Complex fraud prosecutions are pricey and the SFO has not got a lot of cash. Where does that leave the SFO we asked David Green QC, the Director recently.  We have previously said on various occasions the SFO doesn’t have enough money…

Mr Green told us three things:

The SFO, we are told, will not refuse a case due to lack of funds.  Period.

In order to deal with the budgetary constraints “block buster” financing arrangements have been agreed with the Treasury for cases of unusually large scale. This funding is separate to the SFO’s budget. It is currently being used, Libor is a good example.

On a day-to-day basis the SFO are expanding their secondment arrangements, encouraging those with particular skills to work within the SFO for an extended period before returning to their firms with enhanced insight and knowledge. This programme is proving to be highly effective and successful, it is to expand. It is cost efficient. It seems to be the future.

Opinion

There is the prospect of getting some money in the SFO door (and potentially significant sums) through recoveries under UK money laundering laws.

David Green QC has made clear that his background, prosecuting at the Bar, running the Revenue and Customs Prosecutions Office is relevant. The SFO under his leadership is not to be confused with a regulator. He has re-focussed the SFO as prosecutor of serious fraud and corruption.

One of the side effects arising from such focused activity is that as investigator and prosecutor the SFO will be well placed to gain funds from the financial penalties levied upon those convicted as a result of their prosecutions.  As prosecutor and investigator the SFO gets a significant share of the cake of money recovered by its cases under UK money laundering laws.

This concept is nothing new in the US the DoJ has benefitted for years.

But, there is a wrinkle.

It takes time to investigate, bring charges, for those cases to be heard in the courts and for monies to recovered (if at the end of the process defendant(s) are found guilty and money is recovered).  So, it will be while before the money the SFO could recover works its way into the SFO coffers.

In the meantime the SFO is reliant upon blockbuster funding from the Treasury for big cases which require big resources (like LIBOR).  Mr. Green argues that this is the answer.

But sadly it isn’t.

The Treasury holds the purse strings and can always deny funding.

The age of austerity

Given the present imperitive to reduce Whitehall expenditure it is hard to see that the SFO budget will be increased.  One way forward might be an agreed ‘agreed credit line’ with the Treasury which the SFO could draw down for use in exceptional cases (but not for day to day funding) without having to seek specific approval for them.

In the meantime the SFO’s budget looks small.