The Serious Fraud Office is facing fresh embarrassment after US authorities succeeded in a major anti-corruption prosecution centred on the City of London – just one month after the SFO failed to land a blow in the same case.
The Securities and Exchanges Commission, the US financial regulator, found a “London-based consultant” paid £65m in bribes to senior officials in the Bahrain government to secure lucrative contracts with one of the world’s largest aluminium smelters.
The man – described as “connected to the Bahrain royal family” and “well versed in the normal ways of Middle East business” – was found to be a central player in a huge fraud committed by another big aluminium business, Alcoa, which the SEC fined £233m – the fourth largest fine of its kind in US history.
The news is another blow for the SFO, after the collapse last month of its linked anti-corruption prosecution involving a billionaire friend of Tony Blair who has funded Labour-related causes.
Victor Dahdaleh, 70, was found not guilty of paying more than £35m in bribes on behalf of Alcoa to former executives at Aluminium Bahrain (Alba) in return for contracts worth more than £2bn.
The case was dropped by the SFO after it received stinging criticism from the judge for “delegating” the Bahraini strand of its investigation to Akin Gump, one of the largest law firms in the world, in an attempt to save money.
The failed prosecution added to the department’s shamefacedness in its fight against a criminal conspiracy which, it now transpires, centred on the City of London.
An SFO spokesman said: “We are aware of the announcement and continue to work with the [Department of Justice]. We discontinued our criminal proceedings against Victor Dahdaleh last month in connection with alleged corruption offences around the supply of aluminium to Bahrain. This was due to factors fully described in court.
“We have secured a conviction against a conspirator, Bruce Hall, who pleaded guilty to a charge of conspiracy to corrupt. He will be sentenced in due course.”