British bribery trial collapses in blow to anti-fraud agency
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British bribery trial collapses in blow to anti-fraud agency

British bribery trial collapses in blow to anti-fraud agencyBritish bribery trial collapses in blow to anti-fraud agency

Canadian billionaire Victor P. Dahdaleh waves as he leaves Southwark Crown Court after a guilty plea and case management hearing in central London January 13, 2012. REUTERS/Finbarr O’Reilly

By Estelle Shirbon LONDON (Reuters) – One of Britain’s biggest corruption trials in years was abruptly halted on Tuesday when the Serious Fraud Office (SFO) dropped the prosecution of businessman Victor Dahdaleh, in a further blow to his already damaged reputation. The SFO accused Dahdaleh of paying bribes of about $67 million to former Aluminium Bahrain (Alba) executives, including a member of the Bahraini royal family, between 1998 and 2006 in exchange for part of contracts worth more than $3 billion. The case involved allegations of corruption in senior government and business positions in Bahrain, a sensitive issue at a time of political unrest in the secretive Gulf kingdom. But the SFO’s top lawyer told a London court there was no realistic prospect of a conviction after two American lawyers who played key roles in the case refused to testify in court and a key witness changed his story. The abrupt collapse of Dahdaleh’s trial, which began on 5 November and was due to run until 2014, followed costly mistakes by the SFO in other high-profile cases that had put pressure on the agency to deliver significant convictions. “I have escalated the cases to the highest level at the Serious Fraud Office and have consulted with the attorney general,” SFO legal adviser Philip Shears said in announcing the SFO’s decision. The attorney general is the British government’s legal adviser. Judge Nicholas Loraine-Smith directed the jury to return “not guilty” verdicts on all eight charges before they were dismissed. ‘A MESS’ “Cases like this shake people’s confidence to the core,” said lawmaker Emily Thornberry, the opposition Labor Party’s “shadow attorney general” or spokeswoman for the courts. “I’m a critical friend and I want the Serious Fraud Office to do well. But you have to tell your friends the truth. It’s a mess and they know it, they should have seen it coming and it’s very disappointing,” she told Reuters. Judge Loraine-Smith said he asked the SFO to reconsider its position on Thursday after being troubled by evidence given earlier in the day by SFO case officer Sasi-Kanth Mallela. Mallela told the court the agency had delegated its investigative duties in Bahrain to Alba’s lawyers at US firm Akin Gump. The US lawyers provided documents and witnesses to the SFO on Alba’s part. The judge said the lawyers, acting on Alba’s behalf, were also Dahdaleh’s opponents in a “hotly contested” US civil case, raising questions about whether the SFO relied on them for evidence against Dahdaleh in the British criminal trial. “The defence raised issues questioning Akin Gump’s role in providing assistance to the SFO, both in terms of their motives in disseminating the material and in assisting witnesses,” Shears told the court. “Their refusal to attend creates a situation where the legal process cannot put things right and we accept that the defence is now unfair,” he said, adding that SFO director David Green had personally called Akin Gump’s chairman to try to secure their presence, but was unsuccessful. CHANGING STATEMENT Several phone and email messages from Reuters seeking comment from Akin Gump were not returned. Shears said the second main reason for the SFO’s decision was that Bruce Hall, the former Alba chief executive who pleaded guilty to a bribery conspiracy with Dahdaleh, changed his testimony in court from what he said in his witness statement. Outside court, Dahdaleh’s lawyer, Neil O’May of Norton Rose Fulbright, told reporters it had been an emotional day for the 70-year-old businessman who was “overwhelmed and relieved”. “He is concerned and wants those with oversight, within and outside the SFO, to consider how part of the investigation was outsourced to an external firm of US lawyers who refused to come to court to give a full account of their involvement,” O’May said. Dahdaleh admitted making payments to Alba managers but pleaded not guilty, relying on “director consent”, a defence available under the UK Prevention of Bribery Act 1906. In essence, his defence was that the payments were known to and authorised by persons in authority at Alba and in the Bahraini government and were part of Bahraini custom and practice. Dahdaleh was charged under that legislation because the offences alleged occurred before the Bribery Act 2010, under which the “director consent” defence is no longer available. (Additional information: Kirstin Ridley; Editing: Kevin Liffey)