A Price to Pay: The Inside Story of the NatWest Three David Bermingham

Gibson Square, pp.384, 8.99

Conrad Black sympathises with the NatWest Three — victims of British cowardice and a corrupt US legal system

It was the misfortune of David Bermingham and his co-defendants to be very peripherally connected to the Enron debacle. Enron was the ultimate hot financial client for a merchant banker and designer of sophisticated financial vehicles, the author’s occupation at Greenwich National Westminster.

Bermingham’s offence was to produce a spectacularly imaginative new structure for an existing financial company, which impressed the Enron financial officers, at a time when Greenwich National Westminster was being offered for sale and NatWest itself was a takeover candidate. His plan was so original that, as he wrote, quoting Blackadder, ‘If you could put a tail on it, you could call it a weasel.’ Emails at the time that referred to the delicate position they were in as their employer was being shopped to possible buyers and everything was frozen — though they tried to conduct business as usual as best they could — were later misrepresented by American prosecutors as evidence of fraudulent intent, in collusion with Enron and against the buyer of NatWest, the Royal Bank of Scotland, which made no such contention.

In the unique manner of US prosecutors, there was not only a scramble to avenge the wronged and financially wounded city of Houston, but also to put as large as possible a notch in their belts.There is fierce competition between US and district attorneys for headlines, and thus acceleration up the political ladder or into the highest echelons of the private sector bar. The United States has five per cent of the world’s population, 25 per cent of its incarcerated people and 50 per cent of the world’s lawyers. The legal profession takes about 10 per cent of the country’s GDP, approximately $1.5 trillion, a sum close to the entire GDP, depending on exchange rates, of Russia, India or Canada.

US criminal justice is based on the almost completely corrupt manipulation of the plea bargain, in which suspects, or alleged suspects, are interviewed and advised that they can have immunity in exchange for miraculous revenances of memory that incriminate the prime targets — failing which, however flimsy or nonexistent the evidence, they too will be charged.

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In Britain, and most other serious jurisdictions, this routine form of extorted or suborned pseudo-evidence would be inadmissible and would cause the prosecutors to be disbarred. Only about 10 per cent of US criminal cases are tried, so proficient is the prosecution at intimidating its targets, and running all but the wealthiest of them out of resources. They frequently make a case, however spurious, that the assets with which a target would contest a case were ill-gotten gains, connected to a crime of which he is about to be accused, causing the assets to be frozen, and then bring down the criminal charges, denying the defendant access to the funds he had been relying on to pay the retainer of American counsel, leaving him without means for defence.

The procedural rules and trials themselves are a stacked deck; the government lines up (i.e. intimidates) as many co-operating witnesses as it feels it needs to make its case. The pre-trial procedure is the ludicrous charade of the grand jury, promised in the Fifth Amendment to the Constitution as an assurance against capricious prosecution, that is a notorious rubber stamp for the prosecutors. The prosecution throws all the spaghetti at the wall, tens or scores of charges, including catchments such as Honest Services, Obstruction of Justice, Criminal and Civil Racketeering (the latter a unique American concept), Civil Assets Forfeiture and all manner of conspiracies, whether any offence was actually committed or not, and which can be defined to the taste of the prosecutor and are very difficult to rebut. The prosecution speaks last to the jury, who have to rely on their memories without access to transcripts.

By their asset-freezing wheeze of alleging ill-gotten gains, and by the prosecutors’ custom of media indictments and lynchings, in which the US media are generally only too happy to co-operate, and by dragging everything on endlessly, the Fifth and Sixth Amendment rights of avoidance of seizure of property without just compensation, access to counsel, an impartial jury, and prompt justice are all routinely subverted.

It is little wonder that American prosecutors win over 90 per cent of their cases (compared with about 65 per cent in Canada). And sentencing, in response to the mindless reactionary law and order agitation that is uniform in America from right to left, is so severe that the United States has six to 12 times as many people in prison per capita as Australia, Canada, France, Germany, Japan and the UK, the most closely comparable jurisdictions.

For David Bermingham, once the dominoes started falling in Houston, in the ashes of Enron, the great prosecution turkey-shoot began in earnest, and it was open season on anyone with any connection to the giant failed company. Defendants get reduced sentences if they are helpful in roping in other convictions. Those who plead guilty receive a fraction of the sentence of those who go to trial and are convicted. The constitutionally hallowed right to trial is in fact often worthless, as exercise of it is severely penalised, as the prosecutors almost always win, regardless of the facts, unless the defendant is innocent, wealthy, and can evoke the issue to a very high court.

In these circumstances, Giles Darby, Gary Mulgrew and David Bermingham, when they were inevitably dragged into the Enron cauldron, really only had one chance: avoiding extradition. Except for the ineffable Boris Johnson, Bermingham’s MP, almost everyone in British officialdom favoured giving the Americans what they wanted, no matter how shabbily British citizens were treated as a result, and regardless of any reciprocity. (The Americans had not even ratified the extradition treaty.)

The NatWest Three put up a terrific fight, which is engagingly described in this book, and had a good deal of British media support. But they were victims of the cowardice of their government and the slavish will to compliance of the British courts. Once transported to Texas, the defendants made a go of it for a while, and then made the best deal they could.

This is a lively book by an innocent and persecuted man. And it is a grim and truthful account of the moral bankruptcy of the American legal system. Bermingham is at pains to criticise himself for not notifying his employer of the investment opportunity as he created it, and makes no excuses based on the impending sale of his company. He pleaded guilty to precisely what he had volunteered to the regulator six years before, without attracting any sanction or allegation of wrongdoing at all. He manfully reproaches himself, but chiefly denounces the servility of the British to the US.  

(Disclosure: I was charged under 17 counts of corporate misconduct in Chicago in 2005; all counts were abandoned, rejected by jurors, or unanimously vacated by the US Supreme Court, but two counts were spuriously revived by a lower court judge, whom the high court excoriated for his mistaken opinion, but to whom it perversely referred the vacated counts for assessment of the gravity of his own errors.)

This article first appeared in the print edition of The Spectator magazine, dated

Tags: Banks, Book review, Crime, Justice, Non-fiction