NatWest Three
4149880
221780986
2008-06-26T02:04:40Z
Andre Toulon
7285785
The '''NatWest Three''', also known as the '''Enron Three''',<ref>
{{cite news
|work=The Times
|title=Enron Three lose test case against extradition to US
|date=2006-02-21
|url=http://www.timesonline.co.uk/tol/news/uk/article733156.ece
|accessdate=2008-04-14
|first=Simon
|last=Freeman
}}
</ref> are three [[United Kingdom|British]] businessmen - '''Giles Darby''', '''David Bermingham''' and '''Gary Mulgrew'''. In 2002 they were [[indictment|indicted]] in [[Houston]], [[Texas]] on seven counts of [[wire fraud]] against their former employer Greenwich NatWest, at the time a division of [[National Westminster Bank]].<REF>{{cite web | date = [[2006-07-12]] | title= NatWest Three: the US indictment | url = http://news.bbc.co.uk/1/hi/business/5174358.stm | format = HTML | publisher = BBC News | accessdate = 2006-07-13}}</ref> After a high-profile battle in the British courts they were [[extradition|extradited]] from the United Kingdom to the United States in 2006. On [[November 28]], [[2007]], they each pleaded guilty to one count of wire fraud in exchange for the other charges being dropped.<ref name="Guardian">{{cite web|date=[[2007-11-28]]|title=NatWest Three plead guilty to wire fraud|url=http://www.guardian.co.uk/business/2007/nov/28/2|format=HTML|publisher=Guardian Unlimited|accessdate=2007-11-28}}</ref> On [[February 22]], [[2008]] they were each sentenced to 37 months in prison.
==Background==
In the year 2000 the Three had been working for Greenwich NatWest, then a unit of [[NatWest|NatWest bank]], later acquired by [[Royal Bank of Scotland]] (RBS). All three were involved in Greenwich NatWest's dealings with [[Enron Corporation]]. As a result of these dealings NatWest owned a stake in a [[Cayman Islands]]-registered partnership called '''Swap Sub'''.
Swap Sub was a [[special purpose entity]] created by Andrew Fastow, Enron's CFO, ostensibly for the purpose of [[hedging]] Enron's investment in Rhythms NetConnections, an [[internet service provider]]. Swap Sub's assets consisted of cash and Enron stock. Its liability was an option giving Enron the ability to require it to buy Enron's entire investment in Rhythms NetConnections at a predetermined price in 2004.<ref name="fox">Fox, pp. 152-153</ref> In addition to NatWest, [[Credit Suisse First Boston]] held an equal stake in Swap Sub. The remainder was owned by a partnership managed by Fastow.<ref name="fox"/>
In March 2000, Enron decided to terminate the hedging arrangement with Swap Sub. Fastow managed to persuade Enron to pay Swap Sub a $30 million fee to terminate the option with Swap Sub and recover the Enron stock it owned,<ref>Fox, p. 159</ref> even though, because of a decline in the price of the Rhythms stock, "Swap Sub owed Enron a ton of money".<ref>
{{cite book
|title=Pipe Dreams: Greed, Ego, and the Death of Enron
|first=Robert
|last=Bryce
|location=New York
|publisher=PublicAffairs
|year=2003
|isbn=1586482017
|pages=p. 227
}}
</ref> $10 million of the payment went to Credit Suisse First Boston; Fastow falsely claimed that the other $20 million was going to NatWest, but in fact only $1 million did so. The payment, which was formally agreed on [[March 22]] [[2000]], resulted in large profits for Swap Sub, enriching several Enron employees who had acquired ownership interests in the partnership.<ref>Fox (2004), pp. 159-160</ref>
==The crime==
According to the Statement of Facts which was signed by all three defendants as part of their eventual plea bargain, the Three realized in early 2000 that, because of rises in the stock prices of Enron and Rhythms, NatWest's interest in Swap Sub "had quite some value".<ref>Statement of Facts, section 16</ref> On February 22 of that year, the three bankers made a presentation to Enron CFO Andrew Fastow suggesting ways in which this value could be captured; however, Fastow ultimately rejected this proposal.<ref>Statement of Facts, section 19</ref>
Shortly afterwards, Fastow contacted Gary Mulgrew in late February or early March 2000 and offered to purchase NatWest's interest in Swap Sub.<ref name="facts_20">Statement of Facts, section 20</ref> He also offered Mulgrew what is described in the Statement of Facts as "an unspecified financial opportunity" if he were to leave NatWest.<ref name="facts_20"/> Mulgrew discussed this conversation with Darby and Bermingham. On [[March 6]] [[2000]], Fastow's assistant Andrew Kopper contacted Darby with a formal proposal that a company Kopper controlled should purchase NatWest's stake in Swap Sub for $1 million.<ref>Statement of Facts, section 21</ref> Mulgrew and Darby subsequently recommended to their superiors that NatWest should accept this offer.<ref>Statement of Facts, section 22</ref>
