Fintech meet up
Out-Law News | 03 Mar 2014 | 3:01 pm | 2 min. read
In its short report following the SFO's funding application, the Justice Committee said that it was concerned about the "magnitude" of the request "when considered against the size of the Office's budget". The money, which was requested by the SFO in January, would increase the agency's resources for 2013-14 by 52%, from £36.6m to £55.6m.
"We consider that the Supplementary, and the funding arrangements for so-called Blockbuster cases which underlie it, are matters which should be drawn to the attention of the House before it is asked to approve the Estimates," the committee said in its report. "We intend to pursue with the Attorney General the question of whether he considers that the current funding arrangements of the SFO are sustainable."
The SFO is the independent agency responsible for the investigation and prosecution of serious or complex cases of fraud and corruption. It has applied for the additional funding to cover a number of high-profile investigations and prosecutions over the remainder of the financial year, as well as litigation costs in relation to the failed Tchenguiz prosecution.
Although the SFO's budget was cut this year from £40.8m in 2012/13, the UK Treasury has set aside additional 'blockbuster' funding that can be provided to the agency to support certain large investigations. However, this funding will only be granted on a case by case basis. In addition to central government funding, the SFO can also keep some assets seized as a result of its investigations.
White collar crime expert Barry Vitou of Pinsent Masons, the law firm behind Out-Law.com, has been highly critical of the cuts to the SFO's budget at a time when its case load has been increasing. Writing on his website, thebriberyact.com, he welcomed the Justice Committee's intervention.
"Many will seize on the request for additional funding by the SFO as another example of poor management focussing on mistakes made by the SFO over recent years... [but] the historic budget cuts were a mistake," he said.
"That the present funding model of the SFO is now being debated and pursued with the Attorney General is welcomed, but requests for extra funding now should not be used as a stick to beak the SFO. They represent realism in investigation and prosecuting serious fraud. The budget was never enough," he said.
Writing to the Justice Committee as part of its investigation, SFO director David Green said that "an appropriate and more certain funding model" needed to be agreed between the agency and "all those with an interest".
"This funding reflects the arrangement through which 'blockbuster' cases are supported," he said in his letter to the committee. "It is in the nature of the SFO's work that significant additional funding can be required at short notice. In a very short space of time, it can become clear that an investigation, as wide as that into LIBOR, is required."
"At the same time, I consider it would be unacceptable to have expert investigators, lawyers and accountants as permanent employees waiting around in case such an investigation is required," he said.
Fintech meet up