We Won't Go: British Bankers and Enron

In the morning of June 28 2002, David Bermingham was in bed at home in Oxfordshire. It was 6.45am, and he was feeding a bottle of milk to his three-month-old son, Archie. He was also watching the BBC breakfast news – from which he learned that the US Justice Department intended to prosecute him for fraud.

He went looking for his wife in the bathroom. “I walked in with Archie and said, ‘Emma, I have to go to London,’” he recalls. “She said, ‘Why?’ And I said, ‘Come and watch the news.’”

That same day, Giles Darby was staying with friends in Wiltshire. “Somebody phoned and said we should watch the news – because I was on it.” He too was being sought by the American prosecutors. He went into a daze, he says. “As far as we knew we might be on a plane to the US the very next day. I spent the day going round winding up my affairs – as much as that’s possible in such a short period.”

Some time afterwards, Gary Mulgrew, a friend and former colleague of Bermingham and Darby, was chatting to a neighbour in Brighton. The neighbour told Mulgrew about a conversation she’d had with Mulgrew’s eight-year-old son. The boy had said that some Americans were coming after his dad. But it was all right, the boy assured her, because he kept a spear under his bed with which to protect his father.

After hearing that, Mulgrew went inside his house and climbed the stairs to his son’s room. He got down on his knees and looked under the bed, where he did indeed find a small spear. At this point, Mulgrew choked up.

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Bermingham, Mulgrew and Darby – all aged 42 – worked at NatWest’s investment banking division in the late 1990s. They were very different from one another.

A former colleague once said of them that Mulgrew, the team leader, was the type who would say “kick the door down”. Darby, his energetic deputy, would kick it till it broke. And Bermingham, the technical wiz, would offer the key to the door.

Bermingham, who has tidy features and silvery hair, is the quietest of the three. But get him started on his legal case and his eyes sparkle as he throws out arguments and detailed research. He attended a private school for Catholic boys and afterwards studied law. Sponsored through university by the army, he took a commission in the artillery after graduating and served for five years; he still retains something of the upright military bearing. At 27, having reached the rank of captain, he decided he must either leave at once or stay for the rest of his working life.

“I really wanted to run my own business,” he recalls, “but I didn’t know how. So I looked for companies that would provide a good business training.” He joined the graduate scheme at NatWest.

Moving to London, he soon found himself hard up: in the army he’d paid little tax and enjoyed free accommodation. “I was in debt fairly frequently. Not big debt, but I couldn’t go out. I had to sell the car.” He also initially found the workplace culture alienating. “I couldn’t cope with the fact that so many people reported sick on Mondays and Fridays. In the army there was a sick parade in the medical centre at 6am. If you were suffering from a hangover that just wasn’t good enough.”

But the money gradually improved and he found himself absorbed in work that he enjoyed: creating “products” (innovative financing mechanisms, taking advantage of discrepancies between tax regimes) to sell to corporate clients.

“It was right up my street. The learning curve was almost vertical. There were some very talented people in the department and I soaked it up like a sponge.”

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The regular working day was from 8am to 7pm, but like many others in the City, he routinely stayed up all night. “It’s amazing how many deals get signed at 4am.”

He grew to like the people he worked with. “It was like a village within the City. A number of banks do this work and everyone knew each other. It attracted people with a particular mindset – lateral thinkers with a warped sense of humour. A fun bunch, gregarious.”

But Bermingham found NatWest’s management oppressively hierarchical. “There were an awful lot of people above us, adding nothing and getting paid for our efforts.” In 1993 he left to run a group at another bank. Five years later, in November 1998, he was invited back by Darby, who’d left NatWest around the same time as Bermingham but rejoined in 1997.

“Giles rang and said, ‘You’d love it here. It’s changed… ’”

NatWest had overhauled its investment banking division, merging it with an American bond boutique, Greenwich Capital. The management structure was flattened. In charge of the 250-strong worldwide group was Mulgrew, who’d known Darby since they first worked together in the late 1980s. They were close friends, each man godfather to one of the other’s children.

Darby joined NatWest aged 18 to work as a cashier at the bank’s high-street branch in sleepy Trowbridge, Wiltshire, and gradually worked his way into investment banking in the City. Married with five daughters, Darby has white hair but retains the chunky body of an active rugby player – Mulgrew, less flattering, describes him as having “a round head on a round body”.