Later that month, the three bankers learned that the "unspecified financial opportunity" which had been mentioned to Mulgrew involved their personally acquiring a portion of NatWest's stake in Swap Sub.<ref>Statement of Facts, section 23</ref> In furtherance of this, Kopper set up a deal for the Three to acquire a [[put option]] on half of NatWest's former stake in the company. On March 17, Darby collected the signatures needed to finalize the NatWest sale.<ref>Statement of Facts, section 26</ref> On March 20 the Three executed the option agreement with Kopper.<ref>Statement of Facts, section 27</ref> The Three concealed both their dealings with Fastow and Kopper, and the fact that they now had a financial interest in the company that bought Swap Sub, from their superiors at NatWest.<ref>Statement of Facts, section 28</ref>
According to the Statement of Facts, the Three were unaware that Fastow secured the March 22 agreement to pay $30 million to Swap Sub.<ref>Statement of Facts, section 29</ref> On [[April 21]] [[2000]] Bermingham, who had resigned from NatWest in the meantime, exercised the options, resulting in a profit of more than $7 million.<ref>Statement of Facts, section 31</ref> He subsequently split the proceeds with Darby and Mulgrew.<ref>Statement of Facts, section 33</ref>
==Timeline of legal proceedings==
===FSA Investigation===
In November 2001 the three bankers, having learned that the US [[Securities and Exchange Commission]] (SEC) was investigating Fastow, voluntarily met with the British [[Financial Services Authority]] (FSA) to discusss the deal.<ref name="hays">
{{cite news
|work=Houston Chronicle
|title=Source: British bankers to plead guilty in Enron case
|date=2007-11-27
|url=http://www.chron.com/disp/story.mpl/special/enron/5333449.html
|accessdate=2008-04-14
|first=Kristen
|last=Hays
}}
</ref><ref name="guardian_q_and_a">
{{cite news
|work=The Guardian
|title=Q&A: NatWest Three
|date=2006-07-13
|url=http://www.guardian.co.uk/business/2006/jul/13/corporatefraud.enron3
|accessdate=2008-04-13
}}
</ref> According to their own account, the Three initiated this meeting in order to "ensure transparency". Bermingham later claimed that "[w]e gave [the FSA] everything because we thought we had nothing to hide."<ref name="boggan"/>
In February 2002 the FSA completed its inquiries without taking any action.<ref name="hays"/> It later emerged that the FSA had passed the results of its investigation to the SEC, which had in turn passed them on to the prosecutors in the US Department of Justice.<ref name="times_fsa">
{{cite news
|work=The Times
|title=City watchdog's findings were crucial in US case against NatWest Three
|date=2007-11-30
|url=http://business.timesonline.co.uk/tol/business/law/article2971588.ece
|accessdate=2008-04-13
}}
</ref> According to a report in ''[[The Times]]'' the FSA report was so detailed that it told the SEC whom to interview and what evidence would be needed to secure a conviction, and concluded that “there appears to be evidence that the three individuals were subject to a major conflict of interest”.<ref name="times_fsa"/>
===Issue of arrest warrants and indictment===
U.S. arrest warrants for the Three were issued in June 2002.
They were [[indictment|indicted]] by a [[grand jury]] in [[Houston]], [[Texas]] in September of the same year on seven counts of [[wire fraud]].<ref>[http://www.usdoj.gov/dag/cftf/chargingdocs/berminghamindictment.pdf Indictment: United States of America v. David Bermingham, Giles Darby and Gary Mulgrew], United States District Court, Southern District of Texas, Houston Division</ref>. The warrants were among the first issued by Enron prosecutors and media reports speculated that their main purpose was to induce the Three into a [[plea bargain]] whereby they would testify against Kopper and Fastow (seen as more important prosecution targets) in exchange for reduced sentences<ref>
{{cite news
|work=The Spectator
|title=The NatWest Three case lacks common sense, proportion -- and a victim
|url=http://findarticles.com/p/articles/mi_qa3724/is_200607/ai_n17178795
|first=Martin Vander
|last=Weyer
|date=2006-07-08
|accessdate=2008-04-14
}}
</ref><ref>[http://www.chron.com/disp/story.mpl/special/enron/1573032.html Grand jury indicts trio in Britain], ''[[Houston Chronicle]]'', [[17 September]], [[2002]]</ref><ref name="scandal">
{{cite news
|work=The Observer
|title=The bankers, the big deal and the taint of scandal
|url=http://www.guardian.co.uk/business/2006/jul/16/enron.usnews
|date=2006-07-16
|accessdate=2008-04-30
}}</ref>. However, during the long delay caused by the decision of the Three to fight extradition Kopper and Fastow both pled guilty and entered into plea bargains themselves. Thus, in an ironic turn of events, Kopper and Fastow were likely to have been the key prosecution witnesses against the Three if the case had gone to trial.
