Rule of Law in Britain on Trial
Kings brought to heel
Britain used to pride itself on its adherence to the rule of law. Somewhat contradictorially, it saw its adherence both as a model for nations seeking freedom and unity, as well as justification for its rule over the diverse peoples of a colonial empire. However, conspicuously, today substantial elements within the British elite appear to see themselves as above the law.
Somewhat ironically, therefore, it was eight hundred years ago this year that the seeds of the rule of law were sown, when the barons of England reined in the power of the monarch by pressuring King John to put his seal to Magna Carta (The Great Charter). In doing so they asserted a fundamental principle: that the king was subject to the law, the very law that was inherent in Magna Carta. For the king to act outside the law meant he risked being seen as a tyrant, such that restraint or deposition might follow.
However, duplicitous to the end, three months after he had sealed the Charter, King John persuaded the pope to quash it. In response, the barons instigated what is known as the First Barons' War. Abetted by King Alexander II of Scotland, who made encroachments in the north of England, and by Llywelyn ab Iorwerth in Wales, who took the royal castles of Cardigan and Carmarthen, John was deposed. He died shortly after and was succeeded by his son, Henry III, who reaffirmed the Charter first in 1217, and then a more definitive version in 1225. Henry III's son, Edward I, in acknowledging that Magna Carta bound him, helped cement the concept of monarchs being subject to the law. But, what of the barons?
'Barons' above the law
In the 21st century, it is not the monarchy that is acting as if it were above the law, but Britain's modern-day barons in banking, commerce, public office and the media. With banking, tax and public office fraud, coupled with newspaper crime, seeming to be rife, it is, perhaps, more than coincidence that once again it is in Scotland and Wales that the most dissatisfaction and disaffection is being manifested, with devolution, or even independence, being demanded.
Albert Venn Dicey (February 4, 1835 – April 7, 1922) would have strongly objected. He was a British jurist and constitutional law theorist whose "An Introduction to the Study of the Law of the Constitution (1885)" is considered part of the British constitution. He argued for the impartiality of the courts and insisted that not even those in the highest positions of power were exempt from law.
The "Rule of Law" ensures that leaders, who were elected by the people and whom were given the power and authority by the people, always act in the best interest of those people. Dicey, however, warned that the law must be followed by all, as people in power often thought that they were “above the law.” He argued that the inner tendency of all people in power is to satisfy their personal needs out of public resources and, thus, insisted that “no person is above the law and it is law that rules all.” He wrote that: "[E]very official, from the Prime Minister down to a constable or a collector of taxes, is under the same responsibility for every act done without legal justification as any other citizen....................[Appointed government officials and politicians, alike]…and all subordinates, though carrying out the commands of their official superiors, are as responsible for any act which the law does not authorise as is any private and unofficial person" (Dicey  2006).
According to David Wilson, professor of criminology at Birmingham City University, when commenting on the rioting and looting that erupted in London, Birmingham, Bristol, Manchester and various English towns in the summer of 2011, "it's not just about the underclass - it's about politicians, it's about bankers, ....... it's clear that young people of all classes aren't being given appropriate leadership." But, is the phrase, “aren't being given appropriate leadership”, merely a euphemism for: the elite setting a bad example by indulging in criminality and frequently doing so with impunity?
Foreign killing with impunity
One does not have to look far to find evidence of this. The 2003 war in Iraq that resulted in the murder of between 100,000 and a million people, was an illegal war on at least two counts: (1) the British government had no democratic mandate for the invasion because, in making the case for war, it lied, omitted and distorted facts to deceive the British people about Iraq's weapons of mass destruction and about its actions at the United Nations, which it claimed were aimed at securing peaceful Iraqi compliance with its disarmament obligations; and (2) under international law, because the British government undertook and/or conspired in the "planning, preparation, initiation or waging of a war of aggression" (UN resolution 1441 certainly did not authorise this) it was a 'crime against peace' as defined by the Nuremberg principles. The Chilcot Inquiry, which commenced in 2009 and during which disclosure was often blocked by the government, has yet to report and is seen by many as "an establishment stitch-up". In any case, there have been a number of other instances in which our lawmakers have been breaking the law, largely with impunity.
