LONDON (WithinTheLaw) - From poor culture, to overworked staff, and bungled cases, the Serious Fraud Office is struggling to repair its reputation. However, while it has ‘broadly’ accepted most of the recommendations made by the independent Government reports, there is still an underlying feeling that it hasn’t truly grasped the seriousness of the situation.
Writing on the FCPA blog, a former SFO professor, Bill Waite, spoke about how the SFO has responded to criticism. After publishing a blog which highlighted the problem of a low conviction rate, and how it could go after fraudulent claims for financial assistance the service contacted him to offer what it called ‘guidance’.
The SFO, he was told, only prosecutes the most serious cases. So far it hadn’t been presented with a case of Covid 19 fraud which matched that criteria. If things changed it promised to snap into action.
As for those cases it does prosecute, many of these are highly complicated and difficult to win. A success rate of 100% would be a bit of a false positive and would suggest they were only taking on the low hanging fruit and avoiding cases which it felt would be challenging.
Making excuses
However, on closer analysis neither of these really stand up to much scrutiny. Elsewhere in the world authorities have spotted the potential for fraud relating to the Covid 19 outbreak. The Wall Street Journal reported that the Department of Justice is undertaking abroad search for fraud in the $660bn paycheck support package focusing on claimants and the banks distributing the funds.
A massive state intervention such as we’ve seen on both sides of the Atlantic has enormous potential for abuse. Other authorities appear to have spotted it; why hasn’t the SFO?
As for their conviction rate, the SFO has a point when it claims a 100% conviction rate would be suspiciously high. However, there is a gulf between that and a rate of around 60% we’ve seen over the past five years.
Recent major cases such as that against Barclays, Tesco and the Libor scandal have all resulted in failure. When it comes to the biggest and most complex cases, the SFO continues to let itself down.
Yes, cases are complex and, yes, the opposition often come to the table armed with the best legal defences money can buy, but the SFO isn’t stretched for resources itself. It can and should do better.
So, what can be done?
In plotting a path forward, Waite has a series of suggestions which could put the SFO back on track.
- Getting ahead of the curve as a prosecutor. It shows intent and can have a deterrent effect. Sitting back and waiting for cases to become apparent is too passive and misses a golden opportunity to manage real structural change.
- It should challenge its own narrative. Failure to do so will lead to group think which would see it fail to fulfil its own mission.
- Institutional memory. All successful institutions need to ensure that when one member of staff leaves, he or she doesn’t take their knowledge with them. That expertise and the insights they have gained must be captured to ensure continuous development.
- Improving its record keeping. He says it’s incredible that an organisation which, according to its July 2018 annual report, is processing 10 million documents a month through its digital forensics unit, can’t find six years of key reporting detail in more than 40 cases.
First, though, it has to take the important step of recognising it has a problem. Although the SFO has made statements about how it plans to change, it still seems as if they are in denial. It’s not a case of tinkering around the edges; the need to dig right down into the organisation and manage a complete change of processes and culture. If it doesn’t it will continue to make the same mistakes time and time again.
(Written by Tom Cropper, edited by Michael O'Sullivan)