The indictment<ref name="indictment">{{cite web
|url=http://news.findlaw.com/hdocs/docs/enron/usbrmnghm91202ind.pdf
|title=Indictment: United States of America v. David Bermingham, Giles Darby and Gary Mulgrew
|accessdate=2008-04-14
}}</ref> set out seven counts of wire fraud, each one corresponding to a document (fax, email or wire transfer) that was transmitted electronically in the United States in furtherance of the alleged fraudulent scheme.<ref name="indictment"/> In addition to the facts agreed to as part of the eventual plea bargain, the indictment alleged that the Three knew, at the time they recommended the sale of Swap Sub to NatWest, that its value was significantly greater than $1 million,<ref name="indictment"/> and that the February 22 presentation to Fastow was part of the fraudulent scheme.<ref name="indictment"/> Although Enron officials were involved, the indictment did not allege that Enron Corporation itself was a victim of the scheme, or that the Three's activities had any connection to Enron's collapse.<ref>{{cite news
|work=BBC News
|title=Fraud accused talks of MSP mother
|date=2004-10-19
|url=http://news.bbc.co.uk/2/hi/uk_news/scotland/3756240.stm
|accessdate=2008-04-14
}}
</ref>
The evidence against the Three included preparations for the February 22 presentation, which contained the phrase
:''"Problem is that it is too obvious (to both Enron and LPs) what is happening (ie, robbery of LPs), so probably not attractive. Also no certainty of making money ..."
Prosecutors alleged that the use of the word "robbery" in showed that the Three knew that they were planning to commit a crime,<ref name="redhanded">{{cite news
|work=The Guardian
|title=NatWest Three: hounded by the US or caught red-handed?
|date=2006-07-15
|url=http://www.guardian.co.uk/enron/story/0,,1821114,00.html
|accessdate=2008-04-13
}}</ref> Prosecutors also pointed to the discrepancy between the $1 million accepted by NatWest, and the $10 million accepted by Credit Suisse First Boston for their equal stakes in Swap Sub.<ref name="boggan"/>
===Extradition to the United States===
US prosecutors began to pursue proceedings in what they expected to be a "routine" extradition in the summer of 2002.<ref>
{{cite news
|work=Houston Chronicle
|title=Enron case extradition push begins
|url=http://www.2002-06-29
|accessdate=2008-04-14
}}
</ref> The Three were arrested in Britain on [[23 April]] [[2004]] and extradition proceedings under the [[Extradition Act 2003]] commenced in June of that year amid widespread [[NatWest Three#Extradition controversy|controversy]]. <ref>[http://www.chron.com/disp/story.mpl/special/enron/2619555.html Brits arrested in Enron case awaiting extradition hearing]
''[[Houston Chronicle]]'', [[10 June]], [[2004]]</ref> In September of 2004 a judge at [[Bow Street Magistrates' Court]] ruled that the extradition could proceed.<ref>
{{cite news
|work=The Independent
|title=Judge backs extradition of NatWest trio to face Enron trial
|url=http://www.independent.co.uk/news/business/news/judge-backs-extradition-of-natwest-trio-to-face-enron-trial-543910.html
|date=http://www.2004-10-16
|accessdate=2008-04-14
}}
</ref> The Three responded by suing Britain's [[Serious Fraud Office]] (SFO) in the [[High Court of Justice]], seeking [[judicial review]] in order to force a prosecution in the UK which would have taken precedence over the US investigation and, because of protections against [[double jeopardy]], would have prevented a subsequent prosecution in the US. Bermingham commented to the press that "I cannot imagine anyone has taken the SFO to court for not prosecuting them before".<ref>
{{cite news
|work=Evening Standard
|title=NatWest trio sue Serious Fraud Office
|url=http://www.thisismoney.co.uk/news/article.html?in_article_id=398018&in_page_id=2
|date=2005-02-14
|accessdate=2008-04-14
|first=Andrew
|last=Gilligan
}}
</ref> In response the SFO issued a statement defending their decision to defer to prosecutors in the US: {{cquote|“When we considered a submission by the three former NatWest employees that we should open an investigation for potential prosecution in this jurisdiction the balanced view we took was that the US authorities had a stronger call on the matter. Alleged acts performed by the three were conducted in the US, thus their alleged fraud was conducted in the same jurisdiction as was the overall issue surrounding Enron. The place of residence of the three (ie, the UK) was not considered to be an over-riding consideration. The defendants were already indicted in the US in an investigation that had been in progress for some time and where the evidence had already been marshalled and assessed<ref name="boggan">
{{cite news
|work=The Times
|title=We want British justice, not a US witchhunt
|url=http://www.timesonline.co.uk/tol/life_and_style/article509608.ece?token=null&offset=24
