Joint Committee on The Draft Corruption Bill Minutes of Evidence

Examination of Witness (Questions 180-199)


20 MAY 2003

  Q180  Chairman: I can see that. What about another clause where you say the language is so awful that it cannot achieve anything?

  Mr McKittrick: Clause 5(1) and (2), because they are not using examples and even looking at the guidance notes does not help—

  Q181  Chairman: Clause 5(1) and (2) you may say are complex, but is the language so unclear that it would not work?

  Mr McKittrick: Yes, I think it is. I think the point is that if somebody has got to read it through heavily, use the guidance notes, they will probably just say, "Forget it!" Now, I did take it out because a friend convinced me to take it out because he said that if I put it in, you probably would not read it, but my initial feeling of this was that it would be made over-complex because possibly only lip-service was being paid to trying to rid the place of corruption, so I did take it out, but I will say it here, that I think it is over-complex and that, to my mind, is a very, very bad situation to have.

  Q182  Chairman: Well, it may be tough on the person who cannot be quite sure what the language means, but apart from the complex language, the awful language, what else is wrong with this Bill? What other specific criticisms do you make?

  Mr McKittrick: That it is inconsistent in giving examples. You cannot leave things as—

  Q183  Chairman: Forgive me, but does that mean, as you say in your paper, that in the one case they give an example and in another case they do not? Is that what you mean?

  Mr McKittrick: Yes, indeed.

  Q184  Chairman: Any other inconsistencies?

  Mr McKittrick: I just find some of the wording really quite unclear. If we go to clause 9(1), "A person who obtains an advantage obtains it corruptly if—(a) he knows or believes that the person conferring it confers it corruptly, and (b) he gives his express or implied consent to obtaining it (in a case where he does not request it)", so the explanation goes into it a little bit where it starts talking about somebody wanting the job to be offered his son, her daughter or whatever, whatever, whatever, and it begins to go down that road, but when I am writing contracts in construction, in fact I am not allowed to have explanatory notes. It has to be clear within the contract, not within another set of non-contractual documents.

  Q185  Lord Waddington: I think you make one statement with which hopefully we can all agree. You say that you believe that the Corruption Bill should be clear, simple and unambiguous.

  Mr McKittrick: Correct.

  Q186  Lord Waddington: And you say that applying that test, you reckon that the Bill fails.

  Mr McKittrick: I reckon it does on that aspect, yes, I do.

  Q187  Lord Waddington: And you do actually make another criticism of the Bill in 4.2 that you object very strongly to the idea of the Bill criminalising certain behaviour, but the authorities indicating that in certain circumstances, although the Bill criminalised that behaviour, discretion would be exercised and no prosecution would be brought.

  Mr McKittrick: Indeed.

  Q188  Lord Waddington: So are you, therefore, saying that where the Bill appears at first blush to criminalise conduct which should not be criminalised, you would like to see specific exemptions in the Bill spelling out clearly where it would not be right to prosecute rather than leaving a discretion? Is that what you are saying? Can I put it another way. You have already agreed that you could under this Bill find somebody being prosecuted for the payment of money quite openly which nobody would consider corrupt. Is the way around it not, therefore, to spell out in the Bill, having made the general prohibition, specific exemptions?

  Mr McKittrick: I am not sure I actually said that. You gave me the example earlier of £10—

  Q189  Lord Waddington: I will give you an example and I gave you one already. What if a person knows that he is entitled to get a service when he gets to a foreign country, but is led to believe that he is not going to get that service unless he pays a small sum of money—should there be a threshold?

  Mr McKittrick: I think there should be a threshold.

  Q190  Chairman: What would you make the threshold?

  Mr McKittrick: Well, the Chancellor has made a threshold in terms of tax breaks for entertaining staff within business, and I think he raised it from £70 to £150.

  Q191  Lord Carlisle of Bucklow: Is that £150 for any function?

  Mr McKittrick: No, it is within any one year. I think, therefore, you may be able to connect a gift from somebody to the financial figure below which would be taken as accepted and would not be corrupt. I think that would probably help if there were some specifics of that nature.

  Q192  Mr Oaten: I want to go back to one thing which I think you said earlier on which is that if this were to work, there would need to be a period of years for adjustment in business. Amnesty is one thing, I guess, where you have everyone just being open about it, but, for example, a five-year transitional period so that there were no prosecutions in that period, but people were working towards knowing that in five years' time there would be prosecutions, would that be something which you think might help make this work in practice?

