Wednesday, October 24, 2012

Deferred Prosecutions - more '...get out of jail free cards...' for the City mafias - When are this Government going to start taking city financial crime seriously?

I am so angry, I am finding it hard to restrain my otherwise genteel prose and not adopt some basic Anglo Saxon language instead.

I opened the newspaper this morning to be confronted with the strap-line '...Plea Bargains for UK...' The story opened;
'... The Government is to give the green light to the introduction of plea bargains in the prosecution of complex financial crime.
The Ministry of Justice is set to publish its response to consultation on “deferred prosecution agreements” the legal mechanism companies will be able to use to avoid prosecution for financial crimes such as bribery.
Legislation could follow as soon as early next year. Barry Vitou, partner at law-firm Pinsent Masons said: “There have been rumours for sometime that the Government is looking to accelerate the introductions of DPAs. It fits with the Government’s crime agenda it is now pursuing.”
It is assumed any new law will mimic the US model. The law allows companies to agree a deal with prosecutors, including paying a fine and setting remedial action, in return for avoiding prosecution...'
If this discredited Government ever wanted to be able to dispel the damaging impression that they were too close to the organised criminals and the gangsters who run the City of London; that they were still captured, financially and politically by the disgusting vested interests who squeeze the billions of pounds out of the sleazy funds that daily flow through the financial sewers of the London markets; that they protect the interests of those who benefit from the vile profits from money laundering, Bribery and Corruption on a global scale, foreign tax evasion, or home-bred tax avoidance for corporate entities who thumb their nose at British Corporation Taxes; or those who process the uncountable billions of dollars, pounds and euros that are generated by the global drug barons and which have made the City of London economically drug dependent, they should not have announced this specific piece of criminal justice policy right now.
Let us dispel one lie right away. What is proposed is not 'plea bargaining' by any stretch of the criminal imagination. If you want to give it a name, then call it by what it truly is and that is a craven capitulation to the vested interests of the financial sector, who have just been given another 'get out of jail free' card by this most feeble of Governments.
This proposal is 'Prosecution Avoidance', even the press release says so. It is a means of not being prosecuted for major crimes, how on earth can this be called 'plea bargaining'?
Plea bargaining takes place when criminal charges have been brought, the defendant charged by a prosecutor, and the defendant is now at a stage of the process when he is confronted with the full understanding of the gravity of the indictment against him, for which he will be tried.
He is then invited to indicate which charges he will be willing to plead guilty to immediately, having received an indication from the prosecution of the amount of jail time they are going to invite the judge to accept as a fair and just outcome of the plea agreement. The defendant knows he is going to jail as a convicted criminal, he is now merely negotiating the amount of time he has to serve!
Plea bargaining is something I have been advocating for some time, having seen how effectively it could be used in the US courts, particularly against white collar criminals. I studied plea bargaining in the US courts while travelling on a Winston Churchill Travelling Fellowship, and the topic of my study with which I was expected to comply was '...Methods and systems designed to make Fraud trials more effective in the UK...'
I studied plea bargaining in the Federal Courts in Washington, and in two separate State courts in Pennsylvania and in New York. I sat with the judges on the Bench and was given a completely free rein to interview Judges, prosecutors, both federal and district attorneys, defence attorneys, police officers, and Court administrators, and I observed the plea bargaining process first hand in a large number of trials.
Upon my return to England I completed a full report of my findings which were circulated around Whitehall, the SFO, the Treasury, the AG's Office, the Bar Council, and the Law Society. Upon submission, my report disappeared into a legal black hole and I never heard anything about it again! Nevertheless, it was there to be used if so desired and it had the full approval of the Manhattan D.A.s office as an accurate exemplar of plea bargaining.
So, I am not going to accept the casual use of the suggestion that what is proposed here is a rigorous 'plea bargaining' process, because it is not. The use of this process-specific phrase is a typical piece of British chicanery, emanating from some weasel-mouthed civil servants in the Department of Justice, who have taken it upon themselves to use this honourable phrase to give the impression that the British are about to take white collar crime seriously.
Mark my words, as this debate continues we will hear a lot more of this big lie being spread about, that this is an effective and just way of dealing with white collar crime cases. We will be faced with more lies when we are told that this policy demonstrates that the Government is illustrating its toughness in going after the major white collar criminals, and dealing with them in a draconian manner. They will spin the effect of this law, they will dissemble, they will lie, they will float a package of untruths and distortions about this policy, and they will say how they are now getting really tough and prosecuting more white collar criminals.
Well don't believe a word of it, because it is all total bollocks!
The Government is talking about introducing what are called 'Deferred Prosecution Agreements' (DPA). These are yet another soft-option, hire purchase equivalent for the fat cats!
Today, Justice Minister Damian Green started the bullshit smothering process when he said that the new arrangements would give prosecutors an "effective new tool" to tackle economic crime.
