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England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Bermingham & Ors v Director of the Serious Fraud Office & Anor [2006] EWHC 200 (Admin) (21 February 2006)
URL: http://www.bailii.org/ew/cases/EWHC/Admin/2006/200.html
Cite as: [2006] EWHC 200, [2007] QB 727, [2006] 3 All ER 239, [2006] UKHRR 450, [2007] 2 WLR 635, [2006] EWHC 200 (Admin), [2006] ACD 55
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QUEENS BENCH DIVISION
DIVISIONAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
MR JUSTICE OUSELEY
____________________
| THE QUEEN ON THE APPLICATION OF BERMINGHAM & OTHERS v THE DIRECTOR OF THE SERIOUS FRAUD OFFICE |
Claimant Respondents |
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| - and - |
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| HER MAJESTY'S ATTORNEY GENERAL THE SECRETARY OF STATE FOR THE HOME DEPARTMENT and BERMINGHAM & OTHERS v THE GOVERNMENT OF THE UNITED STATES and THE SECRETARY OF STATE FOR THE HOME DEPARTMENT |
First Interested Party Second Interested Party Appellants First Respondent Second Respondent |
____________________
Smith Bernal WordWave Limited
190 Fleet Street, London EC4A 2AG
Tel No: 020 7421 4040 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Ian Burnett QC and David Perry (instructed by the Treasury Solicitor) for the Director of the Serious Fraud Squad
Hugo Keith (instructed by the Treasury Solicitor) for the Attorney General
Khawar Qureshi (instructed by the Treasury Solicitor) for the Secretary of State for the Home Department
John Hardy and Mark Summers (instructed by the Crown Prosecution Service) for the Government of the United States of America
____________________
Crown Copyright ©
- There are two sets of proceedings before the court, an application for judicial review and a statutory appeal. Both are brought by the same three persons. The context of both is an accusation of fraud which has been levelled against all three by the federal prosecuting authorities in Texas. Though they are the protagonists in the proceedings, for convenience I shall call the three the defendants. (When I refer to them individually I shall for economy's sake simply use their surnames; I intend no discourtesy.) The judicial review, for which permission was granted by myself and David Steel J on 7 April 2005 after an oral and contested hearing, is brought against the refusal of the Director of the Serious Fraud Office ("the Director") to institute a criminal investigation under s.1(3) of the Criminal Justice Act 1987 ("the 1987 Act"). The statutory appeal, or more accurately appeals, are levelled against decisions of a District Judge and an order of the Secretary of State for the defendants' extradition to the United States of America following a request in that behalf by United States federal authorities. The decisions and order were made, and the appeals are brought, pursuant to provisions contained in the Extradition Act 2003 ("the 2003 Act"). I shall introduce all the relevant statutory materials directly. My Lord Ouseley J and I heard argument in the judicial review over two days on 15 and 16 November 2005, and reserved judgment. We then heard the statutory appeals over three days from 28 – 30 November. This is my composite judgment in both sets of proceedings.
- It is convenient to set out the relevant statutory materials, and certain other texts, before explaining the facts.
- The Serious Fraud Office ("the SFO") and its Director were established by the 1987 Act. S.1(3) provides:
- The 2003 Act created a new extradition regime. Part I, which has its genesis in the Council Framework Decision of 2002 on the European arrest warrant, contains provisions dealing with extradition from the United Kingdom to what are called "category 1" territories, that is to say territories designated by the Secretary of State. These are in effect the European Union countries which operate the European arrest warrant. It is unnecessary to describe the Part I procedures in detail. They include provision for an extradition hearing, and I should note (for it is germane to one of the arguments advanced in the judicial review by Mr Jones QC for the defendants) that s.21 requires the judge at the extradition hearing to decide whether the relevant person's extradition would be compatible with the Convention rights within the meaning of the Human Rights Act 1998 ("the 1998 Act"), and if he decides that it would not, he must order the person's discharge. The material terms of s.21 are identical to those of s.87 which appears in Part II, and which I set out below.
- Part II deals with "category 2" territories. These also are designated by order of the Secretary of State. A principal category 2 territory is the United States. So it is the provisions of Part II that are engaged in this case. I must set out a large portion of the measures it contains.
- S.70:
- If the judge decides that none of the statutory bars specified in s.79(1) applies, he is required by s.79(4) (in the case of a person not unlawfully at large after conviction) to proceed under s.84, subsection (1) of which provides:
- S.92(2) requires the judge, if he sends the case to the Secretary of State, to inform the person in question of his right of appeal to the High Court (I will deal with the appeal provisions below). S.92(3) requires him to remand the person in custody or on bail to await the Secretary of State's decision, and his extradition if the Secretary of State so orders. (Provision is made by ss.117 and 118 for the person's actual extradition to the relevant category 2 territory within a fixed period, where there has been no appeal or a failed appeal.)
- The Secretary of State's functions are conferred by ss.93 ff. By s.93(2) he must decide whether he is prohibited from ordering the person's extradition by any of three matters, including "(b) section 95 (speciality)". If he decides affirmatively, s.93(3) requires him to order the person's discharge. If negatively, s.93(4) requires him, subject to certain exceptions, to order the person's extradition to the territory of the requesting State. He has no discretion. By force of s.99 the Secretary of State's decision has to be made within two months of the day when the judge sends the case to him, subject to any extension granted by the High Court under s.99(4).
- S.95 is cross-headed "speciality". For some reason which we have not fathomed the legislature chose this word to mean the same as "specialty", which is the term long used in the law of extradition to refer to the rule (I summarise) that an extradited person may only be tried in the requesting State for the crime or crimes for which he has been extradited. In this judgment I shall use the expression "specialty rule". S.95 provides so far as material:
- I may turn now to the appeal provisions. There are separate rights of appeal against decisions of the judge, and against an order for extradition made by the Secretary of State. Both are invoked in this case. As for the first, s.103 provides so far as material:
- The right of appeal against an extradition order made by the Secretary of State is given by s.108. S.108(3) is in identical terms to s.103(4). S.109 is an analogue of s.104. S.109(1) is identical to s.104(1) save that there is no equivalent of s.104(1)(b). S.109(3), (4) and (5) are in the same terms as s.104(3), (4) and (5) with appropriate substitutions of the Secretary of State for the judge, and the extradition order for the duty to discharge. S.110 is analogous to s.105, and confers a right of appeal on the requesting State against an order by the Secretary of State for the person's discharge.
- Now I may turn to s.137, which as I have said defines "extradition offence" as it applies in circumstances like those which obtain here. By ss.(1) s.137 is stated to apply "in relation to conduct of a person". The section continues:
- It is convenient while dealing with the statutory materials also to introduce the the 1972 UK – USA Extradition Treaty, which has played some part in the argument. I should say that there is a new extradition treaty agreed between the two States in March 2003. However it has not so far entered into force, because the United States has not yet ratified it. Accordingly for the time being the 1972 treaty remains effective.
- Article V of the 1972 treaty specifies circumstances in which extradition between the States is not to be granted. Article V(2) provides:
- I have already referred to this European measure but should set out one of its provisions in light of a particular submission advanced by Mr Jones. The Decision (2002/584/JHA) was adopted on 13 June 2002. Article 4 lists grounds on which "[t]he executing judicial authority may refuse to execute the European arrest warrant". The grounds include
- As is well known the 1998 Act imposes duties in municipal law upon public authorities, including the courts and the Secretary of State, to uphold and enforce (I summarise) the Convention rights specified in the Schedule. I need only cite part of s.6:
- Other measures in the 1998 Act include s.4, allowing the court to make a declaration of incompatibility where it is satisfied that a provision of primary legislation is incompatible with a Convention right. The Convention rights are of course the principal rights guaranteed by the European Convention on Human Rights and Fundamental Freedoms ("ECHR"). I should cite part of ECHR Article 6 (and summarise the rest):
- Now I may turn to the facts. The account which immediately follows of the circumstances of the alleged crime is largely taken from the case assembled by the American prosecuting authorities in support of the request for extradition, principally but not exclusively drawn from an affidavit sworn by Mr Hays, Special Agent of the Federal Bureau of Investigation ("the FBI"), on 13 January 2004. In fact much of the primary factual history is uncontentious, being as often as not established by contemporary documents. I should however make it clear that the defendants hotly dispute the accusation brought against them, notably its core element of fraud upon their employers. The later parts of the narrative, dealing with events after the period of the alleged crime, are mostly drawn from documents which I will identify and in many cases quote.
- The case is, to use an advisedly neutral expression, connected with the affairs of the American company, Enron Corporation ("Enron"). The defendants were not employees, officers or shareholders of Enron. They were at the material time in 1999 and 2000 employed in London by Greenwich NatWest ("GNW"), a division of National Westminster Bank plc ("the Bank"). They are British citizens, resident in the United Kingdom. They were part of a team responsible for a number of the Bank's clients, including Enron in the United States. Enron's headquarters were in Houston, Texas. GNW and the Bank had offices there as well as in London. During the relevant period a Mr Michael Kopper was employed as a managing director at Enron. His primary task was to assist Enron's Chief Financial Officer, Mr Andrew Fastow with "special projects in the structured finance area" (as it was to be put in an affidavit sworn by Mr Hays. Kopper and Fastow play an important part in the history.
- In addition to his position at Enron, Kopper was managing director of a Cayman Island limited partnership called LJM. Fastow was also involved in supervising LJM's operations, and indeed LJM was to be described by the defendant Bermingham as Fastow's brainchild. In June 1999 GNW, after being approached by Fastow, invested $7,500,000 in LJM. The investment was channelled through a Cayman Island company called Campsie Ltd ("Campsie"), which was a vehicle of the Bank. The defendant Bermingham was a member of Campsie's board of directors. Another bank, Credit Suisse First Boston ("CSFB"), also made an equity investment of $7,500,000 in LJM; and Fastow himself put in $1,000,000.
- LJM created a subsidiary called LJM Swap Sub ("Swap Sub"). Its purpose (put shortly) was to act as a vehicle for the conduct of transactions by LJM and Enron. GNW invested in Swap Sub through Campsie, and came to own a 50% stake in Swap Sub, as did CSFB. Assets owned by Swap Sub included 3.1 million Enron shares. However the value of Swap Sub was problematic, because it was involved in hedging transactions by which it was committed to purchase shares in a company called Rhythm Net, in which Enron owned a large shareholding, at future dates at agreed prices irrespective of the market price of the shares at the transaction dates. In consequence GNW valued its interest in Swap Sub at nil. The accusation against the defendants is centred on the disposal, in the events which happened, of GNW's interest in Swap Sub.
- The Bank of Scotland and the Royal Bank of Scotland ("RBS") both made hostile takeover bids for the Bank in autumn 1999. Each indicated that if it were the successful bidder it would sell GNW, and the Bank itself sought buyers for GNW. Thus it is said that by early 2000 the defendants were aware that GNW was likely to be sold, and that would have implications for their continuing employment. In fact RBS was to acquire the Bank on 6 March 2000.
- In the first two months of 2000 there was a marked increase in the value of the Rhythm Net shares and in Enron's share price. The US prosecutor asserts that in consequence the defendants appreciated that Swap Sub possessed a significant value, in contrast with the nil figure which GNW had assigned to it. On 29 January 2000 the defendant Bermingham sent an e-mail to his colleague Darby which included this:
- So it was that in February 2000 the defendants travelled to Houston. The meeting which took place there on 22 February is at the centre of the case against the defendants. The prosecutor says that it was a secret meeting with Fastow, whose purpose so far as the defendants were concerned was to explore ways and means of unlocking the value in Swap Sub for their own benefit. Reliance is placed on material contained in contemporary e-mails as showing that the defendants concealed the meeting from Kevin Howard, who was the Bank's manager with responsibility for the Enron account.
- It is said that at the meeting of 22 February 2000 the defendants put a written presentation before Fastow, containing various alternative proposals whose implementation would be harmful to the Bank's interest as a limited partner in LJM. However these proposals were seemingly not taken forward, and in the event Kopper formed a partnership to purchase GNW's interest in Swap Sub. This was done, according to the prosecutor, at the instance of the defendant Mulgrew who shortly after the February meeting had called Kopper, told him that the Bank did not believe there was any value in Swap Sub, and asked him to form the partnership. It became known as Southampton LP. On 6 March 2000 (the day of the RBS takeover) after conferring with Fastow and Mulgrew Kopper sent an offer letter to the defendant Darby, offering $1,000,000 for GNW/the Bank's interest in Swap Sub. The next day, 7 March, the Campsie board of directors considered the offer together with a memorandum recommending acceptance written by the defendant Darby and an employee of the Bank called Dai Clement who figures elsewhere in the history. The memorandum contained the statement, "[t]here is clearly no way we can generate any profit (if any exists) from this subsidiary until 2004". The Campsie board (including Bermingham, who recommended that the offer be accepted) approved the proposed sale, which was duly effected. GNW accordingly sold its shares in Swap Sub to Southampton LP for $1,000,000 by an agreement entered into on 17 March 2000.
- Meantime Kopper had established a vehicle called Southampton K Co in the Cayman Islands. Southampton K Co took a 50% stake in Southampton LP. Bermingham drafted an option agreement by which he and the other defendants became entitled to acquire the whole interest in Sourthampton K Co from Kopper. The option was exercised in April 2000. Before that, however, on 22 March, an agreement was entered into between Enron, Swap Sub and Southampton LP whose effect was that after the conclusion of certain transactions by 28 April 2000 Swap Sub would be left with a residual value of some $30,000,000. Swap Sub accordingly received about that sum. $10,000,000 went to buy out CSFB. About $15,000,000 of the remainder was attributable to the interest in Swap Sub previously held by GNW.
- On 1 May 2000 Kopper caused $7,352,626 to be transferred by wire to an account in the Cayman Islands held in the name of Southampton K Co. This money was divided between the defendants. The remaining $12,300,000 odd was shared by Kopper and Fastow. The prosecutor says that by means of these transactions the defendants defrauded GNW/the Bank of the $7.3m odd which they received. It was money which in fact represented part of GNW's interest in Swap Sub. The whole scheme is summarised by Mr Hanusik, Senior Counsel for Securities Fraud with the United States Department of Justice, in paragraphs 7 and 8 of his affidavit sworn on 21 January 2004 in support of the extradition request:
- The full details of the defendants' defence – of course perfectly properly – have not yet been deployed. As I understand it in barest outline, they do not dispute that they got the $7.3m; indeed they paid UK tax on it. But they deny any fraud on their employers. GNW's sale of its stake in Swap Sub for $1,000,000 was at a proper value. The defendants' later profit was adventitious, and perfectly honest. The meeting of 22 February 2000 had no sinister purpose. It was held to discuss issues of corporate re-structuring.
- On 8 November 2001 Enron filed a statement with the United States Securities and Exchange Commission ("the SEC") re-stating its accounts for the previous three years. It also announced that the SEC was investigating certain transactions, including those relating to Swap Sub. By then the defendants were employed by the Royal Bank of Canada, to whom they made a report about their investment in 2000. They also approached the Financial Services Authority ("the FSA") in order (according to Bermingham's statement of 14 February 2005) to offer their assistance to the SEC investigation. They were interviewed by officers of the FSA and handed over various documents.
- On 8 February 2002, pursuant to certain statutory disclosure provisions, the RBS submitted a "money laundering suspicion report" to the National Criminal Intelligence Service ("the NCIS") to the effect that the defendants may have been involved in a fraud or fraudulent conspiracy "the main victim of which was probably Enron (although it may be that NatWest was also a victim)". The NCIS passed this on to the City of London Police on 11 February 2002. On 4 March 2002 the FSA disclosed to the SEC documents which had been supplied by the defendants to them.
