Examination of Witnesses (Questions 160-168)
POLICE SERVICE
OF NORTHERN
IRELAND
15 FEBRUARY 2006
Q160 Gordon Banks: Sir Hugh, in your
presentation to us you made a suggestion that money laundering
should become a scheduled offence. What sort of discussions have
you had with the Northern Ireland Office about that? How was their
response? What would be the overriding effect of that other than
the bail issue? Linking into the money laundering issue, over
7,000 suspicious activity reports, less than 1,000 examined. On
what basis do you come to 993?
Sir Hugh Orde: I will deal with
the easy one, and I will ask Phil to cover money laundering and
bail. In terms of suspicious activity reports, they are valuable
for two reasons. I actually had a meeting with Sir Stephen Lander
on this particular issue very recently, and our overriding message
is the system needs to remain as it is, so the obligation on institutions
to give us all information on suspicious activity reports is absolutely
vital to the picture. Just because not all of these are acted
on—and there are many reasons for that—does not mean
we should not get them, because we need the whole picture. The
reason for that is quite simple. One of the first checks, if we
are targeting individuals, is that we would go into that database
to look at any reports that may be in that database which, whilst
they may not have been acted on because there is a big volume
issue here, it is hugely important when we start targeting individuals
who we think through intelligence are laundering money. It is
vital from the bottom up, the proactive as well as the reactive.
The other point, which was not made by me but made by the Serious
and Organised Crime Agency, is in terms of the number we act on.
We act on far more than any other police service.
Q161 Gordon Banks: Can I just make
a quick generalisation. People may think 7,315 suspicious activities
but that is not 7,315 different people, is it? Many of these activities
that are reported to you are the responsibilities of one group
and I suppose investigating one of those may put to bed a whole
lot.
Sir Hugh Orde: That is the importance
of getting the whole thing. Quite rightly, as far as industry,
this is an expensive bit of business for them to deliver. It is
vital we keep it in exactly the same way as it is, so the obligation
is to supply everything to us. In fact, some of our best hits
have not necessarily come from big financial institutions. It
is very hard now to buy a car for cash in Northern Ireland, which
is very important when you are trying to stop people getting the
money in this particular field.
Mr Aiken: Chairman, a lot of the
suspicious activity reports are legal. What we quite often find
is that people such as the owners of carry-out restaurants are
taking in a lot of cash, and they go to deposit this in the bank
and it has been put through as a suspicious activity report, and
when we examine it we find it to be quite legal and proper. I
do appreciate the figures in respect of those examined against
those we have an awareness of. We have an assessment unit in the
Financial Investigation Unit, and each suspicious activity report
is examined. Some are examined in greater depth due to the fact
that the person who they relate to may be highlighted on our computer
systems and therefore are deserving of some further attention.
We do not have the capacity to examine them all but we are happy
that our processes are in place to ensure that those that should
jump out at us, that we have a recognition of why they are and
we take the appropriate action. One important area that we must
consider is the fact that they are not time-based and they perform
a great benefit to investigations. When we start to look at a
particular individual or a gang and go back and find evidence
of a previous suspicious activity report, it gives us a hook,
somewhere to start our particular line of inquiry or investigation.
Sir Hugh Orde: The important thing
for us in respect of money laundering is that if it is a scheduled
offence, it means that bail is granted at a higher court and gives
the police an opportunity to make representations. It is also
seen as a more serious offence, and that would be to the benefit
of the overall investigation.
Mr Sheridan: We had an example
recently of people who got bail for quite a considerable amount
of money because it was at the lower court.
Q162 Mr Hepburn: We have learned
that the construction industry is particularly vulnerable to extortion.
Can you tell us something about that? Why, and who is targeted?
What is the mechanics of it? Is it brown paper envelopes passing
between hands? At the end of the day, what are you doing to tackle
it?
Sir Hugh Orde: In broad terms,
last year 26 people were arrested for extortion, 24 were charged.
When we get a complaint we are quite good. It is the tactics we
can deploy. One of the big challenges of extortion, if it is one
on one, is that corroboration is vital. If we are going to convince
our DPP for a prosecution, quite properly, he wants corroboration,
and there are huge opportunities for us in this field if we have
the information up front and we work in partnership with the victims
to deliver. When we do do that, as I have said, we are very successful.