A natural salesman, Darby can build a rapport with practically anybody; in conversation, he calls everybody “mate”.

Mulgrew, darker-haired and taller than the others, has the kind of squishy nose you might find on a boxer. He’s the third son in a Catholic family from Glasgow.

Their father left home when Mulgrew was three, and for four years after that, their mother finding it hard to bring them up alone, they lived in a children’s home. (“But we were all right because we did have a mother,” he says.) He next saw his father when he was 11.

“He was quite a successful businessman, living in England. So I grew up with this strange contrast between Glasgow poverty and those holidays with my dad and his Lamborghini.” Mulgrew studied business at Strathclyde University, paying his way by working as, among other things, a nightclub bouncer. He joined NatWest immediately after.

He worked for a while in Japan and travelled extensively putting together deals in emerging markets. Then NatWest sponsored him through an MBA and sent him to work in New York. In the late 1990s Mulgrew was centrally involved in setting up Greenwich NatWest, as the most senior figure on the NatWest side.

Like anybody else working at that level at such a bank, Mulgrew was earning about £1m a year.

When Bermingham rejoined the other two at NatWest, in 1998, the market was booming. There were plenty of deals, not least in the energy sector. One company that kept the bank busy was Enron, the US energy conglomerate. “I had never heard of them before,” Bermingham recalls. “Many are the nights I wake up wishing I never did.”

Mulgrew’s team first worked with Enron and with its chief financial officer, Andrew Fastow, on the company’s takeover of Wessex Water. “People forget now how lauded Enron was,” Mulgrew says. “It was seen as cutting edge. Banks would work with them for the intellectual property – because a lot of the structures they came up with themselves. They were at the forefront of the market.” Enron’s most favoured banks, including NatWest, could each expect to bring in fees of about $20m a year. “Fastow is an extremely intelligent guy,” says Mulgrew. “He really stood out. But he could be really aggressive. Not usually to me but perhaps to Giles – and I’d have encouraged that.” (Mulgrew and Darby have the kind of friendship that allows deliberately undermining each other in public.)

Early in 2000, NatWest was fighting takeover attempts from both the Bank of Scotland and the Royal Bank of Scotland. The future of the investment banking division looked uncertain. Both Scottish banks indicated that they would sell all or part of the division. “It was a nightmare,” Mulgrew remembers. “Investment banks are all about the people who work in them, and the only way to keep people is to keep them happy.”

How do you do that? “When you get caught up in the City merry-go-round,” Darby explains, “you focus on one thing only – the annual bonus. Everyone is jostling to be on the deal team because the more deals you have worked on the more you can say you have contributed to the bonus pot.” But clients, put off by the takeover battle, were not bringing in new work. So, to enlarge the pool of funds available for paying bonuses to staff who might otherwise leave, Mulgrew set about selling off assets. He also decided that his own future lay elsewhere – as did Bermingham and Darby.

What happened next is complicated – and open to a variety of interpretations.

But essentially it went like this: Fastow phoned Mulgrew at the end of February, offering $1m for NatWest’s stake in an off-shore tax vehicle known as SwapSUB that had been set up in partnership with Enron some time before. (Another investment bank, Credit Suisse First Boston, had a stake in SwapSUB too, the same size as NatWest’s). Mulgrew told Fastow that, because of the takeover bid, NatWest would need the money by the end of March. Then he told his bosses about the offer, and with their permission sold NatWest’s stake for $1m – to another offshore vehicle, controlled by Fastow, called Southampton.

Some days later, Southampton paid $10m to CSFB for its identical stake in SwapSUB. A month later, on the day after Bermingham left NatWest, he bought for himself and on behalf of Darby and Mulgrew a share in Southampton for $251,993. Then – all three having by now left the bank – Southampton sold SwapSUB, its only asset, to Enron. The three men’s share of the proceeds was $7.3m.

That’s quite a return.

To an outsider, one interpretation of this was that Bermingham, Darby and Mulgrew may have defrauded their former employer – by persuading it to accept too little for its asset, then making a huge profit on the same asset themselves. That’s certainly what American prosecutors believe. (The three men deny it, saying that Fastow offered them the private investment only after NatWest had agreed to sell.)