- There followed a series of communications in June 2002 to which Mr Jones attaches some importance in both the judicial review and the appeal, and I must deal with it in some little detail. On 13 June 2002 Mr Tim Crump, of the Enforcement Division of the FSA, wrote to the Assistant Director of the SFO as follows:
- I will of course give a full account of the issues that fall for our determination in due course. However it is perhaps useful just to indicate at this stage, in barest outline, the nature of Mr Jones' concerns in relation to this material as it affects both sets of proceedings before us. I should first notice that although the defendants' solicitors enquired about evidence of valuation as early as August 2004, the letter of 13 June 2002 and the FSA summary (together with two file notes recording communications between the FSA and the City of London Police) were not disclosed to them until 29 September 2005, when the Treasury Solicitor disclosed them at the request of the FSA. Mr Jones says that the letter calls into question the accuracy of paragraph 3 of the Director's statement of 20 July 2005, where he said this:
- Mr Jones says that the material is relevant to the question whether the SFO considered whether to start an investigation in 2002, and that bears on the judicial review proceedings. As for the statutory appeal, the failure (as Mr Jones categorises it) to disclose, in the extradition proceedings, the revaluation of GNW/the Bank's interest in Swap Sub which is spoken to in the FSA summary underlies Mr Jones' submission, to which I will come, that those proceedings were an abuse of the process of the court. He submits also that the evidence of the revaluation cannot have been placed before the federal Grand Jury which returned the indictment in Texas against the defendants (I shall come to this shortly). He says that this too is grist to the abuse of process mill because it may throw light on the true intentions of the American prosecutor in seeking to bring charges in Texas for an offence of wire fraud where the only named loser was an English company, the Bank.
- Before returning to the narrative it is useful to notice that these two aspects, the SFO's consideration in 2002 of the possibility of a prosecution in England and the intentions of the American prosecutor, march together in a submission advanced by Mr Jones in a supplementary skeleton argument in the judicial review dated 11 November 2005:
- On 21 August 2002 Kopper pleaded guilty to an information containing two conspiracy counts which had been filed against him in the Southern District of Texas. On the same day he entered into what is called a co-operation agreement with the United States government. Mr Hanusik says (paragraph 9 of his affidavit of 21 January 2004) that "[i]n his Cooperation Agreement, Michael J Kopper stipulated to facts concerning the same scheme to defraud NatWest underlying this extradition request". The agreement states (paragraph 2) that Kopper's sentence "is governed by the United States Sentencing Guidelines" of which more later. It then recites (paragraph 3) the prosecutor's acceptance of a "downward adjustment" of the sentence in return for his specific agreement to a number of specific matters, including:
- Then on 12 September 2002 a federal Grand Jury sitting in the Southern District of Texas returned an indictment ("the Texas indictment") charging the defendants with wire fraud and aiding and abetting wire fraud. Specific offences are charged at counts 1 – 7, but the essence of the case is contained in paragraph 10 of the Texas indictment:
- One of the planks of Mr Jones' argument in the judicial review is that the Director failed to appreciate or understand that a decision taken by the City of London Police in 2002 not to investigate the allegations against the defendants was based on a "fundamental misunderstanding" of the nature of the case, namely that the crime alleged was a conspiracy to defraud Enron, whereas it was in fact a conspiracy to defraud the Bank. The following events occurring in September and October 2002 are therefore of some importance.
- First, the City of London Police "Fraud Case Logging system" contains a record of an allegation received on 27 September 2002 to the effect that the defendants had defrauded Enron of $27 million. The record refers to the Texas indictment. Then on 1 October 2002 a City of London Police "New Case Report" was filled out with the same allegation. On 8 October 2002 Detective Superintendent Farrow filled out a crime classification document classifying the allegation as "No Crime" on the basis that "the offence was committed outside the jurisdiction of the police force in which it was recorded". On 23 October a report was filed with FRED (which I understand to be a police computer record system) with the note "conspiracy to defraud enquiry is being pursued by US authorities".
- Now I may move forward to 2004. A federal Grand Jury sitting in the Southern District of Texas had returned an indictment charging Fastow on multiple counts, and on 14 January 2004 he pleaded guilty to two counts including conspiracy to commit wire fraud. On the same day he entered into a plea agreement, just as Kopper had done. Amongst many other things he thereby obliged himself (paragraph 7(d)) to "testify truthfully" in any proceedings as directed by the Department of Justice. In a statement exhibited to the agreement Fastow provided "a factual basis for my plea of guilty". It includes the following:
- On 13 February 2004 the United States Department of Justice, acting by what was known as the Enron Task Force, submitted a request for the extradition of the defendants to face charges in the United States District Court for the Southern District of Texas pursuant to the Texas indictment. As I have said the request was supported by Mr Hanusik's affidavit of 21 January 2004 (it seems he swore an affidavit in the case of each of the three defendants: we have that which related to the defendant Darby within Appendix A to the defendants' solicitors' letter to the Attorney General of 26 October 2004). The voluminous exhibits include the agreements with Kopper and Fastow, the indictment, the affidavit of Mr Hays of the FBI, and other affidavits. Now, it will be recalled that the United States is designated for the purposes of s.84 of the 2003 Act by order of the Secretary of State. The consequence (see s.84(7)) is that the judge at the extradition hearing was not required by s.84(1) to decide "whether there [was] evidence which would be sufficient to make a case requiring an answer by the person if the proceedings were the summary trial of an information against him"; indeed he was required not to do so. In fact, as District Judge Evans was to state on 15 October 2004, although the case proceeded under the 2003 Act the extradition request had been prepared to meet the requirements of Schedule 1 to the Extradition Act 1989 ("the 1989 Act"), which in effect required material to be produced to show a case to answer.
- On 31 March 2004 the Secretary of State, pursuant to s.70(9) of the 2003 Act, sent the necessary documents to the Bow Street Magistrates Court from which on 16 April 2004 warrants were issued under s.71 for the arrest of each defendant. On 23 April the defendants were produced at Bow Street. The court fixed 15 June 2004 for the commencement of the extradition hearing and the defendants were released on bail.
- In fact the hearing at Bow Street opened on 21 June. Charges had been prepared to reflect the Texas indictment. Originally they were three in number, but in the event only the first was proceeded with. It charged all three defendants that "between [31 January 2000] and [1 September 2000] [they] conspired together and with others to defraud National Westminster Bank PLC". On 25 June 2004 District Judge Evans delivered a preliminary ruling upon the question whether the offences specified in the request were extradition offences. (The specified offences were seven counts of "wire fraud" set out in the Texas indictment – each referring to a particular "wire transaction", and together making up the seven communications to which I have already referred.) The judge directed himself, correctly, that he had to consider only s.137(1) and (2) of the 2003 Act. He found that the Texas indictment identified conduct which occurred in the relevant category 2 territory, that is of course the United States. He stated:
- Having decided the questions arising under s.78(4) of the 2003 Act in the affirmative the judge was required by s.78(7) to proceed under s.79. He indicated that he would do so at the next hearing. The judge's rulings pursuant to s.79 were ultimately given on 15 October 2004.
- On 23 July 2004 the defendants' solicitors wrote to the Director. This letter marks the first throw in what was to become the judicial review case. After setting out something of the history the solicitors say this:
- There were some chasing letters from the defendants' solicitors. The Director sent a substantive reply on 24 September 2004 but that was preceded in time by a "Vetting Note" prepared by the Director and dated 22 September 2004, setting out reasons why he would not undertake an investigation under s.1(3) of the 1987 Act. Some reliance is placed on this by Mr Jones. I should set out these passages:
- The relevant passages in the Director's reply of 24 September 2004 to the solicitors are as follows:
- The extradition hearing at Bow Street was resumed between 28 and 30 September 2004, when substantial oral evidence was given. Much of it related to the conditions in which the defendants would await and face trial in Texas, and to their personal circumstances. I shall deal with those matters later as necessary. Then, as I have indicated, on 15 October 2004 District Judge Evans delivered judgment giving his rulings on the issues which arose under s.79 of the 2003 Act. I should first cite these introductory passages from the judgment:
- The judge dealt next with the issue of the proposed extradition's compatibility with the defendants' human rights arising under the 1998 Act, as s.87 of the 2003 Act enjoined him to do. He observed that ECHR Articles 5, 6 and 8 were relied on, but noted Mr Jones' acceptance that he had no case under Article 5 unless he succeeded on Article 8. In relation to Article 6 the judge directed himself that the appropriate question was whether the defendants faced "a clear risk of suffering a flagrant denial of a fair trial" in Texas. He proceeded to discuss the case under a number of heads which at this stage I will merely identify: bail, disclosure/discovery, inadequate time and/or facilities to prepare the defence, representation by counsel, defence witnesses, superseding indictments and specialty, the sentencing guidelines, Fastow and Kopper and their plea bargains, publicity and potential jury bias, and pressure to plead guilty. He referred to the evidence of Mr McNabb, a federal defence attorney who was called as an expert witness for the defendants and opined that they would not have a fair trial in Texas. The judge said of him:
- The judge's conclusions on Article 6 and 8 are somewhat conflated. He said:
- The judge's rulings given on 21 June and 15 October 2004 are the subject of appeal by Mr Jones for the defendants pursuant to s.103 of the 2003 Act.
- On 26 October 2004 the defendants' solicitors wrote to the Attorney General. The letter, written on leading counsel's advice, quotes a newspaper article concerning the Abu Hamza case in which it was stated, "[the Attorney General] is understood to favour trials in the British jurisdiction if the evidence justifies them". There is then a recital of some of the history of the matter, followed by the contention (under the heading "The lacuna in the Extradition Act") that
- The Attorney General's office replied on 16 December 2004, shortly indicating that the Attorney did not consider that "it would be right to interfere with the statutory process that is now under way", that is, the Secretary of State's awaited decision whether the defendants were to be extradited. There is a further letter from the Director, to the defendant Darby's Member of Parliament, dated 23 December 2004. It was stated that the accusation was of a conspiracy to defraud "not only the NatWest Bank… but also Enron…", and "[w]ithout the evidence provided by the United States there would be insufficient grounds for an investigation in this Country" – propositions hotly contested by Mr Jones in the judicial review. Finally, the Director acknowledged that he owed a duty to take the ECHR into account in making any decision, but
- The application for permission to seek judicial review of the Director's decision not to open an investigation under s.1(3) of the 1987 Act was lodged on 14 February 2005. Mr Jones has made an unnecessary mystery about what actually constituted the decision. He says it was "a decision of unknown date in early December 2004, communicated in letters of 16 and 23 December 2004". These are the letters respectively from the Attorney, and to the MP, which I have described. In fact it is perfectly clear that the decision was communicated by the Director's letter of 24 September 2004. There is no fresh decision by the director thereafter, and no judicial review of any putative or actual separate decision by the Attorney General.
- As I have said permission was granted by David Steel J and myself on 7 April 2005 to seek judicial review of the Director's decision. Then on 24 May 2005 the Secretary of State issued his decision on the question whether under s.93 he was required to order the defendants' discharge or their extradition. The defendants had made extensive representations to the Secretary of State who in turn had sought and obtained responses from the American authorities. It was contended for the defendants that there were no or no sufficient specialty arrangements in place, and that their extradition would violate their rights guaranteed by ECHR Article 8. The Secretary of State concluded against the defendants on both issues and accordingly ordered their extradition pursuant to the request. That decision is appealed pursuant to s.108 of the 2003 Act.
- There are some other matters of fact. They relate in particular to the conditions in which the defendants if extradited would await and face trial in Texas, and their personal circumstances, and also certain communications from the American authorities received since the Secretary of State's decision of 24 May 2005. It is convenient to deal with these in the context of the issues to which they are relevant.
- Mr Jones' broad case, across both sets of proceedings, has an overarching theme. It is an insistence on the defendants' behalf, put very plainly in their solicitors' letter to the Attorney General of 26 October 2004, that they should not have to face trial in the United States; if they are to be tried at all, it should be in England. Before addressing the detail of the arguments advanced before us I think it is helpful to consider how, if at all, this theme can be translated into a concrete legal submission. No statute enjoins any public authority whether court or minister in terms to decide, where a criminal case is triable in either of two jurisdictions, which is the forum conveniens (I use this expression, despite the Secretary of State's comment in counsel's note of 18 August 2005 to the effect that it is inapposite, as a well known shorthand simply to mean the more appropriate venue). Under the 2003 Act neither court nor minister possesses any discretion to further the extradition process or not to do so. If certain conditions are satisfied the court must send the case to the Secretary of State; if not, it must not. If certain further conditions are satisfied, the Secretary of State (once the case is sent to him) must order extradition; if not, he must not. This is in contrast to the predecessor legislation. Under the Extradition Act 1870, the Fugitive Offenders Acts of 1881 and 1967, and the 1989 Act the Secretary of State possessed a general discretion whether or not to surrender the fugitive to the requesting State. Accordingly he was on the face of it in a position to consider issues of forum conveniens as he thought fit, subject to judicial review.
- In fact that may be to state the matter too simply, at least unless a qualification is added. In a skeleton argument dated 27 September 2005 counsel for the Attorney General submits (paragraph 14) that "there was never any suggestion under the old Extradition Acts that the Secretary of State, by use of his power to start and/or end the extradition process, could or did give active consideration as to which jurisdiction should take priority". I should have thought that the old statutes would have allowed him to do so; but at all events, the 2003 Act does not. As I have shown ss.88 and 97 of the 2003 Act effectively require postponement of the extradition process, by the court and the Secretary of State respectively, where the relevant person is charged with an offence in the United Kingdom. But these provisions do not confer a power of discretionary judgment.
- Plainly the legislature has advisedly measured the reach of the functions it has conferred by the 2003 Act. Mr Jones' overarching theme is at once met with the difficulty that it looks for a statutory regime which Parliament has chosen not to provide. But this is not to say that consideration of the forum conveniens is under the present extradition legislation always and in principle beyond the power and duty of any of the public authorities concerned. To the extent that a decision to try a defendant in one jurisdiction rather than another may lead to a violation of his Convention rights, some public decision-maker must be in a position to conclude the matter so as to avoid such an outcome, or the process will fall foul of s.6(1) of the 1998 Act by whoever sends the defendant to the offending jurisdiction: unless he is saved by s.6(2)(a), but in that case the relevant statute will be vulnerable to a declaration of incompatibility under s.4.
- In these circumstances Mr Jones' overarching theme is translated into a concrete question: where (if at all) in the legislation before us do we find a provision or provisions by force of which the decision-maker is to reach a conclusion as to place of trial, as the means of affording protection to the defendant's Convention rights in fulfilment of his duty under s.6(1) of the 1998 Act?
- Now I may turn to the judicial review challenge to the Director's decision not to open an investigation under s.1(3) of the 1987 Act. Before considering whether that subsection provides the answer to the question I have just posed I will deal with certain narrower points advanced by Mr Jones.
- Mr Jones submits that the Director, in responding to the request to investigate, has made a number of factual errors which render his decision irrational and thus susceptible to challenge on conventional Wednesbury grounds ([1948] 1 KB 223). Four such alleged errors were identified at the application for permission. These remain the core of this part of the case, though they have been somewhat elaborated and expanded in Mr Jones' skeleton argument of 31 August 2005. The four primary points are:
- I entertain considerable reservation as to the propriety of the courts embarking at all on a challenge to the Director's decision framed in such terms as these. There is much authority to the effect that the jurisdiction to conduct a judicial review of a public authority's decision to launch or not to launch a prosecution, though it undoubtedly exists, is to be exercised sparingly. Where the decision is to prosecute, this admonition of restraint arises in part at least out of the imperative that criminal proceedings should not be the subject of satellite proceedings which have the effect of delaying the trial: R v Director of Public Prosecutions, ex parte C [1995] 1 CAR 136, especially per Kennedy LJ at 141; R v Director of Public Prosecutions, ex parte Kebilene [2000] 2 AC 326. Where the decision is not to prosecute, there cannot I think be a different rule; in any event there will have been expert assessments of weight and balance which are so conspicuously within the professional judgment of the statutory decision-maker that there will very rarely be legal space for a reviewing court to interfere.
- Here, of course, the decision sought to be reviewed is a decision not to investigate. The position as regards the judicial review jurisdiction is in my judgment a fortiori a decision whether to prosecute. The authority's (here, the Director's) discretion is even more open-ended. It will involve consideration of the manner in which available resources should be deployed and whether particular lines of inquiry should or should not be followed: Hill v Chief Constable of West Yorkshire [1989] 1 AC 53 per Lord Keith of Kinkel at 59 D-F, summarising R v. Commissioner of Police for the Metropolis, Ex parte Blackburn [1968] 2 QB 118. It is submitted for the Director that absent bad faith or other exceptional circumstances a decision to investigate or not to investigate an allegation of crime is not subject to review. That is not quite right. It looks like an argument to limit the court's jurisdiction of judicial review; but the jurisdiction is as wide or as narrow as the court holds. The true proposition is that it will take a wholly exceptional case on its legal merits to justify a judicial review of a discretionary decision by the Director to investigate or not.
- In this case there are particular considerations against review. The request to investigate in effect invited the Director to constitute himself the judge of the proper forum for the defendants' trial and to decide the issue in favour of trial here and not the United States: and thereby to pre-empt the statutory extradition process. Such a function cannot conceivably be found in s.1(3) of the 1987 Act.
