am short of resources, I will say so. The bottom line for me is that, as I said earlier, the SFO cannot refuse to take on an investigation because we cannot afford it. That would be completely unacceptable. I believe that it would be unacceptable to Ministers; it would certainly be unacceptable to me and, I am sure, to the public…” [our emphasis]

Our opinion

The Director is right.  It would.

NB

The quotes in this piece come from the uncorrected transcript of a hearing before the Justice Committee.  At the time of writing the participants have not had the opportunity to correct the record. The transcript is not yet an approved formal record of those proceedings.

**footnote:

For those unfamiliar with so-called ‘blockbuster funding’ the Director gave a short explanation to the Committee which we repeat here:

“Blockbuster funding was in the past when huge cases came along such as Oil for Food—you will remember those cases—or Operation Holbein, to do with procurement of pharmaceuticals. When such a case came along, previous directors recognised that the SFO was without the resources to deal with a case so demanding, and investigations so demanding, so agreement was reached with the Treasury for ring-fenced funding to cover that case in any particular year…”

 

 

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