May 7 2023

Remember the De Lorean fiasco? To provide jobs in Northern Ireland, the then government paid the bouffant-haired car designer to set up his factory there. It collapsed a few years later amidst missing money and fraud. Arthur Andersen, the auditors, who admitted missing obvious fraud signs, were banned from government work and sued. It was only when Blair won that the ban on AA was lifted and a risible settlement agreed. (Doubtless entirely coincidentally, AA had provided free advice to Labour in opposition. A “scratch my back and I’ll scratch yours” approach to favours has never restricted itself to one party.)

Fast forward a quarter of a century. Fujitsu, whose Horizon accounting system used by the Post Office, was responsible for the largest miscarriage of justice in British history, has suffered no similar penalty. Indeed, no penalty at all. Far from it. It has been rewarded with more lucrative government contracts; it has not paid any compensation; no company official has been held responsible.

Why? Well, one answer is that AA’s failures harmed the government. Whereas Fujitsu and the Post Office only harmed some lowly sub-postmasters and mistresses. A cynical take. But an accurate one. The brutal reality is that being in public ownership or a public service does not automatically mean an organization behaves well. Worse, it often means that when it causes harm to others, its primary interest is to protect itself – even at the expense of those it has harmed. This is not new. See how the Aberfan families were treated in the decades after the loss of their children. Or the victims of the blood contamination scandal or many other NHS scandals or Windrush.

This story shows a state – and many of its key functions: the Post Office, owned by the state, the criminal justice system, run by the state, and the responsible Ministers and civil servants – to be malign, incompetent, indifferent to the damage caused, defensive and determined (behind all the paraphernalia of inquiries, reviews, assessments) to delay the allocation of responsibility, effective consequences for those responsible and proper, timely compensation for those harmed. It is no consolation – nor anything for the rest of us to be proud of – that some judges, some lawyers, a few persistent journalists and 1 MP – James Arbuthnot – have battled and are still battling to ensure justice.

There has been a book, a podcast, a heartbreaking Panorama documentary. The Times has written some scathing editorials. The inquiry grinds on, lawyers argue about different compensation schemes, the police investigation into possible perjury by Fujitsu personnel has been announced. But nothing seems to happen. Meanwhile yet more postmasters die – 59 so far. Is that the plan? To wait until everyone is dead, then quietly bury whatever report is produced while those responsible get away with it and carry on making money? Apparently so.

It is cruel. It adds a further injustice to the original one. It displays a contempt for the people who have suffered and are still suffering. It displays an indifference to the human consequences of people’s acts and omissions, something all too easy to forget amongst the mass of wrongdoing patiently unearthed by courts and inquiries. That cruelty consists in holding out the promise of compensation while making the process of getting it long, complicated and difficult. Meanwhile, those responsible, both for the injustice and the delays, suffer nothing, withhold evidence from the inquiry and/or, grotesquely, award themselves bonuses and lie about it. On its website the Post Office says it wants “to remain one of the most admired institutions in the public sector”. “Remain“? “Most admired“? Both delusional and arrogant.

Why has this scandal not been taken more seriously?

• The very diffuse nature of the tragedy over two decades. Lots of individual stories, all heartbreaking. But no one event or place to focus on. No image. No buried school or trapped fans in a football pen or burnt-out tower. No anniversary. So it is easy for it to fade away into a complicated background, something to do with accounting and IT and legal stuff. No-one is going to sing their heart out for that. No Royal is going to visit and lay flowers.
• Worse – this was not just the wrong people convicted of a crime. There was no crime.  It is hard to get your head round the fact that hundreds of people were investigated, tried and convicted for crimes that never happened. How can this possibly be?
• The people to whom this happened come from all backgrounds, all over the country, of all ages. It makes it worse but also means they have no obvious representative to speak for them, no-one to whom they – collectively – matter.
• No political party has taken up their cause. All the major parties had Ministers responsible for the Post Office who failed to ensure that it behaved competently and then, when the scandal erupted, failed to ensure that it was handled properly. So they hide behind their pathetic claims that they weren’t briefed or didn’t realise or delegated or assumed that others were doing their job and are shocked and appalled and oh dear … blah blah .. and very sorry etc.,. What is the point of these junior Ministers if all they can do is hand-wringing avoidance of responsibility?
• Far too many groups behaved badly. What makes this so hard to comprehend is the overwhelming scale. Look at all those responsible: Fujitsu, those who developed, oversaw and sold Horizon, Post Office management at all levels, internal investigators, in-house lawyers, external lawyers, IT staff, those knowing something was wrong but saying nothing, Ministers, civil servants advising them, prosecutors, the judges’ ruling that the computer evidence should be believed (one of the stupidest judicial rulings made). All these, through their actions and omissions, are responsible; many continue to be responsible for the delays in giving the victims adequate compensation while they are still alive. Easier to forget or not engage at all.