- In those circumstances I will deal with Mr Jones' Wednesbury points shortly, though I doubt whether it is the court's duty to deal with them at all. I will follow the numbering I have used in paragraph 61 to enumerate the points.
- I conclude that the arguments advanced based on the Wednesbury principle are wholly unsustainable, and I turn to what may be called Mr Jones' more strategic arguments. Here we will find the answer to my earlier question so far as it may be directed to the Director in the judicial review: does s.1(3) of the 1987 Act constitute a provision by which the decision-maker – here the Director – is to reach a conclusion as to place of trial, as the means of protecting the defendant's Convention rights in fulfilment of his duty under s.6(1) of the 1998 Act?
- Mr Jones, however, would cast a wider net. He submits that under s.1(3) the Director is obliged to formulate criteria for the instigation of an investigation – criteria which would, in effect, establish a framework for deciding issues of forum conveniens. This is an attempt to lay on the Director the burden of what I have called Mr Jones' overarching theme: to find in s.1(3), where a potential criminal case is triable in either of two jurisdictions, a positive duty to decide which is the more appropriate venue. Mr Jones marshalled a formidable array of material, including the European Convention on the Transfer of Proceedings in Criminal Matters of 1972, the institution Eurojust (established by the European Union in 2002), the 1972 UK – USA Extradition Treaty, the European Convention on Extradition 1957, the Council Framework Decision of 2002, and an assortment of cases and statutory materials. At paragraph 102 of his skeleton he submits:
- None of the materials Mr Jones assembled, and none of his arguments, began to demonstrate that such a "mechanism" might be supplied by s.1(3) of the 1987 Act properly construed. Just as with the 2003 Act, so with the 1987 Act, Mr Jones' overarching theme is met at once with the difficulty that it looks for a statutory regime which Parliament has chosen not to provide. However there remains the question I have formulated, which would put the case on a somewhat narrower basis. Is the Director required by s.1(3) to reach a conclusion as to place of trial, as the means of protecting the defendant's Convention rights in fulfilment of his duty under s.6(1) of the 1998 Act?
- As I have said the Director in his letter of 23 December 2004 acknowledged a duty to take the ECHR into account in making any decision. To the extent that action taken by him might touch the Convention rights of any affected person – most obviously, anyone the subject of an investigation instituted by him – he was clearly right to do so. It is I suppose possible to envisage circumstances in which that would arise in practice, perhaps where the effects of an investigation upon an especially vulnerable person would be particularly severe. Indeed in such a case the Director's duty would not merely be to have regard to the ECHR but to take a decision which would vindicate the Convention right in question. I cannot, however, envisage any circumstances in which a decision not to investigate might offend the relevant person's Convention rights. At all events, given we are dealing only with investigation, I apprehend that cases in which the director's decision might touch Convention rights would be very rare, and exhibit very special facts. And this is not the basis of what is suggested here. My question can only be answered in the affirmative, and thus in the defendants' favour, if s.1(3) is construed so as to impose a positive obligation on the Director to embark upon an investigation so that he might pre-empt the potential trial venue in favour of this jurisdiction (by proceeding to prosecute here) if it appears that the Convention rights of a suspected person might be violated by trial elsewhere.
- This would be an entirely fanciful construction of s.1(3). It obviously cannot be got out of the subsection's words, which only confer a power to investigate. More than this: it would usurp the role of the District Judge under ss.21 and 87 of the 2003 Act. As I have shown those provisions impose on the judge an express obligation to decide whether the relevant person's extradition would be compatible with his Convention rights, and to order his discharge if he concludes that it would not. Thus Parliament has distinctly allocated the task of determining complaints under the ECHR to the courts. As is submitted at paragraph 1.5 of the skeleton argument for the Director prepared by Mr Burnett QC and Mr Perry, the defendants' argument, if correct, "would enable a request to be made… when the extradition process was well advanced, with a view to halting it or interrupting it with collateral challenges to the decisions of investigating or prosecuting bodies". In my judgment that would be a wholly unacceptable state of affairs. I shall address s.87, and the judge's consideration of it in this case, when I come to the statutory appeals. But I may state at this stage that it is in the material provisions of the 2003 Act that all necessary protection of a defendant's Convention rights in the extradition context is in my judgment to be found.
- There is, moreover, a frank unreality in Mr Jones' case. It would require the Director not only to consider but to consult the suspect, in order to make a fully informed and even-handed decision on what and how much to investigate in light of the suspect's potential Article 8 rights. He would have to respond to representations, if advanced, before any investigation were begun. It is wholly implausible and inappropriate that obligations of that kind should be required of him in the name of a statutory function of investigation.
- These conclusions do not mean that the question of forum is necessarily irrelevant to the Director's consideration of any and every case. Far from it; it is plain that he had regard to just such a question in this case. It will be recalled that the Vetting Note of 22 September 2004 stated:
- There are some other matters I should address before proceeding to the statutory appeals. First, it is to be noted that Mr Jones did not merely submit that the Director's task under s.1(3) was conditioned by the ECHR. He submitted in the alternative that the Director must "consider the interests" of the defendants. This was, as I understood him, another route to the imposition on the Director of a broad duty in effect to foreshadow and pre-empt the issue of choice of trial venue through the medium of his power to investigate. The argument is no better for being founded on an appeal to the common law than in its ECHR guise. It is unreal and inapt however it is put.
- With permission granted by myself in advance of the hearing the organisation Liberty intervened in the proceedings by way of written submissions prepared by Miss Harrison of counsel. She has much to say as to the importance of the rights conferred by ECHR Article 8, which in general terms is of course uncontentious. There is some discussion of the circumstances in which a public authority may be obliged to take positive steps to assure the protection of Article 8 rights, and an acknowledgement that that is what is contended here vis-à-vis the Director. Generally Miss Harrison supports Mr Jones' broad argument: she makes no submissions on the Wednesbury points. I hope it will not appear discourteous if I merely indicate that there is nothing from first to last in Liberty's submissions that to my mind begins to demonstrate that Mr Jones can get what he seeks out of s.1(3) of the 1987 Act.
- It will be recalled that in their letter to the Attorney General of 26 October 2004 the defendants' solicitors referred to a newspaper article, referring to the Abu Hamza case, in which it was stated, "[the Attorney General] is understood to favour trials in the British jurisdiction if the evidence justifies them". I should indicate that Mr Jones has not, as I followed his argument, submitted that this material amounted to a policy statement giving rise to an enforceable legitimate expectation, or anything of the kind. Nor could he sensibly have done so. The Attorney's comment was made in the context of a wholly different case and (as is submitted on his behalf) could hardly be said to constitute a policy in any event.
- I should add that both Mr Jones and Miss Harrison advanced arguments, fashioned in the light of recent authority of the House of Lords in Ullah [2004] 2 AC 323 and Razgar [2004] 2 AC 368, as to the nature and reach of the Article 8 rights in a case where the hurt complained of arises from the complainant's being compulsorily taken out of the United Kingdom. But since I have concluded that Mr Jones' case on ECHR in the judicial review is misconceived in principle, I will not with respect take time with those points. I shall have to return to Ullah and Razgar in dealing with the statutory appeals.
- I should say by way of postscript that on 23 January 2006 the defendants' solicitors drew our attention to a memorandum from the European Commission on Conflicts of Jurisdiction, which had been published three days previously. It refers to a Green Paper to which was attached a lengthy annex. I have not found this documentation of any assistance.
- I would dismiss the application for judicial review.
- In the grounds of appeal Mr Jones took four points under s.103 of the 2003 Act against the District Judge's rulings, and two against the Secretary of State under s.108. Against each it is said that he "ought to have decided [questions] before him… differently" and "if he had decided the question[s] in the way he ought to have done, he would have been required to order the person's discharge" (ss.104(3), 109(3)). The points against the District Judge's rulings, in the order in which I will deal with them, are:
- The prosecutor's case relies on s.137(2) of the 2003 Act. The critical concept in s.137 is the defendant's "conduct" said to constitute the putative extradition offence. However in his skeleton argument Mr Jones advanced a submission, based on the majority decision of the House of Lords in Aronson [1990] 1 AC 579, that there had to be a strict correspondence between the ingredients of the crime alleged in the request and an equivalent crime acknowledged by the law of England, if the former was to qualify as an extradition offence. That submission has been abandoned following their Lordships' decision in Armas UKHL 67, [2005] 3 WLR 1079, on which, however, Mr Jones now relies for a different argument.
- Armas concerned an extradition request by the Belgian authorities under Part I of the 2003 Act. The House was called on to decide whether the conduct alleged in the European arrest warrant which had been issued fell within s.65. There was an argument about the applicability of s.65(2) to the case, which I can pass over. The relevance of the case arises from their Lordships' construction of s.65(3)(a), whose language is identical with that of s.137(2)(a) save of course that it refers to category 1 and not category 2. It will be recalled that s.137(2)(a) provides:
- In this case, likewise, part of the conduct alleged by the prosecutor took place in the category 2 territory, part in the United Kingdom. Mr Jones' new argument is founded on a passage at paragraph 40 in Armas in the speech of Lord Hope of Craighead. The submission is that in a case where the conduct giving rise to the charge occurred both in the relevant category 2 territory and in another jurisdiction, s.137(2)(a) is only met if the conduct in the other jurisdiction was "targeted" at the category 2 territory: that is to say, if the alleged crime's harmful effects were felt there. Here, it is said, the harm was not in the United States (the category 2 territory) but here: the victim was the Bank, a UK institution.
- This submission rests on a misunderstanding of Lord Hope's reasoning. The passage in paragraph 40 on which reliance is placed reads thus:
- In such a case the simple position is that the relevant conduct occurred in the category 2 territory within the meaning of s.137(2)(a). On its true construction the subsection does not require it to be shown that the whole of the conduct occurred there. That approach is, I apprehend, in keeping with the decision in Somchai [1991] 1 AC 225; I need not with respect cite the text. One may contrast the terms of s.137(4)(a) – "the conduct occurs outside the category 2 territory and no part of it occurs in the United Kingdom". S.137(5)(a) is in the same terms. The distinction is the same as that drawn by Lord Bingham in paragraph 17 of Armas between the different subsections of s.65.
- Here there is no contest but that the relevant alleged conduct substantially took place in the category 2 territory, the United States, as well as in the United Kingdom. S.137(2)(a) was satisfied, and the District Judge was right so to hold on 25 June 2004.
- The test under s.82 is whether "it would be unjust or oppressive to extradite [the defendant] by reason of the passage of time since he is alleged to have committed the extradition offence". The relevant period in the present case runs from 31 January 2000 (the first date pleaded in the conspiracy charge drafted to reflect the Texas indictment) to the hearing of the appeal in this court (Kakis [1978] 1 WLR 779, 782G). In my judgment this submission falls to be rejected on the short ground that there is no reason to suppose that the judge was wrong to hold on 15 October 2004 that it was not shown that any defence witness might be unavailable owing to the passage of time, and that assertions of "oppression" were if anything relevant to the argument on abuse rather than delay.
- The content of the terms "unjust" and "oppressive" may no doubt overlap, but authority shows that what is "unjust" refers primarily to the risk of prejudice to the accused, arising from delay, in the conduct of the trial itself; what is "oppressive" relates to hardship to the accused arising from changes in his circumstances during the period falling to be considered: Kakis, per Lord Diplock at 782H. Under the s.82 heading I shall address Mr Jones' submission that his clients were prejudiced because the passage of time had occasioned difficulties in relation to the evidence on which they might rely, so that their extradition would be "unjust". For his part Mr Jones canvassed a number of other matters under s.82. Some of these might no doubt properly be canvassed under the "oppressive" rubric in s.82. I find it more convenient to address them under headings (iii) and (iv), abuse and human rights.
- In his ruling of 15 October 2004 District Judge Evans stated:
- There is nothing in the distinct argument under s.82 based on the suggestion of witness difficulties. In truth, Mr Jones' complaints lie elsewhere.
- Mr Jones excoriates the US government's refusal to disclose any of the evidential material it possessed beyond what was contained in the extradition request. He seeks to imbue this circumstance with a miasma of bad faith: he submits there is now evidence which "fundamentally undermines the proposition that [the Bank] was defrauded of $7,000,000". The reference is to the FSA summary attached to Mr Crump's letter of 13 June 2002. Further, Mr Jones' skeleton argument (paragraphs 43 ff), which he supported before us, proceeds to accuse the American authorities of "unjustified and inexcusable delay" in seeking the defendants' extradition. The delay, it is said, has denied them safeguards they would have enjoyed under the 1989 Act consisting (a) in the Secretary of State's discretion whether or not to order extradition "and the power to negotiate the venue of trial with a requesting State" and (b) the requirement that the requesting State should demonstrate a case to answer on the facts. Here too the suggestion is in truth one of bad faith – a deliberate delay to await the new statute.
- We had the benefit of submissions from counsel on the question whether the District Judge conducting an extradition hearing under the 2003 Act possessed any jurisdiction to refuse the order sought on the ground that the proceedings were an abuse of the process of the court on the part of the prosecutor. In fact Mr Hardy for the United States government was in agreement with Mr Jones that the jurisdiction existed; but since it is indeed a matter of jurisdiction, we are no doubt bound to determine the question for ourselves.
- In Atkinson [1971] AC 197 the House of Lords held that under the Extradition Act 1870 the magistrate to whom application for a committal was made had no power to refuse on the ground that natural justice so required. Lord Reid accepted (at 232) that there can be cases where "it would clearly be contrary to natural justice to surrender a man although there is sufficient evidence to justify committal". But he held that the Secretary of State's discretionary power to refuse to surrender a man committed by the magistrate was an adequate safeguard, it being the legislature's intention that the power should be used "whenever in his view it would be wrong, unjust or oppressive to surrender the man". Then he said (233):
- In Schmidt [1995] 1 AC 339 the House of Lords had to consider an argument that extradition proceedings under the 1989 Act were vitiated by abuse of process: the applicant had been induced to come to the United Kingdom by a ruse on the part of a police officer. Lord Jauncey referred to "the principal safeguard" resting in "the general discretion conferred upon the Secretary of State by Parliament in section 12" (379A-B), and held, following Atkinson, that the magistrate acting under the 1989 Act possessed no abuse jurisdiction (379B). Their other Lordships agreed.
- In Gilligan [2001] 1 AC 84 their Lordships' House was concerned with proceedings brought under the Backing of Warrants (Republic of Ireland) Act 1965. In one of the two linked cases heard by their Lordships the Irish authorities had applied to a stipendiary magistrate for an order that the applicant, who was wanted on 18 arrest warrants issued in Dublin and had also been arrested and charged with offences in England, be handed over to the Garda. The applicant contended that the application was abusive, claiming among other things that he had been improperly arrested in England so as to hold him while the Irish charges were drawn up. It was held that the magistrate possessed no abuse jurisdiction. Lord Steyn referred (97G) to the ability of the Irish courts to guard against abuses; this was seen as an analogue to the protection in extradition cases under the 1989 Act afforded by the Secretary of State's discretion, which as I have shown was critical in Schmidt.
- In my judgment the reasoning in these cases of high authority has no application in the context of the 2003 Act. Under its provisions the Secretary of State has no statutory discretion to refuse extradition. The safeguard emphasised in Atkinson and Schmidt is lacking. Moreover in Part I cases, and Part II cases where the category 2 territory has (like the United States) been designated for the purpose of s.84, the prosecutor is not required to establish a prima facie case on the evidence. Under the old law that requirement was itself an important discipline. Its absence makes the need for a residual abuse jurisdiction all the plainer.
- I should not leave the point without considering the nature of the juridical exercise involved in concluding, as I would, that the judge conducting an extradition hearing under the 2003 Act possesses a jurisdiction to hold that the prosecutor is abusing the process of the court. Lord Reid, in the passage from Atkinson which I have cited, would if necessary have inferred that the magistrate had power to refuse to commit. Now, it is plain that the judge's functions under the 2003 Act, and those of the magistrate under the predecessor legislation, are and were wholly statutory. He therefore possesses no inherent powers. But that is not to say that he may not enjoy an implied power. The implication arises from the express provisions of the statutory regime which it is his responsibility to administer. It is justified by the imperative that the regime's integrity must not be usurped. Where its integrity is protected by other powers, as in Atkinson, Schmidt and Gilligan, the implication is not justified. But under the 2003 Act that is not the case. The implication of an abuse jurisdiction – Lord Reid's inference – follows.
