Nick Clegg to face questions in ENRC Court action
When Miriam González Durántez joined her husband Sir Nick Clegg in California, little did they think that their past lives would follow them. After all, they had both taken on exciting new roles. The UK’s former Deputy Prime Minister had joined Facebook in Palo Alto, as head of global affairs and communications while his wife had recently left Dechert to become a partner at Cohen & Gresser (C&G), a boutique international law firm. But an application by Eurasian Natural Resources Corporation (ENRC) in the Northern District Court of California, where the Cleggs now live, has brought their past back into the spotlight. The application was for discovery ‘directed at Sir Nicholas William Peter Clegg’ in relation to ‘a foreign judicial proceeding in the United Kingdom’.
So why is ENRC interested in Clegg’s private correspondence when he was in government? In 2011, ENRC instructed Dechert to conduct a fact-finding investigation into a whistleblower’s allegations of corruption and financial wrongdoing within one of its Kazakh subsidiaries. Having been engaged in dialogue with ENRC since August 2011, the SFO commenced a criminal investigation into allegations of fraud, bribery and corruption relating to the acquisition of substantial mineral assets in April 2013. Six years on, no charges have been brought.
Clegg’s alleged connection to the case comes through his wife, who advised ENRC. Gonzalez joined Dechert in October 2011 and began working on the ENRC matter in January 2012. In the interim, in December 2011, Mark Thompson of the SFO wrote to the Foreign & Commonwealth Office, responding to a request for a briefing on ‘any investigation by the SFO into the above company [ENRC] in anticipation of a possible question for the Deputy Prime Minister’.
In July 2012, an anonymous whistleblower letter was sent to the Director of the SFO, alleging that Neil Gerrard ‘claimed that via Miriam Gonzalez his legal partner he had direct access to Nick Clegg and the heads of many European governments. He had the ability to influence and in some cases change government policy’. ENRC is seeking testimony and discovery from Clegg ‘to establish whether Gerrard abused his relationship with Clegg with respect to ENRC’.
Papers filed by ENRC supporting its application claim ‘strong evidence’ that González Durántez and/or Gerrard ‘was in communication with Clegg concerning ENRC as part of Gerrard’s scheme to expand the scope of Dechert’s investigation and thereby increase the fees that Dechert was able to charge’.
They also reveal that Clegg himself submitted the information request to the Foreign & Commonwealth Office concerning the SFO inquiry into ENRC in December 2011. The SFO’s briefing in response gave Clegg a detailed summary of the case and warned it ‘regards its dealings with ENRC plc as confidential… the SFO response to any public or press enquiries has been and remains to neither confirm nor deny any investigation is taking place.’ In spite of the request being in anticipation of a possible question for the Deputy Prime Minister, Clegg was never asked nor did he table any questions about ENRC.
According to protocol, questions relating to the SFO should be directed to the Attorney General’s (AG’s) office. Clegg is accused of flouting this by sending his request to the SFO via the Foreign Office. The Ministerial Code states: ‘It is the personal responsibility of each Minister to decide whether and what action is needed to avoid a conflict or the perception of a conflict [of interest].’ ENRC’s application asserts that ‘There was a clear conflict of interest as a result of Mr Clegg’s wife’s role at Dechert.’ The argument put forward is that Clegg may have breached the Code by making contact.
A US hearing on the application was filed in February. If successful, it could force Clegg to answer questions on the record in relation to his decision to bypass the AG’s office.
Unusually, and despite not being a party to the US proceedings, González Durántez has recently posted an open letter on Instagram addressed to Viscount Rothermere, chairman of Daily Mail and General Trust (DMGT), which first covered this story in its newspapers. In an extraordinary post, she vehemently denies all allegations, launches a valiant defence of her husband, and makes a vigorous attack on the conduct of DMGT newspapers and their journalists.
She has also posted a reply to Clegg from the Cabinet Office – which includes typographical errors – indicating that ‘We can find no record of you (Clegg) having asked for or received briefing in Eurasia Natural Resources Company.’
However, this ‘comprehensive file search of records’ of four government departments – the Cabinet Office, the SFO, the AG’s office and the Foreign and Commonwealth Office – was completed remarkably quickly, in only eight working days.
Clegg has instructed Skadden Arps on this matter while Dechert has filed an application to intervene. It seems that ENRC’s allegations have set hares running on both sides of the Atlantic.
Dominic Carman, journalist, writer and legal commentator.