Publication: The Financial Times Issued: Date: 2007-02-28 Reporter:

A Flawed Framework for Fighting Corruption

 

Publication  The Financial Times
Date

2007-02-28

 

The plea this week by Robert Wardle, Serious Fraud Office director, for reform of Britain's creaking anti-corruption laws is a reminder of one of the more striking and puzzling failures of Tony Blair's government.
 
While the prime minister and Gordon Brown, his likely successor, have talked passionately about the need to combat graft in Africa and elsewhere, their administration's record is one of neglect both in prosecution and in tackling grave legislative weaknesses.
 
Mr Wardle's comments come after severe criticism of Britain's decision in December to scrap a probe into alleged bribery of Saudi Arabian officials by BAE Systems, the arms maker, which denies any wrongdoing. London will defend its stance at a meeting next month of the anti-bribery group of the Organisation for Economic Co-operation and Development, where fellow members such as France have started taking corruption enforcement more seriously after a long slumber.
 
While the SFO should have been spared the politicking that led it to drop the Saudi case on national security grounds, it might still have faced problems launching a prosecution under existing corruption laws. Looming large among these was the need to prove that Saudi officials, known in law as "agents", had accepted the alleged bribes without the consent of the king, or "principal".
 
This restrictive corset for defining bribery is typical of an antiquity that characterises corruption laws passed in 1889, 1906 and 1916. Existing rules are also criticised for focusing too much on hard-to-prove state of mind concepts such as deception, rather than on the substance of alleged bribe-payers' actions. Also problematic is the attorney-general's dual role as politician and the SFO's public interest guardian.
 
To describe the government's response to its critics as inadequate seems almost too kind. A draft corruption bill was scrapped in 2003 after being widely condemned for failing to address key problems. The Home Office launched a fresh consultation in 2005 but little has been heard since.
 
One possible starting point for change is a draft bill commissioned by Transparency International, the anti-corruption group. Its definitions of corruption focus on the improper conduct intended to result from a bribe. Other TI suggestions that have wider support are for a US style "books and records" offence, which allows companies to be pursued for reporting suspected bribes inadequately or misleadingly.
 
The government needs urgently to clamber free of the wreckage of the BAE-Saudi case and ensure it develops a system to allow corruption to be targeted toughly, fairly and independently. If Mr Blair is looking for an achievable and valuable legacy that would go some way towards erasing a big stain on his administration's record, he should ask ministers to start work on a new bill now.

With acknowledgement to The Financial Times.


*1       Thabo Mbeki on the other hand has an adequate, if not perfect, legal framework in the Republic of South Africa for his newly founded anti-corruption crusade, in respect of the 2002 Prevention of Corruption Act (see below).

But does he want it used against himself regarding the promotion, execution or procurement of any contract with a public body, private organisation, corporate body or other organisation or institution?

Me thinks that having given his assurance to Thomson-CSF, some two years before the corvette contract was signed, that Thomson-CSF would be awarded the contract for the combat suite and its sensors (which it duly was), makes Mbeki liable to investigation and possible prosecution under the Act.

It is also quite clear that the price of the corvette combat suite was fixed at R2,6 billion when a price of R2,1 billion or at least R2,3 billion was achieveable. The latter is officially on the then secret record. Who must take the blame for this? At least Chief of Acquisitions Chippy Shaik and Chief of Armscor, Llew Swan, but probably others as well.

Prevention of Corruption Act
of 2002

(As introduced in the National Assembly as a section 75 Bill; explanatory summary of the Bill published in Government Gazette No 23336 of 18 April 2002)


12.     Bribery for giving assistance in regard to contracts
(1)     A person is guilty of an offence if he or she corruptly gives or agrees to give any gratification to any other person as an inducement to give or as a reward for giving or having given assistance or as an inducement to use or as a reward for using or having used influence in­

(a)     the promotion, execution or procurement of any contract with a public body, private organisation, corporate body or other organisation or institution; or
(b)     the fixing of the price, consideration or other moneys stipulated or otherwise provided for in any such contract.

(2)     A person is guilty of an offence if he or she corruptly accepts or agrees to accept any gratification as an inducement to give or as a reward for giving or having given assistance or as an inducement to use or as a reward for using or having used influence in­

(a)     the promotion, execution or procurement of any contract with a public body, private organisation, corporate body or other organisation or institution; or
(b)     the fixing of the price, consideration or other moneys stipulated or otherwise provided for in any such contract.

(3)     Any person convicted of an offence referred to in subsection (1) or (2) is liable to a fine or to imprisonment for a period not exceeding 10 years, or to both a fine and such imprisonment.

20.     Duty to report corrupt transactions
(1)     Any public officer to whom any gratification is promised, offered, given or lent in contravention of any provision of this Chapter must, as soon as possible, report such fact, together with the name, if known, of the person or persons concerned to his or her supervisor or at his or her nearest police station.
(2)     If any gratification has been demanded, solicited, accepted, received or obtained from any person in contravention of any provision of this Chapter, or if an attempt has been made to demand, solicit, accept, receive or obtain any gratification from any person in contravention of any provision of this Chapter, such person must, as soon as possible, report such fact, together with the name, if known, of the other person or persons involved at his or her nearest police station.
(3)     Any person who fails to comply with subsection (1) or (2) is guilty of an offence and liable on conviction to a fine or to imprisonment for a period not exceeding three years, or to both a fine and such imprisonment.