By Tom Stocker, Partner, Corporate Crime & Investigations, Pinsent Masons LLP

Yesterday, two former employees of Edinburgh Council and two directors of a construction company received significant jail sentences for bribery contrary to The Public Bodies Corrupt Practices Act 1889 (the legislation that pre-dates the Bribery Act 2010).

The council employees helped award contracts to Edinburgh Action Building Contracts Ltd (ABC Ltd) and in return they received extensive hospitality including corporate seats at Hibs and Hearts football grounds, meals out and visits to lap dancing bars as well as cash.  Invoices were then inflated to cover the cost of the hospitality. The charges related to the maintenance of council buildings from 2006 to 2010.

Council worker Charles Owenson was sentenced to 4 years and 4 months for accepting bribes. The sentencing Sheriff considered that, despite Mr Owenson’s guilty plea, the plea-in-mitigation put forward on his behalf  demonstrated that Mr Owenson had not accepted that what he did was wrong and he shown no remorse for his actions.

Council worker James Costello was sentenced to 3 years and 9 months. It was stressed that he had been a public servant who misused his office for personal gain.

Construction company director Kevin Balmer was sentenced to 2 years and 10 months plus he was disqualified from being a director for 5 years.

Construction company director Brendan Cantwell was sentenced to 2 years and 3 months plus he was also disqualified from being a director for 5 years.

The public officials received longer sentences because they were in a position of public trust.  The construction company directors were described by the Sheriff as being motivated by greed and arrogance.  These are tough  sentences. The Sheriff stated that deterrence of others was a key aim of the sentences passed.

The bribery scheme was uncovered in 2011 after a whistleblower raised concerns.

It is important to remember that corporate hospitality is not illegal in itself. But, this case shows why companies need to have controls around hospitality. It can easily get out of hand. Companies dealing with the public sector need to be particularly careful.