Sunday, November 04, 2012

Denis MacShane can and must be prosecuted!

The revelations over MP Denis MacShane's resignation from the House of Commons drives yet another nail into the coffin of public shame which is being built while awaiting the final denouement of the screaming death dive of public morality which is the leitmotif of our times!

This shameful tale identifies so much which is wrong with the way that the criminal law is administered in the UK today, with Government immediately imprisoning the poor, the socially marginalised and the underclass arrested for rioting, while allowing the rich, the powerful, the banksters and Parliamentarians every degree of legal leeway to avoid the possible consequences of their gross criminality. 

We are living in disgusting times, and anyone who wishes to claim any degree of association with the principles of open and transparent justice, must feel wholly betrayed and sickened by this constant parade of perfidy and double standards; while the rich commit the crimes of the powerful, like the £18 billion of PPI fraud, for which there is, apparently no means of obtaining redress (or so we are told by the financial regulator), or MP's commit bare-faced fraud and deceit by claiming public money for disbursements through the use of invoices described as adopted 'plainly to deceive', right down to a Chancellor of the Exchequer who tries to ride first class on the train when he only has a second-class rail ticket. 

A Parliamentary committee found that MacShane had submitted 19 false invoices which were 'plainly intended to deceive'. The Chairman said it was the gravest case to come before MPs. Letters between MacShane and the House of Commons in which MacShane admitted his wrongdoing were described as not being admissible against him in a Police investigation.

Apparently the letters are covered by Parliamentary privilege which it is claimed, is necessary for Parliament to function. Hence the Metropolitan Police had dropped their original investigation into MacShane's activities.

In a damning report, the standards committee said the former Europe minister's actions were "so far from what would be acceptable in any walk of life." 

