Three former NatWest employees extradited from Britain were bailed on Friday
by a court in Texas on charges related to the Enron affair. The relevant
law, the Extradition Act 2003, is deficient and should be changed but that
is not reason enough to stay their trial. They are a bad example of the
act’s failings since there is a clear case for them to answer, and in
America. The Enron scandal, one of the biggest frauds in history, ruined the
lives of tens of thousands of people. No British court found in favour of
the trio’s plea to stay at home.
Britain is widely regarded as liberty hall to financial malpractice, as its
auction houses long knew to their advantage. Yet Britain’s treatment of
foreigners in its legal system is a disgrace, holding them in prison for
long periods without trial and jailing 500 West Indian women, almost all
first offenders, for being dupes of Jamaican drug dealers. Britain can
hardly criticise American courts on these grounds. Nor do most of these
people have “pro bono” public relations firms depicting them as humble
citizens with tear-stained families. They have no costly lawyers or sudden
parliamentary concern or “white-collar crime” epithets to launder their
case. They cannot cry “civis Britannicus sum” and work Fleet Street’s
financial pages into a lather of righteous indignation.
Extradition makes hard law because legal systems differ and proceedings can
turn into prejudicial pre-trials. Yet terrorism and commercial crime are so
international that some framework is required to avoid states becoming
havens for each other’s crooks. Hence the extradition treaty passed in the
illiberal aftermath of 9/11.
The act is depicted by the British government as an even-handed adjustment to
what had been a dilatory process, when judges and Home Office played
ping-pong with people’s lives for an average delay of 30 months. The old
requirement that a court hear prima facie evidence of a case before allowing
extradition was scrapped for the signatories of the European Convention on
Extradition in 1991. What happened in 2003 was that America and 20 other
countries joined the convention. It was not another case of Tony Blair’s
subservience to Washington. The same fast-track procedure applied across
Europe and even to Russia.
The hiccup in the treaty is that it gave America special treatment because its
constitution protects its citizens from summary arrest without good cause
proven in court. This means that while an American court can merely demand,
with documentation, a person’s extradition from Britain, it will hold
hearings into requests for extradition from America.
Defenders of the NatWest Three — a bizarre coalition of City figures, Tory
MPs, anti-Americans and liberals — are incensed by this manifest asymmetry.
They see it as a licence for the ever-lengthening arm of American regulators
to trawl the world for anyone who might have breached their laws. They point
out that almost all international finance now touches America, and
extradition abroad is not just another trial but interim punishment without
prior hearing. While financiers may summon publicists, win bail and be
guaranteed a fair trial, others may enjoy no such privilege and suffer long
periods of hardship away from home when possibly innocent.
Besides, the NatWest Three also point out that the treaty only “goes into
force upon the exchange of the instruments of ratification”. While
parliament has ratified it the US Congress has not, under pressure from the
Irish-American lobby, long averse to extraditing IRA terrorist suspects. The
law is thus lopsided in its terms and its implementation.
There is no doubt that America scores low in the league table of international
legality. Indeed with American agents picking up all and sundry from foreign
streets and airport lounges and “rendering” them to torturing states, the
perils facing British bankers might seem merely the tip of an iceberg.
Beneath it extend the horrors of Abu Ghraib, Guantanamo and other juridical
limbos possibly awaiting a long line of victims of some casual FBI tip-off.
Washington’s palpable double standard in matters of personal liberty has
polluted the image of its judicial system.
But the British bankers are going to a system of federal justice that is not
beholden to the Pentagon or the White House, indeed one struggling to
recover some credibility after the Enron saga (in which a number of Britons,
including Lord Wakeham, became embroiled). All who have followed Enron, seen
the remarkable documentary on it and read the statement of claim against the
NatWest Three would accept that they have a serious case to answer. The men
themselves deny any wrongdoing.
As Lord Goldsmith, the attorney-general, said, the alleged crime was not
confined to Britain nor were its putative victims only British. It involved
three men pocketing $7m in the Cayman Islands in a $20m deal involving money
from both NatWest and Enron. The Serious Fraud Office (SFO) and other
agencies declined to prosecute, variously and reportedly because they
thought the case would not pass a jury, because NatWest would not co-operate
for fear of airing its dirty linen in public and because the SFO agreed that
Houston would conduct Enron-related litigation. Deplorable as it may be that
British financial regulation is so inadequate, these reasons seem plausible.
The NatWest Three were dealing directly with Andrew Fastow, one of the chief
Enron conspirators and now in jail. With the principal evidence, including
all electronic communications, collated in Texas, there was clearly prima
facie evidence for extraditing the three even under the previous treaty.
That America has yet to ratify the 2003 one is a good debating point, but
hardly substantive to the case.
Nor were the three somehow victims of summary justice. Magistrates heard them.
They were granted leave to appeal to the High Court, where Lord Justice Laws
found the case “properly triable in the US courts”. They were turned away by
both the House of Lords and the European Court of Human Rights. Britain
would not try them, America would. I am sure if the roles were reversed
Britons would take the same view. British citizens can hardly complain when
American prosecutors are more assiduous at guarding their joint interests
than their own regulators.
The morals to be drawn from the NatWest/Enron case are many. The 2003 treaty
was undoubtedly lax in protecting individual rights. Britain and others
should have demanded that foreign citizens enjoy the same right to
preliminary hearing as is enjoyed by Americans. This point was made by
critics of the mass of anti-terrorist legislation passed in 2003 and since.
Such critics (and their columnist supporters) were accused of “appeasing
terrorism”.
If ever there were an instance of democracy dropping its guard against
authoritarianism at the bidding of terrorists, it was in the hysterical
aftermath of 9/11. The Confederation of British Industry last week announced
that the 2003 treaty is “an affront to natural justice”. Why did it not say
so before?
The behaviour of the Tories now climbing aboard the bandwagon has been a
disgrace. Where were they to protest against fast-track extradition in 2003?
Could it be they never thought it would apply to their constituents, only to
dodgy Muslims? Where were the self-righteous MPs and peers now earning City
dinners by re-debating the 2003 law when they were supposedly scrutinising
it three years ago? Since then, they have passed ever more draconian
statutes to jail those involved in drugs and immigrant markets and curb free
speech and habeas corpus. Have they no sense of double standard? That they
should suddenly discover the virtues of natural justice and the horrors of
imprisonment when it afflicts three men charged with “white-collar crime” is
not a little sickening.
Britain should revoke and renegotiate the 2003 treaty to allow a judge to
determine the place of a trans-national trial and to require some
preliminary hearing to take place before extradition. This is yet another
Blair law passed in emotion and haste and regretted at leisure. But such a
law was passed and is in place. Even if it were revoked it would not be much
help to the NatWest Three. They were playing in a globalised market and must
accept globalised justice, which in the matter of Enron means American
justice. They must take the rough with the smooth and consider themselves
lucky they were not charged with terrorism.
