The USA seems to be all about jail time these days...
'We are being royally shafted'
John-Paul Flintoff meets The NatWest Three
timesonline.co.uk
When Gary Mulgrew worked at NatWest’s investment banking division in the late 1990s, he was described as the kind of team leader who would say: “Kick the door down.” Giles Darby, his energetic deputy, was the sort who would kick till it broke. Their colleague David Bermingham, more technically minded, would offer the key to the door.
That combination of skills may soon come in handy, because the men, better known as the NatWest Three, face charges of conspiracy to defraud that could see them locked up for 35 years.
They are alleged to have advised NatWest to sell its stake in an offshore business for less than it was worth, then left the bank, bought into the business themselves and resold it to Enron, the US energy company, for a much higher figure. Between them, they made $7.3m. They deny any wrongdoing. “We are being royally shafted,” Mulgrew says.
The indictment makes a persuasive case against them. “It’s a masterpiece,” Bermingham concedes. “The way it’s presented, anyone reading it will think, ‘These guys are guilty’. Even I thought I was guilty when I read it.”
Although the alleged criminals, principal victim, documents and witnesses are all in the UK, British prosecutors are not interested in the case. Instead, the three face trial in Texas where Enron was based. Having failed to convince British and European courts to halt their extradition, under a deeply flawed treaty, they must leave the UK for Houston no later than July 17.
“This has been the worst week of my life,” says Mulgrew. “The number of people crying around me . . . and I’m trying to be strong. This weekend I have to tell my 10-year-old what’s happening. I don’t know how to do that.”
To read the press coverage you would imagine three identical men in pinstripes. Not at all. The Glaswegian Mulgrew has the bearing of a former bouncer, and the squashy nose, but comes across as the most tortured of the three. Darby, from Wiltshire, is round-faced and white-haired. Bermingham, despite streaks of silver in his hair, has the air of a school swot — quiet, thoughtful, but not averse to point scoring.
Last week Ken Lay, Enron’s founder, died of a heart attack while waiting for sentencing for his part in the biggest corporate scandal in recent years, so it is easy to imagine the stress that these three must be under. Lay’s death deprives America of a particularly satisfying scalp — not good news for British men facing a Texan jury.
Mulgrew and Darby first worked together in the late 1980s. They were close friends, each man godfather to one of the other’s children. Darby, married with five daughters, joined the bank aged 18 as a cashier at its branch in Trowbridge, Wiltshire, and worked his way into investment banking. Mulgrew, the third son of a single mother, joined NatWest after studying business at Strathclyde University. Bermingham, who like the others will leave a family behind him when he goes to America, joined the bank after serving in the army. He retains something of the upright bearing.
When Enron filed for bankruptcy in 2001, Bermingham read that one of the men he’d dealt with had been sacked in connection with accounting errors. Together with his colleagues, he voluntarily went to the Financial Services Authority (FSA) to talk about their transaction. “We said, ‘Look, this looks like fraud. What do we do?’” remembers Bermingham. The conversation, which was taped, lasted several hours. “We went through the whole thing,” says Bermingham. “We gave them everything, including a transaction description that I had written as an aide-memoire.”
All three left investment banking soon after Enron collapsed. “We’d been involved in a dodgy deal,” says Mulgrew. “I was paid a lot of money to be better than that. I thought it was the end of my career.” For a while he described himself on Friends Reunited as “an unemployed househusband”. Then he set up a construction business in Brighton. Darby bought into an engineering business in Wiltshire. Bermingham is a consultant to film producers in London.
Darby, looking back, has reached this conclusion about investment banking: “It does not make you a nicer person. You get absorbed by greed. You fail to see the important things in life — your family and friends and your health.”
The FSA soon afterwards asked for the men’s permission to forward the information they had supplied to the American Securities and Exchange Commission. They agreed. That same information would later comprise the bulk of evidence against them in the American indictment. “Every lawyer I have spoken to,” says Mulgrew, “has said we were insane to give that evidence.”
Tony Blair offered last week to help get the three of them bail when they arrive in Houston, perhaps even to be allowed to return and prepare their case in Britain. But Doug McNabb, a Texan federal criminal defence lawyer, considers that unlikely: “I believe the court will find them to be a flight risk because they fought being in the US.” In other words, the three men might be shackled to each other on the journey, then jailed in maximum security prisons for as long as two years while awaiting trial.
It has already hung over them for four years. I first met the three in 2004. Even then they were obviously worried. Mulgrew told me he had had a suitcase packed and ready for months. This week, understandably, the anxiety is much greater. “I am traumatised about leaving my kids,” Mulgrew says. “When will I see them again? If I’m convicted, my mum will be dead by the time I get out. I will be nearly 70.”