In the months after the three men left NatWest, Enron continued to close deals with an assortment of banks – including RBS, which by this time had taken over NatWest. Those deals have subsequently been criticised and have led to civil litigation. Neal Batson, the independent examiner appointed by the US Federal Bankruptcy Court to look into Enron’s collapse, would put it like this, some months later, in Appendix E of his lengthy report: “RBS and Enron worked together on [three so-called ETOL transactions, relating to Enron Teesside Operations Ltd, a subsidiary of Enron Europe]… in which RBS received verbal assurances of repayment that were at odds with the requirements of the applicable accounting rules.”

But none of Enron’s deals – not the ETOL transactions nor the earlier one involving Bermingham, Darby and Mulgrew – came under Batson’s forensic scrutiny until after December 2001, when Enron filed for bankruptcy. Bermingham, in London, read Enron’s filing on Bloomberg: the company had restated its accounts with the Securities and Exchange Commission, announced that a number of deals had been accounted for incorrectly, and that several employees had been sacked. The company’s statement did not mention SwapSUB or Southampton by name, but one of the sacked executives, Ben Glisan, was an investor in Southampton. Bermingham says his instant reaction was “Jesus Christ!”. He phoned Mulgrew, then in Toronto, and told him to look at Bloomberg too.

By this time, having closed their deal with Fastow and deposited the proceeds in their personal accounts – with NatWest, as it happens, in two cases – Mulgrew, Bermingham and Darby had joined Royal Bank of Canada in London. Bermingham and Mulgrew went separately to see the compliance department (Darby was travelling). “We said, ‘Look, this looks like fraud. What do we do?’” remembers Bermingham.

The US Securities and Exchange Commission had launched an accounting investigation – not, at that stage, a criminal one – and when Mulgrew returned to London a week later, the three went to the SEC’s British counterpart, the Financial Services Authority, believing they could help.

Mulgrew remembers meeting a team whose cards identified them as “enforcer”. The man in charge had a card that read “chief enforcer” and his card was additionally embossed. (These details amused Mulgrew at the time. They don’t any more.)

The conversation, which was taped, lasted several hours. “We went through the whole thing,” says Bermingham. “We gave them everything, including a transaction description that I had written as an aide-memoire. They said, ‘It’s fantastic that you have come in. We’ll speak to the SEC and if they want to get in touch with you they will.’ And they said they [the FSA] would do their own investigation.”

That seemed to be the end of that. For Mulgrew, it was bad enough. “We’d been involved in a dodgy deal. I was paid a lot of money to be better than that. I thought it was the end of my career.”

He resigned from Royal Bank of Canada, soon afterwards describing himself on the Friends Reunited website as “an unemployed house-husband”. The others resigned too. Darby bought into an engineering business in Wiltshire. Bermingham decided to try his hand at film finance. These new occupations gave the men some perspective from which to see the work they had previously been doing.

Darby, looking back on the “feverish, bonus-led culture” at NatWest, says he has discussed it many times with his wife, and reached this conclusion about investment banking: “It does not make you a nicer person. You get absorbed by greed. You fail to see the important things in life – your family and friends and your health. The desire to get the next cheque is all-embracing. Looking back, I can see that I lived on adrenalin and excitement. But I was hardly ever at home, hardly ever saw the kids. I’m certainly not proud of that, and my wife certainly wasn’t ecstatic. Now, I can look back and think, ‘Thank heavens it’s all changed.’”

But that sense of relief was brief, because the FSA soon afterwards asked for the men’s permission to forward the information they had supplied to the SEC.

They agreed, and that same information later comprised the bulk of evidence against them in the American indictment of wire fraud (sending faxes and e-mails across US borders in a scheme to defraud), alongside copies of e-mails supplied to the US authorities by RBS and a statement from an Enron executive. The indictment does make a persuasive case against them.

The e-mails in which the men discussed enriching themselves are particularly unedifying. In one, Bermingham writes about the private investment to the other two: “I will be the first to be delighted if [Fastow] has found a way to lock it [$40m] in and steal a large portion himself… We should be able to appeal to his greed.”

“It’s a masterpiece,” Bermingham concedes. “The way it’s presented, anyone reading it will think, ‘These guys are guilty.’ Even I thought I was guilty when I read it,” he adds. Mulgrew, in a separate conversation, says exactly the same.

Since the case has come to light, the question of the Enron Three’s guilt or innocence has been, to a large extent, beside the point. What is most interesting about the case is that here are three Britons who are alleged to have committed a crime in Britain in which the victim (NatWest, now RBS) is British, but who face being sent for trial in Texas under an extradition treaty agreed between the US and the UK as part of the “global war on terror”.