"Fraud alone is estimated to cost the UK £73 billion each year, yet far too few serious cases are brought to justice,"  he said. "It is clear we must find new and better ways of ensuring organisations who commit criminal wrongdoing do not get away with it. DPAs... will ensure that more unacceptable corporate behaviour is dealt with including through substantial penalties, proper reparation to victims and measures to prevent future wrongdoing."
The new DPAs will allow organisations to voluntarily admit to wrongdoing and resolve to make things right. Where a prosecutor, such as the Crown Prosecution Service (CPS) or Serious Fraud Office (SFO) agrees that a DPA is an appropriate course of action, it will be able to defer prosecution in exchange for a range of stringent conditions.
The agreement will be made in open court and details of the wrongdoing and sanctions published. If the prosecutor is satisfied that the organisation has fulfilled its obligations by the end of the deferral period there will be no prosecution, but if the conditions are not met then the organisation could still be prosecuted.
This is just the biggest load of unadulterated crap! The perpetrator has nothing to lose, and everything to gain. The bank isn't going to be prosecuted, they have successfully avoided such an outcome, so what else could they possibly want?
The perpetrator, (well, in reality his slippery lawyers, all of whom will profit mightily from these proposals, a feature which will make their adoption by the snooty 'Magic Circle' of City Solicitors far more easy to effect, because the whole process will not mean ultimate criminalisation, so they won't have to get their lily-white hands grubby dealing with criminals) will effectively be allowed to determine the outcome of the proceedings, in consultation with the prosecutors.
A DPA is a wonderful Christmas present for a lazy prosecutor, because he will not even have to worry about going into court to run a contested case, so it will suit the criminal law illiterates inside the regulatory agencies, who will benefit again because they can now start showing the number of DPAs as part of their commitment to firmer regulation.
This process is so transparently corrupt and dishonest it makes me sick with anger!
DPAs will now become the de facto benchmark for dealing with City financial crime. The banks and the financiers are going to have a field day. They are willing to pay fines quite happily; they pay compensation quite happily; they will pay costs quite happily, because it doesn't  come out of their pockets, so it doesn't hurt them one iota. The financial penalties only hit their shareholders, so it does not matter, and who cares anyway!
They will agree to any proposals a prosecutor asks for, because it will only mean throwing other people's money at the remedial requirements. They will sit back, nod their heads, commit to everything they are asked, and then get on with the business of engineering more financial crimes.
Oh, and don't think for one minute that the likelihood of their being prosecuted at some stage in the future if they don't behave, holds any basis of reality, cos' it just ain't going to happen! The passage of time, helps witnesses go missing, forget their evidence, lose exhibits, and generally make the reality of a lawyer-backed application for a dismissal of all charges so much more likely.
This truly is one of the most spineless and craven actions by this increasingly discredited Government. To announce this total cop-out of all levels of responsibility for the prosecution of financial crime in the City, at exactly the same time as the Prime Minister is talking big about the need to get tougher with ordinary criminals, is nothing more than the purest hypocrisy.
It's all about being hard on working class criminals because that gets votes, while letting the City off scot-free. Every time the FCA comes up against a piece of organised crime in the financial sector, the perpetrator's lawyers will be straight on the phone talking sweetly about a DPA, because otherwise, '...our clients will reserve their rights and will fight you tooth and nail, and it will take you years and huge costs just to come up with some charges with which you will then have to go to court and roll the dice...'
Take it from me, the FCA will roll over every time, and offer a DPA. The banks will accept it because it means that no-one ends up with a criminal conviction, (which as we now know, is the only thing they fear), and everyone lives to defraud another day!
What makes it worse is that the regulator and the government will spin this dishonest process as being a meaningful effort to combat City crime, while all the time, the frauds, the rip-offs, the money laundering, the insider dealing, the bribing, the corrupt practices, the facilitation of the needs of the dodgy foreign dictators and their blood money will continue.
This such an awful betrayal of ordinary working people who have been repeatedly fucked over by the criminal British banking system, that I am lost for the words to describe how I truly feel. It is symptomatic of this Government and the way they have completely lost touch with the ordinary meaning of words and the truth of the banking scandals which continue to engulf this country.
There is only one way to combat City crime, and that is to prosecute the wrong-doers as hard and as often as possible, so the message gets through to every Mafiosi in the Square Mile. We need ambitious criminal prosecutors and tough specialist fraud  investigators who have proper criminal knowledge and understand the way the criminal mind works, and who are not scared, yes, let's use that word, who are not scared to take on the City establishments and their slippery servants with their weasel words, their mobile moralities and flexible integrity!
We did it in the 1970s and early 1980s, when I was at the Fraud Squad, and before the City fathers got scared of our nasty policing tactics and our honestly-held ambitions to lock up the City fat cats, and lobbied the Government and their Machiavellian civil servants, to clip our wings. I am proud that I was part of that era, and I feel sorry for my colleagues who are prevented from doing this good work today.
The Government can try and bull-shit us as much as they like. They can lie, and dissemble, and spin the truth as hard as they like about being tough on financial crime, but this piece of craven caving in to vested City interests isn't going to do it!