- But the question whether abuse is demonstrated has to be asked and answered in light of the specifics of the statutory scheme. Accordingly, subject to an important qualification which I will explain, no finding of abuse can be justified (in a case like the present where the category 2 territory has been designated for the purpose of s.84) by the prosecutor's refusal or failure to disclose evidential material beyond what was contained in the extradition request. The reason is straightforward. In such an instance, as I have shown, the prosecutor does not have to establish a case to answer. Evidence going to whether there is in fact a case to answer is therefore not relevant to the court's task. Mr Jones submitted that while no doubt the prosecutor was not required to produce evidence of merits, if he failed to do so he would or should be at peril of adverse rulings from the court under s.82 or s.87 of the 2003 Act. Here, Mr Jones makes a like mistake to the major flaw in his argument in the judicial review: his submission looks for a statutory regime which Parliament has chosen not to provide. The prosecutor cannot be penalised, under s.82, 87, or by any other route, for limiting the material he places before the court to what is required for the proper execution of the court's function under ss.78 ff. The observations of Ognall J in Lee [1993] 1 WLR 1294, 1298, are in point. I need not, with respect, cite the text.
- Likewise a defendant cannot ordinarily complain of abuse on grounds that if only the prosecutor had acted more promptly the 1989 Act, and not the 2003 Act, would have governed the proceedings, and in that case he (the defendant) would have enjoyed the right to test the prosecutor's case and persuade the court, if he could, that there was no case to answer. We cannot entertain any kind of presumption that where in an extradition case the facts arose in the life of the 1989 Act, the defendant should ordinarily have the benefit of that Act and not be fixed with the effects of the supervening statute. Such a presumption would be unconstitutional: it would imply a value judgment by this court that the scheme of the earlier legislation was to be preferred to that of the 2003 Act. We have no authority to propound any such judgment.
- I have referred to an important qualification. It applies to both of the points I have discussed: the prosecutor's failure to give more disclosure, and his failure to facilitate the defendants' enjoyment of the relative benefits of the 1989 Act. The prosecutor must act in good faith. Thus if he knew he had no real case, but was pressing the extradition request for some collateral motive and accordingly tailored the choice of documents accompanying the request, there might be a good submission of abuse of process. Again, if he knew he could not (or perhaps, could not without great difficulty) make out a prima facie case and so deliberately delayed the extradition process until the 1989 Act had been safely superseded by the 2003 Act, that also might be held to be abusive.
- These are in effect the accusations made by Mr Jones in the present case. He says the FSA summary attached to Mr Crump's letter of 13 June 2002 was deliberately withheld so as to conceal a fatal (at least a very grave) weakness in the prosecution case. He says the extradition request was deliberately delayed until the provisions of the 2003 Act were in force. I think he put these points a little more delicately; but if he did, there is no virtue in being willing to wound but afraid to strike. And his argument on abuse must be as stark as I have expressed it, or it goes nowhere. Underlying both accusations is the suggestion of an ulterior motive on the part of the prosecutor in proceeding against the defendants. It is articulated (though only by reference to what Mr Crump of the FSA might have believed) at paragraph 8 of Mr Jones' supplementary skeleton argument in the judicial review dated 11 November 2005, which I have already cited:
- As for the FSA summary, Mr Jones of course places particular emphasis on the statement it contains that "FSA asked RBS to undertake a revaluation of its stake in Swap Sub at the time of the sale to Southampton LP. This has resulted in a figure very much in line with the original". He says, and it may well be right, that this document was in the hands of the American authorities in 2002 but was not disclosed to the Grand Jury which returned the Texas indictment. I have already foreshadowed Mr Jones' case on these aspects in paragraph 34.
- Has Mr Jones shown that the FSA summary was deliberately withheld from disclosure in the extradition application documents? In the course of the proceedings before us, specific enquiry was made of Mr Hanusik, which yielded a letter from the Department of Justice dated 29 November 2005. Mr Hanusik has no recollection of having seen the document. He also indicated that had he seen it, "he would not have considered it damaging to his case. Further, Mr Hanusik proposes that it is not surprising that those who were unaware of the true value of Swap Sub, and thus sold it for far less than its actual value, might be motivated to justify the sale figure by later providing a low reevaluation… It is clear that the only people at NatWest who knew the true value of SwapSub were [the defendants]… Further, paragraphs 21-28 of Special Agent Hays' affidavit establish that the defendants knew in February 2000 that their minimum profit for selling a one-half interest in SwapSub would be around $7 million".
- Before expressing my conclusions on this issue as to disclosure I should confront Mr Jones' other contention, that the extradition request was deliberately delayed until the provisions of the 2003 Act were in force. In fact the 2003 Act came into effect on 1 January 2004. Mr Hanusik swore a supplemental affidavit on 24 September 2004. He states (paragraph 2) that "the timing of the indictment and the subsequent requests for extradition were dictated by the natural course of the investigation". Then at paragraph 4 he says this:
- There was no contest to this material by Mr McNabb giving evidence before the judge on 29 September 2004. In all these circumstances I conclude that Mr Jones' case on abuse of the process is wholly without foundation. It is, to use a tired old metaphor, an attempt to make bricks without straw. There is nothing sinister in the non-disclosure of the FSA summary, or the passage of time between the relevant events and the extradition request. No ulterior motive for the prosecution has been shown.
- I will deal first with ECHR Article 6. The defendants' case, supported before the judge by Mr McNabb's evidence, is that they would not have a fair trial in Texas. This submission is in part based on a proposition I have already rejected, namely that the purpose of the prosecution is to obtain evidence from the defendants against Enron personnel. Other points, emanating largely from Mr McNabb's testimony given on 29 September 2004, were as follows. The defendants would almost certainly be denied bail, and the conditions in which they would be held on remand would be inimical to their capacity to prepare their defence. There would be a long delay before trial. They would have to pay for legal representation at a cost of between one and two million dollars per defendant. There would be no possibility of recovering costs in the event of acquittal. One defendant, but not all three (as I understand Mr McNabb's evidence – transcript 29 September 2004 p. 13 lines 14-15) might, if found to be lacking means, be represented out of the public defenders' office; the others by private attorneys at public expense, but they would be "inexperienced". To obtain evidence from the United Kingdom they would have to rely on the mechanisms of the Mutual Legal Assistance Treaty between this country and the United States. The use of video-link facilities is (as I have already indicated) discretionary. There would be difficulties in obtaining full and timely disclosure of documents from the prosecution. The Houston jury (I summarise p. 24 of the transcript) would be prejudiced against the defendants, and an application for a change of venue would be unlikely to succeed.
- There is also a statement from a Mr Hamilton, a previous federal prosecutor, who describes the long and unpleasant journey the defendants if extradited would undergo from New York to Texas via Oklahoma, "restrained by chains", and the privations they would then suffer at the Federal Detention Center.
- Mr Jones has a further submission to the effect that the plea bargains struck with Kopper and Fastow are "abhorrent to any English criminal court" (skeleton argument paragraph 61), and are liable to motivate them to give evidence so as to obtain a conviction.
- District Judge Evans was plainly sceptical as to the quality of Mr McNabb's evidence. He noted Mr McNabb's view that "no fair trial for a major fraud of these dimensions was possible in any Federal Court in the US", and that the points he made were "of general application and… not case-specific". I have already cited his conclusion:
- No less important is the United States' constitutional guarantee of fair trial. The Sixth Amendment provides:
- We are in no position at all to hold that trial of the defendants in Houston would violate their Article 6 rights. That would in my judgment be so even if Article 6 fell to be considered free of the constraints, plain from the jurisprudence, which arise from the fact that the putative violation would take place in a State not signatory to the ECHR. As I have shown the judge directed himself that the appropriate question was whether the defendants faced "a clear risk of suffering a flagrant denial of a fair trial" in Texas. He was right to do so. So much is plain from the opinions of their Lordships in Ullah [2004] 2 AC 323, to which I have already referred in passing in dealing with the judicial review. I will cite only this passage from what was said by Lord Bingham:
- There is in my judgment no arguable free-standing complaint under ECHR Article 5, and I turn to Article 8, where the real burden of Mr Jones' human rights case lies. Here there is no doubt that the proposed extradition would constitute an interference with the defendants' rights under Article 8. Equally there is no doubt that the extradition is "in accordance with the law" and is sought in pursuit of a legitimate aim, namely "the prevention of… crime". The only issue remaining is whether it would be a proportionate interference.
- Each of the defendants was born in 1962 and has a family with young children. There are I think no special features relating to the family life of any of them save that one of the defendant Darby's daughters unhappily suffers from a learning disability which requires her to attend a special school.
- In Ullah Lord Bingham drew a distinction between "domestic cases" (paragraph 7) and "foreign cases" (paragraph 9). The parties joined issue as to the appropriate categorisation of this case, in light of the more stringent approach in foreign cases taken by the House of Lords to proof of violation of the Convention rights: an approach which Mr Hardy would have us apply; Mr Jones to the contrary. In fact Lord Bingham recognised a hybrid class of case (paragraph 18):
- In Razgar Baroness Hale of Richmond said this:
- In dealing with Article 6, I have already cited a passage from paragraph 24 of Lord Bingham's opinion in Ullah. In the same paragraph he says:
- Before drawing any conclusions from this learning I should refer to a decision of the Commission at Strasbourg which is directly in point. This is Launder v United Kingdom (1997) 25 EHRR CD 67. The applicant claimed that his extradition to Hong Kong would interfere with his family life in violation of ECHR Article 8, and would be disproportionate to the proposed extradition's legitimate aim. On the issue of proportionality the Commission stated (paragraph 3):
- In my judgment this statement and the authorities in their Lordships' House are, with respect, entirely in line. If a person's proposed extradition for a serious offence will separate him from his family, Article 8(1) is likely to be engaged on the ground that his family life will be interfered with. The question then will be whether the extradition is nevertheless justified pursuant to Article 8(2). Assuming compliance with all the relevant requirements of domestic law the issue is likely to be one of proportionality: is the interference with family life proportionate to the legitimate aim of the proposed extradition? Now, there is a strong public interest in "honouring extradition treaties made with other states" (Ullah, paragraph 24). It rests in the value of international co-operation pursuant to formal agreed arrangements entered into between sovereign States for the promotion of the administration of criminal justice. Where a proposed extradition is properly constituted according to the domestic law of the sending State and the relevant bilateral treaty, and its execution is resisted on Article 8 grounds, a wholly exceptional case would in my judgment have to be shown to justify a finding that the extradition would on the particular facts be disproportionate to its legitimate aim.
- It is convenient to repeat District Judge Evans' conclusion on this issue, as it was stated in his judgment on 15 October 2004:
- The second, albeit lesser, factor is that the defendants are of course United Kingdom nationals; but the paradigm extradition case is where the fugitive is a national of the requesting State, having fled its borders. The United Kingdom is one of the few European States prepared to extradite its own nationals.
- Should the judge have applied his mind to these factors? It could be said that both might colour the judgment he had to make, under s.87 of the 2003 Act, whether the extradition was proportionate. I do not accept Mr Hardy's submission that the possibility of trial in the United Kingdom is legally irrelevant in a case like this. There might be an instance in which such a possibility could tip the balance of judgment in favour of a conclusion that the defendant's extradition would amount to a disproportionate interference with his Article 8 rights. That, I think, has to be accepted if s.87 is to constitute effective judicial protection of the Convention guarantees. What it would take to make such a case is a very different question.
- It would have been better if the judge had confronted the matters to which I have referred and arrived at a reasoned conclusion. But we must pay attention to the terms of our statutory jurisdiction. Under s.104(1)(a) we may only allow the appeal if the conditions in subsection (3) or those in subsection (4) are met. These are framed with reference to the merits outcome of the case. I repeat subsection (3) for convenience:
- We therefore have to decide, as it seems to me, whether upon a proper consideration of the two factors I have described (and especially the first), in light of all the facts the judge would or might have concluded that the defendants' extradition would be a disproportionate interference with their Article 8 rights. If he would, we should allow the appeal under s.104(1)(a). If he might, we should give a direction under s.104(1)(b). If neither, we should dismiss the appeal under s.104(1)(c).
- To my mind the starting-point on this part of the case is that the prospective extradition (as well as satisfying all relevant formal requirements) is not, for reasons I have given, tainted by any of Mr Jones' accusations of abuse. The request was made in good faith, and as it happens, though the prosecutor did not have to demonstrate as much, a prima facie case is shown on the documents accompanying the request. Then I would attach importance to this passage from the judge's judgment of 15 October 2004, which I have already cited:
- In my judgment the case against the defendants has very substantial connections with the United States and is perfectly properly triable there. I do not think that in order to arrive at a right judgment upon the prospective extradition's proportionality it was the duty of the judge, nor is it ours on appeal, to undertake an investigation of such matters as the practical prospects of obtaining Kopper and Fastow's testimony at a trial in London.
- I would respectfully wish to underline the observations of the Lord Ordinary in Wright v Scottish Ministers [2005] Scots CS CSIH 40, which was decided in the Court of Session after Ullah and Razgar, and took into account their Lordships' opinions in those cases. The petitioner had claimed that it was not proportionate to extradite him to Estonia to face trial on criminal charges which could have been tried in Scotland. The Lord Ordinary said:
- In short, in this case no less than in any other, the court must feel the weight of what Lord Bingham called "the great desirability of honouring extradition treaties made with other states". And given the cross-border nature of the accusation here, these observations of Hale LJ as she then was in R (Warren) v Secretary of State for the Home Department [2003] EWHC 1177 are especially in point (at paragraph 40):
- I consider also that the approach of the European Human Rights Commission in Launder, requiring exceptional circumstances to demonstrate a want of proportionality in an extradition upon charges of serious offences committed in the requesting State, is fully applicable notwithstanding the fact that some acts going to constitute the fraud took place in the sending State, the United Kingdom.
- The facts which I have described disclose a significant United States dimension to the whole case; there is a Cayman Islands dimension as well, in addition to the English dimension. In relation to such transactions it is unnecessary, and probably unwise, to canvass the question which is the dominant country in terms of the acts allegedly done or the defendants' alleged "target". The United States dimension does not arise from the contingency that a telephone call or an e-mail happened to be received in that jurisdiction. It arises from the close and critical involvement of two senior Enron figures, not least at the meeting in Houston and in particular in persuading Enron to part with its money. That was essential to the alleged fraud by the defendants on the Bank. They were also instrumental in setting up the corporate arrangements whereby money was ultimately transferred to the defendants. It would be unduly simplistic to treat the case as a domestic English affair. The fact that the defendants could be prosecuted here (and that there would be consequential advantages and disadvantages from the prosecution and defence perspectives) does not amount to an exceptional circumstance.
- Nor, in my judgment, is there anything exceptional about the personal circumstances of these defendants to make a case on proportionality under ECHR Article 8(2). I am afraid that the plight of the defendant Darby's child cannot make the difference. Nor can the conditions which the defendants would face on arrival in the United States and thereafter: those, moreover, are not clearly established given the judge's reservations about Mr McNabb's evidence.
- Mr Jones advanced a particular argument which I ought to confront. It was in fact put forward in the course of his submissions on the judicial review, but as it seems to me could only have effect, if at all, as part of his case on the human rights aspect of the s.103 appeal. The argument is that the discretionary power to refuse extradition contemplated by Article 4(3) of the Council Framework Decision (2002/584/JHA) must have been implemented in domestic law by s.21 of the 2003 Act, there being no other candidate. S.21 of course falls within Part I. But s.87, within Part II, is effectively in identical terms. So it too must be read widely enough to encompass a discretion to refuse extradition in the circumstances contemplated by Article 4(3) of the Decision, which, it will be recalled, refers to a case
- Mr Jones' argument adds nothing. The second arm of Article 4(3) is I would think reflected in part by the provision made to give effect to the rule against double jeopardy (s.80 of the 2003 Act). Otherwise the circumstances contemplated by the Article may, depending always on the particular facts, inform a human rights decision falling to be made under s.87 (or, of course, s.21). But the scope of any Convention right being considered is not thereby either enlarged or diminished.
- For all these reasons there is in my judgment no sufficient basis upon which to hold that the extradition request in this case ought to have been refused on proportionality grounds having regard to ECHR Article 8(2).
- I would accordingly reject the defendants' human rights submissions, and dismiss the statutory appeal against the District Judge.