|date=2005-02-03
|accessdate=2008-04-14
|first=Steve
|last=Boggan
}}
</ref>}}
After a significant delay, the extradition was endorsed by Home Secretary [[Charles Clarke]] in May 2005.<ref>
{{cite news
|work=The Guardian
|title=NatWest extradition confirmed
|url=http://www.2004-05-25
|accessdate=2008-04-14
|first=Simon
|last=Bowers
}}
</ref> The Three appealed this decision also in the High Court. On [[20 February]], [[2006]] both the appeal against extradition and the suit to force the SFO to prosecute (which were consolidated into one case) were rejected by the High Court.<ref>
{{cite web
|title=Bermingham & Others (otao) v Director of the Serious Fraud Office and HM Attorney General
|url=http://oxcheps.new.ox.ac.uk/new/casebook/cases/Cases%20Chapter%2026/Bermingham.doc
|accessdate=2008-04-14
}}
</ref>. The bankers appealed further to the [[Judicial functions of the House of Lords|House of Lords]], but this appeal failed on [[21 June]] [[2006]].<REF>{{cite web | date = [[2006-06-21]] | title = Enron trio fail to secure appeal | url = http://news.bbc.co.uk/1/hi/business/5103730.stm | format = HTML | publisher = BBC News | accessdate = 2006-07-13}}</ref> On [[27 June]], [[2006]] the three lost an appeal to the [[European Court of Human Rights]]. There were then rumours in the UK press that the British government would support their case but this was rejected by [[Attorney General for England and Wales|Attorney General]] [[Peter Goldsmith, Baron Goldsmith|Lord Goldsmith]] on [[July 7]], [[2006]].<REF>{{cite web | date = [[2006-07-08]] | title = UK trial for Enron trio rejected | url = http://news.bbc.co.uk/1/hi/uk/5160094.stm | format = HTML | publisher = BBC News | accessdate = 2006-07-13}}</ref>
===Initial court proceedings in the United States===
After all legal avenues of appeal against extradition had been exhausted, the Three arrived in Houston on [[July 13]], [[2006]] and taken to the Federal Detention Center there <ref>[http://www.chron.com/disp/story.mpl/special/enron/4044456.html British bankers arrive in Houston to face Enron charges], ''[[Houston Chronicle]]'', [[July 13]], [[2006]]</ref>. The next day they were released into the custody of their attorney and ordered to wear electronic monitoring devices. On [[July 21]] a judge ruled that the Three could go free on bond but could not leave the Houston area, could not meet with each other without their lawyers present and must raise between $80,000 and $150,000 by the end of the month <ref>[http://www.chron.com/disp/story.mpl/special/enron/4062614.html Judge: Brits in Enron case must stay put], ''[[Houston Chronicle]]'', [[July 21]], [[2006]]</ref>. US immigration services gave them permission to accept employment in the US for a period of one year: however the judge did not give them permission to travel throughout the US in order to seek work.<ref name="remain">[http://www.chron.com/disp/story.mpl/special/enron/4064384.html Judge orders British trio to remain in Houston area], ''[[Houston Chronicle]]'', [[July 22]], [[2006]]</ref>
===Trial date postponements===
On [[August 2]], [[2006]] the trial date was delayed indefinitely from [[September 13]] [[2006]], in order to allow two of the Three to secure legal representation <ref>[http://www.chron.com/disp/story.mpl/special/enron/4088270.html Former bankers win delay in trial], ''[[Houston Chronicle]]'', [[August 2]], [[2006]]</ref>. On [[August 9]], [[2006]] the legal situation of the Three was complicated by [[subpoena]]s served on them in an Enron-related civil suit against [[Royal Bank of Canada]] <ref>[http://business.guardian.co.uk/story/0,,1840041,00.html Enron investors call NatWest Three in civil lawsuit], ''[[The Guardian]]'', [[August 9]], [[2006]]</ref>. On [[August 12]], [[2006]] all three informed the judge that they had retained attorneys. <ref> [http://www.chron.com/disp/story.mpl/special/enron/4112194.html Ex-bankers from Britain retain lawyers], ''[[Houston Chronicle]]'', [[August 12]], [[2006]]</ref>
On [[September 6]], [[2006]], the trial date was set for February 2007 if witnesses could be obtained in time, failing that for [[September 4]] [[2007]]. Until that time the Three were required to wear monitoring devices and were forbidden from leaving the Houston area. <ref>[http://www.chron.com/disp/story.mpl/special/enron/4167119.html Trial set for next September in Enron-related case], ''[[Houston Chronicle]]'', [[September 6]], [[2006]]</ref> On [[August 1]], [[2007]], the trial date was moved back yet again to January [[2008]]. This was following another earlier postponement to [[October 22]]. This further delay was a significant blow to the three, and their supporters stressed again the problems they were facing with the scale of legal fees and further separation from their families in the UK. <ref>[http://business.timesonline.co.uk/tol/business/law/article2188564.ece Natwest Three devastated at new trial delay],''[[The Times]]'',[[August 2]],[[2007]]</ref>