MacShane breached rules by claiming thousands of pounds of taxpayers' cash for travel across Europe and entertaining European contacts, according to MPs. The findings come after a complaint made in June 2009 about a raft of expense claims he made for "research and translation services". Between January 27, 2005, and January 11, 2008, he submitted 19 claims forms backed by false invoices from the European Policy Institute (EPI).
The organisation's letterhead indicated there was a general manager and four associate directors but Mr MacShane admitted the titles were "simply on the letterhead to make it look more official", according to the report. But the EPI had no office or permanent staff and names on the letterhead were friends of Mr MacShane dating back to the time he spent in Geneva in the early 1990s, it added. Mr MacShane was "by far the main organiser" and also controlled the bank account, the report found.
The Labour MP told the Parliamentary Commissioner for Standards that he used the EPI to recoup expenses he paid out for research as part of his parliamentary work on European issues. He argued that he submitted the EPI bills for "ease of administration" for amounts he considered covered "what I had disbursed in the period concerned". MacShane submitted a list of foreign travel to back up his defence, which included visits to France, Germany, Poland, Kosovo and Switzerland.
But the commissioner found much of the travel was against the rules. That included a trip to Paris for meetings around the European Book of the Year, which was "clearly not a parliamentary duty". He also criticised MacShane for travelling to the French capital to interview candidates for a job as his personal assistant and for the apparent use of parliamentary funds to entertain European contacts.
The committee said the "real mischief" of MacShane's conduct was that the "method he adopted of submitting false invoices" allowed him to bypass rules to spend public money as he saw fit. It said it was "impossible to escape the conclusion" that he claimed in that way to ensure he was not challenged over using taxpayers' cash to fund travel for his work in Europe.
MPs said it was this misuse of cash that was "most serious" and suggested that of the £12,900 of claims he made it was likely around £7,500 was "outside the rules". MacShane has repaid the entire £12,900, the report said. 
These strong findings raise the prospect of a second police investigation into MacShane's expenses. The police decided to take no action against MacShane in July after a lengthy investigation. But a Metropolitan Police spokesman said Scotland Yard would now examine the committee's report. The spokesman said: "We are aware of the report and will be assessing its content in due course."
So, for the benefit of those who like reading this blog, let me spell out how Denis MacShane should be investigated and what evidence the police should be able to acquire in order to convict this thoroughly dishonest man.
Just as I did with the offence we discussed in the LIBOR case, I want to look again at Section 17 Theft Act 1968, the offence of False Accounting, to demonstrate how to bring MacShane before a court. 
Section 17 states:
1. Where a person dishonestly, with a view to gain for himself or another or with intent to cause loss to another:-
a) destroys, defaces, conceals or falsifies any account or any record or document made or required for an accounting purpose: or
b) in furnishing information for any purpose produces or makes use of any account, or any such record or document as aforesaid, which to his knowledge is or may be misleading, false or deceptive in a material particular;
he shall on conviction on indictment, be liable to imprisonment for a term not exceeding seven years.
2) For the purposes of this section a person who makes or concurs in making in an account or other document an entry which is or may be misleading, false or deceptive in a material particular, or who omits or concurs in omitting a material particular from an account or other document, is to be treated as falsifying the account or document.
Legitimate Parliamentary expenses are defined in a document issued by Parliament. The way in which they are to be accounted for and claimed for is also defined. Denis MacShane would have known this.
It is alleged that he made 19 separate claims for expenses, which were supported by invoices which purported to be signed by another person, and were written on the letter-head of an organisation which did not exist in the form claimed. In addition, many of the claims were for travel which did not fall within the rules of the permitted allowances of the House of Commons.
So the claims were false and fraudulent in 3 ways.  
First they were signed with misleading signatures. So the documents could have been genuine, but the signatures were dishonest.
Secondly, the letter-heads were not honest, they were misleading as they purported to represent an organisation that did not exist.
Thirdly, the claims were in some cases for non-qualifying travel.
So MacShane is caught by both sub-sections of S.17. He submitted a false account and a false record, and a false document made or required for an accounting purpose.
Further, in furnishing information for the purpose of his claims, he produced and made use of an account, a record and a document, which to his knowledge was or may have been misleading, false or deceptive in a material particular;
The false documents he submitted were an integral requirement for the Parliamentary accounting purpose, and he used this method to bypass a Parliamentary prohibition of using public money to fund his own work in Europe.
So the evidence is very clear that there is a strong prima facie case against MacShane of the offence of at least 19 separate charges of false accounting. I also believe he could be charged with theft of the lap-tops which were made available to him for parliamentary purposes, and which he later gave to interns when they left his employ.
The facts of the case have been found by the Parliamentary Commission, and that evidence should be capable of being acquired by the Police. What MacShane may have said in a letter by way of admission of the offences to the Commission might not be admissible under a strict interpretation of the law, because they were not made under caution, and were made for proceedings of the House of Commons, but that is irrelevant. Police don't need his individual letters and any admissions made in them because the external evidence against MacShane is so strong.
The physical documents demonstrating the false claims are discoverable; his own bank documents are discoverable by way of Court production order, to prove he received the money; the details of his foreign travel are discoverable; an officer from the House of Commons is subpoenable to prove the breach of the House of Commons rules of claiming expenses, and in the absence of such a person, the rules themselves can be placed before the Court. The fact that the invoices were paid out can be discovered.
MacShane should be arrested (he can come to the police station by appointment with his solicitor) and he should be formally cautioned and then interviewed on tape. In this way the police can put all the allegations to him. He can then either say nothing or make a full confession. He might try to bullshit his way out of the allegations, most con-men and MPs talk too much, but I hope his lawyer advises him to remain silent. In that way the police can put the whole matter to him, including all the details of the individuals named on the false letterheads. They may not be able to use the report as evidence against him but they sure as hell can use it as a 'map' to guide further enquiries of their own which they can then submit in the file to the CPS.
If the CPS then refuse to bring charges, then we will know that they have been leant on by 'higher authority', as I expect happened in the earlier referral. The British prosecution authorities have always been notoriously susceptible to political interference.
This is exactly the kind of case that needs to go before a Jury and I have no doubt whatsoever what its outcome will be if it is so presented. One only has to read the comment pages of any website carrying this shameful story, to see that ordinary people across the country are asking why he has not been prosecuted, and demanding that he should so be!
Parliament should not be permitted to stand in the way of any man's prosecution for serious crimes committed against the public purse, and to claim such a privilege makes them a laughing stock. If this case had been against anyone other than an MP, the police would have had an opportunity to seize the correspondence and use it in evidence against the alleged wrongdoer. If he was not an MP, and thereby protected by the arcane rules of the House of Commons Privileges, there would be none of this as an issue. As a servant of his constituents, remunerated from the public purse, should we the voters, not be entitled to expect that his conduct in high privileged office should be of a far higher standard, and subject to even greater scrutiny? To seek to protect a man under these circumstances, when his reputation has been trashed by his own conduct in front of his peers, is risible.
This is exactly the kind of nonsense that makes a mockery of our system of criminal justice, when a man's letters in which he admits facts which could prove to found a criminal case against him, are deemed to be inadmissible, and he is allowed to walk away from his actions, It is even more galling when earlier MPs who were also prosecuted for false accounting for expenses fraud, had their claims of Parliamentary privilege denied them. Eric Illsley who received a 12 month prison sentence for false accounting under S.17 Theft Act, has accused the police and the CPS of double standards for failing to prosecute MacShane.