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Jason said...

Rowan your writing is wonderful.

I just have a couple of questions.

1. I believe you've written books before. Why not a popular book on this?

2. Why are you not on Newsnight? This post is big news, can't we swing some sort of wider coverage?

3. Why don't you reply to comments? :) Blogs with replies tend to have larger readerships in my experience.

AbogadoNZ said...

Terrific post Rowan. Like you I am disgusted to see the craven behaviour of the government. It is blindingly obvious that the criminal financial services industry is in control and calling the tune. This is not going to end well as the only practical solution for The Man on The Clapham Omnibus is dissent and crime. We don't need rent-a-mob raiding Boots in oxford Street but a good burning in St George's Hill, Weybridge wouldn't go amiss but I digress.

Rowan Bosworth-Davies said...

Thanks to you good people, I am getting support on my recent blogs. Hitherto I have been more used to getting abuse and vile threats, and I have found it more sensible to '...never explain, never complain...' I will make more comment in future. Thanks for your support, it is hugely appreciated!

Jason said...

Hitherto I have been more used to getting abuse and vile threats

Ah, that explains it!

Thanks for your support, it is hugely appreciated!

As far as I'm concerned it's a very great pleasure.

'Something should be done about the criminal banks' -- anyone can say it and many do, but people who actually know anything about what should be done are a lot rarer and more interesting.

If they've actually spent much of their lives doing it already, as seems to be the case with you, as far as I'm concerned they are gold dust.

Almost any mad idiot could get some kind of political power now by promising to sort out the banks, since the three main parties have been neutered. Any real understanding, passionate but sans empty hyperbole, is a great refreshing change.

Lindy said...

Thank you very much for making this information public.

You are helping society on both sides of the Atlantic, and I applaud your efforts. I can't wait to (hopefully) see your message on the BBC.

fourmenterian said...

SOCA, the Serious Organised Crimes Agency, was set up with a great fanfare by the previous government. It is set to undergo another transformation in 2013 when it becomes the National Crime Agency, taking on counter clild exploitation functions and even some powers from the UK Border Agency.
Having set up this UK 'FBI' there is an argument for it to be given policing responsibility for the City - it seems to be doing everything else except 'white collar' crime.
The more I read this blog, the more I am convinced that handing regulatory fiunctions to ex-financial advisors, ex-accountants, ex-city types is a mistake. What is required is, in effect a City police force. Rather than fiddling at the margins with DPAs, the government should seriously consider extending the remit of of SOCA/NCA.

Jason said...

