The UK's Serious Fraud Office (SFO) indicated, following the production in June 2008 of a report by a former New York prosecutor, Jessica de Grazia, that it was going to adopt some of the practices and procedures of US prosecutors and, in particular, those used by the US Department of Justice (DoJ). Ms de Grazia highlighted in her report that a higher rate of success was achieved by prosecutors in New York than was achieved by UK prosecutors. As part of the SFO's new approach to its role, the SFO issued guidance in July 2009 on its approach to dealing with overseas corruption. The guide encourages businesses to self-report. In return, in specified circumstances the SFO is prepared to offer the route of civil settlement as opposed to criminal action, which allows a company that self reports to avoid debarment from public contracts.
Mabey & Johnson
Mabey & Johnson, a company that fabricates bridges (many of which are sold overseas) self-reported prior to the SFO issuing its guidance. In any event Mabey & Johnson did not meet the criteria which would have allowed the company to try to negotiate a civil settlement with the SFO.
The company voluntarily disclosed to the SFO evidence of both how decision makers were influenced in public contracts in Ghana and Jamaica between 1993 and 2001 and how the during 2001/2002 UN sanctions as they applied to contracts in the Iraq "oil-for-food" programme were breached.
On 25 September 2009 the company received the following sentence:
- For bribes paid for work in Ghana – fined £750,000
- For bribes paid for work in Jamaica - fined £750,000
- Breach of the UN sanctions – fined £2 million
- Confiscation order in relation to money received under contracts secured by illegal payments - £1.1 million
- To be paid to Ghana - £658,000
- To be paid to Jamaica - £139,000
- To be paid to Iraq - £618,000
- Payment of the costs to the SFO - £350,000
- First year monitoring costs up to £250,000
Total approximately £6.5 million
As a result of the company's voluntary disclosure the SFO has decided, in relation to the company, to draw a line under the matters that it was investigating in four other countries (Angola, Madagascar, Mozambique and Bangladesh). It appears from papers made available by the SFO that the company had to disclose all relevant material (including privileged material produced by its lawyers) and then plead guilty. There was no agreement at the time of the guilty plea as to the sentence to be imposed. A news release produced by the SFO records that the company "agreed it would be subject to financial penalties to be assessed by the Court, will pay reparations and will submit its internal compliance programme to an SFO approved independent monitor".
It is very clearly recorded in papers made available by the SFO that the SFO is still actively considering the prosecution of individuals at the company who were involved in making the illegal payment. If individuals are prosecuted then the Court's view as to whether the information presently in the public domain has an impact on the relevant person's ability to get a fair trial will be of great interest.
To secure a conviction of a company in the UK it is necessary to identify a single person who has both the necessary mens rea and sufficient involvement with the corrupt act. The prosecutors have identified, in papers made available to the Court, an individual who they state at all material times was in exclusive control of the company's affairs. However, in those same papers it is recorded that a variety of different directors and managers actioned the relevant illegal payments. It is therefore not clear from the material provided that the SFO would have easily secured a conviction of the company on all of the charges.
It is also unclear as to how the conditions of the voluntary disclosure to the SFO have impacted on certain ancillary matters. For instance, the World Bank has a voluntary disclosure programme for those who want to disclose illegal conduct to the World Bank in order to try to avoid disbarment. It is not clear whether the conditions imposed by the SFO, in relation to voluntary disclosure, allowed the company to make a disclosure to the World Bank in an effort to be part of the voluntary disclosure programme.