===Witnesses controversy===
On [[August 6]], [[2007]], the Three asked the judge in the case to order six former colleagues living in Britain to provide video testimony for their defence. In a court filing explaining this request, they alleged that "[s]everal individuals now refuse to travel to the United States to appear on defendants' behalf because they feel, or have been, threatened by the [US] government".<ref>{{cite news
|work=Houston Chronicle
|title=Accused British bankers urge videotaped depositions
|date=2007-08-06
|url=http://www.chron.com/disp/story.mpl/special/enron/5032163.html
|accessdate=2008-04-29
}}
</ref> Such a request would have required the co-operation of British authorities.<ref name="binham"/>
The Three's filing also claimed that Royal Bank of Scotland was obstructing attempts to contact a larger group of thirty-six employees who were also potential witnesses, claiming that "[t]he Royal Bank of Scotland and the Royal Bank of Canada have… taken steps to prevent Defendants from securing the testimony of former colleagues",<ref>{{cite news
|work=The Times
|title=NatWest Three cry foul over witnesses
|date=2007-08-12
|url=http://business.timesonline.co.uk/tol/business/law/article2240251.ece
|accessdate=2008-04-13
|first=Ben
|last=Laurance
}}</ref> and that "counsel for the purported victim in this case [RBS] has interfered with the ability of defence counsel to obtain relevant testimony".<ref name="binham">
{{cite news
|work=TheLawyer.com
|title=NatWest Three lawyers in row with Travers over defence 'interference'
|first=Caroline
|last=Binham
|date=2007-08-20
|url=http://www.thelawyer.com/cgi-bin/item.cgi?id=127942&d=122&h=24&f=46
|accessdate=2008-04-30
}}
</ref> They concluded that the Three's ability "to mount a vigorous defence has thereby been severely compromised, if not eviscerated".<ref name="binham"/> The Three went so far as to publicly name the prospective witnesses in the hope that that would encourage some of them to speak out.
===Plea bargain===
On [[November 28]], [[2007]], the three accepted a [[plea bargain]], pleading guilty to one count of wire fraud. In exchange, prosecutors agreed to drop the other six counts, and to support the application by the Three to serve part of their sentences in the United Kingdom. <ref name="Guardian"/><ref name="doj_plea">
{{cite web
|title=Three Former British Bankers Plead Guilty to Wire Fraud in Enron Case
|url=http://www.justice.gov/opa/pr/2007/November/07_crm_949.html
|last=United States Department of Justice
|accessdate=2008-04-13
}}</ref><ref name="plea_agreement">
{{cite web
|url=http://upload.wikimedia.org/wikipedia/commons/c/c9/NatWest_Three_David_Bermingham_Plea_Agr.pdf
|title=Plea Agreement for David Bermingham
|accessdate=2008-04-13
}}
</ref> In the plea agreement, the Three pleaded guilty to count four of the indictment, relating to the email from London to Houston of the final Swap Sub sale documents.<ref name="plea_agreement"/> A "statement of facts" was appended to the plea agreement as Exhibit A and was signed by all three defendants.<ref name="plea_agreement"/>
Prosecutor Alice Fisher claimed that "[t]hese three defendants admitted today that they defrauded Nat West by entering into a secret and illegal deal with officers from Enron – a deal that yielded millions in profits for them personally at the expense of their employer".<ref name="doj_plea"/> However, an article in ''The Daily Telegraph'' claimed that the guilty pleas were motivated not by actual guilt, but rather by the prospect of further delays before the trial and possible 35-year sentences if convicted.<ref name="quinn">{{cite news
|work=The Daily Telegraph
|title= Natwest Three hope plea will speed up ordeal
|date=2007-11-30
|url=http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/11/29/bcnnatwest12.xml
|accessdate=2008-04-13
|first=James
|last=Quinn
}}</ref> Other British commentators agreed that this was a possibility.<ref>{{cite news
|work=Financial Times
|title= Judicial torture and the NatWest 3
|date=2007-11-29
|url=http://search.ft.com/ftArticle?queryText=judicial+torture&y=0&aje=true&x=0&id=071129000600&ct=0
|accessdate=2008-04-13
|first=Martin
|last=Wolf
}}</ref> The ''Telegraph'' piece went on to claim that the statement of facts did not state that the Three knowingly defrauded NatWest.<ref name="quinn"/> The original indictment alleged that the Three knew that NatWest's stake was worth far more than the $1 million it was being sold for; the statement of facts claimed that bankers believed it was likely that they would make significant amounts of money as a result of the transaction, based on information that they concealed from their employer.