I will ask Peter and Phil to touch on the detail of why.
Mr Sheridan: I suppose the same
question could be asked for why people buy counterfeit cigarettes,
why people buy counterfeit alcohol that is made up of part white
spirit, why people buy perfume that has urine in it, to try and
understand why people buy that because they think they are getting
a bargain out of it. I think it would be fair to say that there
is a degree of tolerance around this. This probably came along
with the troubles. That is no fault of the general public but
there is a degree of tolerance that comes with it. Some of it
is because not all of our politicians unite behind us to support
law and order on this. You create that culture that allows it
to be OK not to make a statement to the police about something.
That is the culture in certain parts of society. I think that
is where some of our difficulties come from.
Mr Aiken: I take the point as
to why, and why the construction industry. What we often have
is subcontractors coming into a particular area and, because of
the area and the paramilitary involvement in that area, they are
vulnerable to approaches being made by paramilitary groupings
to attempt to blackmail them for monies. It is a particularly
difficult offence to investigate because quite obviously, corroboration
in respect of the threat is required to progress to the courts,
and there are the additional problems of providing the necessary
support to the complainant and the potential implications for
that person in giving evidence to the police. So it is a difficult
offence to investigate. Where complaints have been brought to
our attention we have been successful in dealing with them all.
Mr Evans: It is probably just
worth making the point that the construction industry worldwide
tends to have some difficulties in this area. Professor Goldstock,
for example, who has brought to the Task Force his experiences
in New York, where they have many of the same difficulties in
tackling infiltration by criminal gangs within that industry.
It is not particularly different, although the manifestation is
slightly different.
Q163 Rosie Cooper: What is your assessment
of paramilitary and non-paramilitary involvement in criminal activity?
We have actually asked this question of people who have given
evidence before and, other than suggesting that there are two
mafias in Northern Ireland, we have not really progressed that
question.
Sir Hugh Orde: First of all, it
is difficult. It is a hugely grey area. What is crime committed
by people who happen to be paramilitaries for their own gain,
which is what we are seeing? We think we are seeing a shift in
some areas. What is crime committed for their so-called organisation?
Within each crime is there a sub-divide, which there clearly is,
around people siphoning off from their own organisation, ie stealing
from their own illegal organisation, if you like. Then there is
what used to be referred to, bizarrely, as "ordinary, decent
crime", which is just your ordinary armed robbers, the sorts
of people we arrested just before Christmas. I am deeply nervous
about trying to say X% of our crime is one and Y% is another.
I do not know if Phil can put some gloss on that.
Mr Aiken: It is very difficult
to have a determination in respect of involvement. We assist Her
Majesty's Revenue and Customs, who have primacy in this regard.
It is their responsibility, but quite obviously, we assist operationally
in respect of the intelligence. We have had considerable success,
for example, in the latter part of last year, 15 million cigarettes
recovered, which represented a potential loss to the Exchequer
of somewhere around 3.5 million—again, a smuggling problem,
a police-led operation, which had considerable success.
Q164 Rosie Cooper: Could I ask about
fuel smuggling more directly? I have always wondered: for smuggling
at this level there must be a storage problem and a logistics
problem. I would presume that you are working with Her Majesty's
Revenue and Customs, but the actual operations, are they joint
operations? As the sale of legitimate fuel has risen by a quarter,
is that telling us that you are now being more successful?
Mr Aiken: Again, it is an area
where Her Majesty's Revenue and Customs have primacy, and they
are driven, quite obviously, by their national strategy, which
gives the local groups their targets, and it is a matter for them
how they set those targets. Where there is discussion in respect
of gangs or individuals, the police provide intelligence and operational
support, and that operational support is both by way of detectives
in respect of the organised element to it, and quite obviously,
because of the particular areas and the fact that this problem
is based in the border areas, there is a big involvement of our
uniformed colleagues.
Mr Sheridan: Just to give you
an example, we have had four retail sites in Ballymena and County
Tyrone that were being used. £6 million of duty and VAT had
been evaded in a three-year period, and through a lot of the work
we did with Customs, we were able to successfully close that operation
down. It is almost on a weekly/monthly basis that we are involved
in recovering fuel that has been smuggled across the border. Either
laundered fuel or fuel that has been VAT-paid in the south of
Ireland comes into Northern Ireland and evades VAT in Northern
Ireland. So some of it is legal fuel from the south and some of
it is laundered fuel.
