What has happened to British Criminal Justice when it comes to tackling the big institutions?

In a searing blog entitled "...Britain is fast turning into a Banana Republic, wilfully blind to corruption..." ( http://www.ianfraser.org/britain-is-fast-turning-into-a-banana-republic-wilfully-blind-to-corruption/) my friend and fellow blogger, Ian Fraser, lays bare the hypocrisy and the double standards that are present at the heart of British corporate life.

On August 1st, the FRC announced the dropping of its probe into the failure of BAE Systems’s auditors, the notoriously useless KPMG, to raise the alarm, question, or  do anything at all about the massive commissions (= bribes) that its defence industry client was liberally handing to individuals and shell companies to smooth the path to the historic al-Yamama deal. The FRC’s excuse for dropping its three years probe? Apparently it would have meant delving too far back into the past. Of course, it didn’t mention that seven current and former KPMG partners and executives are among the FRC’s board directors and senior staff, including the likes of Peter George and Sir Steve Robson – so no conflict there, obviously..."

Ian goes on to  identify how "...the background to this is that the FRC launched an “investigation” into KPMG’s role as auditor and adviser to the London-headquartered defence and aviation giant in 2010, after BAE settled corruption probes in the US and UK. The FRC investigation was, perhaps conveniently, focused on audit and advisory work carried out by KPMG between 1997 and 2007. BAE Systems — farcically – settled with the UK’s Serious Fraud Office by admitting to a minor accounting charge relating to its activities in Tanzania, for which it paid the modest penalty of £30m. Tony Blair’s government was lampooned and lambasted as wilfully blind to corruption seven years ago after it successfully persuaded the SFO to drop its investigation into the al-Yamama deal on the grounds of “national security”..."

What this coruscating critique of an important regulatory body demonstrates so clearly is that the United Kingdom has become a regulatory banana republic when it comes to investigating the affairs of the powerful!

What has become very clear in recent years is that there are two distinct levels of engagement when criminality is concerned in the UK.

When it affects the lower classes or those whom society can afford to marginalise, then the requisite level of intervention can and will be sanctioned. People will be arrested, charges brought, judges will pronounce in magisterial tones and the prisons will welcome another hapless guest.

When it has some impact upon anyone in what could be termed 'the powerful class' for lack of a better phrase, then an alternative agenda can be observed. Investigations take longer and longer until it is felt that too much time has elapsed for a safe prosecution to be brought, as in the BAE case above! Alternatively papers can get lost (it's amazing quite how often this can happen)!

If you have any doubts about this assertion, examine the vast amount of organised criminality that has been committed by the big banks in the form of theft, fraud, money laundering, market manipulation, drug trafficking, sanctions busting et al!

Has any one director of any of these institutions been prosecuted or brought to book for these crimes which now amount to many billions of pounds worth of criminality?

No, of course not, and this is all part of a British disease which has infected the body politic and which will, in turn, demean our public standards to such an extent that we will become the laughing stock of the civilised world, (if we are not already in that category).

There is something pernicious about the way in which the British insist that their public life is regulated and governed. We are a nation capable of maintaining so many conflicting standards of probity while sensing no distinction between them, it marks us out as a country which is able to juggle levels of hypocrisy which transcend ordinary examples of mendacity.

I first encountered this when I helped to investigate the affairs of a commodity brokerage which had gone into liquidation at a time when this country had exchange controls. Its clients were all very wealthy British investors from an overwhelmingly upper-class background. They were in fact engaging in massive tax evasion, fraud and money laundering by siphoning money out of the country to anonymous Swiss accounts via a series of spurious futures transactions.

When the whole scam was uncovered and their names were in danger of getting into the public domain, the Director of Public Prosecutions suddenly saw fit to announce that there would be no prosecution of anyone involved in the case on the grounds that it was not in the 'public interest.'

This phrase has taken on the same absence of veracity as the phrase 'national security'!  Both can be trotted out at any moment and can be used to obfuscate a multitude of sins, and are equally unbelievable!

So a sector of the British public were protected from the implications of their wholly criminal conduct, purely because of their class, and the influence they were able to exert at the highest levels of national authority!

It is this element of 'influence' that so permeates the culture of our national psyche, and which makes us so susceptible to pressure from above. In the case of public servants, the influence of the number of putty medals, awards, knighthoods, ribbons, and other pieces of pointless frippery, permit a level of adverse influence far outside their normal expected range, to be applied.

Any civil servant knows that if they are to successfully receive their gong, they must toe the line. Stepping outside the accepted standard of acceptable behaviour is a sure and certain way to ensuring that your honour does not arrive!