The practice of extradition is relatively old, though the term itself did not appear in English legal treaties until 1843. For a long time, the Old Testament was deemed to forbid it: “You shall not give up to his master the servant who has fled [from his master] to you” (Deuteronomy). But as long ago as 1174 the kings of England and Scotland agreed to exchange criminals who fled one country to the other.

Five hundred years later, after the Restoration of the monarchy, Charles II persuaded Denmark to surrender various men involved in the execution of his father, Charles I – but failed to secure agreement from Switzerland.

The first treaty covering such exchange between Great Britain and the United States of America was signed in 1792. Since then, there have been a number of other agreements, each of them throwing up awkward issues that threatened good diplomatic relations. In the 1820s, for example, after slavery had been abolished in Britain, the House of Lords decided it would be wrong to return runaway slaves to the US.

And the US has never freely handed over people suspected of terrorist activities in Ireland.

The latest treaty covering extradition between Britain and the US was negotiated in the aftermath of the 9/11 terrorist attacks. The result was an agreement that allowed the US to request individuals for extradition without even supplying prima facie evidence against them. The contrary does not apply: British authorities must still supply a case against American citizens, nor will Britain send Americans to the International Criminal Court, which the US does not recognise.

As the treaty was going through parliament in 2003 to be enshrined as law, a few MPs spoke against it, but without effect. After it was passed, Charles Kennedy, leader of the Liberal Democrats, said: “The home secretary seems to make a habit of ignoring parliament when it suits him. [This] legislation should be properly debated, not slipped through in the pre-Christmas rush.”

As it happens, the US has still not ratified the treaty in the Senate – not least because American civil liberties groups fiercely oppose taking decisions from the courts and handing them to government. But the British parliament has enshrined as law a treaty that not only seems less advantageous to Britain than to the US but also compares unfavourably with similar treaties between the US and other European countries.

Bermingham has drawn up a table of bilateral treaties between the US and 119 other countries. (“That’s how pathetic I am,” he smiles.) He gives me a copy.

“Not a single country has more onerous provisions on its citizens than the UK, with respect to the US,” he says. France, for instance, will not hand over its own nationals to the US but undertakes to try them at home where appropriate. Thus Roman Polanski, the film director charged with statutory rape in the US, remains in France because he enjoys French nationality.

To understand why the Enron Three were charged in the US it may help to consider the timing. After Enron went bust, the Department of Justice launched a criminal investigation in January 2002, appointing a group of prosecutors to form a specialised Enron task force in Washington. Practically every Enron executive and external adviser potentially involved in the investigation pleaded the Fifth Amendment: they were saying nothing.

Consequently the task force had made little progress when, nearly six months later, an even greater corporate failure occurred: on June 26 the biggest bankruptcy in US history saw WorldCom go bust, amid accusations of massive fraud.

This did not look good. Shares on Wall Street fell substantially, contributing to the growing post-bubble gloom enveloping the US economy. The following day, at a meeting of the Group of Eight, US president George W. Bush said the seeming proliferation of corporate crimes was putting the economy at risk. To Bush’s embarrassment, Russia’s president Vladimir Putin was likewise moved to express concern.

This considerably raised the pressure on the Enron task force to get some convictions. The day after, the task force announced charges against Bermingham, Darby and Mulgrew.

Each man separately engaged an American attorney (joint representation is prohibited, to avoid potential conflicts of interest). Without ever meeting their clients face to face, the attorneys went to see the task force, then reported back. As Mulgrew remembers it, the task force told them, “We are not talking unless your clients plead guilty and co-operate.”

The attraction of plea-bargaining, from the point of view of the accused, is that it ensures a limit on the sentence. The alternative is horrific. Federal sentencing guidelines could result in these men serving up to 35 years inside, with no parole. Judges award additional time in jail to defendants who plead innocent and give testimony in their own defence, because this is regarded as perjury.

To avoid this eventuality, many defendants prefer not to say anything at all.

The courts in Washington state have ruled that these sentencing guidelines are unconstitutional, and no longer use them. (The matter is going for review to the US Supreme Court.) But Texas still uses federal sentencing guidelines, so Bermingham, Darby and Mulgrew, if convicted, could be into their 70s by the time they come out.