Q165 Rosie Cooper: Can I ask whether
you are making any impression on the fact that the public's view
is that this is a victimless crime?
Sir Hugh Orde: This is back to
Peter's point. It is seen as exactly that. It is seen as a victimless
crime, although the Exchequer is clearly a substantial victim.
Bizarrely, the use of laundered fuel, Customs, who quite rightly
lead on this, have had many campaigns to make the point that it
wrecks your car, but it is cheap, it is rather like you buy the
vodka that wrecks your liver because it is cheap. There is that
mindset. It is not unique to Northern Ireland. The victim is seen
as the taxman rather than the fact that it increases all sorts
of other costs and detracts from investment in Northern Ireland
simply because the money is not here.
Q166 Rosie Cooper: It encourages
unlawful activity in other places.
Mr Sheridan: Most important is
the health issue, in particular where there is laundered fuel
and you find large amounts of waste, producing huge health problems
for the environment.
Chairman: I want to move on to our private
session in a couple of minutes, therefore, I think what we will
do, there are some questions on illegal dumping and reporting
of organised crime which we will send to you, if we may. I would
like to finish with sentencing on the record.
Q167 Dr McDonnell: There is the impression
that sentencing is far too lenient by the courts in Northern Ireland.
Would you care to comment on that?
Sir Hugh Orde: Yes. At the risk
of getting into trouble, I think there is a number of issues here.
First of all, what is good news is we now have a right to appeal
a sentence which we see as too lenient. By way of example, two
years ago now two of my officers went to a call where they were
faced with armed paramilitary masked men pointing an AK47 in their
direction. It happened to be a de-activated AK47, but you are
not to know that when you are looking down the wrong end. As a
result of their actions, their pursuit and very heroic arrests,
the individuals went to court and were given a suspended sentence,
which we, quite obviously, appealed. I think having that right
to appeal is very important, (a) for the confidence of my officers
but (b) for the confidence of the community.
Q168 Chairman: Was your appeal successful?
Sir Hugh Orde: I am awaiting the
outcome. I raised it with the Lord Chief Justice only recently.
He actually sat himself so obviously cannot comment. The point
he made, which I think is important, is, because we are slightly
different, those sorts of cases allow the Appeal Court judges
to give guidance on sentencing. We have seen that now in extortion,
where three years ago, giving evidence to the Policing Board,
my head of operations said the average sentence was between 18
and 36 months. It is now around seven years and the guidance from
the Court of Appeal is it should be 10-14 if it is a not guilty
plea, so I think there is some very good news in the system. We
have requested, and it is now being undertaken, an independent
review, a comparative analysis of sentencing in Northern Ireland
compared to the rest, and I think that is to be welcomed, because
it will deal with facts rather than individual cases—which
are important. Sadly, we had a case recently I tried to appeal,
was not allowed to appeal because we have no right of appealing
hybrid offences, that is to say, an offence that can be triable
either way. This particular example was a person who had 90 previous
convictions for burglary. Quite properly, the magistrates' court
submitted it to the crown court, feeling it was too serious for
them to deal with, where the individual was seen as redeemable
and was given a suspended sentence. Now, in terms of delivering
a message to my officers, who put huge effort into bringing that
person to justice yet again, it is very difficult from a morale
point of view, but also the public perceive this to be ineffective
policing rather than perhaps a collective failure of the judicial
system. I think in cases like that, if we could have a right of
appeal for hybrid offences, I think we could further increase
confidence, but I do think the analysis will be very important
because it will nail once and for all the facts around this issue.
My perception, coming from here, is that sentences are lower.
Chairman: Thank you very much indeed.
That is extremely good for the record, and obviously we receive
other information there. Could I very briefly thank you formally
in the public session, you and your colleagues, for the very interesting
evidence you have given, and for being so extremely cooperative.
I thank my own colleagues for being cooperative likewise; we have
covered a lot of ground. I would now like to declare the public
session closed. You remain where you are with your colleagues,
Sir Hugh, and would members of the public kindly leave.
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