Lawmakers defraud the British public
By cheating on their expenses claims, members of both houses of Parliament defrauded the British public. Many claimed huge allowances for second homes, based on the fraudulent claim that neither of their houses was their main address. After a parliamentary attempt at covering up these widespread crimes through the use of Freedom of Information legislation, and other ruses (including the shredding of Prime Minister Tony Blair's expenses records 'by mistake' when they became the subject of a legal bid to disclose them), some members were merely sacked, de-selected, retired, suspended for a token period, or obliged to resign. Others made public apologies and simply repaid the amounts, totalling almost £500,000, that they had tried to cheat taxpayers out of. Just a few, such as David Chaytor (a £20,000 fraud), Elliot Morley (a £16,000 fraud) and three other Labour MPs were sent to prison, along with two Conservative peers: Lord Taylor of Warwick and Lord Hanningfield.
On 6th September, 2011, the Crown Prosecution Service announced that Labour MP, Margaret Moran, would face 15 criminal charges of false accounting and six of forgery; but Mr. Justice Saunders of Southwark Crown Court determined that she was not fit to plead. On mental health grounds she was spared a criminal conviction for the £53,000 she had defrauded from the British taxpayer and, instead, was made subject to a two-year supervision and treatment order.
Subsequent to this parliamentary scandal, the Independent Parliamentary Standards Authority was established to independently regulate MPs’ business costs and expenses, and new rules were introduced; but this, seemingly, did not stop the abuse.
In 2014, a report by Kathryn Hudson, the Parliamentary Commissioner for Standards, concluded that because the Culture Secretary, Maria Miller, MP, had claimed that her rented, four-bedroom cottage in Basingstoke (her constituency. and just a 47-minute commute from central London) was her main home, she considered she was entitled, under parliamentary expenses rules, to £90,718 for mortgage interest and the upkeep on what she said was a "second" home in Wimbledon, south London. However, it turned out that her parents and children had been living in the Wimbledon house the whole time, something which also gave the lie to Miller's claim that the house had been "unused for 19 weeks of the year". Kathryn Hudson went on to assert: "I have established beyond reasonable doubt that between June, 2005, and April, 2006, Mrs Miller claimed for mortgage interest against a mortgage significantly larger than the one required to buy her property," adding several other damning conclusions. This is out and out fraud, the investigation into which Miller did her best to obstruct. Although Kathryn Hudson's report concluded that Miller had over claimed by £44,000, the separate, Conservative-dominated Parliamentary Standards Committee, ordered Miller to repay only £5,800 and to apologise for her attitude; something which she did with grudging brevity. If the rule of law is to be seen to prevail, then prosecuting Miller is the proper way to establish whether any crime has been committed. As for her fellow MPs, prosecuting them for their crimes is now unlikely as, conveniently for them, the Commons authorities have destroyed all official records relating to MP's expenses prior to 2010.
Apparently, so contemptuous are British parliamentarians of the great public disquiet at their flouting of the law, that they are now claiming more than ever before, albeit using different ploys. After a rule change that allows MPs to spend up to 25% more on staff and employ relatives, 168 parliamentarians listed their wives, children and even parents on their expenses returns for 2013, in order to increase their household income. Of these 168, five are Cabinet ministers, namely Patrick McLoughlin, Chris Grayling, Michael Fallon, Stephen Crabb and Francis Maude.
Cover-up of lawmakers' sex-crimes against children
Unfortunately, these expenses crimes are very likely to be eclipsed by far worse revelations of criminality by our lawmakers and which are yet to come. In 1983, Geoffrey Dickens MP, presented the then Home Secretary, Leon Brittan, with a dossier naming senior politicians and judges as part of a paedophile ring. Leon Brittan conveniently lost the dossier, and further copies were also 'lost' by the police forces of Derby, North Wales and Yorkshire. However, towards the end of 2014, John Mann, Labour MP for Bassetlaw, handed to Scotland Yard evidence he had gleaned from highly-placed officials, amongst others, on 22 politicians, including three serving MPs, three members of the House of Lords and 13 former ministers. He alleges they were members of five paedophile rings in the seventies and eighties. He subsequently managed to secure an inquiry into alleged establishment involvement, which is now to be chaired by New Zealand high court judge, Justice Lowell Goddard. The evidence against approximately half of these 22 people, Mann says, is “very compelling” and he is quite certain there are other names he is not yet aware of. Mann's dossier was handed over to Operation Trinity, the Metropolitan Police’s investigation into alleged abuse in children’s homes in south London. Shortly before receiving Mann's evidence, Scotland Yard announced it was already investigating the alleged paedophile murders of three young boys in the late seventies and early eighties.
