Serious Fraud Office will have ‘extensive powers’

Press, 5 December 1989, Page 8

Serious Fraud Office will have ‘extensive powers’

By

PATTRICK SMELLIE

in Wellington

People under investigation by the Serious Fraud Office will lose the basic constitutional right not to incriminate themselves, the Prime Minister, Mr Palmer, said yesterday. Legislation to establish the office passed through the Cabinet yesterday and is expected in Parliament before Christmas. The new law would require people subject to S.F.O. investigation to answer questions. “It therefore removes to that extent the privilege against selfincrimination,” he said. This is equivalent to the inalienable right enshrined in the Fifth Amendment of the United States constitution. The office would also be given extensive powers of search and entry, Mr Palmer said. “It will be quite controversial in the sense of the powers which

it gives. But the Government is convinced that those powers are necessary if we are going to effectively detect and prosecute fraud."

The complex “paper trials” in commercial frauds made them “notoriously difficult to prosecute,” Mr Palmer said.

The president of the Auckland Council for Civil Liberties, Mr Barry Wilson, said the removal of the privilege against selfincrimination was worrying because it could become “the thin edge of the wedge.”

"The Government has to demonstrate quite clearly that it. is necessary to remove that requirement to effectively enforce the law,” he said. “I don’t think they have done that.”

But an Auckland University law professor, Mr Grant Hammond, said recent large-scale fraud cases in New Zealand

made such powers justifiable. “If you have the view that there has been widespread and deeply rooted commercial wrongdoing, then you do need those powers to get at them,” he said.

“At the end of the day it’s value judgment as to whether you think such powers are necessary or not. “On the whole, I think the Government is probably right in this instance.”

Recent judgments in commercial fraud cases had been tending towards extending the powers of judges and investigators to ensure the preservation and obtaining of evidence. Mr Wilson said the only other area where the privilege against self-incrimination was breached was in the case of mandatory breath-testing. The S.F.O. legislation was modelled on British law, Mr Palmer said.