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Corruption

My Lords, I thank the noble Baroness for providing the opportunity to debate these issues, and I hope to clear some of the air. It is not the first time that I have come to the House to deal with these issues. I came here immediately that the SFO reached its decision. The noble Lord, Lord Kingsland, at least, welcomed the fact that I did so, even though the noble Lord, Lord Thomas of Gresford, takes a different view. I answered a Question on this matter in the House on 18 January. It was also raised on 11 January in a debate on poverty and governance, to which my noble friend the Leader of the House responded and referred to this matter. I am very happy to be here today and will do the best I can to answer the many questions. I thank all noble Lords for having spoken; it has been a wide-ranging debate. I want to come back to the issues surrounding the BAE case, because a number of misconceptions and inaccuracies, and worse, have been expressed about it and it has touched on the issue of my role. That is an entirely legitimate matter of public debate, and one sees from the newspapers that I am getting a lot of helpful advice from my ministerial colleagues, for which I am extremely grateful, and other Members of this House. The noble Lord, Lord Henley, in his final remark, was absolutely right and I will come back to that. It is only because I am a Member of this House that I am accountable to Parliament for what I do, that I am here answering these questions, that I answered the questions put previously and that I have answered—together with my deputy, the Solicitor-General—something like 20 parliamentary Questions and we have corresponded with some 30 Members of both Houses on this matter. That would not have happened if the role of Attorney-General were fulfilled by an independent civil servant. I very much commend to this House the wisdom and experience of the noble and learned Lords, Lord Lyell of Markyate and Lord Mayhew of Twysden, who, between them, if my arithmetic is right, have 19 years of experience as law officers—far more than I have. When they point to the importance of accountability and the way that prosecution decisions are taken, to which I shall return, the House should, I respectfully suggest, take strong note. I have always paid strong note to what they have said. I start with a point on which I think there is agreement: the strong commitment of this Government to tackling international corruption. The decision of the SFO director to stop the BAE Systems case in relation to the Al Yamamah contract emphatically does not mean that we are backing off from that commitment. On the contrary, I am clear that we need to redouble our efforts. So the SFO is actively pursuing a number of investigations into suspected international corruption, including some involving BAE Systems. I have told the SFO that it should pursue those cases vigorously. It is important to send out a clear message, and I have tried to do so, that no company or individual is above the law. I shall explain in a moment the other steps that we have taken. I want to repeat some basic facts about the SFO decision. The decision to halt the case was taken by the director of the Serious Fraud Office, not by me, let alone by the Prime Minister. What the Prime Minister said was that he took responsibility for the advice given about national security. I shall return to that issue, but I can assure this House that the decision was not taken by the Prime Minister. I would never have allowed that to happen. The director of the SFO has been very clear in what he has said. The noble Lord smiles at that, but that is the fact. I would not stand at the Dispatch Box and say that if it were not the case. The director and the assistant-director of the SFO, who attended the recent meeting of the OECD working party, have made that plain. Secondly, the decision was based on the risk to national and international security, and ultimately the risk to UK lives, if the investigation had continued. I suggest respectfully that those who expressed concern about the director’s decision need to be clear about what they are saying. Are they saying that there was no risk to national security? That is the view of the noble Lords, Lord Garden and Lord Dykes. If so, they should say why their judgment and knowledge on these issues is better than that of those whose job it is to deal with them, including the Prime Minister, senior Ministers, our intelligence agencies and our ambassador. The director and I would value the co-operation of those people, if advice came about the risk, above the opinions expressed by either of the noble Lords, despite their distinction and background. If the noble Lords are not saying that, do they accept that there was a risk to national security but that the SFO should have continued with the investigation regardless, potentially and ultimately putting at risk the lives of our citizens? That is what national security is about. Is that what they are saying? You cannot get away from answering those questions. We cannot wring our hands. We had to reach a decision. The director had to reach a decision. He did so on the basis of advice he received about the risks to national and international security. I agreed with that decision but took into account my own view that the case