Out-Law News 2 min. read

Infrastructure and energy firms focus of recent bribery prosecutions and convictions, says expert


A recent run of bribery enforcement actions in Scotland and England is a "timely reminder" to energy and infrastructure companies in particular of their legal duties, an expert has said.

Tom Stocker of Pinsent Masons, the law firm behind Out-Law.com, was commenting after Graham Marchment, a former procurement engineer, pleaded guilty to conspiracy to corrupt and was sentenced to two and a half years in prison after a high profile joint investigation by the Serious Fraud Office (SFO) and City of London Police.

The conviction came in the same week that the SFO brought further corruption charges against a former director of Alstom Network UK, as part of its long-running investigation into allegations of overseas corruption against companies and former employees of the French-headquartered engineering firm. In Scotland two former directors of a construction company and two former employees of Edinburgh Council were convicted of bribery, fraud and money laundering offences on the same day.

"These cases are a timely reminder that prosecutors have ramped up their bribery enforcement efforts," said Stocker.

"While the SFO's focus is on overseas and corporate bribery, the convictions in Edinburgh are a reminder that law enforcement is also investigating and prosecuting more routine cases of excessive hospitality and gift giving where there is evidence of improper intent, such as when false invoices are created to inflate revenues from corruptly-awarded contracts," he said.

The two former construction company directors admitted corruptly giving £42,500 in cash and hospitality to the value of £30,250 to council employees as inducements to secure contracts for the repair and maintenance of publicly-owned buildings. The accused council employees also admitted committing fraud and breaching proceeds of crime charges, in a scheme that involved falsely inflating invoices to the value of more than £67,000.

The bribery charges in the Edinburgh case were brought under the 1889 Public Bodies Corrupt Practices Act, the legislation in place before the Bribery Act was passed in 2010. Although the Bribery Act, which was enacted exactly five years ago, has not yet resulted in any corporate prosecutions, white collar crime experts at Pinsent Masons have predicted that the first will begin this year given the length of time these complex cases take to investigate and prosecute.

The Marchment prosecution followed a seven-year joint investigation by the SFO and City of London Police, which cooperates with the body responsible for investigating the most serious cases of financial crime on certain investigations, into the awarding of contracts in a series of high-value infrastructure projects. Four of Marchment's co-conspirators were convicted as part of the same case in January 2012 but Marchment, who has been resident in the Philippines in recent years, refused to return to the UK until December 2014, when his passport expired and he was unable to renew it because of the outstanding arrest warrant.

"Marchment's imprisonment is a tribute to both the SFO and the City of London Police's determination to see justice served in full for all those involved in this case of international corruption," said detective constable Martina McGrillen of City of London Police after the sentencing. "It also sends out a clear message that if you break UK laws you should expect to face the consequences in a British court. Hiding away overseas is not the answer; it is just delaying the inevitable."

Jean-Daniel Lainé. Alstom UK's former senior vice president of ethics and compliance, became the sixth individual to be charged by the SFO in its Alstom investigation last week. Lainé, a French national, appeared at Westminster Magistrates' Court on Tuesday together with the previously-charged Michael John Anderson and other representatives of the company, as part of a case involving the supply of trains to the Budapest Metro.

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.