- Here the question is whether the Secretary of State correctly concluded, in his decision of 24 May 2005, that there are in being "speciality arrangements" with the United States within the meaning of s.95 of the 2003 Act. Mr Hardy accepts, as I understand does Mr Qureshi for the Secretary of State, that the court must consider not only the United States' relevant laws and procedures, but also any circumstances specific to the particular case which might bear on the issue whether the requirements of s.95(3) are met.
- It is important to be precise as to the question or questions we have to decide. We are not directly concerned with whether the relevant law and practice in the United States complies with Article XII of the 1972 UK – USA Extradition Treaty, which I have cited. We have to go by the 2003 Act. Article XII(1) forbids process against an extradited person in the requesting State "for any offense other than an extraditable offense established by the facts in respect of which his extradition has been granted". S.95 forbids such process for an offence unless (so far as relevant here) it is "(a) the offence in respect of which the person is extradited; [or] (b) an extradition offence disclosed by the same facts as that offence" (s.95(4)). It is not, I think, to be assumed that the two prohibitions are identical, though they are clearly close.
- However the way in which Article XII of the Treaty is in principle approached in the federal law of the United States must in my judgment be the starting-point of our consideration of the question whether the Secretary of State was right to conclude that s.95 was satisfied in this case. As to that I should first draw attention to Article VI of the US Constitution, which provides in part:
- The second point as to the general approach of the federal law of the United States to the specialty rule, as it has been expressed in successive treaties dealing with extradition, is that the rule has been firmly vouchsafed by decisions of the Supreme Court. The leading case is United States v Rauscher 119 US 407, decided in 1886. The Supreme Court applied the rule, holding that an extradited person could only be tried for the offences for which he had been extradited: "the country receiving the offender against its laws from another country had no right to proceed against him for any other offense than that for which he had been delivered up".
- However Mr Jones submits that decisions of the United States Court of Appeals, and especially the 5th Circuit (on which the defendants will be tried if they are extradited), show that the rule is more honoured in the breach. He says that a practice can be discerned by which the court has repeatedly shown itself prepared to countenance the trial of the defendant on a "superseding indictment" alleging crimes for which he has not been extradited, or in respect of which extradition has even been refused by the sending State. Amongst other cases counsel cited Kaufman 858 F.2d 994 (5th Circuit 1988), LeBaron 156 F.3d 621 (5th Circuit 1998), Fiocconi 462 F.2d 475 (2nd Circuit 1972), Andonian 29 F.3d 1432 (9th Circuit 1994), and Diwan F.2d. 715 (11th Circuit 1989). All these decisions are analysed in detail by Ouseley J in Welsh and Thrasher, which was also an extradition case concerning the United States heard by Ouseley J and myself in the same sittings as these appeals. I have expressed my agreement with Ouseley J's reasoning on which I cannot improve and will not replicate here. He holds, in particular, that the decision in LeBaron "not merely does not support [counsel's] submission, it shows it to be completely wrong" (paragraph 39).
- I should, at least for clarity's sake, state our essential conclusions on the "superseding indictment" point in this judgment. There is no doubt that "superseding indictments" are deployed in the United States for the trial of extradited defendants. But that is not to say that such defendants are put on trial in breach of the specialty rule. LeBaron contains a characteristic statement, made by Circuit Judge Garza after citing earlier authority (627):
- This summation of the position, and indeed the formulation of the test for a violation of the specialty rule set out in Andonian, LeBaron and other cases, reflect the very approach taken by the Supreme Court in Rauscher in 1886 to which I have already referred. Rauscher was extradited from the United Kingdom on a charge of murder pursuant to an extradition treaty of 1842. But he was sought to be tried in the United States for an offence of unlawfully inflicting cruel and unusual punishment on the same victim. Both alleged crimes arose out of what Rauscher was said to have done to a member of the crew on board a ship of which he was the second mate. The Supreme Court by a majority (Waite CJ dissenting) held that Rauscher could not be tried on the lesser charge. In Kaufman the United States Court of Appeals (5th Circuit) gave this useful and illuminating summary of the Rauscher case (1008-1009):
- Mr Jones submits that if they are extradited his clients risk facing a superseding indictment which would charge them with a different fraud (or conspiracy) from that presently levelled against them, namely a fraud on Enron as such. The US Department of Justice has offered certain undertakings in the matter, not least that contained in a letter of 23 November 2005:
- Here the specialty rule, through the medium of s.95, requires that the defendants be proceeded against in Texas only for the crime or crimes described in paragraphs 10 and 23 of the Texas indictment, which I have set out above at paragraph 37. That their co-conspirators were or included Fastow and Kopper, and that in the course of the criminal venture Enron was deceived (though it was not a loser at the defendants' hands), are plainly matters that may be canvassed without offence to the specialty rule. For the reasons I have given I am satisfied that s.95 is met.
- That conclusion is to my mind reinforced by another point on the facts, which seems to me to have some force. In his principal affidavit at paragraph 17 Mr Hanusik refers to the statute of limitations which applies to the counts specified in the Texas indictment. Title 18, United States Code, Section 3282 allows for the commencement of such a prosecution within five years of the alleged offence taking place. Mr Hanusik sets out the date on which each of the seven communications giving rise to the individual counts was made. The latest was 1 May 2000. In a letter of 20 April 2005 from the Department of Justice to the Home Office this is said:
- Mr Jones has another argument on the specialty rule based on a document called the Federal Sentencing Guidelines. These Guidelines were introduced in 1987. An expert instructed for the defendants, Professor Beale of Duke University in North Carolina, refers in her statement to the 1998 Federal Sentencing Guidelines Manual as being applicable in the defendants' case. The argument is that the Guidelines provide for a defendant's sentence to be enhanced or increased by reference to conduct not forming any part of the offence of which he has been convicted. Mr McNabb (in a written statement) asserts that "any act or omission that can be tenuously linked to the indicted offense is considered part of the offense [for the purposes of sentence]". In evidence before the District Judge he said (transcript 29 September 2004, pp. 51 line 24 – 52 line 4) that the trial judge may adjust the sentence upwards on account of "unadjudicated conduct" of which he need only be satisfied on a balance of probability (p. 36 lines 2 – 6). Mr Jones submits, in short, that the defendants are at risk of being sentenced for defrauding Enron though they will not have been extradited for any such crime; and the specialty rule would thus be violated.
- The Federal Sentencing Guidelines were also the subject of argument in Welsh and Thrasher, and their impact on the specialty rule is discussed by Ouseley J at paragraphs 100 ff of his judgment in that case. Again, I agree with his reasoning and will not repeat it. In summary the points are these. (1) The specialty rule does not in the United States "restrict the scope of proof of other crimes that may be considered in the sentencing process. The distinction is thus drawn between proof of other crimes as a matter germane to the determination of punishment for the extradited crime and proof of other crimes in order to exact punishment for those other crimes. Only the latter course is forbidden by the rule of specialty" (Garcia 208 F.3d 1258 (11th Circuit 2000). More shortly, "[R]elated criminal conduct to enhance a defendant's sentence for a separate crime within the authorized statutory limits does not constitute punishment for that conduct." (Witte v US 515 U.S.389 (1995): Witte was not an extradition case.) (2) The US may regard offences in respect of which extradition has been refused as capable of aggravating sentence, and that is not treated as a breach of specialty. (3) Under the Sentencing Reform Act of 1994 the Guidelines had been promulgated as mandatory instructions to the federal criminal courts. The Supreme Court has held that to be unconstitutional: Booker 125 S.Ct. 738 (2005). The Guidelines are accordingly now discretionary. But this circumstance, I think, has no determinative impact on the question whether the defendants would if extradited face a violation of the specialty rule. If the US trial court possesses a discretion to pass sentence on a basis which means that the extradited defendant will be "dealt with" (s.95(3) of the 2003 Act) for an offence or offences other than "(a) the offence in respect of which [he] is extradited; or (b) an extradition offence disclosed by the same facts" (s.95(4)), then the conditions of s.95 are unfulfilled just as surely as if the US trial court was bound to sentence on such a basis; unless, perhaps, it were plain that the discretion would not be so exercised. (4) The sense to be given to the phrase "dealt with" in s.95(3) is accordingly of some importance.
- Here I would respectfully commend the reasoning of Ouseley J in Welsh and Thrasher at paragraphs 135 – 139. I hope I do him no injustice if I venture to highlight these points. (1) "Dealing with" an extradited person plainly includes sentencing him. (2) The Secretary of State must make up his own mind whether on any given scenario of law and fact in the requesting State, the defendant would on return there be "dealt with" conformably with s.95. He may not simply adopt the requesting State's view of the reach of the specialty rule. (3) However, as Ouseley J says (paragraph 136) "the language of [s.95] has to be applied to many treaties and foreign justice systems which will differ from each other as well as from those of the UK"; there is, accordingly, no implied condition of the section's fulfilment that the sentencing practice in the requesting State should be mirror image to the practice here. (4) The authorities suggest that the sentencing practices reflected in the Guidelines have been in place for very many years. Had these practices been perceived in the United Kingdom as repugnant to our conception of the specialty rule, the matter would surely have been clarified in successive treaties or extradition statutes, or surfaced in litigation contesting an extradition order. Thus s.95 "is not intended to bring about profound changes in extradition arrangements in a way which would add a novel and significant hindrance to extradition". (Ouseley J, paragraph 137). (5) Although the United States courts appear to take broader considerations into account when sentencing than do the courts here, that will not of itself produce the result that an extradited defendant would be "dealt with" other than in accordance with s.95.
- In this case we have, and the Secretary of State had, a letter from the US Department of Justice dated 3 February 2005 addressing the defendants' points about the specialty rule including the contention that "the sentences they will receive pursuant to the Sentencing Guidelines will violate the rule". The letter's author cites three "sentencing enhancements" which the defendants fear would be applied to them:
- Given the approach to be taken to the Sentencing Guidelines in light of the correct construction of s.95, as I have summarised it and Ouseley J has explained it, there is in my judgment nothing in this part of the case to expose a violation of the specialty rule as it falls to be applied under the statute by the Secretary of State and on appeal by this court.
- The Secretary of State accepts in terms that "his decision to order the extradition of a person must not be incompatible with his or her Convention rights" (paragraph 17 of Mr Qureshi's supplementary note of 14 November 2005). Such an acceptance is in any case implicit in his decision letter of 24 May 2005. Mr Jones did not make extended submissions on this part of the case, asserting in his skeleton only that the Secretary of State has "declined to exercise any independent judgment on the [human rights] issue, preferring to leave it all to the District Judge".
- That being so little if anything was said at the hearing about the potential impact of the Convention rights upon the Secretary of State's functions under the 2003 Act. It is, however, to be noted that in the context of those functions there is no analogue to s.87; and as I have shown unless the Secretary of State is prohibited from ordering the person's extradition by any of the three matters specified in s.93(2), s.93(4) requires him, subject to certain exceptions, to order the person's extradition to the territory of the requesting State. The three matters are the death penalty (s.94), specialty (s.95), and earlier extradition to the United Kingdom from another territory (s.96). While these – notably the first – may run into ECHR territory, it would appear that the Secretary of State has no free-standing duty or discretion to consider the Convention rights and fashion his extradition decision accordingly.
- It may well be said, however, that by force of s.6 of the 1998 Act the Secretary of State must not order a person's extradition if that would violate his Convention rights; and the price of compatibility with the ECHR is that the 2003 Act must have recognized as much. In these proceedings we have heard no argument upon such an issue, and I am very far from suggesting that it should be canvassed now. The true position may very well be that a defendant's Convention rights are sufficiently protected by s.87 read with ss.103(5) and 104(4). S.103(5) postpones the hearing of any appeal against the judge's decision until after the Secretary of State has made his decision. I have already set out s.104(4). It would appear that if any new facts emerged after the case was sent to the Secretary of State which bear on the defendant's Convention rights, they can be raised on an appeal against the judge which will be heard after the Secretary of State's decision.
- In this case, there were, so far as I know, no such new facts. When the matter came before the Secretary of State there was nothing more to be said about the defendant's Convention rights. In any event the defendants had, and have, no ECHR case for reasons I have given in dealing with the appeal against the judge.
- I would dismiss the appeal against the Secretary of State.
- I agree.
Laws LJ:
INTRODUCTORY
THE STATUTES AND OTHER TEXTS
The 1987 Act
"The Director may investigate any suspected offence which appears on reasonable grounds to involve serious or complex fraud."
Under s.1(4) he may conduct such an investigation in conjunction with the police or with any other person who is in his opinion a proper person to be concerned. S.1(5) provides:
"The Director may -
institute and have the conduct of any criminal proceedings which appear to him to relate to such fraud…"
The 2003 Act
"(1) The Secretary of State must issue a certificate under this section if he receives a valid request for the extradition to a category 2 territory of a person who is in the United Kingdom.
…
(3) A request for a person's extradition is valid if –
(a) it contains the statement referred to in subsection (4), and
(b) it is made in the approved way.
(4) The statement is one that the person –
(a) is accused in the category 2 territory of the commission of an offence specified in the request…
…
(8) A certificate under this section must certify that the request is made in the approved way.
(9) If a certificate is issued under this section the Secretary of State must send these documents to the appropriate judge [defined by s.139(1)(a), for the purposes of England and Wales, as a district judge designated by the Lord Chancellor] –
(a) the request;
(b) the certificate;
(c) a copy of any relevant Order in Council."
Once the Secretary of State has sent documents to the appropriate judge under s.70, s.71(2) empowers the judge to "issue a warrant for the arrest of the person whose extradition is requested" if certain conditions are fulfilled. The first condition is that "the offence in respect of which extradition is requested is an extradition offence". ("Extradition offence", so far as material to the circumstances of this case, is defined by s.137 to which I shall come.) By s.72(3) a person so arrested must (unless he is bailed) "be brought as soon as practicable before the appropriate judge". I may go to s.78:
"(1) This section applies if a person alleged to be the person whose extradition is requested appears or is brought before the appropriate judge for the extradition hearing.
(2) The judge must decide whether the documents sent to him by the Secretary of State consist of (or include) –
(a) the documents referred to in section 70(9);
(b) particulars of the person whose extradition is requested;
(c) particulars of the offence specified in the request;
(d) … a warrant for his arrest issued in the category 2 territory…
(3) If the judge decides the question in subsection (2) in the negative he must order the person's discharge."
If the judge decides the s.78(2) question in the affirmative, he is required by s.78(4) to decide further questions, one of which is whether "(b) the offence specified in the request is an extradition offence". If any of those questions is decided in the negative, then again by s.78(6) the judge must order the person's discharge. If they are decided affirmatively, by s.78(7) the judge must proceed under s.79 which is cross-headed "Bars to extradition". One such bar (s.79(1)(a)) is the rule against double jeopardy. Another is specified by s.79(1)(c) to be "the passage of time". S.82 provides:
"A person's extradition to a category 2 territory is barred by reason of the passage of time if (and only if) it appears that it would be unjust or oppressive to extradite him by reason of the passage of time since he is alleged to have committed the extradition offence…"
"If the judge is required to proceed under this section he must decide whether there is evidence which would be sufficient to make a case requiring an answer by the person if the proceedings were the summary trial of an information against him."
But by s.84(7):
"If the judge is required to proceed under this section and the category 2 territory to which extradition is requested is designated for the purposes of this section by order made by the Secretary of State –
(a) the judge must not decide under subsection (1), and
(b) he must proceed under section 87."
The United States is designated for the purposes of s.84 (and also for the purposes of s.71) by order of the Secretary of State. S.87 provides:
"(1) If the judge is required to proceed under this section (by virtue of section 84…) he must decide whether the person's extradition would be compatible with the Convention rights within the meaning of the Human Rights Act 1998.
(2) If the judge decides the question in subsection (1) in the negative he must order the person's discharge.
(3) If the judge decides that question in the affirmative he must send the case to the Secretary of State for his decision whether the person is to be extradited."
S.88:
"(1) This section applies if at any time in the extradition hearing the judge is informed that the person is charged with an offence in the United Kingdom.
(2) The judge must adjourn the extradition hearing until one of these occurs –
(a) the charge is disposed of;
(b) the charge is withdrawn;
(c) proceedings in respect of the charge are discontinued;
(d) an order is made for the charge to lie on the file…
(3) If a sentence of imprisonment or another form of detention is imposed in respect of the offence charged, the judge may adjourn the extradition hearing until the sentence has been served.
(4) If before he adjourns the extradition hearing under subsection (2) the judge has decided under section 79 whether the person's extradition is barred by reason of the rule against double jeopardy, the judge must decide that question again after the resumption of the hearing."
