Whistleblowers must be protected to stop fraudsters wrecking the UK's economy - Greg Wright

Some of the most troubling evidence has been provided by Spotlight on Corruption, a charity that monitors the UK’s enforcement and implementation of its anti-corruption laws.

The charity says there is now a “very widespread” sense that economic crime enforcement is not working and is not even close to tackling the scale of the problem.

The evidence states: “Too often over the past two decades fraud has not been prioritised as a policing priority either at national or local level. Part of this lack of prioritisation is due to the fact that fraud is misconstrued as a “low harm” crime.”

According to Spotlight on Corruption, over the past five years the government has not been prepared to resource its ambition on tackling economic crime properly from the public purse.

The statement said: “In our experience, prioritisation in enforcement follows the resourcing. If you increase funding and ensure it is ringfenced for a specific crime then law enforcement gets on with the job. We have observed this in the case of international anti-corruption enforcement where no-one was prepared to investigate bribery and kleptocracy cases until aid money was made available for doing so. Then there was increased appetite across the board including in agencies that were not receiving aid money to investigate criminality in this area."

“Under the recent Police Uplift Programme, just 725 police officers out of 20,000 new recruits will be allocated to complex crime in the Regional Organised Crime Units by March 2023. This represents just 3.6% of new officers dedicated to economic crime related work.”

So how do we tackle the problem? The charity believes the UK could significantly enhance prosecution of fraud and other economic crimes by making better use of cooperating witnesses.

“It appears in high-end fraud cases that those who plead guilty to help a prosecution are often the only ones who face any sentence rather than their evidence being used to bring further prosecutions, especially against senior executives.”

The evidence submitted by Spotlight on Corruption calls for stronger incentivisation of whistleblowing, particularly through the use of compensation schemes. In the US, the 1986 False Claims Act increased incentives for whistleblowers to come forward with evidence of fraud. Qui Tam provisions empower whistleblowers who have firsthand knowledge of frauds or violations against the government to report them to the appropriate officials.

If the Government prevails in a qui tam action, the whistleblower typically receives a portion of the recovery ranging between 15 and 30 per cent.

Whistleblowers filed 672 qui tam suits in the fiscal year 2020, and this past year the department recovered more than $1.6 billion in these and earlier-filed suits, according to Justice Department data cited by Spotlight on Corruption.

The evidence also calls for the introduction of specialist economic crime judges and the creation of a failure to prevent fraud offence, a measure supported by the SFO (Serious Fraud Office) and Crown Prosecution Service.

The latter measure would surely raise standards of corporate governance and incentivise companies to put procedures in place that would significantly reduce fraud.

Whistleblowers must be protected and firms which fail to stop fraud should be banned from bidding for public contracts. This tough, scalpel-like intervention is long overdue to safeguard consumers, the Government and businesses.