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SFO exit payments intended to avoid litigation, Alderman tells parliament

Richard Alderman, former director of the U.K. Serious Fraud OfficeA U.K. parliamentary committee criticized former director Richard Alderman’s sloppy handling of exit payments of £15,000 to two former staff but found no intentional wrongdoing.

Members of the Public Accounts Committee said last week that Alderman failed to obtain government approval for the severance awards.

Alderman told the lawmakers he believed that as ‘accounting officer’ for the SFO he could authorize the payments. And he thought final government approval from outside the SFO had been obtained.

He said the payments made just before his own departure from the SFO in April last year were intended to avoid civil service litigation with the two former staffers.

During Alderman’s tenure as director, British politicians often opposed the Serious Fraud Office and its aggressive prosecution of overseas bribery. MPs reduced the agency’s funding and proposed dismantling it.

Alderman told parliament last week the payments to ex-CEO Philippa Williamson and another staff member were far less than the government’s potential claim exposure, according to advice from the SFO’s outside counsel.

‘I acted on the basis that these issues were for my judgment as accounting officer,’ Alderman said in prepared submissions. ‘I formed the best view that I was able to make about the strength of the claims and the prospects of success’ by the staff members.

After offering the two civil servants £5,000 each, Alderman testified, they demanded a further £10,000 to settle all claims.

‘I agreed to this because I believed that their claims had merit and were likely to be successful,’ Alderman said.

The U.K. law firm Farrer & Co had advised that a court would award damages of £72,000 to Williamson, Alderman testified.

He said he believed full government approval had been obtained. Otherwise, he said, he didn’t understand how the payments could have been made.

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