was unlikely to lead to a successful prosecution in any event. It was not a decision taken lightly. Of course, there are countervailing considerations, many referred to by noble Lords today—the reputation of this country, our commitment to tackling corruption, the message that we might give to others—but, at the end of the day, sometimes hard decisions have to be made;one has to grasp the nettle, and the facts were that there was a real threat that had to be considered properly. We also take very seriously our international obligations, and I shall come to that, but let me say a little more about what the SFO and Government are doing to combat international corruption. The thrust of the noble Baroness’s Motion is what we are doing to commit ourselves to that task. The SFO is pursuing other ongoing and active investigations in relation to BAE Systems and to other countries. This week, arrests and search warrants were executed in relation to one of those cases. The SFO is investigating part of the subject matter into suspected corruption in the UN Oil for Food programme concerning alleged fraud involving contracts to supply humanitarian goods to the Iraqi Government. I am very happy to be able to tell the House that the Treasury has recognised the importance of the SFO investigation into the humanitarian aid aspect of Oil for Food, and today I have been told that we have been provided for that purpose with approximately £22 million additional funding. That indicates the commitment. I have told the director of the SFO that I expect him to pursue these investigations vigorously and that, if more resources are needed, every effort will be made to find them. I want it to be clear that neither BAE nor any other company or individual is above the law or somehow immune from action in this area. In addition, the Government are taking other action to combat international corruption. The noble Baroness, Lady Northover, raised this matter, and I have discussed it with the right honourable Hilary Benn, Secretary of State for International Development. There is a four-point plan to investigate and prosecute bribery overseas, to eliminate money laundering and to recover stolen assets, promote responsible business conduct and support international efforts to fight corruption. It is not just a plan, action has taken place: things have been happening; we have more investigative capacity; there is a new international corruption group, staffed by City of London and Metropolitan Police officers. It is that group, I think, that dealt with the arrests this week. If I said that the case was a BAE one—I do not think that I did—I stand corrected; it was a non-BAE case. There is also the new SFO vetting standards and overseas corruption unit. We have played an important part at the inaugural conference of states parties to the UN Convention against Corruption. We are working closely with our international partners to agree guidelines for technical assistance and are providing that technical assistance. For example, the SFO recently provided training to prosecutors from Nigeria. The noble Lord, Lord Brennan, mentioned the importance of prevention. A good example of the work that this country is doing in prevention is our promotion of the extractive industries transparency initiative, which supports improved governance in resource-rich countries through the full publication and validation of company payments and government revenues. There have been other results, too. Moneys have been stopped, having been brought from Nigeria, and the High Court has ordered the return of other moneys to Nigeria. Let me turn to the issue of the legal decision taken and the OECD convention. The noble and learned Lords, Lord Lyell and Lord Mayhew, the noble Lord, Lord Brennan, and the noble Baroness, Lady Taylor, made it clear that, under the system that we have operated for many years—it is set out in the Code for Crown Prosecutors, which was laid before Parliament and to which I consistently refer in this House and in correspondence—there are two tests for prosecution. The public interest test is nothing new; it is consistently applied. Nothing could be a stronger example of public interest than where national security is involved. It happens that decisions have to be made about prosecutions the result of which might be that we would have to reveal information that would be damaging to national security. If so, we do not go ahead. We think about it very carefully, but we do not go ahead. That is the norm. What, then, is the position of the OECD convention? The critical words are: "““Investigation and prosecution … shall not be influenced by considerations of national economic interest””—" I underline the words ““economic interest””— "““the potential effect upon relations with another State or the identity of the natural or legal persons involved””." The director of the SFO and I are firmly of the view that the decision taken was compatible with Article 5 of the OECD convention. I do not believe that the convention does, or was ever intended to, prevent national authorities from taking decisions on the basis of such fundamental considerations of national and international security. I do not believe that we would have signed up to it if we had thought that we were abandoning any ability to have regard to something as fundamental as national security, and