Bermingham’s three children have been told that their father is accused of taking money and might have to go to America to prove he did nothing wrong. They watched him on the television news — the oldest, Jemima, 8, noted with horror the reporter’s suggestion that her father might serve up to 35 years in jail. “Daddy,” she said, “I’ll be as old as you are when you get home.” Bermingham told her that the news was wrong.
You do not need to be related to the men, nor even believe them innocent, to consider that their extradition is unjust. Many hard-headed people feel the same. Indeed, the case has opened up a breach between new Labour and one of its last remaining allies, the business community. Sir Philip Green of Arcadia Group, Sir Christopher Gent, chairman of GlaxoSmithKline, and Sir John Ritblat of British Land wrote this week to John Reid, the home secretary, urging him to stop the extradition. Others who signed their letter included presidents, chairmen and chief executives from a broad range of companies and industry bodies.
Richard Lambert, the new director- general of the CBI, blames the government for the men’s predicament. “The people in the dock over this are the government, who signed a treaty with the Americans that allows them to charge people in this country with alleged offences committed in this country and take them off to the US,” he says.
The first treaty covering the exchange of alleged criminals between Britain and the United States was signed in 1796. Since then there have been a number of other agreements, each throwing up awkward issues. For example, the United States has never freely handed over people suspected of terrorism in Ireland.
The latest 2003 extradition treaty was negotiated by the Home Office under David Blunkett in the aftermath of the September 11, 2001 terrorist attacks and was rushed through parliament. Charles Kennedy, Liberal Democrat leader at the time, said: “[This] legislation should be properly debated, not slipped through in the pre-Christmas rush.”
The result was an agreement that allowed the United States to request individuals for extradition without even supplying prima facie evidence against them. The contrary does not apply because the US has still not ratified the treaty — not least because American civil liberties groups oppose it.
Michael Howard, the former Tory leader, has said the treaty puts British citizens’ liberty at risk. Sir Menzies Campbell, the Lib Dem leader, believes the government should put through an act of parliament suspending all extradition obligations under this treaty until the US ratifies it.
Boris Johnson, Bermingham’s MP, and 159 other MPs have called on the government to defer all extraditions until the US ratifies the treaty — but also to require prima facie evidence from the US authorities in each case.
Bermingham has drawn up a table of bilateral treaties between the United States and 119 other countries. “Not a single country has more onerous provisions on its citizens than the UK, with respect to the US,” he says. France, for instance, will not hand over its own nationals to America but undertakes to try them at home where appropriate.
“We understand that we are not sympathetic to the mainstream,” says Mulgrew. “We are three ex-City bankers.” But the next people to be extradited might not be bankers.
To establish jurisdiction over the case, the US authorities point out that the three men attended a meeting in Houston and sent communications over American computer networks. Mulgrew believes that just about anybody could be targeted by American prosecutors eager to make their names. “If you send an e-mail [on what turns out to be a contentious matter] from London to Edinburgh via a [US-based] Cisco server . . . you’re f*****.”
The picture is less bleak, interestingly, for the terrorist suspects whom the treaty’s designers originally had in mind. In 2004 the US government sought the extradition of Abu Hamza, formerly imam at the Finsbury Park mosque in north London, to try him on terrorist charges. Hamza, a British citizen, was arrested by British police on suspicion of terrorism offences: he was protected against extradition because the British case took precedence.
Bermingham, Darby and Mulgrew have done their best to get British prosecutors to charge them, even taking the matter to court, but without success.
In Houston they will have to conduct their defence separately. “Even if I’m found innocent,” Mulgrew says, “I’ll be ruined. How will I fund the case? To get witnesses there from England I’d have to pay their tickets. Some of them don’t know me. Are they going to come over? No chance, and I won’t be able to subpoena them. The ones who do come, I’ll have to buy them open airline tickets because you don’t know when they would be called.”
To cover the cost, the men say they will be obliged to sell their homes. Mulgrew has already done that. Even if they are cleared, the costs will not be recoverable.
An incredible 98% of suspects plead guilty in US courts because of the potential legal costs and the sentencing structure. Indicted on seven counts of wire fraud, each of which carries a five-year jail sentence, the men face 35 years in prison. Plea bargaining on one count would limit that to five years.
Insisting on innocence, as they do in Britain, might come to seem foolish when they get to Texas. “We will run out of money,” says Bermingham, “and if we have not convinced them then we are forced to plead guilty.”
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