Among all these failings, two deserve very close scrutiny.

The lawyers

There were obvious problems with the Post Office being its own prosecutor, the confusion between the role of investigators and prosecutors, the failures of those investigators, a lack of clarity about the duties owed and to whom by the in-house lawyers, failures to make proper disclosure, withholding key evidence, failure to speak up, conflicts of interest for the lawyers advising on the compensation schemes, lack of honesty, failure to understand or challenge the accounting and technical evidence (a persistent problem for the legal system – see the Sally Clark case) and so on. Bluntly, the Post Office ruined innocent people by lying, manipulating and subverting for its own commercial advantage the English justice system. Its lawyers were central to that. Many of those involved should be ashamed of – and deserve censure for – their unprofessionalism and behaviour.

The approach to the technical (in this case, computer) evidence

There is a tendency (not confined to the Post Office) to believe there is one technological system which will provide the answer to a problem; and believe only what that technology tells you. Both are foolish, dangerous impulses. (A lesson for us on the cusp of a new technological revolution.) When combined with working back from your desired conclusion (“we’re going to find fraud with our shiny new toy”), miscarriages of justice are all but inevitable. (Something for Holyrood to consider before proceeding with its judge-only rape trial pilot designed to increase convictions.)

What now?

3 people: the PM, the Chancellor, the Business Secretary need to stop hiding behind endless inquiries and legal to-ing and fro-ing and make it a top priority to get compensation paid promptly.

• Those MPs trying to help their constituents need to badger them until they do.
• The inquiry into responsibility must be uncoupled from the assessment and payment of compensation.
• Fujitsu should be given no government contracts until they pay compensation.
• The Post Office’s senior management needs replacing by honest capable people. A public explanation is needed for why it awarded itself a bonus scheme for complying with an inquiry set up to investigate its own failings and why it lied about it in its public accounts.

Meanwhile, remember the words of Desmond Ackner QC, Counsel for the Aberfan families, to the official inquiry. They apply as easily to Horizon as to a slag heap.

This was a slow growing man-made menace, fed by the indifference of those who should never have permitted its existence. That is the horror of this disaster. There can be no more bitter reminder of the truth and wisdom of George Bernard Shaw’s condemnation –

“The worst sin towards our fellows is not to hate them. It is to be indifferent to them. For that is the essence of inhumanity.”

Photo by Kutan Ural on unsplash.com.

July 11 2021

There is always a clue. Sometimes more than one. Often hiding in plain sight, if only others used their eyes.

On Friday, Wayne Couzens, a former Metropolitan Police officer and member of the Parliamentary and Diplomatic Protection Squad, authorised to carry a firearm, pleaded guilty to the murder of Sarah Everard earlier this year. He had earlier pleaded guilty to her kidnap and rape. The story of what he did to her is harrowing.

Despite his planning and attempts to cover his tracks, he gave his police mobile number to the firm from which he hired the car he used for the kidnap. That mistake (or arrogance) was what caught him. The number plate was caught on CCTV next to where Sarah was last seen and the telephone numbers were run through the police database. One can only imagine the reaction and shock of those doing that search when they realised that their prime suspect was a serving police officer, moreover one who would have had to go through an enhanced level of vetting for his role and his authority to carry firearms.

Perhaps they should not have been so shocked. Following his arrest, we learnt that a few days earlier he had been caught indecently exposing himself elsewhere in South London. No action was taken and the reasons for this are the subject of a separate police investigation.

This weekend we also learnt that:-

1. He had been accused of indecent exposure six years ago, again with no action being taken.

2. When in the Civil Nuclear Constabulary protecting Sellafield, his nickname among colleagues was “The Rapist” because his behaviour towards women colleagues was so creepy.

It would not be surprising if more were to come out about his behaviour and attitudes. As of now there are 12 police officers in at least two police forces under investigation with regard to what they did or did not do re the investigation and the Everard murder.

There are a number of points worth making, even on the basis of this limited information.

1. It is usually best to avoid hiring wrong’uns into your organization. Or at least try to. An obvious point perhaps but one which is not in practice always taken as seriously as it should be. Keeping someone out is a whole load easier and less time-consuming than trying to get them out later. The refusal to admit a mistake was made, the belief in HR development and appraisals are powerful forces favouring inertia.

2. Checking CVs, due diligence, vetting really matter. Small inconsistencies, missing information, stories which do not add up, which do not correspond with what was said in interview, which are changed are warning signs and should never be ignored. They too often are. Vetting is too often outsourced to juniors far away, too often treated as an administrative step to be completed rather than as a key part of the decision-making process. If someone warns you about a person’s reputation (as happened with a notorious fraudster) don’t ignore it just because you don’t have a procedure to deal with with it. Due diligence is not a paper exercise: it is trying to find out about a person’s character, what they are like when they are not shiny faced and trying to impress you.