  Mr McKittrick: I think it would be probably the only way we could manage to convince people that there was a way ahead, that people could plan to—

  Q193  Mr Oaten: Is five years the kind of figure you would envisage?

  Mr McKittrick: I think five years is probably a fair one because a lot of overseas contracts are for several years and hence you would be saying to somebody, "Don't get involved in new jobs from here on in, but we can accept that those which are running need to run their course".

  Q194  Mr Shepherd: I am sorry, but I am still uncertain how any audit trail would throw up a commissioned agent who acts on behalf of a British company abroad and takes 15 per cent commission, and it is declared and all the rest of it. If a British company maintains that that is the commercial going rate in Saudi Arabia or wherever it is, but in fact 12 per cent of that is paid to individuals the other side, that, we know, is corrupt, but from the British company's point of view or the German company's point of view or the Italian company's point of view, they are doing what has been a traditional, normal transaction. They have a commissioned agent who is working on their behalf to take over their contracts. How do we identify that and in what language would you express in the Bill the impropriety of this?

  Mr McKittrick: The slight difference with the Middle East is that generally the agents do actually facilitate, they do some consultancy, they have some consultants working with them and they are doing something for it. I think that stage is probably the least of our worries. If you look at last week's Times, Kellogg Brown & Root, a major US firm, have admitted paying a bribe of US$2.6 million recently a to Nigerian company, and that is the same Brown & Root which the American, Dick Cheney, was Chairman of. Now, I have a problem. My firm has a big job with them in the UK and I am now asking them what is meant there, so we have it happening here and that was picked up by an audit trail. Their auditor picked that up, it was not somebody else. It has been suggested that it was an aggrieved Nigerian who suggested to the auditor that he look deeper into the books, but that was picked up through an audit trail.

  Q195  Chairman: The division prevented you from answering Mr Shepherd's earlier question. Is there anything you want to add on the question he put just before we broke?

  Mr McKittrick: The Middle East one is exceedingly difficult because it is recognised by Middle Eastern governments, and it is accepted by most governments around the world, that there will be an agreed figure of agency fees. I do not have an answer to that one, I am afraid.

  Q196  Chairman: One possibility to make the Bill more precise might be, as I think you yourself were indicating, to have some exemptions with a threshold for facilitation payments, as we have just mentioned. Would it, in your view, be better to approach the whole topic differently, so instead of drafting a general crime of corruption, they have a list of specific crimes? It has been suggested to us that trading in influence could be a separate crime, that misfeasance in a public office could be a separate crime, and you could go on adding different crimes to those like fraud and bribery which exist already. Would you approach it in that way rather than in this general way?

  Mr McKittrick: I really do not know because I do not know the breadth of what has come up. I know what happens in my own industry and profession.

  Q197  Chairman: I am thinking about somebody like you who is very concerned about corruption on the ground. What is the best way of tackling it if this is not the best way?

  Mr McKittrick: I think the best way probably is putting financial limits on what is acceptable and, beyond that, absolutely nothing is acceptable, so as not to have grey areas and to have a complete watershed. "Facilitation" is a horrid word, it is a very difficult one to decide how far one would go. We have talked of what might be the amount of somebody accepting an invite to Henley or whatever, but that is quite different from being able to determine a limit on a facilitation payment. That is another issue.

  Q198  Lord Waddington: I know this is a terribly difficult question, but what, in your mind, makes a payment corrupt? Is it deceit? Is it betrayal of trust? Is it the clandestine nature of the transaction? Is it the failure to disclose to your principal what you are up to or the failure of the recipient to tell his principal what he is up to? There must be something, some moral element in this surely to differentiate the sort of payment to the baggage handler that I mentioned earlier and the sort of payment you are obviously worried about, and rightly worried about, the prevalence of under-hand payments to agents overseas to win business which otherwise you would not get. I am just wondering what is the moral element in your mind which differentiates one from the another? Is it dishonesty?

  Mr McKittrick: It is pulling the wool over your competitors' eyes, which is part of it. It is taking work away from somebody who is better suited to doing that work by paying a bribe so that the client is suffering and the country into which the money is going is suffering because it is not getting the best value, the appropriate value if someone else is siphoning money off.

  Q199  Lord Carlisle of Bucklow: To get something which you otherwise would not have got?

  Mr McKittrick: Well, that is the phrase I tried to use earlier, but somebody picked me up on it, but it is. It is denying the end user of getting the best value for money because if there was bribery of £150,000 in a million, that means that the end user is failing to achieve the value of that £150,000. They have probably got quite good value at £850,000, but they have lost £150,000.

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