The UK's Serious Fraud Office - A Dissapointment for the People of Armenia

Over the course of the past year, the Government Accountability Project has backed the 'Blowing the World Bank Whistle' claim of corruption in World Bank-funded projects in Armenia. A number of British nationals were at the centre of the sordid affair, so since July 2007 the UK’s Serious Fraud Office (SFO) has been monitoring the case, in accordance with the new UK ‘Bribery and Corruption Law’, which gives UK courts jurisdiction over crimes of bribery committed wholly overseas by UK nationals.

In February 2008, a senior SFO officer travelled to Washington to discuss the matter with the Department of Institutional integrity (INT), and promised to report on the trip after his return to the UK.

On the 14th August, after many requests to the SFO, and after pressure from the British Ambassador in Armenia, the SFO eventually submitted the report promised on its year-long investigations, a one page letter which included the following statement: “I have explored your allegation that one named UK citizen received what would amount to a bribe. I have spoken to the INT department of the World Bank. They have uncovered no evidence to support your allegation during their extensive enquiries”.

It was later determined that the SFO statement referred only to the matter of bribery, not to the other 10 items of fraud, corruption and embezzlement. The conclusion reached by the INT on this matter, however again brings into question its sincerity with this investigation, after more than a year, which led to this amazing decision.

The UK Government “Law on Bribery and Corruption” clearly defines bribery as “the receiving or offering/giving of any benefit (in cash or in kind) by or to any public servant or office holder or to a director or employee of a private company in order to induce that person to give improper assistance in breach of their duty to the government or company which has employed or appointed them”. This definition of bribery is in line with the UN Convention against Corruption, to which the UK is a signatory.

The INT and the SFO reached the conclusion that Richard Walkling was not offered and did not accept a bribe when he was appointed General Director of the Yerevan Water & Wastewater Company, the company to which he was contracted to manage the World Bank Municipal Development Project. However, throughout the five-year duration of the project, Walkling presented himself to the Armenian public as the Authorized Representative for the Italian water utility company A. Utilities and concealed that he was also General Director of the Armenian state water company. In practice Walkling was contracted to himself, signing his own pay checks and involved in fraud, corruption and embezzlement which cost the Armenian people tens of millions of dollars. On the one side of his contract he was protected by a corrupt Armenian government and on the other by a corrupt World Bank Country Manager - a very beneficial position.

As a result of the INT decision, the UK’s Serious Fraud Office is not able to pursue an action against Richard Walkling, because according to the UK “Law on Bribery and Corruption”, without bribery there can not be corruption – interesting?

Apparently the INT investigation is still ongoing, but in the light of this unbelievable decision on the matter of bribery, there is not much hope that the investigation will find wrongdoings with the other ten items. The action is published on the Government Accountability Project website, "The Fight in Washington against Corruption in Armenia", which has links to the basic evidentiary documents behind the claim. There are eleven exhibits, of which Exhibit 1 gives details of Richard Walkling’s ‘Conflict of Interests’, which came about as a result of him accepting a bribe offered to him by the Armenian Government.

Together with GAP, we are still pressing for a final INT report on their investigation, but in the meantime, GAP is working to have the matter brought before the U.S. Congress.