Ironically, when Margaret Thatcher was in her first term of office, she wanted to take strong action against benefit cheats and persons who made false claims for welfare benefits. She was adamant that this would be a major plank of her platform of social reform. She was reminded by Cecil Parkinson that they would have difficulty being seen to go after underclass cheats, when a major City financial fraud case, the Guinness share manipulation affair, was about to become public, and a lot of City suits were embroiled in the scandal. Parkinson wanted to know how Margaret Thatcher intended to square that circle. Her answer was illuminating;

"...Well get the handcuffs on, Cecil..."

That very afternoon, Ernest Saunders was arrested coming out of his lawyers' offices!

The point here is that in the not too distant future, the Government is going to have to face up to the prospect of massive inner-city riots and public disorder when their cuts policy begins to bite down even harder on the poor, the unemployed and the socially marginalised. There will be widespread rioting and more looting as we witnessed last year.

The politicians will seek to respond as they did before by encouraging the courts to engage in knee-jerk responses, locking up hundreds of offenders and making a huge song and dance about public misconduct.

They will not like being reminded then that they themselves have been persistently guilty of sending the wrong messages to the country at large, by allowing the banksters, the financiers and the other members of the privileged classes, including MPs, to walk away scot-free from crimes whose absurd values dwarf the relatively small sums involved in public rioting.

The real problem about the MacShane case is that the public standing of our politicians has fallen so low that they daren't spend too much time keeping this case in the public eye for fear of another backlash in public derision and opprobrium. They want the MacShane case to go away, and for MacShane himself to be dispatched to the dustbin of history. It is up to those of us who care enough to keep these issues alive so that people are not allowed to forget that the crimes of the powerful must not go unpunished, because this shameful episode of public double standards and legal dissembling is yet again, another example of how there is one law for the powerful and another for the poor.


Jason said...

Curbing bank wrongdoing is certainly about justice, but it's also about even bigger issues -- national security and the preservation of our democracy.

The next crash could involve gilts. It could be carnage. If justice doesn't start to be seen to be done, the riots won't be one-time. We will turn into Greece.

Have a look at what's happening there -- eg. police collusion with neo-Nazis -- which same neo-Nazis have 21 seats in parliament.

The ingredients are there for exactly that in this country.

The stakes are very high indeed.

Rowan Bosworth-Davies said...

Spot on Jason, Once the general public lose faith in the legitimacy of the criminal justice process, then they will begin to feel free to take the law into their own hands. Once a man believes that he is legally disenfranchised, and that his interests are not being protected, then he will engage in self-protection, or demand that vigilante groups or protection gangs to act on his behalf. This is not the way we should want to go, but I fear it is becoming more likely. That is why the Criminal Law must be applied fairly and impartially, and apply to all members of society equally!

Phil Espin said...

As a former HMRC investigator with 30 years experience of tax fraud I have to say I think HMRC are partly responsible for the breakdown in honesty when it comes to false invoices. HMRC can offer not to prosecute someone who makes a clean breast of tax fraud and fully discloses understated tax liabilities. The guilty party is charged a cash civil penalty of (in my experience) up to 50% of the tax lost. Much less than 10% of cases like MacShanes involving false tax invoices are prosecuted and HMRC have judicial authority for this "selective" prosection penalty.

I suspect this HMRC approach which puts raising cash above justice, is at the root of the difficulty with much of our financial services "regulation".

It is time to prosecute everyone who creates false invoice, lies and cheats for financial gain for whatever reason.

Rowan Bosworth-Davies said...

Thank you Phil for such an honest and forthright answer. You are of course brutally correct, and this line of least resistance which has been adopted by the FSA, the SFO under Alderman, himself ex HMRC, HMRC et al, has created a vacuum for criminalisation. Thanks for the heads' up, you have given me a theme for another blog!

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