"(1) The Secretary of State must not order a person's extradition to a category 2 territory if there are no speciality arrangements with the category 2 territory.
…
(3) There are speciality arrangements with a category 2 territory if (and only if) under the law of that territory or arrangements made between it and the United Kingdom a person who is extradited to the territory from the United Kingdom may be dealt with in the territory for an offence committed before his extradition only if –
(a) the offence is one falling within subsection (4), or
(b) he is first given an opportunity to leave the territory.
(4) The offences are –
(a) the offence in respect of which the person is extradited;
(b) an extradition offence disclosed by the same facts as that offence…;
(c) an extradition offence in respect of which the Secretary of State consents to the person being dealt with;
(d) an offence in respect of which the person waives the right that he would have (but for this paragraph) not to be dealt with for the offence.
(5) Arrangements made with a category 2 territory which is a Commonwealth country or a British overseas territory may be made for a particular case or more generally.
(6) A certificate issued by or under the authority of the Secretary of State confirming the existence of arrangements with a category 2 territory which is a Commonwealth country or a British overseas territory and stating the terms of the arrangements is conclusive evidence of those matters."
S.97 applies where the relevant person is charged with an offence in the United Kingdom after the judge has sent the case to the Secretary of State, and s.97(2) and (3) contain provisions conferring functions on the Secretary of State exactly parallel to those conferred on the judge by s.88(2) and (3).
"(1) If the judge sends a case to the Secretary of State under this Part for his decision whether a person is to be extradited, the person may appeal to the High Court against the relevant decision.
…
(3) The relevant decision is the decision that resulted in the case being sent to the Secretary of State.
(4) An appeal under this section may be brought on a question of law or fact.
(5) If an appeal is brought under this section before the Secretary of State has decided whether the person is to be extradited the appeal must not be heard until after the Secretary of State has made his decision.
…"
S.104:
"(1) On an appeal under section 103 the High Court may –
(a) allow the appeal;
(b) direct the judge to decide again a question (or questions) which he decided at the extradition hearing;
(c) dismiss the appeal.
(2) The court may allow the appeal only if the conditions in subsection (3) or the conditions in subsection (4) are satisfied.
(3) The conditions are that –
(a) the judge ought to have decided a question before him at the extradition hearing differently;
(b) if he had decided the question in the way he ought to have done, he would have been required to order the person's discharge.
(4) The conditions are that –
(a) an issue is raised that was not raised at the extradition hearing or evidence is available that was not available at the extradition hearing;
(b) the issue or evidence would have resulted in the judge deciding a question before him at the extradition hearing differently;
(c) if he had decided the question in that way, he would have been required to order the person's discharge.
(5) If the court allows the appeal it must –
(a) order the person's discharge;
(b) quash the order for his extradition.
…"
S.105 confers a right of appeal on the requesting category 2 territory against an order made by the judge for the relevant person's discharge. That does not arise here.
"(2) The conduct constitutes an extradition offence in relation to the category 2 territory if these conditions are satisfied –
(a) the conduct occurs in the category 2 territory;
(b) the conduct would constitute an offence under the law of the relevant part of the United Kingdom punishable with imprisonment or another form of detention for a term of 12 months or a greater punishment if it occurred in that part of the United Kingdom;
(c) the conduct is so punishable under the law of the category 2 territory (however it is described in that law).
(3) The conduct also constitutes an extradition offence in relation to the category 2 territory if these conditions are satisfied –
(a) the conduct occurs outside the category 2 territory;
(b) the conduct is punishable under the law of the category 2 territory with imprisonment or another form of detention for a term of 12 months or a greater punishment (however it is described in that law);
(c) in corresponding circumstances equivalent conduct would constitute an extra-territorial offence under the law of the relevant part of the United Kingdom punishable with imprisonment or another form of detention for a term of 12 months or a greater punishment.
(4) The conduct also constitutes an extradition offence in relation to the category 2 territory if these conditions are satisfied –
(a) the conduct occurs outside the category 2 territory and no part of it occurs in the United Kingdom;
(b) the conduct would constitute an offence under the law of the relevant part of the United Kingdom punishable with imprisonment or another form of detention for a term of 12 months or a greater punishment if it occurred in that part of the United Kingdom;
(c) the conduct is so punishable under the law of the category 2 territory (however it is described in that law).
…"
The 1972 Extradition Treaty
"Extradition may be refused on any other ground which is specified by the law of the requested Party."
Article XII(1):
"A person extradited shall not be detained or proceeded against in the territory of the requesting Party for any offense other than an extraditable offense established by the facts in respect of which his extradition has been granted, or on account of any other matters, nor be extradited by that Party to a third State –
(a) until after he has returned to the territory of the requested Party; or
(b) until the expiration of thirty days after he has been free to return to the territory of the requested Party."
The Council Framework Decision
"(3) where the judicial authorities of the executing Member State have decided either not to prosecute for the offence on which the European arrest warrant is based or to halt proceedings, or where a final judgment has been passed upon the requested person in a Member State, in respect of the same acts, which prevents further proceedings".
The European Convention on Human Rights
"(1) It is unlawful for a public authority to act in a way which is incompatible with a Convention right.
(2) Subsection (1) does not apply to an act if –
(a) as the result of one or more provisions of primary legislation, the authority could not have acted differently…"
"6(1) In the determination of… any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law…
(2) Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law."
Article 6(3) confers "minimum rights" on criminal defendants. They include the right to adequate time and facilities to prepare the defence, legal assistance (free if necessary), and the right to require the attendance and examination of witnesses. Then Article 8 provides:
"(1) Everyone has the right to respect for his private and family life, his home and his correspondence.
(2) There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others."
THE FACTS
The Circumstances of the Alleged Offence
"One last thing. An unexpected change of circumstances re LJM. We have always assumed that the swap sub assets have nil value, because of the mark to market value of the Rhythm Net Put. This was true up to about 10 days ago, when Enron became a virtual company, and its shares went through $60. I ran the numbers last night, and I would say there is quite some value there now. The trick will be in capturing it. I have a couple of ideas, but it may be good if I don't share them with anyone until we know our fate!!!"
"7. Between February and August 2000, David Bermingham, Giles Darby, Gary Mulgrew, Enron Chief Financial Officer Andrew Fastow and Enron Managing Director Michael Kopper devised and executed a scheme to defraud NatWest. The essence of the scheme was that, by misrepresentations, omissions, and deceit, the co-schemers caused NatWest to sell its interest in a limited partnership for $1 million to an entity that the co-schemers secretly controlled. The co-schemers knew that NatWest's interest in the partnership was worth well in excess of $1 million. In fact, weeks later, the entity that David Bermingham, Giles Darby and Gary Mulgrew secretly controlled received approximately $7.3 million for one-half of the same interest that they caused NatWest to sell for $1 million.
8. The three NatWest employees charged in the scheme… each received approximately $2.4 million for their participation in the scheme. Each of the defendants recommended that NatWest sell its interest for $1 million, but none of them disclosed to NatWest that the interest in the partnership was, in fact, worth far more, or that they were investing in the entity that was buying that same interest…"
Later Events to January 2004
"I refer to your recent telephone conversation with Ken O'Donnell in relation to the activities of Messrs Darby, Mulgrew and Bermingham as disclosed to you at a presentation by the FBI on 12 June 2002.
The [FSA] has been reviewing the individuals' conduct following their disclosure to us of information regarding their involvement in transactions relating to Enron. To date no formal investigation has commenced. However a disclosure of information was made to the [SEC] on 4 March 2002 on the basis that the US authorities were the most appropriate to investigate the matter.
At the time FSA possessed no evidence of a crime occurring in the UK. [RBS] informed the FSA that it had reported its suspicions to the City of London Police… Subsequently FSA discussed the matter with the police and was informed that without further evidence they were unlikely to take the matter forward…
At a meeting yesterday at FSA, the FBI stated that it intended to conduct interviews with various witnesses based in the UK. FSA had been given no prior warning that this was to happen. At the same meeting it was confirmed that the joint US Department of Justice, SEC and FBI investigation into events at Enron possesses evidence that a fraud may have taken place in the UK. Again this was the first time that FSA had been informed of this.
For your information I have enclosed documents which were disclosed to SEC. These set out our understanding of the transactions that took place and a summary of the information obtained by FSA at that time…
To the extent that any of the information enclosed with this letter is confidential information under section 348 of the Financial Services and Markets Act 2000, it is disclosed to you in accordance with… Regulations… for the purpose of any criminal investigation or for the purpose of initiating any such investigation or facilitating a determination of whether it should be initiated."
The summary there referred to is a 4-page document which bears no date or signature, but which clearly emanated from within the FSA, presumably the Enforcement Division. Its terms suggest it was written after the defendants were interviewed but before the FSA disclosed documents to the SEC. These observations appear towards the end of the document:
"18. Supervision and Enforcement have held two meetings with senior staff of RBS, at which explanations of the procedures followed and of NWB's and later RBS's involvement with LJM1 were provided. On the basis of these explanations and documents it appears that:
(a) the procedures laid down by NWB at the time for making significant investments were followed and included quite thorough due diligence and a final sign off by the then chief executive of NWB, Derek Wanless, and
(b) the decision to dispose of the investment was properly taken in accordance with the procedures in place at the time.
19. However, examination of the documentation has revealed that the valuation memo signed off by GM was dated 20 March 2000 – three days after the sale and the day that the three individuals signed the option.
…
22. FSA asked RBS to undertake a revaluation of its stake in Swap Sub at the time of the sale to Southampton LP. This has resulted in a figure very much in line with the original. However RBS has noticed slight peculiarities in the original paperwork and an arithmetical error in the calculations. The correctly calculated figure would still have been well within the discretionary limits of local management to accept the offer.
Preliminary Conclusions
23. On the basis of the information gathered to date it would appear that prima facie there appears to be evidence that the three individuals were subject to a major conflict of interest. To take the matter further FSA would need to obtain evidence from a number of key witnesses, including Mr Kopper and Mr Fastow. Furthermore supporting documentation would be required from the Cayman Islands and USA. Obtaining this would involve jurisdictional issues and issues of availability of witnesses given the apparently large number of existing investigations into these matters.
24. It is also possible that the US$ 7.3 million received by the three individuals may have represented the proceeds of fraudulent activity. However the location of any such fraud is clearly in an overseas jurisdiction and is more properly the concern of the regulators in that jurisdiction."
"It was not until I received a letter dated 23 July 2004 from the firm of solicitors, Jeffrey Green Russell, that I was asked to consider whether the SFO should investigate the allegations against their clients."
In fact it is stated in a letter from the Treasury Solicitor of 25 October 2005 on behalf of the Director that the SFO has no record or recollection of any such presentation or meeting as is referred to in the letter of 13 June 2002. It is surmised that there may have been an informal meeting. It is not denied that the SFO received the documents sent to it.
"8. If the [Director] did receive materials with a view to considering whether to commence an investigation, a decision by the SFO not to proceed in 2002 is explicable on the basis as recorded [in a file note prepared by a detective sergeant in the City of London Police] that it appeared to Tim Crump of the FSA that the prosecution of the Appellants had been brought for the ulterior purpose of obtaining evidence against people involved in Enron."
The file note is dated 15 July 2002. It contains this observation:
"Tim [Crump] has also indicated that the Dept of Justice have bigger fish to fry in the US and are probably aiming towards using BERMINGHAM and others to prosecute the ENRON individuals."
On 24 July 2002 another file note, made by the Financial Investigation Unit of the City of London Police, records that the case is "related to the Enron Corporation, but the centre of gravity is in the USA and FSA/SFO have the UK angle covered."
"(d) Defendant agrees to testify at any proceeding in the Southern District of Texas or elsewhere as requested by the Department."
There follows at paragraph 14 a heading "Stipulated Factual Basis for Guilty Plea". It is there stated, "In pleading guilty, Defendant acknowledges that all of the facts stated below are true, and were the case to go to trial, the Department would be able to prove all of those facts beyond a reasonable doubt." There is then set out a detailed narrative which includes the following:
"Southampton: In approximately February 2000, Enron's CFO, KOPPER, three bankers employed by [the Bank] and others devised a scheme to defraud Enron and others in connection with a buyout of the investment interests of [the Bank] and [CSFB] in an SPE entity called Swap Sub.
To carry out the scheme, KOPPER… and others caused Enron to pay $30 million for the Swap Sub buyout. That price was based on Enron's CFO's false representation to Enron that [the Bank] and CSFB had agreed to sell their interests in Swap Sub for $20 million and $10 million, respectively. In fact, [the Bank] received only $1 million and had agreed to receive this sum based on fraudulent misrepresentations and fraudulent conduct of its own employees, who sought to skim profits that should have gone to [the Bank].
As a result, the three NatWest bankers who participated in the scheme received approximately $7.3 million."
"Between approximately February 2000 and August 2000, defendants David Bermingham, Giles Darby, and Gary Mulgrew, and others, devised and executed a scheme to defraud NatWest and GNW and deprive them of money and their right to honest services by recommending to GNW that it sell its interest in Swab Sub for only $1m, when the defendants knew that GNW's interest was worth far more, and when the defendants were planning fraudulently to convert the balance of GNW's interest to themselves and others."
Paragraph 23 specifically alleges that the defendants:
"having devised the above mentioned-scheme and artifice to defraud and to obtain money and property by false and fraudulent pretences, representations and promises, and to deprive Natwest and GNW of their intangible right to an employee's honest services for the purpose of executing such scheme and artifice transmitted and caused to be transmitted by means of wire communication in interstate commerce writings, signs, signals, pictures and sounds, including the following",
[then reference is made to one fax from Houston to London, five communications from the UK to Texas, and one wire transfer from Houston to the Cayman Islands: these communications are represented by the specific charges at counts 1 – 7].
"14. Due to a dramatic increase in the market price of Enron stock, the value of Swap Sub (whose primary asset was Enron stock) had also increased dramatically. I was, however, barred from profiting from any increase in the value of Enron stock held by Swap Sub. In approximately February 2000, I and others, including three bankers employed by NatWest, participated in a scheme to extract this increased value by defrauding Enron and NatWest.
15. Enron paid $30 million for the Swap Sub buyout. That price was based on my misleading representation to Enron that the limited partners of Swap Sub had agreed to sell their interests in Swap Sub for $20 million and $10 million, respectively. In fact, NatWest had agreed to sell its interest for only $1 million, not $20 million. I knew that the NatWest bankers induced NatWest to sell its interest in Swap Sub for $1 million at a time they knew the interest was worth significantly more.
16. As a result of their participation in the scheme, the three NatWest bankers together received approximately $7.3 million…"
February 2004 – May 2005
"The fact that each of these defendants are [sic] United Kingdom nationals, living and working in England, and that it was a United Kingdom Bank which suffered the loss does not matter. The fact that the conduct of each of these defendants, if looked at individually, might show that, say 95% of that conduct was within the United Kingdom and only 5% within the category 2 territory does not matter. S.137(2)(a) does not require all the conduct to have occurred in the category 2 territory. I am satisfied that s.137(2)(a) is satisfied."
"[W]e invite you to conduct an investigation as to whether or not a prosecution should be brought in the UK against these three clients. It seems to us that in accordance with the comments of the Home Secretary which were widely quoted in the press, namely that the UK would prosecute any alleged offender where there was evidence of an offence having been committed in the UK, … this is exactly what should happen in this case."
A good deal of correspondence with Members of Parliament was entered into on the defendants' behalf, and the SFO made enquiries of the Crown Prosecution Service. The defendants' solicitors wrote again to the Director on 25 August 2004. They said, "[S]omeone needs to both investigate and, if appropriate, prosecute these individuals in England", and pointed out that at the Bow Street court counsel for the United States government had conceded that "victim, conduct and alleged perpetrators were all in the UK, and that there was no doubt that the UK could claim jurisdiction over these matters". And there is, indeed, no dispute but that the English courts possess jurisdiction to try the defendants on the conspiracy charge framed to reflect the Texas indictment.
"The losers were Enron and National Westminster Bank…
[B]ut for the evidence of the American investigation I cannot see that there would be reasonable grounds for suspecting an offence of serious or complex fraud… The report by RBS to the police makes it clear that there may be a fraud – probably on Enron although possibly too on NatWest but it is clear that at that stage there were insufficient grounds for commencing a criminal investigation in the UK. Even if there were the evidence was in America and it was entirely logical to leave it to the Enron Task Force…
Whether Kopper and Fastow would be available to give evidence in the United Kingdom is presumably doubtful but even if they were, are there any public interest considerations which require us to take over this matter with a view to prosecuting in the United Kingdom?