@fourmentarian: The more I read this blog, the more I am convinced that handing regulatory fiunctions to ex-financial advisors, ex-accountants, ex-city types is a mistake.

Oh that is absolutely clear and not only from this blog, I would have thought. :)

Obviously something hard nosed is required -- and is being deliberately avoided as of now. If it were politically desirable it could surely be done in a heartbeat.

Rowan constantly uses the organised crime tag. We are looking for the kind of force able and willing to take on organised crime. We know that is a hard slugging match, not a polite cease and desist.

Rowan seems to be chomping at the bit to do this job. :)

Such an outfit would probably need backing, ideally by politicians at least one or two of whom who don't mind losing business friends and interests -- whilst being enormously popular with the public.

That takes some guts, as well as anatomical elements hanging slightly lower. And of course, such politicians can be dangerous to democracies.

Rowan Bosworth-Davies said...

My friends, you are among the few enlightened people who read and understand what I am trying to say. I have been saying this stuff for over 25 years now, my first book, 'Too Good To Be True' - How to survive in the Casino Economy was published in 1986. The problem is Jason that these days, no-one wants to publish books like mine any more, because they are only read by a small and specialist audience. The City has its own way of dictating how and who it wants to disseminate its message. I have been trying for years to get some teaching opportunities at one of the Business Schools, but to no avail.They will not employ me because they get money from the banks in sponsorship, and that dictates that they only teach what the banks want them to teach. When I talk publicly, bankers refuse to attend my events,I am not being paranoid, it is a fact. I spoke the other night at a City event on the extraterritorial powers of the US to extradite criminals. It was for leading City think tank (run by an old friend). Not one banker attended, but it is a banker's forum! So, you can understand why your support is so valuable. Please keep reading and commenting, in this way we build a community of like-minded people who may one day begin to have influence. If you want to re-tweet my stuff or share it, I am delighted if you help to spread the word.

Jason said...


I do understand, and certainly don't feel you're in any way paranoid. The banks do dictate flow of information. This includes having tamed most of the economics profession as well which is another reason governments won't act -- no-one is telling them the dangers.

That said, I still think there must be outlets for your message. I don't think the banks like Rickards. I don't think they like Yves Smith and I don't think they're thrilled with a lot of what Gillian Tett says either ("How Unrestrained Greed Corrupted a Dream, Shattered Global Markets and Unleashed a Catastrophe"... ^_^), or a lot of other extremely critical voices. They get published because in spite of all the dumbing down in the media people do actually want to know the truth.

The public is screaming for this. One advantage of a capitalist system is that when there is a market there is usually a way to reach it, and the banks can't shut down all the avenues yet! If nothing else, self-publishing on Amazon or Lulu is for real.

I'm sure you know some good people who'd give you a back cover quote! And as for the banks denouncing what you write -- the more they did, the more incendiary the book would become, and the more people would hear the message.

Apologies if it sounds like I'm badgering you! I would love to read this book -- and think it might have some effect too.

I can think of other potential outlets as well, such as the more combative TV options eg. Dispatches... if you are in a position to gather secret audio and video as I suspect...

I'll shut up now. I'll be reading... :)

Rowan Bosworth-Davies said...

Thanks Jason, funnily enough I think I am having more impact with this blog than anything else possible. In the last couple of weeks over 600 new Twitter followers have signed up for my Twitter feed which brings them straight here to this site. My reader stats have gone through the roof, and thanks to people like you who are spreading the word out there, the blog is growing apace. I can't do this without you all, and I do sincerely thank you. I am saying what I have always believed and known, but you guys are spreading my words.

city said...

thanks for sharing...

Jamie_Griff said...

You've helped me get the anger back and for that I am grateful.

Your following is indeed growing - I followed a link here from, the blog of documentary film maker David Malone who self published The Debt Generation a couple of years back (apologies for the lack of link but I'm on a rubbish phone).

A popular account of fraudulent behaviour in the UK financial sector is sorely needed. Everything that exists at the moment is about the US or is too academic for a lay readership.

Keep up the good work.

Art Smith said...

You popped up on Golemn's blog. Thanks for making us aware of this travesty. Asked for DPA's to be looked at on the Guardian ideas thread. Don't hold your breath.
Chin up!

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