The Serious Fraud Office must prevent third parties having ‘direct access’ to the watchdog’s director and ensure all prosecutions have an ‘effective disclosure strategy’, a review into the calamitous Unaoil bribery case recommended today – as a third man jailed after the investigation had his name cleared.
‘Fundamental’ failures by the SFO – including poor record keeping and ‘inadequate resourcing’, as well as previously-undisclosed dealings with a ‘fixer’ working on behalf of the family behind Unaoil – led to the unsafe convictions being overturned, the review found.
Four men were jailed for conspiracy to give corrupt payments following the SFO’s investigation into bribes paid to obtain lucrative contracts in Iraq after the overthrow of Saddam Hussein.
But the SFO did not prosecute the company's owners and controllers: Cyrus and Saman Ahsani, Unaoil’s chief executive and chief operating officer, cut a deal with the US authorities. Their father, Unaoil’s chairman Ata Ahsani, was also not prosecuted.
In December, the Court of Appeal quashed the conviction of Unaoil’s former territory manager for Iraq Ziad Akle, 47, after the SFO disclosed evidence of ‘wholly inappropriate’ contacts with David Tinsley, a former US Drug Enforcement Administration agent who acted on behalf of the Ahsanis.
Tinsley – who met with Osofsky and had regular contact with senior officers – told the SFO that he could persuade Unaoil’s former Iraq partner Basil Al Jarah, 73, to plead guilty, which he ultimately did.
Attorney general Suella Braverman commissioned Calvert-Smith, a former High Court judge and ex-director of public prosecutions, to review the SFO’s disclosure failings in February – shortly after which former senior sales manager at SBM Offshore Paul Bond, 70, had his conviction overturned, which the SFO estimates in its annual report will lead to a £1.5m costs bill.
Today – as Calvert-Smith bemoaned the ‘distrust between the case team and senior management’ caused by the contacts with Tinsley – the conviction of Stephen Whiteley, 67, former vice president at SBM and Unaoil’s territory manager for Iraq, was also quashed.
Calvert-Smith said some of the events which prompted the appeals were ‘beyond the control of the SFO’, such as the fact that Osofsky – formerly the Federal Bureau of Investigation’s deputy general counsel – previously worked with ‘former senior officials of US law enforcement agencies’.
His review also found that the SFO ‘cannot be blamed for the decision of the US to institute its own extradition requests’ in relation to Cyrus and Saman Ahsani, adding that there was a clear need to need to ‘mend fences with the US authorities’.
Osofsky’s introduction to Tinsley by a former colleague ‘within days of taking up her appointment’ was also ‘unavoidable’, with Calvert-Smith saying: ‘The new [director], aware of the damage recently done to [US Department of Justice] or FBI/SFO relations, could hardly refuse at least an initial approach from a person recommended to her by a former respected colleague.’
However, the review found that the SFO should not have taken ‘the opportunity presented by the possibility that the Unaoil case could be “wrapped up” with pleas from Basil Al Jarah, Ziad Akle and Paul Bond either in the US or in the UK without the need for costly trials and presented as a triumph for the new SFO regime, and the start of a new era of transatlantic cooperation with the assistance of David Tinsley’.
‘Such improvements in UK/US cooperation did not need, and should not have involved, the assistance of a third party “fixer”,’ Calvert-Smith said.
He made 11 recommendations, including the development of ‘a revised process to enable the superintendence of sensitive and high-risk cases’ and that the director’s private office should ensure that any contacts concerning current investigations or prosecutions should be ‘immediately “rerouted” and that no further direct access to the [director] is allowed’.
His review was made public on the same day as another review into the collapse of the case against two former directors of outsourcing giant Serco after disclosure failings – which landed the watchdog with a £2.7m costs bill.
Brian Altman QC said there were ‘systemic problems of real concern’ in relation to the SFO’s disclosure in that case, including that the appointed disclosure officer’s ‘inexperience should have disqualified him from appointment as Disclosure Officer on such a large and complex case’. He also found that the SFO’s quality assurance review regime was ‘inadequate and unfit for such a large and complex disclosure process’.
Osofsky said in a statement that ‘implementing the recommendations’ made by Calvert-Smith and Altman is ‘our pressing priority’.
‘The reviews are a sobering read for anyone who believes in the mission and purpose of the SFO, but from the outset we wanted to establish what happened in these two cases and use the findings to improve our performance,’ she added.
Braverman said that ‘a clear plan of action to respond to the [Calvert-Smith] review recommendations has been developed’, adding that she will be ‘closely monitoring the SFO’s progress and delivery of that plan’.
Whiteley’s lawyer Sam Healey, partner at JMW Solicitors, said: ‘We’re extremely pleased that Mr Whiteley’s appeal has been successful. Given the concerns with disclosure in this case and the conduct of the SFO, the Court of Appeal has today agreed to overturn his conviction.
‘This case has cast a dark cloud over Mr Whiteley’s life for several years. It has been the catalyst for a series of health concerns, has caused immense financial strain and has weighed heavily on his partner and the rest of his family. Today’s news means that Mr Whiteley can now begin to live his life again and we wish both him and his family all the best for the future.’
Bond’s solicitor Joseph Kotrie-Monson, of Mary Monson Solicitors, said: ‘This case was a sham all along and the SFO’s head Lisa Osofsky knew it. Quite unbelievably, despite odious truth upon odious truth having being revealed, she remains in post. Perhaps now, finally, the government will do the only honourable thing and send her on her way.’
Susan Hawley, executive director at anti-corruption charity Spotlight on Corruption, said: ‘This is a grim day for the SFO. The catalogue of errors laid out in the Calvert-Smith review shows that the quashing of yet another conviction in the Unaoil case was entirely avoidable.’
She added: ‘Both the Calvert-Smith and the Altman reviews point to similar and very serious underlying issues behind the SFO’s spate of collapsed trials. The huge burden that disclosure places on prosecutors is a ticking time bomb that has to be grappled with urgently.
‘Lack of proper resourcing, outdated technology, and poor management at the agency is leading to over-stretched case teams, poor quality assurance on cases and disclosure failures.
‘The SFO is ultimately too important to the UK’s ability to fight big ticket fraud and corruption to be allowed to fail. The recommendations from these reviews need to be implemented urgently.’
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