I do not believe that any other country would have signed up, either. Two points make this case very special. The decision was not based on commercial interests; it was based on national security. A key point is the crucial importance of Saudi Arabia as a partner in the UK’s fight against terrorism. I set this out in some detail in the letter to the noble Lord, Lord Garden, which has been placed in the Library. Saudi Arabia is a source of valuable streams of intelligence on al-Qaeda and other terrorist activity that may represent a threat to the UK, to our citizens here and abroad and to our Armed Forces. Saudi Arabia also plays a key role in the Government’s efforts to promote peace and stability in the Middle East. This is important not only in relation to international tension but in reducing a sense of grievance in the Muslim world, which has an impact here at home. The question was asked whether this applies to other countries. I do not see how it does, because of the particular position of Saudi Arabia as a partner. Having been advised of the risk, the director concluded that it was not one that could properly be run in the public interest. The noble Lord, Lord Chidgey, suggested that 35 out of 36 members of the OECD working group took the view that there was a problem. That is not what I am told happened at the meeting, which I did not attend. But let there be an inquiry; let the working group consider it, if that is what it wants to do. That is fine. We have responded fully and explained it. I do not have a difficulty with this. I believe that the group was grateful for what we said. Equally, it has continuing questions about our law. The noble Lords, Lord Chidgey and Lord Renton of Mount Harry, referred to the prospects for an anti-corruption law. These are proper questions, which will need to be debated. I need to deal with one or two matters specifically. First, the position of SIS, the secret intelligence agency, was raised. I have dealt with this in the House and I want to say something about it again. SIS has made it clear publicly that it shared the concerns of others in government over the possible consequences for the public interest of the SFO investigation. It considered that there was a threat to the UK’s national security interests from pursuing the Al Yamamah investigation and it had been informed of the threat to curtail co-operation directly. Neither SIS nor anyone else who was consulted disagreed with the overall assessment that the Saudi threats were real. SIS agreed that, while it did not know whether this threat would be carried out, it had to be taken seriously. As I said on 18 January, before the SFO decision was taken, I discussed the matter directly with the chief of SIS. The SIS has authorised me to say that it is clear about the importance of the Saudi counterterrorist effort to the UK. Its view is that it would not be possible to replicate the level of counter-terrorism effort that had been achieved with the Saudis on UK/Saudi aspects of the problem if it were necessary to work at one remove, via the USA, for example. I turn briefly, as time is short, to my own position. An interesting thing about the debate, given that the director and I have made it clear that he took the decision, is quite why there is such a lot of focus on my role, but I am perfectly happy to deal with that and, in due course, to respond and to debate the issues. Accountability seems to me an absolutely critical issue, which must be put into the balance in any case. I have to say something about the speech of the noble Lord, Lord Lester, which appeared to me to be very much his article in today’s Guardian—none the worse for hearing it twice. He said that I have argued that the Attorney-General should be at the heart of government so that he may be politically influential. I do not recall ever having said that. It is not my position. Indeed, I have taken some care to ensure that my involvement in political affairs has been very limited. No one has ever seen me on ““Question Time””. No one has ever heard me speak at a party conference. If I dare to say it in the presence of two distinguished former Attorneys-General who were members of the House of Commons, I have not been round the country canvassing for my own seat, let alone anybody else’s. However, I believe that there is real value in being a member of the Government. For example, I would like to think that one of the achievements of my time here has been the strengthening of the position of prosecutors. The Crown Prosecution Service has gone from being, to some extent, a demoralised, undervalued service to being a forward-looking service serving the interests of the community and helping to bring offenders to justice. I do not believe that that could have been achieved if I had not been in this position in government, with the ability to talk directly to other Ministers. Let me deal with the story in this morning’s Guardian. It is the case that at one stage the SFO contemplated inviting BAE and certain BAE executives to plead guilty to certain charges. No charges had been laid. Counsel had been consulted on that course and I did not object to it, although it is of course entirely a matter of speculation whether anyone would have been prepared to plead guilty. It is quite untrue that I changed my mind about the case. I was sceptical about the