Fraud case offices supply SFO staff: Labour says use of secondees in fraud office raises doubts about ability to carry out investigations

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The Independent Online
THE Serious Fraud Office is staffed by people seconded from some of the same City firms which have acted for people and companies involved in major fraud scandals.

Almost half the SFO's 250-strong workforce are police officers, lawyers and accountants on temporary assignment. Three of the agency's assistant directorships are, or have recently been, filled by secondees from City accountant firms, all of which have in some way been involved in recent fraud scandals:

Mark Ballamy is a partner at Price Waterhouse, BCCI's auditors;

Peter Hyatt is from Neville Russell, the same firm that audited the accounts of Glen International, the former company of Terry Ramsden, currently awaiting trial on 22 charges of fraudulent trading;

The third assistant directorship is currently vacant but was occupied until recently by Ian Huntingdon from KPMG Peat Marwick, one-time auditors to Brent Walker and Eagle Trust.

Of the 250-strong workforce, only 136 are permanent SFO employees. Eighty are police officers on attachment and the remainder come from City accountancy and law firms.

The City secondees are often paid much more than their colleagues in the civil service and police force. Alistair Darling, Labour spokesman on the City and financial services, said the use of so many secondees raised serious questions about the SFO's ability to carry out investigations. 'In any organisation, unless you have people who have got loyalty to the organisation itself, you have got problems,' he said.

Mr Darling recalled how on a recent visit to the SFO's headquarters in Elm Street, central London, he asked a police officer if he was looking forward to seeing a long-running investigation through to its successful conclusion. 'He said he was going back to his force during the next week to take over its traffic division,' Mr Darling said. 'He was doing that because his career was with the police, not with the SFO.'

While he was not opposed to secondment in principle, Mr Darling said the way it was currently managed at the SFO could give rise to conflicts of interest and morale problems. 'When you have two people sitting at the same desk and one is paid substantially more than the other, it shouldn't matter, but people are human and it does.'

The use of so many secondees may go some way towards explaining what sources close to the Attorney General, Sir Nicholas Lyell, have recently been calling 'a lack of esprit de corps' at the organisation.

George Staple, the SFO director, said on Radio 4 yesterday that the official who is alleged to have accepted that he was engaged in an improper 'fishing expedition' for information about Asil Nadir's affairs, was not a member of staff. 'He has for some time been in private practice,' Mr Staple said.

A spokeswoman for the SFO said secondees were required to sign the Official Secrets Act. The SFO pays the City firms a civil service salary and pension contribution. After that, the level of pay is up to the individual firm.

She emphasised that all SFO staff were vetted and assistant directors were allocated cases that would not put them in a position of conflict with any other SFO investigation. She said it was the responsibility of the deputy director to ensure that conflicts did not arise. 'In addition, the parent firms confirm prior to a secondment that secondees will advise the SFO of any potential conflicts of interest.'