The UK Police and SFO must be independent and transparenton Monday 4 September 2017 Written by David Clarke
Specialist fraud and corruption investigators in Britain’s police forces and Serious Fraud Office (SFO), must remain independent from central government to minimise the risk of political interference and be crystal clear in recording crimes and investigation decisions. That was the view I presented when speaking on BBC 5 Live on behalf of the Fraud Advisory Panel last week.
A Surprise Announcement
The subject of Britain’s fraud fighting capabilities made the news following an announcement earlier this year by the Home Secretary that a special review would assess the UK’s response to economic crime https://www.bloomberg.com/news/articles/2017-08-31/may-faces-questions-on-economic-crime-review-as-sfo-awaits-fate.
The Prime Minister Theresa May later sparked outrage among eminent legal professionals when she made a pre-election pledge to subsume the SFO into the National Crime Agency (NCA), despite the review being incomplete. Opponents of this proposal expressed concern that it would disrupt existing investigations and dilute the multidisciplinary expertise that currently works under one roof (lawyers, accountants, police and regulators). They also warned that merger could potentially lead to the public perception of political interference in cases involving key players in the UK economy, if SFO were part of the NCA, which reports directly to ministers.
For almost 30 years, the SFO has operated under a structure that is technically, a non-Ministerial Government Department, ‘superintended’, though not managed, by the Attorney General. In that time, it has developed an international reputation as an expert and effective specialist unit.
There has been criticism in the past that the SFO is costly to run and not delivered results. That has certainly changed under the leadership of the present Director, David Green CB, QC, who was one of the most highly rated criminal silks at the Bar. His most recent investigations have resulted in charges against senior bankers, and the use of Deferred Prosecution Agreements (DPAs) to incentivise self-reporting by companies and good corporate governance. The SFO has brought in excess of £600 million to the public purse through the use of DPA’s and it is questionable whether these could have been delivered without the expertise of organisation.
The SFO costs comparatively little to run, against its benefits in bringing serious criminals to justice. However, it has experienced significant cuts to its budget and in a recent report, the OECD group of wealthy nations has said, ‘The persistent uncertainty about the SFO’s existence and budget is harmful, especially given the SFO’s prioritisation of foreign bribery cases and its demonstrated expertise in such cases’.
Counting all Economic Crimes
When society is facing a critical threat, there are calls for more resources and with fraud and cyber-crime now accounting for over half of all recorded crime in the UK, there is a persuasive case to increase the number police officers and specialist investigators available to tackle this area. However, the huge growth and complex nature of serious fraud, corruption and money laundering, what is urgently needed, is people with the skills and experience to fight fraud and bring serious offenders to justice.
The public need to know what the threat to the UK looks like, how our law enforcement agencies are performing and why they investigate some serious economic crimes and not others. This requires transparency in the recording of crimes, independence of law enforcement officers to take action (without the appearance of political influence), and evidence of effective coordination across agencies. There are examples of where law enforcement agencies have excelled when tackling serious fraud, corruption and money laundering such as Operation Broadway, the multi-agency initiative to target investment fraud. Unfortunately, there are many other cases where the response is lacking and victims and the public are left wondering why certain serious criminals are not being pursued. The PM’s review has been taking evidence from agencies and stakeholders, and will undoubtedly have heard a number of key themes emerging.
One theme is the subject of transparency in recording crime and decisions to investigate or not. It crucial to ensure that crimes are being recorded correctly by the various agencies engaged in the fight against fraud and corruption. Police forces across the UK record crime in accordance with rules set out by government in the National Crime Recording Standard (NCRS).
To quote the guidance from the UK Home Office, the NCRS is designed ‘to ensure that all police forces have the best crime recording system in the world. The purpose recording crime correctly is to ensure that victims of crime receive the service they expect and deserve and inform the public of the scale, scope and risk of crime in their local communities’.