<ref name="doj_plea"/><ref name="indictment"/>
===Sentencing and prison===
The NatWest Three were sentenced on [[February 22]], [[2008]] to 37 months of imprisonment. <ref name="murphy">
{{cite news
|work=International Herald Tribune
|title= 'NatWest 3' sentenced to 37 months each
|date=2008-02-22
|url=http://www.iht.com/articles/2008/02/22/business/natwest.php
|accessdate=2008-04-13
|first=Kate
|last=Murphy
}}
</ref> They were given no remission for the time they had spent in the United States awaiting trial. <ref>{{cite news
|work=The Guardian
|title= NatWest Three express remorse as they are jailed for 37 months
|date=2008-02-22
|url=http://www.guardian.co.uk/business/2008/feb/22/banking.enron
|accessdate=2008-04-13
|first=Andrew
|last=Clark
}}</ref> They were also required to repay $7.3 million to [[Royal Bank of Scotland]], the successor bank to Greenwich NatWest, of which $1.25 million would be due when the men surrendered themselves to prison authorities.<ref name="murphy"/><ref>
{{cite web
|title=Three Former British Bankers Sentenced in Enron Case
|last=United State Department of Justice
|url=http://www.usdoj.gov/opa/pr/2008/February/08_crm_135.html
|accessdate=2008-04-13
}}
</ref> During sentencing, the three each made brief statements to the judge. Mulgrew said that he had shown a "lack of integrity" and "exercised poor judgement", concluding that "I have no one to blame but myself".<ref name="murphy"/> Darby admitted that he was "wrong", and said "I deeply regret my involvement in this whole affair."<ref name="murphy"/> Darby's lawyer stated that "Andy Fastow and the culture of greed at Enron corrupted everybody and everything it came in contact with", and added that the Three "are as much victims as anybody else."<ref name="murphy"/> The Three requested to be assigned to the low-security [[Federal Correctional Institute, Allenwood|federal prison]] in [[Allenwood, Pennsylvania]].<ref name="murphy"/> In April 2008, each was assigned to a different prison: Mulgrew was ordered to surrender to the facility in [[Big Spring]], Texas, on April 30; Giles Darby to the Allenwood facility on May 7; and David Bermingham to the prison in [[Lompoc]], California, on May 9.<ref>
{{cite news
|work=Houston Chronicle
|title= Different prisons for 3 ex-bankers
|date=2008-04-22
|url=http://www.chron.com/disp/story.mpl/business/5722689.html
|accessdate=2008-04-30
}}
</ref>
Mulgrew, Darby and Bermingham were assigned consecutive federal inmate numbers (66096-179, 66097-179 and 66098-179 respectively) and their projected release date is in January 2011.
==Public relations campaign in Britain==
Press coverage of the Three in Britain was initially mostly negative, focusing on the amount of money the men had gained and their extravagant lifestyles.<ref name="davies">
{{cite book
|title=Flat Earth news: an award-winning reporter exposes falsehood, distortion and propaganda in the global media
|first=Nicholas
|last=Davies
|isbn=0701181451
|location=London
|publisher=Chatto & Windus
|year=2008
|url=http://www.cityam.com/index.php?news=7222
}}
</ref> For example, ''The Independent'' wrote that the men saw themselves as "womanising buccanneers who played as hard and as fast as they pursued their deals"<ref>
{{cite news
|work=The Independent
|title=Enron and the British connection: Bankers accused of £5m fraud
|date=2002-06-29
|url=http://www.independent.co.uk/news/business/news/enron-and-the-british-connection--bankers--accused-of--acircpound5m-fraud-606695.html
|accessdate=2008-04-18
}}</ref> and ''The Sunday Times'' described Mulgrew as "fiercely competitive" with "a massive ego" and "scars on his arms" from his former career as a nightclub bouncer.<ref name="davies"/> The tone of the reporting changed when the Three secured the services of Bell Yard Communications, a [[public relations]] firm which specialised in "public reputation management during times of corporate crisis or dispute", headed by [[Melanie Riley]].<ref name="davies"/> [[Adrian Flook]] of the firm M: Communications was also involved.<ref name="quainton">{{cite news
|title=M and Bell Yard outline NatWest Three strategy
|first=David
|last=Quainton
|2006-07-06
|url=http://www.prweek.com/uk/news/article/570555/
|work = PRWeek UK
|accessdate=2008-04-18
}}</ref>. Both firms claimed to be working ''[[pro bono]]''.<ref name="charter"/> Riley said that "I have been working pro bono for the last six months because I believe in the case. We have worked hard to ensure that people understood the inequity of the Extradition Act."<ref name="charter"/>
Ex-''Guardian'' journalist Nick Davies, in his book ''Flat Earth News'', described the strategy adopted by Bell Yard:
{{cquote|According to some of those involved, when Bell Yard took on the case of the three bankers, its founder, Melanie Riley, rapidly saw the story she wanted. Fleet Street must stop talking about the alleged guilt and extravagance of these three men and must focus instead on one single aspect of their case, the new Extradition Act under whose terms the three men now faced trial in Texas.<ref name="davies"/>}}
Davies later recounted the reaction of the press:
{{cquote|The media could have refused to go along with Bell Yard’s strategy. In practice, they went for it, like a baby fastening on a teat. Melanie Riley pushed the story personally with journalists from every publication and broadcast outlet. The suspects became victims of the law. The stories about high-living womanisers became features about family men, worried about their children. The former bouncer and his cronies became “the NatWest Three” with its echo of the wrongly convicted [[Guildford Four]] and [[Birmingham Six]].<ref name="davies"/> }} Riley summed up her strategy as follows: "Originally we focused on a political and civil liberties audience. ... But we moved the issue on to focus on the impact it would have on the business community in particular."<ref name="quainton"/> M: Communications co-founder Nick Riley added that "It is not a matter of whether or not they are guilty – although they have always expressed their innocence... Our role was to convince editors of the validity of our argument: that Britain's new extradition laws have anomalies."<ref name="quainton"/>
