THE “reciprocal” treaty on extradition with the United States, which Britain signed three years ago, has still to be signed by the US. Such is the nature of the “special relationship” that Tony Blair’s Government values so highly.
Yesterday, three British former investment bankers moved one step closer towards extradition under the treaty. The three are bit-players in the Enron saga but the crime of which they are accused was alleged to have been committed against a British bank, which, for reasons of its own, has chosen not to press charges.
Whether or not they are guilty does not trouble the UK courts. Neither does the US even have to make a prima facie case against them before being allowed, under the treaty, to load them on to a plane bound for the US. According to Lord Justice Laws in the High Court, the case had “a significant United States dimension” and could be tried there.
But what lies behind the desperate efforts that the three are making to avoid extradition is the fear that they will not get a fair trial in the US. The British legal system may have its imperfections but the NatWest Three are fighting not for a pardon but for a trial in UK rather than US courts.
The climate of opinion against white-collar crime in the US is such that they could not expect to be viewed with any sympathy. It is almost certain that they would be classified as fugitives and banged in jail for up to two years while the case against them was prepared.
Choosing to fight the case would make them rarities in the US, where the system is to threaten such extreme penalties for a failed not-guilty plea that the vast majority of accused opt to plead guilty and bargain for a lesser sentence. Meanwhile, legal costs mount and, even for three former investment bankers, they already look daunting.
The British Government has refused to budge in its insistence that extradition under the treaty should not be opposed. This despite ministers’ assurance to Parliament that the treaty’s purpose was to expedite the extradition of suspected terrorists. It is certainly not going to concede that it does not believe that UK nationals accused of whitecollar crime are unlikely to get a fair trial in the US.
Business people, however, are increasingly fearful of the implications of doing business with the US. Home office ministers have been heard to remark in discussing the treaty that, if people do not have confidence in the legal system of a particular country, then perhaps they should not go there, let alone do business there.
That is certainly a view likely to be endorsed by Ian Norris, the other businessman currently facing extradition to the US. He is accused of being part of a cartel at a time when cartels were not even outlawed in the UK.
Ironically, yesterday it came to light that the Office of Fair Trading, having spent at least £1 million and several years investigating allegations of cartel-like behaviour in the cable world, is not going to proceed with the case. Although there appeared to be evidence of a cartel, the organisation said, the case “no longer constitutes an administrative priority for the OFT”. Mr Norris would not appreciate the joke.
Barclays boost
CONFIDENCE oozed from John Varley yesterday as he unveiled bumper profits from Barclays. Happy with last year’s Absa acquisition in South Africa, the chief executive sees organic growth maintaining its momentum.
Barclays Global Investors is storming ahead on the back of buoyant equity markets and turned in profits equating to twice the price the bank paid for the core of the business last year. At Barclays Capital, Bob Diamond continues to build a hugely profitable business that made 70 per cent of its profits outside the UK. As far as Mr Varley can see, there are “no market share constraints” that might stop Barclays Capital’s innovative approach winning customers.
The jump in bad debts caught attention but the bank is relatively sanguine about the number. With overall profits up 15 per cent, it was a problem to be kept in perspective.
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EU needs many powerful players
IF SPAIN’S Socialist Government wants to emulate France in creating national champions, it needs to be more cunning. Ministers foisted a hostile, patently anti-competitive bid from its main gas supplier on to Endesa, the dominant electric power company. The ensuing stand-off helped to trigger a superior bid from E.ON, which had the nous to persuade Angela Merkel, the German Chancellor, to smooth the path with a warning call to José Luis Rodríguez Zapatero, the Spanish Prime Minister.
Madrid has now promised to play by European Union market rules, even though it still has a golden share in Endesa. You would not catch French ministers doing that. Volatile markets and political threats have made many governments think that they need an energy policy with a national champion to turn it into action. In theory, powerful national power utilities might then compete Europe-wide. In practice, putting together a national market’s dominant suppliers of gas and electricity is calculated to squeeze out domestic competition and stifle new competition from abroad.
Neelie Kroes, the European Competition Commissioner, can decide that E.ON’s bid is better for Spain’s consumers. But that is not the only issue. If the European Union’s second and fifth-biggest power suppliers merge, it would be hard to see more than three competitive groups surviving. E.ON and Endesa together have six times the market value of Centrica, the UK’s biggest power utility. If a genuine EU-wide power market is to develop there must be enough big pan-European suppliers to make it work.
Playing dumb
THE Financial Services and Markets Tribunal has overturned a finding by the Financial Services Authority of insider dealing and a £49,000 fine against Tim Baldwin, the stockbroker. The tribunal was impressed by his frankness when he said that he could not remember why he bought the shares in question — it thought that the temptation to invent an explanation must have been strong. Without impugning Mr Baldwin, its message to would-be insider dealers seems to be: act dumb and you might get away with it.