I do not think there are. The most compelling argument advanced by [the solicitors] was to quote the Home Secretary… when… he said 'Had we evidence in this country of a crime committed here then of course the police and the Attorney General would have taken action'. That is of course right and any crime committed in the United Kingdom should be prosecuted if the evidence is available. But here we are dealing with a different matter. We are dealing with a crime that by its nature is committed over more than one jurisdiction. Prosecuting and investigating authorities competing for the right to try it is unlikely to be in the public interest. On the contrary. It is important that we cooperate and coordinate such investigations and prosecutions and, where possible, they are all tried before the same Court. In this case Fastow and Kopper are to be tried in the United States and are able to give evidence against the three above. Any investigation in this country would lead to further delay. I note that the defendants do not admit their guilt.
For these reasons I reject this case."
"This is a case where the evidence is to be found in the United Kingdom, Cayman Islands and the United States of America. In particular the other participants in the alleged conspiracy – Kopper and Fastow – are to be dealt with in, and are available to give evidence in, the United States. In these circumstances I think it more likely to be in the interests of justice for your clients to be tried in the United States.
In the correspondence you quoted the Home Secretary in connection with an entirely different case as saying 'Had we evidence in this country of a crime committed here then of course the police and the Attorney General would have taken action'. That I am sure is right but… I do not think [the Home Secretary] was necessarily suggesting that an investigation would inevitably follow in every circumstance where [there is] some evidence that an offence has been committed here where the evidence shows that the facts may give rise to criminal offences committed within two or possibly three jurisdictions simultaneously.
… The previous involvement of [the SFO] was to assist the United States Authorities in obtaining evidence in this country for the Enron investigation generally. There has been no previous investigation by this Office under s.1 Criminal Justice act 1987 into your clients and my understanding of the position of [the FSA] is that they did not commence an investigation although they did refer the matter to the SEC.
In the circumstances I do not intend to commence an investigation under s.1 Criminal Justice Act 1987."
"The defendants put forward the proposition… that these extradition proceedings ought never to have been brought. The defendants are UK citizens working in the UK, accused of defrauding their UK employers… At any trial it will be necessary to explore whether the value attributed to 'Swap Sub', at the time of its sale, was fair and reasonable. The evidence relevant to that is largely to be found in London. Mr Jones… says… these proceedings are an abuse of the processes of the UK court. The UK regulatory and prosecuting agencies are said to have surrendered improperly their statutory responsibilities to [the Enron Task Force].
…In my judgment the defence submissions place too great an emphasis on the sale of Swap Sub by the bank, and ignore the very real US links and the conduct which took place in the US. At any trial it will be necessary to consider the defendants' involvement in Southampton K Co… It seems to me that there is a very real basis, on the facts as alleged, for the case to be tried in Houston. The scheme could not have got off the ground without Fastow, Kopper and Enron's involvement… Of course, these defendants could have been tried here but it would seem they are not going to be… The reality is that were the SFO now to commence an investigation, then by the time they were ready to launch a prosecution, there would be defence submissions inviting the court to stay the prosecution as an abuse because of what by then would be the considerable delay. Additionally and crucially Kopper and Fastow are important witnesses for the prosecution. They are readily available to give evidence in the States but not in the UK…"
Encouraged by counsel the judge proceeded to indicate that he accepted that he should entertain the submissions on abuse – as indeed he had just done – without distinctly holding that he possessed the jurisdiction to do so. We have heard submissions on this issue of jurisdiction, and I must return to it. The judge then went on to consider, pursuant to ss.79(1)(c) and 82 of the 2003 Act, whether on the facts the defendants' extradition was barred by the passage of time. He held there was no basis on which to conclude that the American authorities had "deliberately engineered" an element of delay so as to be in a position to bring their case for extradition under the 2003 Act rather than its predecessor the 1989 Act. He dismissed other points that were taken by Mr Jones, observing that it was not shown that any defence witness might be unavailable owing to the passage of time, and that assertions of "oppression" were if anything relevant to the argument on abuse rather than delay. Thus he concluded that the defendants' extradition was not barred under ss.79(1)(c) and 82.
"I felt that rather than give disinterested evidence he was (maybe unconsciously) pressing home the defence agenda. It must be rather depressing for him to practice [sic] as a defence attorney in the Federal Courts when he is of the opinion that fair trials and justice are not available."
"I accept the defendants could have been prosecuted in the UK. There was, however, no obligation to prosecute them in the UK. They are not going to be prosecuted in the UK. There is a good and proper basis for prosecuting them in the US. The process of extradition is 'necessary in a democratic society' and proportionate.
Whether considered separately or in combination the arguments put before me fail to identify a clear risk to these defendants of suffering a flagrant denial of a fair trial."
The judge lastly returned to the abuse issue and stated his conclusion that there had been no manipulation of court processes nor any improper motive on the part of the prosecutor, and hence there was no abuse. He duly sent the case to the Secretary of State under s.87(3) of the 2003 Act for his decision whether the defendants were to be extradited; a decision that would not be made (after the grant of successive extensions of time under s.99(4)) until 24 May 2005.
"[t]he 2003 Act has removed the general discretion of the Home Secretary as to whether an individual should be extradited. It has not replaced this discretion with a power in the courts to insist on a UK trial."
A transcript of the Bow Street proceedings is enclosed, together with copies of correspondence with the Director and other letters. Trenchant and detailed complaints are made of the Director's decision not to conduct an investigation under s.1(3) of the 1987 Act. The underlying theme is that it is quite wrong for the defendants to have to face trial in the United States; if they are to be tried at all, it should be in England, and the Attorney is invited "to take action to ensure that this happens".
"I do not think a refusal to investigate an offence in itself contravenes your constituent's human rights. Whether the extradition is in breach of [the ECHR] is a matter for consideration by the Home Secretary."
THE ISSUES – OVERVIEW
THE JUDICIAL REVIEW
Wednesbury
i) The Director apparently believes that the crime alleged was a conspiracy to defraud Enron, or Enron and the Bank: see the Vetting Note of 22 September 2004 and the Director's letter of 23 December. In fact the accusation was of a conspiracy to defraud the Bank only. It is also now said that when they decided in 2002 not to investigate or prosecute here, the City of London Police made the same mistake; and the Director has failed to appreciate the fact.ii) It is said to be implicit in the Director's letter of 23 December 2004 that he believed that Southampton K Co was an American company, whereas it is in fact a Cayman Islands company. The thrust of the point is that this belief provided, or went towards providing, a false basis for having the case tried in the United States. That is reflected in the more general submission now made at paragraph 26(d) of the skeleton: "[t]he [Director] has failed to take into account that the substance of the conduct alleged, and the most important evidence, is in the United Kingdom".
iii) The Director wrongly asserted, again in the letter of 23 December 2004, that "[w]ithout the evidence provided by the United States there would be insufficient grounds for an investigation in this Country." The submission is, first, that this ignores the fact that most of the material had been sent to the US authorities by the FSA, who had received it from the defendants. Secondly, it is said that the Director pays no heed to what were referred to as the "powerful investigative tools" available by statute to the SFO. This argument is closely related to the fourth point:
iv) As it was originally put this point concerns the statement in the Vetting Note that "Fastow and Kopper are to be tried in the United States and are able to give evidence against the three above [sc. in that jurisdiction]". It was first asserted that Fastow and Kopper were not to be tried; they had pleaded guilty and entered into plea agreements. That is a trivial point. The substance of the submission is that it would be perfectly possible for them to give evidence in England or by video-link. Mr Jones referred to provisions contained in the treaty of 6 January 1994 between the United Kingdom and the United States of America on Mutual Assistance in Legal Matters, which I will not set out.
It is also submitted, under the Wednesbury banner, that the Director has failed to appreciate that no delay would be caused by a decision to investigate now, or would have been caused by a decision to investigate taken either in 2002 or 2004; and that he appears to have concluded (it is said unreasonably) that the advanced stage of the US investigation made it inappropriate to order an investigation in 2004.
i) Wrong identification of loser. The point depends upon a precise and literal reading of the indictment. Obviously such precision has its place. But in the context of the Director's discretion under s.1(3) of the 1987 it is important that on the prosecution case the benefit received by the defendants and their alleged co-conspirators was derived from funds paid by Enron on the strength of a false representation made to that company by Fastow; Enron was deceived into parting with US $20,000,000. What the Director thought about the views of the City of London Police in 2002 is in my view neither here nor there.ii) Whereabouts of the conduct alleged. Only Michael Kopper and Andrew Fastow give direct evidence of the scheme to defraud. The prosecutor says that their testimony is critical to the success of the prosecution. That finds strong support in the witness statement of Rosemary Fernandes (paragraphs 36 and 37) of the Crown Prosecution Service, made on the prosecutor's behalf. They are in a position to testify as to the meeting in Houston on 22 February 2000. Kopper gives (or may or will give) evidence of the defendant Bermingham's visit to New York when the option to purchase 50% of Southampton LP was created. It is to be noted that the material given by the defendants to the FSA contains no admission of wrongdoing. The particular point about Southampton K Co is based upon a quotation (set out in the Director's letter of 23 December 2004) from the District Judge's judgment of 15 October 2004 which cannot bear the weight placed on it. In my judgment the Director was entitled to conclude that critical evidence in the case was in the United States.
iii) Mistaken conclusion that US evidence was essential for an investigation here. See (ii) above. Other potential testimony emanating from the United States includes that of Konrad Kruger, former Co-Chief Executive of GNW. He can speak to the sale of the Bank's interest in Swap Sub and describe admissions made to him by the defendant Mulgrew in 2001.
iv) Fastow and Kopper can give evidence here. It is the evidence of Ms Fernandes for the prosecutor that neither of these witnesses can be compelled to testify in the United Kingdom, pursuant to their plea bargains or otherwise. Consideration of the potential for the use of measures such as the treaty on Mutual Assistance in Legal Matters cannot begin to generate a judicial review of the Director's discretionary decision.
The points about delay and the stage reached in the US investigation go to the Director's broad judgment of the matter and do not begin to make a case for judicial review.
Criteria for a Decision under s.1(3) of the 1987 Act; Human Rights
"At the heart of this matter, and the associated extradition proceedings, is the absence of any statutory or other mechanism for determining in which jurisdiction an allegation of crime should be investigated and tried where more than one jurisdiction has power to bring the allegation to trial."
"Prosecuting and investigating authorities competing for the right to try it is unlikely to be in the public interest… It is important that we cooperate and coordinate such investigations and prosecutions and, where possible, they are all tried before the same Court... Any investigation in this country would lead to further delay."
Those points figured in the Director's judgment; but not as a means, advisedly chosen, of protecting the defendant's Convention rights. No doubt he had to consider the practical prospects of a prosecution here rather than there in order to reach a decision as to the utility of a s.1(3) investigation. But that is of no assistance to Mr Jones. As a matter of judgment it seems to me plain that the Director was entitled to take the view he did. It is not without interest that the Eurojust "Guidelines for Deciding which Jurisdiction should Prosecute", issued following a seminar in November 2003, contain this:
"In cases where the criminality occurred in several jurisdictions, provided it is practicable to do so, prosecutors should consider dealing with all prosecutions in one jurisdiction. In such cases prosecution should take into account the effect that prosecuting some defendants in one jurisdiction will have on any prosecution in a second or third jurisdiction. Every effort should be made to guard against one prosecution undermining another.
When several criminals are alleged to be involved in linked criminal conduct, whilst often it may not be practicable, if it is possible and efficient to do so, prosecutors should consider prosecuting all those involved together in one jurisdiction."
THE STATUTORY APPEALS
i) The judge should have held that the offences specified in the extradition request were not "extradition offences" within the meaning of s.137 of the 2003 Act.ii) He should have held that the defendants' extradition was barred by reason of the passage of time: s.82.
iii) He should have held that the proceedings were an abuse of the process of the court. I should notice the specific basis on which this submission is put forward in the Grounds of Appeal: "[t]he US Department of Justice has sought to gain unfair procedural advantage by manipulating the process of the English court in that it unnecessarily delayed the submission of the request for extradition until the Extradition Act 2003 came into force".
iv) He should have held that the defendants' extradition would not be compatible with their Convention rights under the 1998 Act: s.87.
The points relating to the Secretary of State are:
v) He should have concluded that there were no or no effective specialty arrangements pursuant to s.95.
vi) He should have concluded that the defendants' extradition would not be compatible with their Convention rights under the 1998 Act.
There is a degree of overlap between some of these points. Subject to that I will deal with them in the order I have set them out.
THE APPEAL AGAINST THE DISTRICT JUDGE
i) "Extradition Offence"
"The conduct constitutes an extradition offence in relation to the category 2 territory if these conditions are satisfied –
(a) the conduct occurs in the category 2 territory".
Part of the conduct alleged in Armas took place in Belgium (the category 1 territory), part in the United Kingdom. It was submitted that because the conduct charged did not occur wholly within Belgium the condition in subsection (3)(a) was not satisfied. Lord Bingham of Cornhill stated (paragraph 17):
"I cannot, however, accept that subsection (3) is to be read as requiring that all the conduct complained of should have occurred in the category 1 territory. The subsection does not so provide, and the qualification that no part of the conduct should have occurred in the United Kingdom, expressly stipulated in subsections (2)(a), (5)(a) and (6)(a), is not found in (3)(a). It must be inferred that that qualification was not intended. It is enough, under subsection (3)(a), if some of the conduct complained of or relied on occurred in the category 1 territory."
Their other Lordships agreed. Lord Scott of Foscote said (paragraph 49):
"[T]he request can, in principle at least, be brought under section 65(3) of the Act – because it does not matter for the purposes of that subsection that the conduct took place not only in Belgium but also in the United Kingdom."
"The conduct must occur 'in' the category 1 territory if the condition which is set out in these paragraphs to be satisfied. But a purposive meaning must be given to the word 'conduct' in this context. It would impose a wholly artificial restriction on the extradition process if it were to be taken as meaning that all the conduct which resulted in the offence must have taken place exclusively within the category 1 territory. Actings elsewhere will be sufficient to constitute conduct in that territory so long as their intended effect was to bring about harm within that territory."
In my judgment, with great respect, this reasoning does not show that where there is relevant conduct both within the category 1/2 territory and elsewhere, the case is outside s.65(3)(a)/137(2)(a) unless the conduct elsewhere is directed at, or has harmful effects in, that territory. That would be at variance with Lord Bingham's approach with which Lord Hope agreed in terms (paragraph 19). Their other Lordships agreed with Lord Bingham and Lord Hope and made no distinction between their opinions. As it seems to me Lord Hope's reference to "intended effect" looks to the particular case where the defendant's acts, having in fact taken place elsewhere, can only qualify as amounting to conduct within the category 1/2 territory on the footing that that was the place where their malign effects were felt. So much is illustrated by the graphic example given by Lord Keith of Kinkel in DPP v Stonehouse [1978] AC 55, 93, cited by Lord Hope at paragraph 36, of the man standing on the Scottish bank of the River Tweed who with murderous intent fires a rifle at someone on the English bank: he would be guilty of murder or attempted murder under English law. But where the defendant's acts – the relevant conduct – substantially took place in the category 1/2 territory as well as elsewhere, there is no need to resort to such a purposive approach.
ii) Delay
"The defence did not identify any potential witness that they might wish to call who might be unable to attend by reason of the passage of time."
Mr Jones' copious references to the transcript of the evidence before the judge have not begun to undermine this conclusion. He referred to passages in the defendant Bermingham's testimony given on 28 September 2004 in which he named various potential witnesses – Clement, Bruen, McCulloch, Hing, Learmonth, Copcroft (or Cockcroft), Potter, O'Donnell, Crump – whom he would wish to call. But there was no whisper of a suggestion that by reason of the passage of time they would not be available. Other categories of witnesses were mentioned, without naming them; again, no suggestion that they could not testify. I should notice that there was evidence before the District Judge from the defendants' expert Mr McNabb that evidence might be given by video-link at the discretion of the court.
iii) Abuse
"If I had thought that Parliament did not intend this safeguard to be used in this way, then I would think it necessary to infer that the magistrate has power to refuse to commit if he finds that it would be contrary to natural justice to surrender the man. But in my judgment Parliament by providing this safeguard has excluded the jurisdiction of the courts."
"… [T]he prosecution of the Appellants had been brought for the ulterior purpose of obtaining evidence against people involved in Enron."