An article in the ''[[Financial Times]]'' also highlighted the achievements of the public relations team: {{cquote|[PR experts involved with the case] believe that the main achievement of the campaign has been to highlight their side's view of the inequality of the extradition arrangements. But perhaps even more of an achievement is that the public perception of the three has been turned from that of apparently wealthy bankers, alleged to have been involved in an £11m fraud and attempting to escape justice, to deeply wronged men being ripped from the bosoms of their families, destined for servitude in a vile penitentiary.<ref>The Way We Live Now, Maggie Urry, ''[[Financial Times]]'', [[13 July]], [[2006]]</ref>}}
==Extradition controversy==
The extensive news coverage of the Three in Britain resulted in a large-scale debate over the merits of their extradition to the United States. In particular, a high profile campaign against the extradition was led by the ''[[The Daily Telegraph]]'' newspaper.<ref name="charter">{{cite news | date = [[2006-07-13]] | author = David Charter | title = PR machine wins bankers sympathy...for free | url =http://business.timesonline.co.uk/tol/business/law/corporate_law/article686919.ece | publisher = The Times | format = HTML | accessdate = 2006-07-17}}</ref> Several arguments were raised against the extradition.
===Jurisdiction argument===
It was argued that the crime was committed by [[United Kingdom|British]] citizens living in Britain against a British company based in [[London]], the nation's capital city and that, therefore, any resulting criminal case fell under British legal and territorial jurisdiction <ref>Randall, Jeff [http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=M3&xml=/money/2006/03/01/ccjeff01.xml Natwest Three caught on extradition's one-way street] The Daily Telegraph, [[01 March]] [[2006]]</ref> and should be tried by a British court.<ref>[http://news.bbc.co.uk/1/hi/uk_politics/5155596.stm Try Natwest three in UK - Tories] BBC News, [[06 July]] [[2006]] 17:23 [[BST]]</ref> However, British authorities decided not to prosecute because of lack of evidence.<ref>[http://news.bbc.co.uk/1/hi/business/4576281.stm Enron charge trio facing US trial] BBC News, [[24 May]] [[2005]] 16:04 [[BST]]</ref>
===Fair trial argument===
Some argued that it would be very difficult for Three to receive a fair trial in Texas. The case could have taken years to come to trial (the trial was scheduled to begin in September 2006, but was repeatedly postponed to January 2008). The three accused men would be forced to remain in the USA, far away from their families in the UK. Additionally, whilst on bail they would be unable to find gainful employment in order to fund a legal defence against the charges brought against them. (In fact the Three were permitted to seek employment in the US provided they remained in Houston. <ref name="remain"/>)
In addition, it was claimed that the defendants would be handicapped in preparing a defense because most of the evidence and witnesses were overseas in the UK. They argued that witnesses would be reluctant to come to Texas.<ref>{{cite news
|work=International Herald Tribune
|title=Lone Star limbo for the 'NatWest 3'
|date=2007-05-04
|url=http://www.iht.com/articles/2007/05/04/business/natwest.php
|accessdate=2008-04-13
|first=Kate
|last=Murphy
}}</ref>
===Extradition inequality argument===
It was alleged that the extradition arrangements between the U.S. and the UK are highly unequal. It is comparatively easy to extradite British citizens to America. In contrast it is difficult to extradite Americans to Britain -- for example there are still [[Provisional Irish Republican Army|PIRA]] terrorist members who fled to the USA in the 1980s after being accused of terrorist crimes who still cannot be extradited. <ref>{{cite news | date = [[2006-07-06]] | author = Tom Stevenson | title = Senior executives attack 'invidious, one-sided treaty' | url = http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/07/06/ccnat06.xml&menuId=242&sSheet=/money/2006/07/06/ixcoms.html | publisher = The Telegraph | format = HTML | accessdate = 2006-07-13}}</ref> There has been much criticism of the fact that the Americans do not have to produce a ''[[prima facie]]'' case - or even any "reasonable case"<ref>{{cite web | date = [[2006-07-04]] | title = Lib Dem leader joins bankers' extradition battle | url = http://politics.guardian.co.uk/foreignaffairs/story/0,,1812471,00.html | format = HTML | publisher = The Guardian | accessdate = 2006-07-13}}</ref> to extradite UK citizens, whereas there is no comparable facility to extradite U.S. citizens to the UK. Despite this, the head of Britain's [[Serious Fraud Office (UK)|Serious Fraud Office]], Robert Wardle, has claimed that there would have been enough evidence to extradite the Three to the US even under the old extradition arrangements. He expressed astonishment that the men had become a "[[cause celebre]]", and expressed confidence that the Three would get a fair trial in the US.<ref name="redhanded"/> Supporters of the Three claim that when the extradition law was passed in the wake of [[September 11, 2001 attacks|September 11]] the UK government stated that it was only to be used in the so-called [[War on Terrorism|war against terror]] ''and'' if the treaty was ratified by the US.<REF>{{cite news | date = [[2006-07-10]] | authoer = Graeme Wilson and Alec Russell | title = 11th-hour plea in battle of NatWest Three | url = http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2006/07/10/natwest10.xml&sSheet=/news/2006/07/10/ixuknews.html | format = HTML | publisher = The Telegraph | accessdate = 2006-07-13}}</ref>. However, neither of these conditions was written into the text of the extradition law, and neither had been fulfilled in the case of the Three at the time of their extradition (the treaty was subsequently ratified by the US in September 2006).