A similar ongoing criminal investigation is that of Operation Midland, which is looking at allegations of paedophile parties attended by MPs at Dolphin Square, Pimlico in central London. Three further Metropolitan Police investigations into paedophile rings are: Operation Fernbridge, which is focusing on high-profile alleged visitors to the Elm Guest House, Rocks Lane, Barnes, south-west London, to which boys from Grafton Close Children’s Home were taken; Operation Cayacos, which is investigating allegations made by Tom Watson MP, concerning politicians linked to a paedophile ring that included the notorious paedophile, Peter Righton, who had been very senior in the field of residential child care and a consultant to the National Children’s Bureau; and Operation Fairbank, which has garnered evidence against a range of politicians and others in the public eye.
Additionally, there is much speculation that the killing of the BBC presenter, Jill Dando, outside her home in Fulham, west London, in April, 1999, is related to a high-echelon cover up of an establishment paedophile ring which Jill Dando was on the verge of exposing, and that police ignored reported sightings of her actual killer. Instead, Barry George was convicted of the murder in July, 2001; but was acquitted at a retrial in August, 2008, after spending eight years in jail, for which compensation has been denied him. Arms-deal bribery with abandonment
Then, of course, there was al-Yamamah, Britain's largest-ever arms deal, clinched in 1985 with the help of Margaret Thatcher, and which generated £43 billion for BAE Systems, with another £40 billion in the offing. The contract with Saudi Arabia provided for the supply of military hardware, including 120 Tornado planes, 60 trainer planes and 72 Eurofighter Typhoons. In breach of explicit law, it was riddled with corruption, which, it is alleged, the Ministry of Defence knew of and rubber stamped, and which BAE Systems did its best to conceal using, amongst other guises, offshore shell entities. Huge sums were spent buttering up Saudi government officials and the Saudi royal family, particularly Prince Bandar bin Sultan, son of the then Saudi defence minister. Due to the suppression of the National Audit Office's conclusions to its investigation in 1992, these payments only came to light in 2001, when an ex-BAE Systems employee spilt the beans; but, significantly, nothing was done until the revelations became public in 2003.
In 2004 the Serious Fraud Office (SFO) launched an investigation into various allegations of bribery, contrary to Part 12 of the Anti-terrorism, Crime and Security Act 2001, in connection with the deal. These included payments to Prince Bandar of £1 billion and the gifting to him of an airliner by BAE Systems. However, BAE Systems promptly refused to comply with orders to produce details of its secret offshore payments to the Middle East. When, in 2006, the Swiss were about to disclose incriminating bank records to the SFO, the pressure for a cover up became immense. Ministers continued to mendaciously protest that the deal was clean, while BAE Systems and its lobbyists remonstrated that jobs would be lost. Simultaneously, the Saudis threatened to stop cooperating on countering terrorism (somewhat ironically, Osama bin Laden and the Al-Qaeda network were actually funded by corrupt plutocrats in Saudi Arabia, many of whom used British banks as financial conduits), raising the spectre of another 7/7 attack, and indicated they might take their next multi-billion pound aircraft order to France. While the SFO saw these threats as coming from Prince Bandar to conceal his corruption, Prime Minister Tony Blair, nevertheless, instructed his Attorney General, Lord Goldsmith, to end the SFO investigation.
Subsequently, the High Court of Justice ruled, in very emphatic and condemnatory terms, that terminating the SFO investigation had been unlawful; but the more compliant House of Lords overturned this. Since the UK had incorporated the OECD's anti-bribery treaty into domestic law, it sent investigators to establish why no prosecution had been forthcoming; but to no avail. Fortunately, the US Department of Justice decided to launch its own investigation (in which, tellingly, the British government refused to cooperate), which led to an indictment for false accounting and making misleading statements, to which BAE pleaded guilty and paid the derisory fine of just £260 million for "deception, duplicity and knowing violations of law ... on an enormous scale". Then, to top the lot, in 2013, the SFO admitted losing 32,000 pages of data and 81 audio tapes linked to its stalled investigation into BAE System's criminal conduct.
Banks: a hotbed of criminality
Now let's turn to the barons in the banks. Those people worried about their credit rating should have pity on Britain's banks, for theirs is far, far worse, which is much of the reason for their current crimes. UK banks, which should be bastions of probity, particularly since they are central to the health of both the British economy and, thus, British society, are guilty of nefarious conduct that would not be becoming of a crooked pawn shop.