"Following the return of the indictment in this case, I consulted with the Office of International Affairs, United States Department of Justice about the requirements for extradition of the defendant from the United Kingdom. I was instructed to, and did prepare an extradition request which establishes a prima facie case… At that time, and through the date that I submitted the extradition request to the Office of International Affairs, I had no knowledge, nor was I informed, that a new Extradition Act was being contemplated by the United Kingdom. I had only been informed that both the United Kingdom and the United States were negotiating a new Extradition Treaty… I was advised and directed not to wait for the implementation of the new treaty, nor did I wait for the implementation of the new Extradition Act, of which I had no knowledge…"
Mr Hanusik proceeds to explain why it took the time it did to assemble the extradition request. In fact, the period was within 16 months of the Texas indictment being returned. Aside from anything else, this tends to give the lie to the submission in Mr Jones' skeleton (paragraph 43) that there was "unjustified and inexcusable delay" on the part of the prosecutor in seeking the defendants' extradition.
(iv) Human Rights
"I felt that rather than give disinterested evidence he was (maybe unconsciously) pressing home the defence agenda. It must be rather depressing for him to practice [sic] as a defence attorney in the Federal Courts when he is of the opinion that fair trials and justice are not available."
That is important, because although s.103(4) of the 2003 Act confers on this court an appeal jurisdiction in matters of fact as well as law, there has been no suggestion that we should take live evidence ourselves and there is no basis upon which we might properly doubt the judge's assessment of Mr McNabb.
"In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defence."
The content is strikingly similar to that of ECHR Article 6. It would be frankly grotesque for this court to hold, on the strength of testimony which the District Judge concluded was parti pris, that this fundamental constitutional right would be more honoured in the breach than the observance at any trial of the defendants in Houston. There is a right to legal representation, to apply for bail, and to seek a change of venue. The defendants have already had much time to prepare their defences, having been aware of their predicament since November 2001. Jurors are vetted for bias in a voir dire process. There is no suggestion that the judge would be other than impartial. As it happens Mr McNabb described the judge assigned to the case as "a good judge: conservative, but tries to do the right thing" (transcript 29 September 2004, p. 15 lines 22-23).
"24. While the Strasbourg jurisprudence does not preclude reliance on articles other than article 3 as a ground for resisting extradition or expulsion, it makes it quite clear that successful reliance demands presentation of a very strong case. In relation to article 3, it is necessary to show strong grounds for believing that the person, if returned, faces a real risk of being subjected to torture or to inhuman or degrading treatment or punishment: Soering, paragraph 91; Cruz Varas, paragraph 69; Vilvarajah, paragraph 103. In Dehwari, paragraph 61… the Commission doubted whether a real risk was enough to resist removal under article 2, suggesting that the loss of life must be shown to be a 'near-certainty'. Where reliance is placed on article 6 it must be shown that a person has suffered or risks suffering a flagrant denial of a fair trial in the receiving state: Soering, paragraph 113…; Drodz, paragraph 110; Einhorn, paragraph 32; Razaghi v Sweden; Tomic v United Kingdom."
On a particular point taken by Mr Jones, there is Strasbourg authority to show that Article 6 does not require that the legal system in question should make provision for a successful defendant to recover costs.
"[S]ome [cases] were of a hybrid nature. The removal of a person from country A to country B may both violate his right to respect for his private and family life in country A and also violate the same right by depriving him of family life or impeding his enjoyment of private life in country B."
"43. This case… is concerned with article 8. In that context, Lord Bingham also refers [in Ullah] to a third or hybrid category. Here 'the removal of a person from country A to country B may both violate his right to respect for his private and family life in country A and also violate the same right by depriving him of family life or impeding his enjoyment of private life in country B' (paragraph 18). On analysis, however, such cases remain domestic cases. There is no threshold test of enormity or humanitarian affront. But the right to respect for private and family life, home and correspondence, which is protected by article 8, is a qualified right which may be interfered with if this is necessary in order to pursue a legitimate aim. What may happen in the foreign country is therefore relevant to the proportionality of the proposed expulsion."
These observations of Lady Hale are clearly in point, but with respect I entertain considerable doubt whether the case's classification as "foreign" or "domestic" will in the circumstances cast much light on the stringency of the test for violation of Article 8 which the court should apply. The defendants complain of the threatened separation from their families; they also complain of the privations they may suffer in the United States. While for reasons I have given it is necessary to treat Mr McNabb's evidence before the judge with considerable circumspection, the defendants clearly face some hazards – potential remand in custody, the possible heavy expenses of representation – which cannot be wholly ignored in looking at the Article 8 case.
"The lack of success of applicants relying on articles 2, 5 and 6 before the Strasbourg court highlights the difficulty of meeting the stringent test which that court imposes. This difficulty will not be less where reliance is placed on articles such as 8 or 9, which provide for the striking of a balance between the right of the individual and the wider interests of the community even in a case where a serious interference is shown. This is not a balance which the Strasbourg court ought ordinarily to strike in the first instance, nor is it a balance which that court is well placed to assess in the absence of representations by the receiving state whose laws, institutions or practices are the subject of criticism. On the other hand, the removing state will always have what will usually be strong grounds for justifying its own conduct: the great importance of operating firm and orderly immigration control in an expulsion case; the great desirability of honouring extradition treaties made with other states. The correct approach in cases involving qualified rights such as those under articles 8 and 9 is in my opinion that indicated by the Immigration Appeal Tribunal (Mr C M G Ockelton, deputy president, Mr Allen and Mr Moulden) in Devaseelan v Secretary of State for the Home Department [2002] IAT 702, [2003] Imm AR 1, paragraph 111:
'The reason why flagrant denial or gross violation is to be taken into account is that it is only in such a case - where the right will be completely denied or nullified in the destination country - that it can be said that removal will breach the treaty obligations of the signatory state however those obligations might be interpreted or whatever might be said by or on behalf of the destination state'."
Although the focus of these remarks, given their context, is on foreign cases as such, the reference to "the great importance of operating firm and orderly immigration control in an expulsion case; the great desirability of honouring extradition treaties made with other states" is not dependent on any such precise classification. Here I should also refer to this reasoning of Lord Bingham in Razgar:
"17. In considering whether a challenge to the Secretary of State's decision to remove a person must clearly fail, the reviewing court… must ask itself essentially the questions which would have to be answered by an adjudicator. In a case where removal is resisted in reliance on article 8, these questions are likely to be:
…
(5) If so, is such interference [so as to engage Article 8] proportionate to the legitimate public end sought to be achieved?
…
20. The answering of question (5), where that question is reached, must always involve the striking of a fair balance between the rights of the individual and the interests of the community which is inherent in the whole of the Convention. In Secretary of State for the Home Department v Kacaj [2002] Imm AR 213, paragraph 25, the Immigration Appeal Tribunal (Collins J, Mr C M G Ockelton and Mr J Freeman) observed that:
'although the [Convention] rights may be engaged, legitimate immigration control will almost certainly mean that derogation from the rights will be proper and will not be disproportionate.'
In the present case, the Court of Appeal had no doubt (paragraph 26 of its judgment) that this overstated the position. I respectfully consider the element of overstatement to be small. Decisions taken pursuant to the lawful operation of immigration control will be proportionate in all save a small minority of exceptional cases, identifiable only on a case by case basis."
"[I]t is only in exceptional circumstances that the extradition of a person to face trial on charges of serious offences committed in the requesting State would be held to be an unjustified or disproportionate interference with the right to respect for family life."
"I accept the defendants could have been prosecuted in the UK. There was, however, no obligation to prosecute them in the UK. They are not going to be prosecuted in the UK. There is a good and proper basis for prosecuting them in the US. The process of extradition is 'necessary in a democratic society' and proportionate."
This reasoning is thin, to say the least. Two matters in particular have troubled me. The first, and much the more important, is that the judge simply takes it as a given that the defendants are to be prosecuted in the United States and not in the United Kingdom. But that is the very outcome hotly opposed by these defendants, and it is common ground that they could, as a matter of jurisdiction, be tried here. I should recall my earlier question: where (if at all) in the legislation do we find a provision by force of which the decision-maker is to reach a conclusion as to place of trial, as the means of affording protection to the defendant's Convention rights in fulfilment of his duty under s.6(1) of the 1998 Act? I have already stated (paragraph 71) that it is in the material provisions of the 2003 Act – effectively, s.87 – that all necessary protection of such rights in the extradition context is in my judgment to be found.
"The conditions are that –
(a) the judge ought to have decided a question before him at the extradition hearing differently;
(b) if he had decided the question in the way he ought to have done, he would have been required to order the person's discharge."
The subsection (4) conditions do not, I think, arise for our consideration. Thus we may only allow the appeal on this part of the case if we conclude that, on a proper appreciation of the material before him, the judge should have decided under s.87(1) that the defendants' extradition would be incompatible with their Article 8 rights. It is true that (while not allowing the appeal) we may under s.104(1)(b) "direct the judge to decide again a question (or questions) which he decided at the extradition hearing", and such a question might of course include that which the judge had to answer under s.87(1). But it would be futile, and thus an improper exercise of the discretionary power conferred by s.104(1)(b), to make such a direction if in law the judge was bound to arrive at the same result as that in fact arrived at.
"In my judgment the defence submissions place too great an emphasis on the sale of Swap Sub by the bank, and ignore the very real US links and the conduct which took place in the US. At any trial it will be necessary to consider the defendants' involvement in Southampton K Co… It seems to me that there is a very real basis, on the facts as alleged, for the case to be tried in Houston. The scheme could not have got off the ground without Fastow, Kopper and Enron's involvement…"
In dealing with Mr Jones' Wednesbury case against the Director I have already stressed the point made by the prosecutor, which so far as I can see is uncontradicted, that only Kopper and Fastow give direct evidence of the scheme to defraud; in particular, they are in a position to testify as to the meeting in Houston on 22 February 2000.
"Extradition does not and should not depend upon the ability or otherwise of the requested state to undertake its own investigations with a view to prosecuting the case within its own jurisdiction. Such an approach would involve unnecessary duplication of effort, would result in additional delays in the prosecution of suspected criminals and would have an adverse effect upon international relations and international co-operation in the prosecution of serious crime. In most, if not all, extradition cases the requested state would depend upon co-operation from the requesting state if the requested state were to embark upon its own investigation and ultimate prosecution of the case."
"The object of extradition is to return a person who is properly accused or has been convicted of an extradition crime in a foreign country to face trial or to serve his sentence there… The extradition process is only available for return to friendly foreign states with whom this country has entered into either a multi or a bilateral treaty obligation involving mutually agreed and reciprocal commitments… [T]here is a strong public interest in our respecting such treaty obligations. Such international cooperation is all the more important in modern times, when cross-border problems are becoming ever more common, and the need to provide international solutions for them is ever clearer."
"where the judicial authorities of the executing Member State have decided either not to prosecute for the offence on which the European arrest warrant is based or to halt proceedings, or where a final judgment has been passed upon the requested person in a Member State, in respect of the same acts, which prevents further proceedings".
THE APPEAL AGAINST THE SECRETARY OF STATE
(i) Specialty
"This Constitution… and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby…"
Thus by the Constitution the 1972 Treaty became part of the domestic law of the United States upon its coming into effect, without more. This differs, of course, from the constitutional position in the United Kingdom. Here as is well known a treaty is only made part of our domestic law if Parliament enacts legislation to that effect.
Superseding Indictment
"[T]he doctrine of specialty is concerned primarily with prosecution for different substantive offenses than those for which consent has been given, and not prosecution for additional or separate counts of the same offense. The appropriate test for a violation of specialty 'is whether the extraditing country would consider the acts for which the defendant was prosecuted as independent from those for which he was extradited'."
The formulation there quoted is from Andonian at 1435. This test, as Ouseley J shows, is a recurrent theme through the cases. In applying it, moreover, the courts of the United States do not simply go on the basis that the absence of specific objection by the sending State is to be taken as consent to the defendant's trial on a re-formulated charge. I would respectfully repeat and emphasise this passage in Ouseley J's judgment in Welsh and Thrasher:
"84. The US Courts do not infer consent merely because there is silence. They do not turn a blind eye to what are obvious problems in the sending state's known attitude, whether from past extradition requests or from the particular case or Treaty involved. Rather… they adopt a realistic assessment of the sending state's attitude, in recognition of the specialty doctrine as a principle of international comity and out of respect for a foreign state's sovereignty. But the Courts do not treat it as a technical hurdle devised for the benefit of properly convicted criminals, enabling them to take points which truly belong to the sending state and which the Courts properly infer that the sending state does not take.
85. There is nothing in the cases which would justify the conclusion that the US Government or Courts would not respect the express limits in the UK-US Treaty or in the 2003 Act or in any judgment of this Court…"
"Rauscher… was decided against a backdrop of political controversy over precisely whether the treaty contained a rule of specialty. The controversy arose after the conclusion of the treaty when one Winslow was charged with forgery in the United States. The United States requested the extradition of Winslow, who had taken refuge in England. Before Britain agreed to relinquish Winslow, the British Foreign Office required a pledge that the United States would not try Winslow on any charge other than forgery. The United States refused to accede to the British demand, diplomatic negotiations ensued, and the matter was significant enough that the British Foreign Minister, Lord Derby, spoke on the subject in the House of Lords. Thus, although there is no record of a formal British protest of the extradition of Rauscher, the British had made known their very strong feelings through a history of negotiations and deliberations."
"US authorities will not seek a superseding indictment charging [the defendants] with offenses arising from conduct other than that conduct for which [they] have been extradited by the United Kingdom."
This undertaking was also deployed in Welsh and Thrasher, and Ouseley J considered (paragraph 152) that on the facts of that case it did not affect the position. In the present case I consider that the undertaking confirms the position which the United States courts would anyway adopt. They will be satisfied, not least by the terms of this court's judgment, that the defendants' extradition is ordered on the precise basis that the accusation they will face at trial will be limited to, and travel no wider than, the case which is essentially formulated in paragraphs 10 and 23 of the Texas indictment and reflected in the charge drafted for the proceedings at Bow Street. And the American courts will be loyal to this expectation: not merely because in general they respect the specialty rule, but because by their own express jurisprudence (from Rauscher onwards) it is "essential to determine… whether the surrendering state would regard the prosecution as a breach" (Fiocconi, 480). This test is meticulously applied. It means, in short, that the American courts will give effect to the views of the Secretary of State and of this court (as to which there will be no room for doubt) of the requirements of s.95 of the 2003 Act.
"[A]s we stated in our earlier response, the prosecutors have advised that the statute of limitations bars prosecutors from charging the defendants with further substantive offenses based upon these facts after May 2005."
May 2005 has of course come and gone. No superseding indictment has been filed. I am not aware of any possible scenario by which the defendants might now be accused of other offences, against Enron or otherwise, within the statutory limitation period, and none has been suggested.
Sentencing
"First, if a judge determines that they obstructed justice by contesting extradition proceedings.
Second, if a judge finds that the value of the fraud they committed is in excess of $7 million.
Third, because they committed their crimes in the United Kingdom."
The letter continues:
"The first allegation that contesting extradition is tantamount to the offense of obstructing justice is absurd. Under United States law, and we assume under United Kingdom law, merely defending oneself in a legal action, including contesting extradition, is not considered a criminal offense.
I have attached an outline of the possible enhancements that the fugitives may face if they were extradited to the United States and convicted on all charges for which they might be extradited, and if the sentencing court follows the advice set forth by the Sentencing Guidelines. These enhancements include two of the three cited by the defendants – the amount of the fraud and the use of sophisticated means to commit the fraud, or commission of a substantial part of the fraud scheme outside the United States… If all the possible enhancements are established, the maximum sentence each defendant could receive is 135 – 168 months in prison, well below the statutory maximum of 420 months [a footnote states that this is a 'worst case scenario' for the defendants]. This is based upon the calculations provided by the 1998 Sentencing Guidelines which were in effect at the time the alleged offences were committed."
The attachment to the letter allocates a score for "loss enhancement", and adds this note:
"This assumes a $19 million loss, but could be reduced by 1 point if the loss is found to equal the amount of gain to the defendants, or $7.3 million."
Mr Jones complains about this "assumption" of a loss of $19 million, but the letter is merely stating the "worst case scenario"; and what in truth it demonstrates is that the amount of the loss to GNW/the Bank will be determined judicially by the sentencing court, to a maximum of $19 million.
(ii) Human Rights
OUSELEY J