==House of Commons debate==
In a highly unusual move, the [[Speaker of the British House of Commons|Speaker of the House of Commons]], [[Michael Martin (politician)|Michael Martin]], allowed an emergency debate, on [[12 July]], [[2006]], on both the treaty and the 'Natwest Three' after a request by Liberal Democrat MP [[Nick Clegg]]. During the debate, news shocked the House that a former Royal Bank of Scotland executive and FBI prosecution witness [[Neil Coulbeck]] had been found dead, after committing [[suicide]] by slitting his wrists. It had been suggested by friends and family that the FBI 'hounded' him. At the inquest into his death, Mr Coulbeck's wife stated that he had been deeply disturbed by the extradition of the Three, and it was known that he had provided a crucial statement which in part led to their extradition. On the day of his death he tried to contact NatWest's lawyers and shortly after left his home and was found dead a few days later. <ref>{{cite news
|work=Daily Mail
|title=NatWest Three banker's suicide in the park
|date=2007-05-23
|url=http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=457212&in_page_id=1770
|accessdate=2008-04-13
}}
</ref>
<ref>{{cite web | date = [[2006-07-12]] | title = NatWest Three witness 'hounded' | url = http://www.guardian.co.uk/uklatest/story/0,,-5946722,00.html | format = HTML | publisher = The Guardian | accessdate = 2006-06-13}}</ref> The FBI denied this, saying that it had interviewed Coulbeck only once, four years earlier <ref name="redhanded"/>
Gary Mulgrew is the son of [[Trish Godman]], a [[Member of the Scottish Parliament]].
==See also==
* [[Babar Ahmad]]
* [[David Carruthers]]
* [[Peter Dicks]]
* [[Gary McKinnon]]
* [[Alex Stone]]
==References==
{{reflist}}
==Bibliography==
*{{cite book
|title=Enron: The Rise and Fall
|first=Loren
|last=Fox
|isbn=0471432202
|location=Hoboken, NJ
|publisher=Wiley
|year=2004
|url=http://books.google.com/books?id=3-qvLpoYXUIC
}}
*{{cite web
|date=2007-11-28
|title=Statement of Facts (Exhibit A to Plea Agreement, United States v. David Bermingham, Giles Darby and Gary Mulgrew)
|url=http://upload.wikimedia.org/wikipedia/commons/c/c9/NatWest_Three_David_Bermingham_Plea_Agr.pdf
|accessdate=2008-05-21
}}
==External links==
* [http://www.friendsextradited.org/ Friends Extradited], supporter website
* {{cite web | title = Text of the Extradition Act 2003 | url = http://www.opsi.gov.uk/acts/acts2003/20030041.htm | format = HTML | publisher = Office of Public Sector Information | accessdate = 2006-07-14}}
* [http://media.guardian.co.uk/presspublishing/story/0,,1813133,00.html Report on Telegraph support]
*[http://www.bop.gov/iloc2/InmateFinderServlet?Transaction=IDSearch&needingMoreList=false&IDType=IRN&IDNumber=66098-179&x=26&y=20 Inmate Tracker - shows Bermingham's current location within the Federal Bureau of Prisons system]
*[http://www.bop.gov/iloc2/InmateFinderServlet?Transaction=IDSearch&needingMoreList=false&IDType=IRN&IDNumber=66096-179&x=26&y=14 Inmate Tracker - shows Mulgrew's current location within the Federal Bureau of Prisons system]
*[http://www.bop.gov/iloc2/InmateFinderServlet?Transaction=IDSearch&needingMoreList=false&IDType=IRN&IDNumber=66097-179&x=31&y=13 Inmate Tracker - shows Darby's current location within the Federal Bureau of Prisons system]
[[Category:British fraudsters]]
[[Category:Enumerated defendants]]
[[Category:Enron]]
[[Category:Corporate crime]]
[[Category:Multiple people]]
[[Category:Living people]]