evidential basis of the case for quite some time, but I allowed the SFO to seek to deal with the problems. After it became apparent quite how dangerous the issues of public interest were, I cleared my diary and spent three days, I think, on this. I called in the SFO investigators and asked them to take me through all the detail, which I had not been able to do before. I took the advice of very experienced leading counsel and formed the conclusion that, ultimately, this case was not going to succeed. I have stood at this Dispatch Box often enough on failed prosecutions, concerning the Jubilee Line, the Burrell prosecution and the case of Trooper Williams, when noble Lords have looked at me and, even if they have not said it, in their eyes I have seen the question, ““Didn’t you see this coming?””, to which the answer has always been, ““Well, yes””. The question is then, ““So what did you do about it?””, and the answer is, ““I let them get on with it””. I am sorry but if, after 18 months of investigation, damage had been done to this country, I would have stood at this Dispatch Box trying to answer the question, ““Why did you allow this to go on?””, but I would not have had an answer. I do not think that it is in the interests of this country to allow that sort of risk to occur. The SFO took the decision that, in the public interest because of national security risks, the investigation should not go on. I agreed but I had that additional important consideration in my mind. As I said, I cannot believe that we would ever have agreed not to take that sort of national security considerationinto account, still less that we should not take it into account in a case which was, at best, doubtful and, in my view, would never have got anywhere. What advice should be given to those who are doing business in Saudi Arabia? It would be: do not commit criminal offences. The whole issue of bribery and corruption is difficult but we are determined to tackle it; we do not condone involvement in corrupt practices anywhere. If noble Lords will permit me to take a moment or two longer, I shall respond to the noble Lord, Lord Skidelsky, who raised a very important point. He said that the phrase ““balancing the rule of law against the wider public interest”” could lead to misunderstanding, yet he rightly identified, unlike one or two other noble Lords, that those words were from the SFO press release. I read it out in the House but they were not my words. On reflection, I think that there is a risk of misunderstanding in those words. I understood that the SFO was seeking to say that the desirability of bringing a criminal prosecution needed to be balanced against national security. That is a perfectly proper balance to bring, but I am very happy to make it clear from this Dispatch Box—if this is repudiating the statement, I am happy to do so—that there is no question of saying that the rule of law in general should be set aside for wider interests of expediency or political or national interest. I hope that that at least clarifies the issue. If the House will permit me, I shall conclude by dealing with the six questions put to me by the noble Lord, Lord Goodhart. What pressure was put on the Government by BAE? So far as I was concerned, and as I answered in a question from the noble Lord, Lord Avebury, whom I see in his place, representations came from BAE to me about the public interest in November 2005, but I forwarded those to the SFO and did not engage with BAE at all. What did the Saudis say were the likely consequences? Neither I nor the SFO had any direct contact with the Saudis, but it was made clear by the Prime Minister that theyhad threatened to withdraw counter-terrorism co-operation if the investigation went ahead. The ambassador said that those threats were real; the Saudis were not bluffing. What advice was there from SIS? I have now given that answer. What advice came from the ambassador? The Solicitor-General has answered a parliamentary Question explaining that Mr Wardle met the ambassador three times. He confirmed the risks of damaging counter-terrorism co-operation with Saudi Arabia if the investigation went ahead. What did the Prime Minister, the Foreign Secretary and the Defence Secretary say to me? I set out the basis of the national security interest in the Statement of 14 December and in the letter to the noble Lord, Lord Garden. I obviously cannot go into the precise details, as that would involve disclosing information about our counter-terrorism arrangements. The final question was: why did the Attorney-General not take the decision? I said that I agreed with it, but I have to say that the House cannot have it both ways. If it is an investigation being carried out by the SFO, one side says, ““You should not interfere””, and the other side says, ““You should take the decision””. I have done the best that I can. We have a strong commitment. We intend to send a very clear message. I hope that noble Lords who agree with us about the importance of the anti-corruption fight will now help us to send out that message strongly to the world. I shall answer any questions that I can and I will continue to be accountable, but let us now recognise that the BAE case and Al Yamamah was a special instance. Our commitment is there; let us now work together to demonstrate that Britain will lead the world in fighting corruption.