I saw this so clearly when I had occasion to challenge a man called the Ombudsman, otherwise known as the Parliamentary Commissioner for Maladministration. I had referred an investor case to the Ombudsman in a case where the investor's investments which they were paying to the crooked adviser, were going straight into the coffers of the Inland Revenue who were squeezing the man hard for unpaid revenues.

He should have been closed down for his fraud, but every time the Government Department responsible for acting against him for fraud suggested moving against him, the Revenue vetoed the suggestion on the basis that he was coughing up unpaid and otherwise uncollectible revenue, so he was allowed to continue trading.

Perhaps unsurprisingly, I thought this was unconscionable behaviour on behalf of the Revenue and I referred the matter to the Ombudsman. I had previously been successful against Government Departments by using this referral tactic, so I was perhaps not surprised to find that the old Ombudsman ( a fair-minded and judicious lawyer) had suddenly been supplanted by a former Civil Servant, who again, unsurprisingly, found no maladministration.

I wrote some fairly scathing articles about this individual in which I pointed out his investigative failings. He wanted to sue for defamation, but it was pointed out to him that should he do so, and the court find that he had not acted judiciously, (which was a possibility), that it would mean the end to any hope he might have had of any kind of putty medal. So he chose to keep quiet instead and had to wait a while longer for his award. If I had got my way he would have received nothing at all.

My point is that it seems to me that there are far too many ways of influencing the decision making process in the UK in ways which are not necessarily in the public's best interest.

The Royal family can be an unconstitutional influencer of policy. I am not talking about the Queen who has a constitutional right to advise and guide, and who in every other way is punctilious about the use of her powers, no I am talking about some of the lesser members of the family.

Ian Fraser points out the undue influence of Prince Andrew.

"...You may remember that a few years ago it emerged that a “cocky” Prince Andrew appeared to welcome and endorse bribery and corruption — or at least that he abhors those who would seek to get in its way, including anti-corruption regulators and investigative journalists (by the way, we only know this thanks to the efforts of the recently convicted U.S. army private Bradley Manning, Wikileaks and The Guardian).

In an October 2008 U.S. embassy cable Tatiana Gfoeller, the U.S. ambassador to Kyrgyzstan, revealed that during a 2008 engagement at a hotel in the central Asian republic’s capital, Bishkek, a “rude” Prince Andrew — who for some inexplicable reason is a UK trade representative — attacked the Serious Fraud Office for what he called “idiocy”.

In the cable Gfoeller wrote: “Rude language à la British … [Andrew] turned to the general issue of promoting British economic interests abroad. He railed at British anticorruption investigators, who had had the ‘idiocy’ of almost scuttling the al-Yamama deal with Saudi Arabia.” The prince, she explained, “was referencing an investigation, subsequently closed, into alleged kickbacks a senior Saudi royal had received in exchange for the multi-year, lucrative BAE Systems contract to provide equipment and training to Saudi security forces”. The dispatch continued:

“His mother’s subjects seated around the table roared their approval. He then went on to ‘these (expletive) journalists, especially from the National [sic] Guardian, who poke their noses everywhere’ and (presumably) make it harder for British businessmen to do business. The crowd practically clapped.”

Whether we like it or not, a very large percentage of the British people like being seen in the company of members of the Royal Family, even boors like Andrew who seems to feel that he has some God-given right to be rude and offensive in public, as long as it is in the interests of 'British Trade'. We do well to remind ourselves of Dr Johnson's famous epithet that 'patriotism is the last refuge of the scoundrel'!

As Ian Fraser identifies; "...What I find disturbing is not just the behaviour of the oafish Andrew, it is that many of Britain’s regulators seem to share the Prince’s views. They either welcome corruption and collude with corrupt companies to help them cover up past wrongdoing, or are simply too lazy or frightened to bother tackling high-level fraud and corruption..."

We could easily say the same about financial regulators who find it so much easier to dish out fines for wrong-doing, all of which merely dilute the interests of the shareholders, than to take a principled view and bring criminal prosecutions for wrong-doing.

In fact, things have got to such a state that we can assume that as long as the institutions which reflect the interests of the powerful are subject to the present laws and regulatory oversight, there will be no interventionist activity which will threaten the interests of those in charge.

We are now a country where as long as you can have people of influence on your board, former senior civil servants in particular, you stand every chance of walking away from any allegation of wrongdoing.

What message this sends to other countries is anyone's guess. Presumably, when it comes to more lucrative arms deals with dubious Middle Eastern potentates, the bribes will continue to be paid, and British representatives will continue to receive their share of the largesse, secure in the knowledge that their accountants will not discover these payments in the accounts and the country's prosecutors will be leant on by the politicos if it all looks like coming unravelled.