The hearing involving Gerald James, former chairman at Astra Holdings, not only plunged the Joint Disciplinary Scheme into the heart of the arms-to-Iraq affair, but also created a new controversy over disciplinary tribunals being held in public. In an unprecedented move, tribunal chairman Roger Henderson QC, opened the hearing to the press. Although Chris Dickson, executive counsel of the JDS, insisted the move created no precedent, the action re-opens the question over whether hearings should be opened up or kept well and truly behind closed doors. At the heart of the James case is an accusation that he fell ‘below the standard of conduct reasonably to be expected of a member of the ICA’ by creating and funding a false invoice for £240,000. He was also charged with failing to cooperate with the DTI inspectors and refusing to cooperate with the JDS executive counsel. All three complaints were found proven and he now faces possible unlimited fines and costs of up to £135,000. James was chairman at Astra, a company implicated in the arms-to-Iraq scandal which was investigated by the Scott inquiry. But for accountants across the country, and especially the English ICA, the issue that will have them gripped is opening the hearing up to the press. James’ case may be exceptional but the question is one which has been addressed in the past, critically in the Beloff report for the English ICA which recommended open hearings. Ironically, the measure was defeated by a meeting of the institute council behind closed doors, but for Peter Mitchell, chairman of the Small Practitioners Association, who lobbied against open hearings, the latest move in the James case will come as a bad omen. Mitchell’s concern revolves around open hearings forever marring the reputation of accountants facing only minor offences and certainly not guilty of malicious intent. Such offences merit only an ‘unpublicised caution’ according to Mitchell who has also called for ‘helping hands’ rather than ‘reprimands’. He said: ‘We are not talking about criminal offences. We are talking about issues where there is no public interest.’ The institute is waiting to see whether the JDS continues to hold open meetings before revisiting the issue of whether it should open up its own. ACCA, however, has already settled the matter. Andrew Harding, head of professional standards at ACCA, says having disciplinary hearings in public is an issue of ‘openness, transparency and justice being seen to be done for the complainant and the accountant’. Indeed, ACCA is out alone as the only professional body currently holding hearings in the open, though Harding believes it will become unavoidable for other bodies when the European Convention on human rights comes into force next year. Harding believes ACCA has ways to avoid being heavy-handed and has built-in powers to close hearings to the public, though it has only done that once since opening them up in May 1996. However, Harding says: ‘The principle has to be applied consistently. We regard publicity as naturally following a finding of misconduct.’ Last week Gerald James was happy to have his hearing in public. He believes he is being ‘persecuted’ and wants all his evidence available for public scrutiny. It remains to be seen whether other members of the profession will feel the same. GERALD JAMES: MY TEN YEARS OF PERSECUTION. Though Gerald James, a former chairman of arms dealer Astra Holdings, was accused of falsifying an invoice to make up a shortfall in forecast pre-tax profits, what emerged during the hearing of his response was a string of allegations involving an intelligence service spy, MI5 and MI6 interference and the paying of ‘secret commissions’, writes Gavin Hinks. Through his lawyer, Richard Johnson, James, an English ICA member, let loose a barrage of allegations to explain why he would make no ‘plea’ or a defence of any substance. He claimed documents crucial to James’ defence were still being withheld by the DTI. Without them James said he could not defend himself. The next step was an attempt to show that a DTI report published in 1993, which formed a central plank of the JDS case against James, was flawed because allegations made by James of intelligence service interference in the affairs of Astra, were never investigated by the department’s inspectors. Evidence was produced which he claimed demonstrated this meddling. The first was a schedule of what were described as ‘secret’ commissions dated 1 June, 1986, and amounting to a total of £398,000 in relation to work done in places including Indonesia, Malaysia, Nigeria and Abu Dhabi. James denied knowledge of the commissions but they may account for the shortfall in profit. Next, Johnson produced a bundle of internal memos said to be from both MI5 and MI6 and referring to meetings with Stephan Kock – code name 1779 as he is referred to – a non-executive director at Astra. Although the DTI attempted to have James and other board members disqualified as company directors, Kock was never the subject of any such action. In one document the handler refers to Kock as ‘Mr Clean’ and describes his efforts to shift the Astra board and even obtain a DTI inquiry. Last year, Margaret Beckett halted the DTI action to have James and three other Astra directors disqualified. After last week’s hearing he faces expulsion from the ICA and thousands of pounds in costs. James remains convinced he is being victimised. ‘I’ve been persecuted for ten years,’ he said last week. ‘This is just another step in that persecution.’
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