UK fraud agency was undermined by 'obsessed' Theresa May's attacks, former head says

6 September 2019 11:37am

5 September 2019, by Annie Robertson

Former UK Prime Minister Theresa May’s attempts to disband the Serious Fraud Office undermined the agency and led to resources being diverted from fighting financial crime, its former head has said.

At an event this week, David Green spoke for the first time since his departure in April last year about the pressure the SFO faced during a government attempt to disband it that ended up being aborted. In his remarks, he also criticized banks for only cooperating with law enforcers when it suited them.

“In terms of serious fraud, I’m now free to say that I had spent at least 25 percent of my time as director of the SFO defending attacks from the home secretary and later prime minister, who was completely obsessed with getting rid of the SFO.”

Theresa May had first attempted to disband the SFO and roll it into the larger National Crime Agency during her role as home secretary in 2011, and later in 2014. Her efforts were met with resistance from the former attorney general and Conservative lawmakers.

As prime minister, May released a manifesto in May 2017 which again called for the SFO to be folded into the NCA, but the plan was finally abandoned that September.

“It was certainly undermining, and my complaint is that she is perfectly entitled to have her views, but it diverted resource from where it should have been going,” Green said.

Funding cuts

Green discussed the challenges of stamping out corruption in the UK after funding had been cut. While the public “cannot expect the state to chase down” every case of low-level fraud, he said, “why is that picture so unsatisfactory? Well … it is quite obvious. It’s years and years of cuts.”

He added that “the country used to have dedicated fraud squads … but they have been allowed to wither on the vine. And you put that together with the obvious signs — although the government will deny it until they are blue in the face — the effects of cuts to police, the courts, the [Crown Prosecution Service].”

Corporate liability

Green, who spent six years as director of the SFO, said he had supported the expansion of Section 7 of the Bribery Act 2010 to criminalize companies failing to prevent money laundering and fraud. ​“I favor that change for many reasons, and it is not because it would make prosecution easier. It’s a question of public confidence,” he said.

He said the UK “has a problem where people in the street think big companies are unaccountable — and they are not wrong.” The SFO “needs a mechanism to be able, in a straightforward way, to combat really bad behavior” by businesses, he added.

The agency’s current head Lisa Osofsky told a parliamentary committee last November that “the Bribery Act does something wonderful for us, and I wish it was mirrored in other areas, rather than just failure to prevent tax evasion”.

There has been a dearth of cases under the act, with only two Section 7 "failure to prevent" actions reaching the courts since it came into force in 2011. The most recent case of a company fighting such charges won't come to trial for another 12 months, a judge in London said in March.

Board-level decisions

A theme of the event was closer relationships between companies and prosecutors, but Green said that banks will only cooperate with law enforcement if it suits them. “There’s an increasing trend of bringing in the banks, and the private sector, and getting them to help in the fight against fraud. The banks will help if it assists them — they don’t do it for any other reason.”

Lack of genuine co-operation by businesses also causes delayed investigations, Green said. “The SFO gets companies and banks complaining that investigations are taking too long, when in fact they have made a decision at board level not to cooperate.”