As Mark Spragg, the lawyer representing all three men in the UK, argues, the US Department of Justice indicted his clients and sought their extradition as much as anything to intimidate them into giving much needed evidence about Enron executives. “If you bully people and frighten them enough,” he says, “they wet themselves. It’s a form of torture. In Britain we do not recognise the idea of putting pressure on people in this way.”

It must have crossed the minds of the three men to take up the task force’s offer: to plea-bargain and to give evidence against each other and against Enron executives such as Fastow, against the former president, chief executive and chief operating officer Jeffrey Skilling and even against the chairman, Ken Lay.

“We were given the opportunity,” says Mulgrew. “We were offered a deal. And I know now that [Fastow] has done a lot of bad stuff.” (Fastow, like Glisan, has pleaded guilty to criminal charges.) “But I liked him and I genuinely feel sorry for him – though that’s not going to make me popular. I would not want to stand up in court and perjure myself. I have never met Lay – and Skilling only a couple of times. My attorney encouraged me to take this seriously. I said it would take 10 seconds. The answer was no.”

It is easy to understand why the Enron task force charged the men, but why didn’t the British authorities take action?

Could it be, simply, that the British authorities do not wish to upset their American counterparts? According to this line of thought, just as Tony Blair is George Bush’s poodle, so the FSA must be considered poodle to the SEC, and the Serious Fraud Office trots daintily at the heels of the Department of Justice.

But does that stand scrutiny? On August 16, the US government went to court in London to begin proceedings on the extradition to the US of Abu Hamza, formerly imam at Finsbury Park mosque. The US hoped to try him on terrorist charges. But 11 days later Hamza, a British citizen, was arrested by British police on suspicion of terrorism offences.

The British case takes precedence over the extradition proceedings – which suggests that the British authorities are prepared to frustrate their American counterparts occasionally.

Or does it? Could it be that the British arrested Hamza precisely in order to save American embarrassment in the extradition proceedings? Shortly beforehand, the American attorney-general, John Ashcroft, had made the mistake of mentioning that Hamza could face the death penalty, which Britain does not recognise and would in itself constitute a reason for blocking Hamza’s extradition.

Thus, paradoxically, the type of individual who occupied the minds of British parliamentarians who consented to the new extradition law – an alleged terrorist – has been kept from American justice, while three former investment bankers are being rushed through the new fast-track extradition procedures.

More executives could follow. Alun Jones QC, the barrister representing Bermingham, Darby and Mulgrew, is aware of four other men, senior figures in industry and the City, who have sought legal advice relating to potential extradition requests for conduct in the UK.

Mulgrew believes that just about anybody working in the City could be targeted by American prosecutors eager to make their names. “If you send an e-mail [on what turns out to be a contentious matter] from London to Edinburgh via a [US-based] Cisco server… you’re fucked. All it needs is an aggressive prosecutor. They don’t even need any prima facie evidence.”

Anybody in Britain who feels a chill upon reading that sentence must hope that Bermingham, Darby and Mulgrew succeed in providing a strong precedent against extradition under the new treaty.

So why, given the nature of the charges – and the fact that so much of the evidence came from the FSA – does the FSA not pursue them itself? Why does the British taxpayer fund all those enforcers if they do not actually enforce? And can it really be sensible for the FSA to throw off responsibility for people who came voluntarily to provide help? Does it suppose anybody else will risk doing that in future?

The answer, according to director of enforcement Andrew Proctor, is that the FSA is restricted by statute to investigating and prosecuting a narrow range of offences, which can be characterised as having more to do with financial services regulation than fraud. It is, in addition, permitted to help overseas regulators – and that is exactly what it did after the three men came in to provide information.

What about the Serious Fraud Office?

Immediately before the three men’s extradition hearing in London at the end of September, the SFO’s director, Robert Wardle, sent a letter to the Crown Prosecution Service affirming that he did not intend to investigate their case. “The other participants in the alleged conspiracy [including Fastow] are to be dealt with in, and are available to give evidence in, the United States,” he wrote.

That letter persuaded the judge to allow the extradition: “Of course these defendants could have been tried here,” Judge Nicholas Evans said in his judgment, “but it would seem they are not going to be.” He observed that there was “a good and proper basis for prosecuting them in the US. The US wants to prosecute them in the US. The process of extradition is necessary in a democratic society and proportionate.”

