The past few years have been tumultuous, particularly for Brazilians, in the battle against corruption. Controversial judicial decisions, sparking significant debate, diminished the effectiveness of Operation Car Wash (“Lava Jato”), a landmark anti-corruption probe, in Brazil. The once unassailable figures in the fight against corruption found themselves vilified in a country prone to casting shadows on those in the spotlight.
However, the most astonishing news of this last week came from England, in which the Serious Fraud Office (SFO) was accused by the High Court of Justice in London of having committed a serious violation. Consequently, the Office will be required to compensate a company under investigation.
Indeed, according to the Court, the issue emerged when the SFO began investigating corruption at the company Eurasian Natural Resources Corp., based on information improperly acquired by a senior attorney-at-law of said company.
This attorney was associated with the law firm Dechert, which had been engaged by the company to conduct an internal inquiry into potential bribery. The SFO launched its investigation based on information provided by this attorney, without which the inquiry would not have been possible.
Indeed, after over a decade investigating Eurasian Natural Resources Corp., the SFO abandoned the inquiry. Subsequently, the court will hold an additional trial to determine how much the Office should pay Eurasian Natural Resources Corp. in light of the alleged violation.
This marks a significant setback for the SFO, whose challenges may have escalated in 2023 when it imposed its largest penalty since its inception. The penalty resulted from a settlement that imposed a £280 million fine against the company Glencore, an Anglo-Swiss multinational commodities mining company, which deals in metals, agricultural products, and energy. Glencore has international headquarters in Baar, Switzerland and was founded by Marc Rich, an Israeli-Belgian-Spanish businessman. The fine was imposed due to bribes aimed at securing privileged access to oil exploration in Africa, alongside two other investigations in the USA and Brazil.
This achievement sharply contrasts with the setback in the investigation into Unaoil, SFO faced accusations from a judge of a series of errors. Unaoil, a Monaco-based company offering "industrial solutions to the energy sector in the Middle East, Central Asia, and Africa," is incorporated in the British Virgin Islands, a tax haven with a relatively opaque banking system.
The fact is that the SFO directed its investigation towards interactions with a private investigator named David Tinsley, a former DEA agent representing one of the members of the Ahsani family, owner and controller of Unaoil. This investigator attempted to negotiate a deal with the Office, pledging to secure guilty pleas from multiple defendants. Once again, the SFO suffered a significant setback in court, as the judges determined that the defendants had been adversely affected due to the Office's failure to disclose documents demonstrating interactions with David Tinsley.
Finally, according to SFO Director Lisa Osofsky, the Office is currently grappling with a major challenge: recruiting and retaining staff. Inflation in the UK has diminished the purchasing power of public servants, whose salaries have not been adjusted. As of March 2023, the SFO had only 450 public servants, compared to 470 the previous year, resulting in a vacancy rate of 8.5%. This has compelled the Office to rely on temporary workers and external attorneys hired for specific tasks.