Having received a slap on the wrist for almost bringing the British economy to its knees in 2007-8, through reckless expansion driven by light regulation and massive bonuses, not only did they continue to mis-sell payment protection insurance (PPI), indulge in money laundering and set up tax-evasion schemes; but some also blithely capitalised on the ease with which the £3.5 trillion-a-day foreign exchange market (forex), inter-bank lending rates and central bank lending rates can be rigged.
That British banks have poor credit ratings is fairly self evident. In 2007, for instance, Lloyds TSB was obliged to write off £200 million as a result of the US sub-prime mortgage crisis. Subsequently, to save the bank during the financial crisis, the government was obliged to take a 43.4% stake in Lloyds in October, 2008, and pumped in nearly £20 billion of taxpayer money. Ironically, not long after this, Lloyds was seriously remiss and negligent in its due diligence prior to its takeover of HBOS. Consequently, in August, 2009, Lloyd's bad debt had ballooned to £13.4 billion.
However, the rot did not stop there. In August, 2013, Lloyds Banking Group's PPI mis-selling liabilities amounted to £7.3 billion, and the bank was fined for its involvement in money laundering, through helping the Alavi Foundation, Bank Melli, the Government of Iran and others circumvent U.S. laws banning financial transactions with certain states. Additionally, HM Revenue and Customs brought a case against Lloyds for illicitly pouring hundreds of millions of pounds into transatlantic tax avoidance schemes in the form of loans to American financial institutions.
Of course, Lloyds was not the only bank involved in such malfeasance and, therefore, not the only bank to indulge in rate rigging aimed at improving its credit rating by giving a false impression of its financial health, while also boosting profits and, in the process, defrauding savers of interest amounting to billions of pounds.
The rates that were rigged are the London Interbank Offered Rate (LIBOR), its euro equivalent known as EURIBOR, and the Repo rate, which is the rate at which the Bank of England lends money to commercial banks. These are absolutely crucial rates that are normally used to control inflation and underpin trillions of pounds worth of loans and financial contracts. As such, they are fundamental to the correct operation of both UK and international financial markets and economies. This fraud is all the more heinous because one of the rates being rigged determined the amounts payable to the Bank of England under the Special Liquidity Scheme (SLS), the Government's emergency fund aimed at saving UK banks from free-fall in 2007-8.
According to Mark Carney, the Bank of England's governor, "Such manipulation is highly reprehensible, clearly unlawful and may amount to criminal conduct on the part of the individuals involved." Since the SLS was aimed at improving the liquidity position of the banking system, Owen Watkins, barrister in the corporate team at Lewis Silkin, considers that: "This is effectively a fraud on the taxpayer as the SLS was a taxpayer-backed measure." Mark Garnier, MP, concurs: "This is, on the face of it, a deliberate action to defraud the taxpayer.”
Royal Bank of Scotland, Lloyds Banking Group, HSBC and Barclays were all implicated in the rate-fixing frauds and face fines. Indeed, Britain's SFO is investigating more than 20 financial institutions in relation to fraudulent rate rigging; but so far only 17 people have been charged, including Barclays employees - Peter Charles Johnson, Jonathan James Matthew and Stylianos Contogoulas - in connection with the manipulation of LIBOR. In addition, it is understood that there are other very serious foreign exchange crimes in the investigative pipeline, such that UK banks are expected to set aside another £22 billion to cover fines for their heinous misconduct. Not unexpectedly, this criminality is also reflected in the scale of cybercrime in Britain’s banks, which is thought to be substantially understated.
The SFO is also currently investigating possible criminality in the way the Bank of England lent money to banks under, what was, a new type of liquidity auction scheme during the financial crisis of 2007-8. Under the scheme banks were allowed to offer a wider range of assets as collateral against the three-month loans. It now seems these auctions were manipulated, with or without the knowledge of Bank of England officials, such that the value of the collateral was exaggerated to make the borrowing banks look financially stronger than they actually were.
Banking on impunity
Just recently, HSBC has been shown to be complicit in tax evasion (which HSBC's Chief Executive also indulged in personally) and providing banking services to criminals, drug smugglers, and friends and families of dictators. This scandal is yet another example of British banks largely getting away with murder. In a legal opinion that makes reference to HM Revenue & Custom's (HMRC) failure to act against HSBC on evidence it held for almost five years, former Director of Public Prosecutions, Lord Macdonald, writes: "It seems clear, from the evidence we have seen, that there exists credible evidence that HSBC Swiss and/or its employees have engaged over many years in systematic and profitable collusion in serious criminal activity against the exchequers of a number of countries.
