All you need to know about self reporting - Written by on Sunday, May 8, 2011 8:42 - 0 Comments

SFO Director Richard Alderman may quit in Whitehall turf war

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In February we wrote:

“We strongly advocate maintaining the combined prosecution and investigation function in the context of serious fraud.  We are also opposed to the junking of Self Reporting, Civil Settlement and dumping of the moves to US style plea bargaining”

in an article about the “fight” we reported which was going on in Whitehall about the future of the SFO and the investigation and prosecution of fraud and corporate crime.

Not much had been written about the Whitehall turf war which was even then in full swing.  We had been contacted by very senior sources who were concerned about the way things were headed.

Today’s article in the Daily Mail signals that the fight is intensifying. It is now reported that the appointment of a second director to the SFO is being discussed to oversee the breaking up of the SFO with investigation going one way and prosecution going another.

The story reports that Richard Alderman would find this intolerable and that he would rather resign his role.  Or put another way, Richard Alderman appears to have played the “over my dead body” card.

In the Daily Mail it is claimed that Dominic Grieve QC MP, the Attorney General, who was reportedly in favour of a combined investigation and prosecution agency has, so the story says, lost out to Theresa May at the Home Office, who it is reported favours splitting the department and the tasks.

When we asked Dominic Grieve for comment earlier this year we were told that he was no longer responsible for the issue.

A proposed break up of the SFO and splitting of the prosecution and the investigation tasks would at best be ill conceived.

The SFO was created following the Roskill Report which advocated the merger of investigation and prosecution 25 years ago for serious economic crime (a recent article on the SFO website marks the occasion).  The De Grazia SFO review and report (commissioned to look at the SFO and learn from the success of the US approach to prosecution and investigation of fraud) emphasised the importance of combining the roles of prosecution and investigation in serious economic crime – as has been the position in the US for decades.

The De Grazia review makes the point:

“Throughout this Review, I have borne in mind that the English and Welsh independent prosecution agencies are infants compared to their American cousins. The first prosecutor to head up SDNY – a one-man show – was appointed by President George Washington in 1789. Twelve years later in 1801, the New York State Legislature established the Office of District Attorney. In contrast, the CPS and SFO became operational in 1986 and 1988 – making them 22 and 20 years old respectively – and RCPO (founded in 2005) is only three years old. If DANY and SDNY are streets ahead of the SFO, it is because they have had a running start of about 21 decades.”

Nothing has changed in the last few months.

The coalition understands the risks which go with splitting functions. After all the George Osborne, Chancellor of the Exchequer, pointed the finger at the split of banking regulation between the FSA and the Bank of England as a primary cause of the financial crisis in his first Mansion House speech.

Combating serious fraud is important. Failure to do so creates a lack of confidence in business and financial markets. We have seen the result if that happens.

25 years ago the Roskill report criticised a fragmented approach to the investigation of fraud. Today, reportedly, that is what is proposed again.

Richard Alderman is a principled man.  He strongly believes in the SFO and in the work that it is doing.  He has presided over a significant improvement in its fortunes following the SFO’s implementation of recommendations in the De Grazia report (a former US prosecutor who reviewed the SFO three years ago) which made a slew of recommendations which the SFO has largely implemented on Richard Alderman’s watch. comment

If the roles are to be split there will be claims that the coalition government does not take the investigation and prosecution of economic crime seriously.

We do not understand why it is suggested to split prosecution and investigation flying in the face of the Roskill Report, the De Grazia Report and over 200 years of US experience which points to the contrary.

Image © Crown Copyright 2011

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