Bluntly, if the Met’s enhanced vetting allowed someone like this to hold a firearm and guard Parliamentarians, what is the point of it? Or was it the case that it simply was not done well – or at all?

3. Remember that, whatever sector you are in, you are managing risk. If someone dubious gets past your first line of defence, they’ve learnt that your defences are not great. They’ve learnt how to fool you and get away with it. How seriously do you think they’re going to take your training and your other defence systems? How are you going to manage a risk you don’t even know you have?

4. Don’t ignore the small stuff. Not every person indecently exposing themself goes on to rape and murder. Not every person telling a lie on a CV becomes a fraudster. But can you tell the difference between those who will and those who won’t? And do you want to take the risk of getting it wrong?

Perhaps indecent exposure (a crime) was seen as a bit of a joke? Perhaps creepy behaviour towards women was seen as him simply being a bit of a lad? Maybe the women were seen as unduly sensitive and their concerns downplayed? The police investigations may reveal answers.

But what about the much more common small lie – often handwaved away as “small” and so unimportant, forgetting that it is the fact of lying which matters not what the lie is about? Most of the major fraudsters in recent history lied about seemingly unimportant things at an early stage in their career. Their lies were ignored. They learnt they could lie and get away with it. They did not stop there.

There are always clues. They tell a story. It’s one we should read with care.

Photo by Tadas Petrokas on Unsplash

July 30 2020

Last week Parliament’s Intelligence and Security Committee wrote about how Russian oligarchs and their money had been welcomed by the UK from the mid-1990’s onwards, with Britain’s “light touch … regulation” (where have we heard that before?). The UK’s rule of law and judicial system were seen as a particular draw. But, as the report says: “few questions – if any – were asked about the provenance of this considerable wealth.” Oh dear.

The report says that, rather than the encouragement of ethical practices and transparency amongst the Russian investors as hoped, Britain’s institutions provided “ideal mechanisms by which illicit finance could be recycled through what has been referred to as the London ‘laundromat’”. The patronage and influence this money brought to “willing beneficiaries” helped the reputation laundering process. And then there are the enablers, described with some asperity, as those who “on occasion help launder money through offshore shell companies and fabricate ‘due diligence’ reports”. Dear oh dear.

The authorities do have some ways of countering this: Unexplained Wealth Orders, for instance and seizure of assets. How well these work is another matter, of course. The Court of Appeal recently overturned three UWO’s obtained against the family of the former president of  Kazakhstan, now subject to appeal by the National Crime Agency. The NCA may win its appeal but, as stated in the report, there is an imbalance of resources between the NCA and those with the wealth to fight back. And the longer the money is around and channelled through companies, property, trusts, charities and the rest, the easier it is to disguise its original smell and explain it away – enough to fight off the UWO, anyway.

There have been some successes: in relation to the spending (£11 million on a townhouse, £16 million spent in Harrods over a decade) by the wife of a former chairman (and convicted fraudster) of a state-owned bank in Azerbaijan, for instance. Or the seizure by the City of London police of £2 million in cash held in British banks by a professional money launderer acting for the Calabrian mafia, the ‘Ndrangheta, after a two-year investigation.

Three points are worth noting:

• One of the weakest points of any system is the point of entry. Much easier to keep “dirty” money out than to try and get rid of it once it is in and, over time, made to appear respectable or, at least, explained. Ditto re dodgy individuals.
• Once in, getting rid of the dodgy individuals and money risks becoming a game of Whack-a-Mole, one which tests the patience and resources of the authorities and requires their relentless and sustained focus.
• Be wary of those seeking to use the credit and reputation you have built up over years. That applies to professionals as much as it does to countries. It is flattering to think you will teach and improve them. The grubby reality may be that it is your reputation which is tarnished. It’s an old problem: some well-established banks and professionals learnt this the hard way – with one Robert Maxwell back in the early 1990’s. It’s a lesson worth remembering rather than relearning.

One thing is puzzling though. For years – since at least 1994 – there have been money laundering regulations, with the latest iteration brought in last year. The level of information needed is onerous and extensive. The principle underlying all these rules and regulations and the concept of due diligence is that banks and lawyers and estate agents and the myriad of intermediaries should really know and understand their customers and where their money comes from. So how is it that, even now, a couple of Calabrian Mafiosi are able to set up a company that does nothing, give an address where they do not live and deposit £2 million in an English bank account?

Surely it is not because, as reportedly attributed to Anarchasis, a Scythian visitor to 6^th century Athens: “Written laws are like spiders’ webs; they catch the weak and poor but are torn in pieces by the rich and powerful.”

Photo by Bence Balla-Schottner on Unsplash