08:29, July 20 389 0

2017-07-20 08:29:15
SFO management takes home a collective £400k in year of savings

The management board of the Serious Fraud Office (SFO) was paid a total of £410,000 in the last financial year, as the investigator came under increasing pressure to deliver value for money for the taxpayer at a time of reduced public spending.

The SFO annual report reveals that director David Green was paid £175,000 -£180,000 in 2016/17, while the next highest earner, general counsel Alun Milford, was paid £120,000 – £125,000. Chief operating officer Mark Thompson took home £100,000-£105,000 and saw the biggest increase in pay on the previous year, when he took home £85,000- £90,000.

These salaries have largely increased by an average of £5,000 for both Green and Milford compared to the 2015/16 financial year.

Neither Green nor Thompson received any bonus pay, but Milford accepted a payment of £5,000- £10,000. All three received pension payments ranging from £66,000 to £113,000, with Green earning the lowest rate and Thompson the highest, while  Milford received a £70,000 pension.

In January 2017, the management board was replaced by two new committees, the board and the executive group.

The combined salaries of the SFO’s senior management pales in comparison with those earned by presenters at the BBC, whose best paid star Chris Evans was revealed earlier this week to have a take-home salary of £2.2m this year. By those same metrics, Green’s pay is on a par with Clare Balding, who earns £150,000- £199,999, while the combined value of the SFO’s three senior managers is less than Claudia Winkleman’s £450,000 -£499,000 salary.

In a nod to the Conservative government’s threat to disband the SFO on its election, Green uses his foreword to praise the cost-efficiency of his organisation, pointing to the high conviction rate achieved this year.

Thirteen defendants were convicted in seven cases, giving a conviction rate by defendant of 87 per cent and by case of 100 per cent, enabling the SFO to achieve a net financial impact of £325m over the four years covering 2013-14 to 2016-17.

The SFO is among several other agencies that are the subject of a current Cabinet Office review into the UK’s response to white-collar crime. The consultation, which was launched earlier this year, has been met with criticism from lawyers from firms that specialise in white collar crime because they were not asked to provide any input into the process.

In the last few months, the SFO has secured high profile settlements from both Tesco (for £129m) and Rolls Royce (for £670m). It is also involved in a high-profile investigation and dispute with Eurasian Natural Resources (ENRC), the latest iteration of which was a High Court decision on the legal privilege of documents between ENRC and former counsel Dechert.

It also started an investigation into oil giant Petrofac and its subsidiaries over claims its officers, employees and agents may have engaged in alleged bribery, corruption and money laundering, while other notable cases include the alleged fraudulent investment scheme marketed by Ethical Forestry Limited which targeted pensioners, to allegations of bribery and corruption against Airbus Group, Unaoil and ABB Ltd.

In its standout investigation into Rolls Royce, which it accused of 12 counts of conspiracy to corrupt, false accounting and failure to prevent bribery, the SFO forced the manufacturer to pay a penalty of £497.3m secured through a deferred prosecution agreement (DPA).

Under the DPA Rolls Royce will pay the penalty in four instalments, the first of which is £119m that has to be paid on 30 June. The next payment of £100m is not until 31 January in 2019, while the further two payments of £130m and £148, 252, 652 are to be paid on 31 January 2010 and 31 January 2021 respectively.

The regulatory body secured two DPAS in 2016-17, one with Rolls Royce and the other with an unamed UK SME, which will pay financial orders of £6.6m. The financial recoveries secured using this method of resolution amounted to £544.7m over the course of the year.

The SFO returned £516, 766 to the Treasury this year, a significant increase from the £21,474 generated the previous year.

Savings have also been guaranteed by the SFO’s use of technology, with 95 per cent of the data it seizes and processes now in electronic format. Its largest case to date contains 30 million documents, while a future case has more than 100 million documents.

Its use of the robot RAVN in the Rolls Royce investigation led to savings of 80 per cent in just one aspect of the case, meaning the reliance of independent counsel was reduced.

Green wrote: “2016-17 has been another successful year for the SFO, with a number of long-running investigations reaching positive resolution. We remain uniquely well-placed to investigate and prosecute the top-tier of serious and complex economic crime and our operating model underpins our success.”

The SFO also fell short of its department expenditure limit of £53.6m,agreed in the 2015 spending review. It spent £51.8m of that total, an underspend of £1.8m. Its annually managed expenditure (AME), historically harder to predict, was underspent by £3.1m.

Green was appointed director of the SFO in April 2012 for a fixed term of four years. His contract was extended to end on 20 April next year.

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