The Court of Appeal has reversed a conviction of Aberdeen exec Stephen Whiteley, the third such reversal for cases stemming from the Unaoil scandal.
A court had previously found Whiteley, guilty of paying bribes of $500,000 to Iraqi officials in order to win a $55 million contract for his Monaco-based employer Unaoil to supply oil infrastructure.
After being found guilty in 2020, Mr Whiteley was ordered in November 2021 to repay criminal gains of almost £100,000.
But a review into the conduct of the Serious Fraud Office has led to the Court of Appeal quashing Mr Whiteley’s case, following similar results for other former Unaoil and SBM Offshore execs linked to it.
His lawyers said he had co-operated with the Unaoil investigation and that Whiteley, from Aberdeen, has had his health suffer as a result.
Sam Healey, partner at JMW Solicitors representing him, said the case had “cast a dark cloud over Mr Whiteley’s life for several years; it has been the catalyst for a series of health concerns, has caused immense financial strain and has weighed heavily on his partner and the rest of his family.
“Today’s news means that Mr Whiteley can now begin to live his life again and we wish both him and his family all the best for the future.”
An SFO representative said the agency had not contested the appeal today: “Our investigation into Unaoil uncovered the payment of $17m in bribes that were paid to win contracts worth $1.7bn in Iraq and we’re proud to have exposed this serious wrongdoing,” he said.
Aberdeen exec’s case is three in a row for Unaoil
The Court of Appeal freed Paul Bond in March this year and Ziad Akle in December 2021. The turning point was the Akle case, with the court ruling the conviction was unsafe. Bond was a senior sales manager at SBM Offshore while Akle was Unaoil’s Iraq manager.
In particular, the court has flagged up shortcomings from the SFO, not least in its handling of disclosure. The agency received assistance from a private US investigator, who was working with the Ahsani family, the founders of Unaoil.
Akle’s lawyers said the initial guilty plea from Basil Al Jarah had stemmed improperly from the SFO’s relationship with David Tinsley, the Florida-based former Drug Enforcement Administration (DEA) agent.
Akle’s initial trial, in 2019, sought disclosure of the SFO’s contact Tinsley. According to a review today of the SFO’s conduct in the Unaoil case, the agency’s legal team was concerned about airing its “dirty laundry” in public.
This came to a point where SFO lawyers considered abandoning the trial should its director, Lisa Osofsky, be called to the witness stand.
SFO review
Attorney General Suella Braverman launched a review of the SFO’s conduct in February. The government has published the report today. David Calvert-Smith led the review into the SFO.
© BloombergHe described SFO head Osofsky as being unprepared for taking over the role. Osofsky was required to take decisions on the Unaoil case within days of starting, he wrote.
She faced a “difficult situation very early in her tenure and made a number of mistakes and misjudgements”, he continued. This came in reference to a meeting with Tinsley.
The review found the SFO had not formally adhered to expectations in how it handled casework on the Unaoil case and limited formal recordkeeping. The agency and Osofsky took no formal notes of meetings with Tinsley, for instance.
Calvert described the SFO’s notes showing progress on the Unaoil case as “anodyne” and “hardly helpful”.
Friction
The Calvert review also noted the SFO’s dissatisfaction with the way in which the US authorities took over the prosecution of the Ahsanis. It noted an incident between the lead SFO investigator on the case Tom Martin and US officials. Thompson allegedly accused an FBI officer of being a “quisling” and a spy.
The relationship between Tinsley and Osofsky appears close. The head of the SFO said she was “super honoured” to talk to him, while Tinsley said Osofsky was his “new most favourite person”.
Calvert said it was too easy to describe contact with Tinsley as “wholly wrong”. However, he said, it was clear that the SFO should have sought legal advice.
It may have been that tensions within the SFO over how the US was pursuing the case hindered such discussions. Counsel Alun Milford opposed the US’ actions, the review said. As a result, management may have come to see him as a hindrance.
Next steps
Braverman said the SFO has developed a clear plan of action. “I will be closely monitoring the SFO’s progress and delivery of that plan and will provide an update to Parliament in November 2022 and February 2023,” she said.
Osofsky, responding today to the publication of the report, described the review as sobering.
“The SFO of today is already not the same organisation I inherited. While the expertise and determination of our committed staff remains steadfast, a new senior leadership team has prioritised investment in technology, introduced a stringent case prioritisation system and we have embedded a change programme to overhaul the SFO’s working practices and culture,” she said.
Susan Hawley, executive director at Spotlight on Corruption, said it was a “grim day” for the SFO.
“The catalogue of errors laid out in the Calvert Smith review shows that the quashing of yet another conviction in the Unaoil case was entirely avoidable. The very serious failings at the top of the organisation, including use of personal mobiles for sensitive business, failure to record meetings and the sidelining of the SFO’s legal counsel as well as case team, must never be allowed to happen again.”
Hawley went on to say the SFO was too important for the UK’s fraud fight to be allowed to fail. We need “ambitious thinking about building greater oversight and accountability at the agency, not to the Attorney General who is a political appointee, but to an independent panel that can provide a robust challenge function”, she said.
“And we need a huge re-investment of the fines that the SFO brings in back into the agency to beef it up and ensure these failings don’t keep being repeated.”
Updated at 5:26 pm with Spotlight on Corruption comment.