News and Insights
Heart of Darkness – is this “The End” of the Serious Fraud Office? – Article by Ben Brocklehurst

I was recently reminded whilst reading the rather coruscating discussion paper “Fraud Focus: Is the Serious Fraud Office fit for purpose?” published by James Forder of The Institute of Economic Affairs that the SFO under Richard Alderman’s Directorship was colloquially known as “The Nightmare on Elm Street” after the popular horror film of the mid-90’s and as a result of the catalogue of failures and misjudgments under his directorship when their offices were located in Elm Street, London.

I imagine it was hoped that this colloquialism would be consigned to history with the appointment of subsequent Directors and given the move of premises to Canada House at 2-4 Cockspur Street, London.

However, given some of the conclusions reached by Mr Forder and the most recent development in the long-running saga between ENRC and the SFO,  perhaps it is time to consider a new sobriquet, maybe “Canada House of Horror – Tales of Terror from The Legendary British Prosecution Agency”, as a tribute to the popular British television series of the early 80’s made by Hammer films in which each self-contained episode featured different types of bizarre and inexplicable goings-on.

I say this because following on from Mr Forder’s comments that the “…succession of issues of improper behaviour [by the SFO] are not the normal adverse rub of the green. Stretching as they do over such a period of time, they point to fundamental problems.” and that the “improper contacts between SFO officials and other parties in ENRC and Unaoil are suggestive of another pattern. They are clearly suggestive of a cultural failing”; the SFO has encountered further issues.

Namely, it has now lost its application for permission to appeal an Order directing the SFO to request that current and former high-ranking officers (including current Director Lisa Osofsky, former Director Sir David Green and former interim Director Mark Thompson) to voluntarily submit to searches of their personal email accounts and other personal devices.

The Court of Appeal found that there was a sound evidential basis for the High Court Judge, making the original Order, to conclude that at least some of the relevant custodians had or may have, used personal accounts and devices for work related purposes.

Notwithstanding the fact that the use of non-work email accounts and devices for SFO investigation/prosecution related matters must breach all manner of SFO policies on confidentiality and disclosure, including most probably The Official Secrets Act, GDPR and other employment rules, one does ponder what the nature of the subjects and matters were that they considered had to be conducted outside the specified work channels.

Mark Thompson, as you may recall, was found in the Judgment of Mr Justice Waksman to have sent a letter from the SFO to ENRC at the behest of ENRC’s then lawyer Neil Gerrard the terms of which itself were disingenuous” and that it was written to help “Mr Gerrard (albeit wrongfully) to exert pressure on his client to “play ball”” (ENRC v Dechert Judgment at paragraphs 746-747).

These communications were presumably conducted through proper work channels as we are aware of their existence (although Mr Thompson did double-delete this material from the SFO records in the mistaken belief there was a size restriction on his electronic mailbox but, one assumes, Mr Gerrard/Dechert must have retained it in their records) so if this type of behaviour was something they were prepared to conduct on the record what may they have done “off the books”!

The inclusion of Lisa Osofsky in the list of SFO officers that will be asked to search her personal email accounts and devices for material relating to the ENRC investigation follows on from the heavy criticism she received in relation to the Unaoil case for her interactions with a ‘fixer’ where communications were conducted through a personal device and there was a failure to take contemporaneous notes of these meetings and conversations.

The apparent defence to this was that she had not been in the job that long, had limited direct experience of the English and Welsh system and didn’t receive proper training for such a role in the civil service. This was notwithstanding she is a qualified UK barrister and had “over 30 years’ experience of focusing on financial crime in both the UK and US, including as a federal prosecutor. She spent five years as the Deputy General Counsel and Ethics Officer at the FBI” (Chapter 5, paragraph 5 of Sir David Calvert-Smith’s Independent review of the Unaoil case).

In that same review (Chapter 6, paragraphs 18 and 19 of Sir David Calvert-Smith’s Independent review of the Unaoil case) Lisa Osofsky at the start of her tenure “recalled that he [Mark Thompson] was commended to her as someone she could rely upon” in terms of being someone within the SFO’s senior leadership team who she could turn to for advice and that she did “attempt to learn as much as possible about the role from former SFO Directors”.

No doubt one of these former Directors would have been Sir David Green who also appears on the list of SFO officers that had, or may have, used personal accounts and devices for work related purposes. If it transpires that Sir David Green did indeed engage in work related communications on non-work email accounts and devices; at first blush it would make his public lambasting of the Richard Alderman regime and castigation of Mr Alderman during his evidence in the ENRC v Dechert proceedings for having “fireside chats” and not taking proper notes somewhat hypocritical.

It would also tend to support Mr Forder’s conclusion that it is indicative of a cultural failing in the SFO. Perhaps a memo came down from on high that, despite what the policies say and never mind that it breaches all sorts of rules, certain communications in relation to our work can be conducted through personal email accounts and mobile phones.

That said Richard (Dick) Gould and Kevin Davies (SFO senior officers who worked on the ENRC and Unaoil investigation and prosecution respectively) obviously didn’t get this theoretical memo.

Mr Gould’s work phone got lost and all the data on Mr Davies’ work phone, who was the main SFO contact with the ‘fixer’, was accidentally (five incorrect password attempts) ‘wiped’ five days after a SFO case controller had specifically asked him for any relevant material in relation to his contact with the “fixer” which was required for a review by disclosure counsel (Chapter 8, paragraphs 20 and 26 of Sir David Calvert-Smith’s Independent review of the Unaoil case).

To be fair to Mr Davies this wasn’t the first time this had happened with his phone, he apparently had a habit of incorrectly entering his password several times, which had had to be rebuilt on one occasion prior to this. This was five days after another SFO Officer had sent an email to him which said, “can I ask that any communications [with the ‘fixer’] include ‘A’ and ‘E’ as the assigned case controllers? It is obviously important that they remain sighted on all developments, not least from a disclosure perspective.” (Chapter 8, paragraphs 16 and 86 of Sir David Calvert-Smith’s Independent review of the Unaoil case).

Additionally, one might consider whether the use of personal email accounts and devices for SFO investigation and prosecution related communications was restricted to the ENRC and Unaoil matters. Is it possible that other SFO matters (not least any involving Mr Gerrard) have caches of such material in existence?

In keeping with the movie theme, the title of this article is a reference to the Joseph Conrad novel of the same name which was adapted into the late 1970’s classic film “Apocalypse Now” (Apocalypse in Greek means “unveiling of the truth”) which has a memorable closing scene played out to the Doors song “The End”: Will the material uncovered by theses searches be the figurative “napalm” that burns down Canada House?






Featured News & Insights