SFO Confidential: yet to lead to any investigations
The new SFO director, David Green, has his work cut out for him as his budget strapped department heads towards the first anniversary of the Bribery Act, without having initiated a single corporate prosecution for corruption.
As the Act has no retrospective effect, there was always going to be a lag before the SFO would begin enforcement of the Act with any vigour; offences would need to have been committed after 1 July 2011, be detected/reported and investigated before any enforcement action could commence....and even then, there is a great deal of pressure on the SFO to commence its enforcement regime under the Bribery Act with a strong case.
Certainly the SFO is well underway with harvesting leads. In November 2011 the SFO launched its confidential whistleblower hotline “SFO Confidential”, for the reporting of serious or complex fraud or corruption. According to a report in the Financial Times yesterday, SFO Confidential has logged approximately 100 complaints a month since its launch.
To date not a single official investigation has been commenced as a result of the information received via SFO Confidential. It is fair to say that not all of those leads will be worth pursuing, but where there is so much smoke there must surely be a fire somewhere.
We have previously blogged on two high profile whistleblower cases, concerning BP Tankers and EADS, both of which involve allegations of corruption having been handed to the SFO on a platter. We await with interest the SFO’s next move with respect to BP and the supplier that is alleged to have paid bribes to a BP employee. The allegations came to light in March 2012 and we expect it will take some time for both BP and the SFO to investigate. In the meantime, the EADS investigation has been underway for over a year, with still no outcome. While this case involves allegations of conduct pre-dating 1 July 2011, the length of time required for the SFO to complete its investigation suggests we may have to wait some time before we see enforcement by the SFO of Bribery Act cases.
While a significant prosecution under the Act would no doubt kick many of those who are complacent about corruption risks into action, many organisations are nevertheless coming under pressure to develop and implement anti-corruption policies and procedures. This pressure is not coming from the direct fear of prosecution, but is driven by the need to meet the standards expected of counterparties and others who wish to mitigate their organisation’s exposure to corruption through associated parties. It remains to be seen, however, how long this momentum will continue in the absence of enforcement.