Records maintained by the police provide transparency around what reports the police receive, which they investigate and why, and the outcome of investigations. This information also builds a national picture of the demands made on the police, their effectiveness in fighting crime and helps government establish and measure crime reduction policies.
The NCRS guidance specifies the purpose of the standard is to ensure the public and victims of crime have confidence in the police response when they report a crime. As such, it is imperative that crimes are recorded consistently and accurately.
The majority of economic crime reported to the police in the UK, is now reported to the City of London Police via the Action Fraud service. This simplifies the process of reporting crimes where the location of the offence may be unknown or cross multiple jurisdictions. It also guarantees important information such as details of victims and suspects in collated in one place and can be matched across other intelligence data to identify investigative leads and see global crime trends. Whilst other organisations such as CIFAS (the UKs fraud avoidance service) share fraud information with Action Fraud, some government organisations do not.
The SFO and NCA do not record crimes and to conform with the NCRS, they will direct victims to report to the police, who issue a crime number. This approach has merits but has left victims in the dark about the action and decisions taken by those agencies.
In 2006, the Attorney General led the Fraud Review, the largest cross cutting review of its kind ever undertaken. It published 64 recommendations to improve the UK’s response to fraud, most of which were accepted, and some were implemented. One of the recommendations that was implemented was the establishment of Action Fraud and the NFIB to act as the central repository for all reports of economic crime including cases investigated by law enforcements outside the police. The government’s latest review may have considered this matter and could recommend that all law enforcement agencies adopt the NCRS and/or feed their reports of economic crime into the NFIB’s centralised crime repository as proposed in 2006.
Peel’s Principles Prevail
The independence and accountability of law enforcement officers is the concrete that underpins the effectiveness of the police in a democratic society. In the UK, the birthplace of modern policing, the level of independence, responsibility, accountability and powers vested in police officers is unparalleled. Upon appointment, a police officer swears an oath of allegiance to the Sovereign and vows to uphold the law. They are then subject to the Police (Conduct) Regulations 2012 and the Police Code of Ethics and assume all the powers of a constable, prior to the completion of two years professional police training. The office of constable is both a rank given to a police officer entering service and a position that carries powers that remain with the officers as they rise through to specialist roles and the most senior ranks. An officer has complete discretion as to whether to use their powers and whilst they will be liable for any neglect or misconduct, they cannot be ordered to use their powers.
Police officers of all ranks in the UK are accountable for their own actions and whilst they are answerable to the public and government ministers, they do not take direction from them. Police officers are recruited and selected for further training and promotion based on a fair and transparent process designed to build trust and avoid political influence and corruption. The powers, privileges and responsibilities of the office of constable come to the fore when they are summoned to investigate allegations involving persons in positions of influence. Providing the officer’s conduct is lawful, necessary and proportionate, there is little to obstruct them as ultimately, as servants of the Crown, it is for a court of law to determine whether an officer’s actions were either lawful or unlawful.
The British model of policing is enshrined in the nine Peelian Principles, introduced by Sir Robert Peel when he became Home Secretary in 1822. In Principle 5, Sir Robert defined (in rather quaint language) the ethical nature of policing in the officers duty: ‘To seek and preserve public favour, not by pandering to public opinion, but by constantly demonstrating absolutely impartial service to law, in complete independence of policy, and without regard to the justice or injustice of the substance of individual laws, by ready offering of individual service and friendship to all members of the public without regard to their wealth or social standing, by ready exercise of courtesy and friendly good humour, and by ready offering of individual sacrifice in protecting and preserving life’.
Today, the Principle has evolved into international doctrine and can be found in a succinct form in the European Code of Police Ethics specifically section 15 which states, ‘The police shall enjoy sufficient operational independence from other state bodies in carrying out its given police tasks, for which it should be fully accountable’.
In emerging democracies that have only ever known the police as servants of the state, appointed and directed by a political figure, the prospect of the community appointing a servant, who operates with their consent and has independence from political influence, powers and discretion, is hard to grasp. In the UK, the issue of independence in this unique office becomes most apparent when police officers are called to account for their decisions, often in the courts.
