The Serious Fraud Office has had a big year. In January, its investigation into corruption at Rolls-Royce – which lasted four years, involving 30 million documents — led to a landmark deferred prosecution agreement and the largest fine ever imposed on a UK company for criminal conduct. In March, it reached another substantial DPA, with Tesco Stores Ltd, and in June it charged Barclays and some of its former senior executives with fraud offences. It has probes ongoing into Airbus, Rio Tinto, and other household names.

The fines add up. Since April 2014, the SFO has cost the taxpayer £216 million, but earned the Treasury £676 million – a return of £1million for every employee.

Then came the general election, at which the Conservative Party’s manifesto promised to “incorporate” the SFO into the National Crime Agency – widely taken to involve stripping the SFO of its independence. Although that promise did not make it into the Queen’s Speech, thanks to Theresa May failing to win a majority, the future of the SFO is not resolved. This is therefore a time of both success, and uncertainty.

At the Frontline Club’s seventh kleptoscope, hosted as usual by journalist Oliver Bullough, SFO director David Green will talk about how the SFO works, and what might lie ahead for the investigation of fraud and corruption in the UK post-Brexit. He will be joined by Camilla de Silva, who led a key strand of the SFO’s investigation into Rolls-Royce and was recently rewarded with the Bar Council’s Award of Employed Barrister of the Year, for what promises to be a fascinating evening even by kleptoscope’s standards.

What do a dead poet, organised crime and the air we breathe have in common?
On Thursday 21 November the Frontline Club screened The Carbon Crooks – director Tom Heinemann’s exposé of the massive fraud and failures within global carbon trading schemes.

Heinemann introduced his picture thus:

“This film is a about a system where, one could say everybody are crooks, or nobody are crooks. . . . How can you nail a whole system? That was the challenge in this film. Maybe you’ll find a lot of crooks in this film, or maybe you’ll find no crooks.”

Director Tom Heinemann. Photography Credit: George Symonds

The first question from the audience asked: “The VAT carousel has been known for 20 years. How is it possible that they didn’t think of it for emissions trading?”

“That’s a very good question,” said Heinemann, “that the EU Commission didn’t want to answer me either. . . . I don’t know who designed the system, but I’m sure someone has some red ears, somewhere. It took them way too long to stop this. Way too long.”

“Are we going to move away from market-based mechanisms?” followed another audience member.

“Well, I’m a journalist. I ask questions, I don’t give the answers,” began Heinemann. “But, my impression is that . . . the politicians today say, ‘We can’t do it better so we’ll pick the second or third best system.’ What can we do about this? I don’t know. Kevin Anderson, the advisor for the British government on climate issues has stopped flying. He has said, ‘I’ve used my credits.’”

https://twitter.com/CCESltd/statuses/403805857760428032

In response to a question on police investigations Heinemann explained:

“The real problem here is that most of the scam money came from organised crime. We have drug dealers, terrorist funders – the scum of the earth – have laundered money into these VAT carousels. There are a lot of investigations going on . . . there are employees of Deutsche Bank still accused of laundering carbon credit money.”

On why the authorities refuse to answer where the missing – traceable – credits have gone:

“Why don’t they tell us? Maybe it’s too embarrassing,” offered Heinemann. “Maybe it would reveal that these credits have been in so many ‘honest hands.’ . . .  You heard the Director of Europol, Rob Wainwright, saying it’s easier to hack into a carbon credit registry than stealing a car. I mean, that’s really trustworthy isn’t it? These questions need to be asked by people other than me, because there are a lot of people who don’t want to talk to me any more.”

Heinemann then expanded on the connection between carbon trading and international development:

“Gold Standard admits to us that half of their projects – about 60 – throughout the world are based on a system called ‘suppressed demand’. Meaning, you ask the poor people, ‘If I brought in a money tree, and you pluck it every day, would you then change your behaviour?’ . . . It’s not a big part of the system but a very important story. Because it was created by a lot of NGOs, based on a mathematical economic theory where the Danish professor says, ‘In the old days we had the vicar, we could go and get redemption. Today we have a long mathematical formula.’ So it fits!”

Heinemann concluded with his forecast for future carbon control:

“The head of communication for DONG Energy, a 80% state-owned Danish energy company, admits it has never been cheaper to pollute than today. It is cheaper than ever. Then there’s something wrong with the system. . . . The problem is that the market cannot reduce carbon emissions, apparently.”

More information about the film can be found at The Carbon Crooks website.