SOMEONE WANT TO GRAB THAT BIT OF MR. KRUGMAN'S SKULL...:

We are far too soft on City villainy: The British should emulate the Americans' vigorous fraud-busting approach (Will Hutton, July 16, 2006, The Observer)

Last week three bankers - the NatWest Three - became almost national heroes, resisting the long arm of American law which required them to face trial in the US over an alleged offence related to the Enron scandal. The extradition treaty under which they were being removed from Britain had not even been ratified by the Americans, it was said; the burden of proof there was lower; and not even their own British bank was pressing charges. The plane left Gatwick for Houston carrying these tribunes of liberty to a manacled future; businessmen demonstrated; there was a special debate in the House of Commons. A delegation is to be sent to Washington to press the Americans to ratify the treaty.

You have to blink at the craziness. Only towards the end of the week did sanity emerge. The affidavit from the FBI agent in the bail hearings disclosed the email exchanges between the three, and the extent of their involvement in a series of offshore transactions apparently set up to throw up personal profits. 'We're going to get rich,' wrote one. The NatWest Three declare their innocence in the transactions, but there are questions to answer.

It is unusual for the British to witness fraud being taken seriously so long after the event and with such intent by the prosecuting authorities. This is the rule of law at work. The principle is surely right? If any government believes that British nationals may have been party to fraud against organisations under their jurisdiction then it should collaborate to see justice done. And if we don't want to prosecute, then we must stand aside and let others do it. The principle at stake is justice - and whether we want to ring-fence the City of London so that, in effect, anything goes.

Unlike 9-11, no one will much remember Enron in a few years, but it's fitting that the lesson we'll take away is: if you want corporate fraud prosecuted seriously you have to rely on George W. Bush's America to vindicate justice.

Posted by Orrin Judd at July 16, 2006 8:58 PM