"The corporate and wholesale nature of HSBC's Swiss' apparent involvement in what amounts to grave cross border crime makes it all the more obvious that the relevant evidence, once it came the attention of HMRC, should have been the subject of urgent and sustained criminal investigation."
This shows, yet again, that impunity is rife, largely because undertaking legal prosecutions is seen as putting the banks and the banking system at risk. They are too big to fail and, therefore, seen as too big to jail. This is also, perhaps, the reason why many of the fines – but not all - that have been imposed on banks are minuscule compared to the potential gains from the frauds perpetrated and the economic and social damage that is flagrantly being risked. Unlike Britain, Iceland and Ireland and, to some extent, Germany and the Netherlands, have jailed high-level bankers. The SFO is currently investigating Barclays executives; but only in connection with allegations of corruption in raising emergency funds in Qatar in 2008.
Despite this ostensible immunity, in November, 2014, Britain's Chancellor, George Osborne, in a statement that smacks of gross naiveté, declared that now that a number of traders have been suspended or fired, the SFO is conducting criminal investigations and the banks face big fines, “the world can have confidence in the integrity of Britain's financial markets”.
Bringing the 'barons' to heel
Given this rampant, high-echelon criminality, what is urgently needed is a new Magna Carta; but this time with the ordinary people, rather than barons, stipulating terms. The last time something similar happened was under the auspices of the greatest jurist of the Elizabethan and Jacobean eras, Sir Edward Coke, and led to the civil wars of 1642-48, and subsequently the Glorious Revolution of 1688-89. Through the latter, parliamentary sovereignty became supreme, and the Declaration of Rights, which Parliament enacted as the Bill of Rights in 1689, was, indeed, seen as a new Magna Carta. However, even by the eighteenth century public opinion was ranged against Parliament for its perceived political machinations, graft and corruption. A campaign, at the time, for people’s rights aimed at countering oppression did invoke Magna Carta; but paranoia in Britain, stemming from the revolution in France, soon resulted in a clampdown, with fundamental British laws even being satirised.
Consequently, although Magna Carta's relevance declined in the eighteenth, and even though universal suffrage was still a long way off, Parliament’s foremost place in government was assured, such that parliamentary majorities were at liberty to pass statutes to abolish, or alter, even fundamental law. This position was subsequently bolstered by the delusion that Britons live in a democracy; but, as we have seen, often today it is the country's very lawmakers who are contemptuously breaking the law. Concomitant with this perversion has been the corrupting of British banks and even the media that were once seen as bastions of probity.
For the rule of law to become a reality in Britain, any new Magna Carta would need to contain terms that would ensure far higher levels of transparency and accountability in government, law enforcement and banking, and penalties for misconduct that fully reflect the import of the wrongdoing on British society and the extent of the trust that was of necessity placed in the perpetrator - the Financial Services (Banking Reform) Act 2013, makes reckless misconduct in the management of a bank, causing it to fail while aware of the risk, a criminal offence punishable by a maximum of only seven years in prison - rate rigging was not addressed. Modern technology has an important role to play here and must be harnessed to bring Parliament - devoid of its absurdly antiquated, anachronistic and almost laughable procedures - into the 21st century.
While good sense may be in short supply amongst the powerful of Britain, there is good reason to trust that the British public, rather than indulging in scapegoating, xenophobia or apathy, will rise above petty politics and insist ways are found to stop the erosion of democracy and the rule of law, long before upheavals similar to those of the seventeenth century rear their ugly head.
The Independent Police Complaints Commission announced it was investigating 14 referrals relating to allegations that Scotland Yard covered up child abuse from the 1970s to the 2000s. Further, it is now being acknowledged, inter alia, that there was a cover up of the sex crimes of the late Cyril Smith MP, and that corruption blocked other historic police investigations into child abuse. The cover-up of paedophile activity involved politicians and other senior figures who protected Smith out of concern that their sexual abuse of children might also come to light. Smith was accused of eight counts of sex abuse including six offences at a care home he set up in Rochdale. At the time, police officers were ordered to hand over notebooks and video footage from their undercover operations and were told they risked being prosecuted under the Official Secrets Act if they dared revealed what had happened.