Coordinated People Prevent Crime
Fraudsters and corrupt individuals are especially adept at stealing money, cleaning their ill-gotten gains and covering their tracks. Organised criminal groups achieve this through careful planning and coordination, often in collaboration with gangs in other countries. Unearthing their exploits and bringing criminals to justice requires a high degree of sophisticated cooperation and planning by law enforcement agencies.
Tasking and coordination across law enforcement agencies is a dynamic process that was pioneered in the UK and is applied to great effect to tackle any type of crime and disorder. Using a process called the National Intelligence Model (NIM), this well-established and recognised model is used for:
- Setting the strategic direction of the organisation and units.
- Making prioritised and defendable resourcing decisions.
- Allocating resources intelligently.
- Formulating tactical plans and tasking and coordinating resulting activity.
- Managing the associated risks
The NIM has become a cornerstone of policing in the UK and all forces in the UK have reached the minimum standards for compliance with the model. The UK Government ensured that NIM was fully embedded in forces’ mainstream policing, by issuing a code of practice to require observance of the principles and standards for implementation of the model, and continuous development.
The NIM works at three levels, Local, Regional and National or International. Certain key ‘Assets’ must be in place at each level to enable intelligence to be produced. Without them, the intelligence function will not operate efficiently. Key ‘Intelligence Products’ are produced to drive policing through a formal Tasking and Co-coordinating process. This process is relatively straight forward to apply to crimes that frequently occur in a location such as night time disorder in a city centre. In cases such as large, complex fraud and corruption that cross local and international borders, tasking and coordination multiple agencies is more challenging but not insurmountable. For instance, the response of law enforcement agencies to prepare, prevent and respond to terrorism against a backdrop of heightened threat and police budget cut backs has been exceptional. The adoption of a similar, joined-up approach to tackle the UK’s fraud epidemic is a logical and much needed step.
Obstacles to Collaboration
All agencies are essentially autonomous, with their own operational priorities and discretion as to the cases they investigate. Both the National Crime Agency and the NFIB have a remit to coordinate certain crime operations, however neither has the authority to direct another agency. As a consequence, agencies must encourage others to take action and collaborate and in an era of budget cuts and dwindling police resources, the investigation of a complex economic crime may not be viewed as a priority. The problem is compounded by the fact that the 50 or so law enforcement agencies in the UK use an abundance of different technology platforms to record and track investigations. These systems don’t readily communicate with each other, making it difficult at times to provide updates between agencies and to victims.
In February 2017, the Fraud Advisory Panel wrote to the Home Office recommending that guidance be issued to police forces to assist them to decide which cases warranted investigation based on various factors.
If the Prime Minister’s review of fraud results in the introduction of a process to overcome the many obstacles that delay, hinder or prevent one agency, such as the NFIB from tasking another, say a local police force, to investigate a serious fraud and report back on progress, it will have removed a previously insurmountable barrier.
It remains to be seen what the latest review of fraud fighting capability will recommend and how effective any new measures will prove to be in fighting the war on fraud and corruption. What is certain, is success will be determined by the level of skill, experience, integrity of those men and women we send into battle and their ability to act without undue political influence.
David Clarke is a former Head of the City of London Police Fraud Squad and was a member of the Attorney General led Fraud Review, leading the work to implement the National Fraud Intelligence Bureau and Lead-Force for Economic Crime Investigations. He also led programmes of work to restructure the City of London Police. As a special advisor to the United Nations, OSCE and others, he has aided government agencies in the Middle East, Europe and former Soviet Union to modernise their law enforcement bodies and align themselves to the ethics and structures of the United Kingdom. He is a Trustee of the Fraud Advisory Panel charity and the Head of Anti-Corruption and Multilingual Due Diligence at Today Advisory.