One of the consequences is that it will be harder for the men to mount a defence: from a Texan jail, they will be able only to request certain documents from NatWest rather than subpoena the lot (as they could if they were tried in Britain).

“Even if I’m found innocent in Texas,” Mulgrew concludes, “I’d be ruined. How would I fund the case? To get witnesses there from England, I’d have to pay their tickets. Some of them don’t know me. Are they going to come over? No chance. And I would not be able to subpoena them. And the ones who did come, I would have to buy them open airline tickets because you don’t know when they would be called… I’d be better off walking into a police station in England and saying I’m guilty. I would do two years in an open prison [in the UK].”

Equally surprising is the RBS’s failure to start proceedings against the three former employees. Lawyers representing Bermingham, Darby and Mulgrew have written asking the bank to launch such proceedings if it sees grounds, or else to make clear that it regards them as blameless.

“We’ve begged Fred Goodwin [the bank’s chief executive],” says Bermingham. “‘For God’s sake get off the fence!’” In reply, they received a somewhat non-commital letter from RBS’s lawyers: “Our client continues to reserve all rights which it may have against your clients.”

Does RBS feel that the men did not defraud it after all? The Batson report shows that CSFB, before securing $10m for its own, identical stake in SwapSUB, valued it at just less than $3m. So perhaps RBS considers the $1m paid by Southampton to be satisfactory.

But that can’t be right: because the bank could save its former employees a lot of trouble by saying so and it has not done so.

For the bank, the extradition case is an embarrassment. Batson was outspoken in his criticism of the ETOL deals that RBS transacted after the departure of Bermingham, Darby and Mulgrew. In his conclusion he wrote that the evidence he had seen was “sufficient… to conclude that RBS aided and abetted Enron officers in breaching their fiduciary duties”. Based on the evidence in Batson’s report, a group of Enron shareholders has already started a civil action against RBS (and others), accusing the bank of helping Enron executives to falsify financial statements.

When I asked RBS for further comment, a spokesman would say only this: “Serious allegations of criminal conduct have been made against these three ex-NatWest bankers. We are not yet aware of all the facts and evidence. Accordingly we have pursued the appropriate course, namely to reserve our rights against the three, to monitor the criminal proceedings closely and to determine what action, if any, would be appropriate in light of the final outcome.”

On November 26, lawyers representing Bermingham, Darby and Mulgrew submitted papers to the home secretary, David Blunkett, containing an array of reasons why the extradition should not be allowed. The home secretary is likely to make a decision in February, on a case that will set an important precedent.

Meanwhile others have got involved, conscious that the case has wider repercussions for all British citizens. One is Liberty, an independent organisation based in south London, which works to promote human rights and protect civil liberties through test-case lit

igation and lobbying. While the extradition bill was going through parliament, Liberty had argued strenuously that the fast-track procedures offered insufficient protection. In response, home office minister John Denham promised that judges would be obliged to consider whether extradition complied with the European Convention on Human Rights.

If a case could be brought in the UK, Liberty believes, extradition would interfere with the right to respect for private and family life (Article 8). And the case of the Enron Three offered a chance to set a precedent on this matter. If the home secretary declines to intervene on the men’s behalf, Liberty intends to join them in pursuing the matter in higher courts.

Mulgrew, who went to see Liberty, did not expect the organisation to be particularly interested in his case. “We understand that we are not sympathetic to the mainstream. We are three ex-City bankers. There is a view that there is no smoke without fire, you don’t make as much money as we did without doing something bad.”

In fact, Liberty welcomed him. After all, cases involving people from ethnic minorities can be even harder to promote in the mainstream media. To put that another way, three rich bankers may not appeal to everybody, but they’re probably less loathed than Abu Hamza.

Senior members of parliament have rallied around the men. Like Liberty, most MPs avoid taking a view on the alleged fraud – they have no idea whether the three are guilty – but they do not believe they should be extradited.

Bermingham’s MP, Boris Johnson, has put down a motion calling for the government to defer all extraditions until the US ratifies the treaty, and to require prima facie evidence from the US authorities in each case.

Friends have established a website, www.friendsextradited.org, which sets out the issues and invites comments from supporters. One, from Darby’s nephew, reads: “Please help him and the other two because I couldn’t stand seeing anything bad happen to him so please anyone, everyone please help!!!”

Another supporter is an American who has lived in the UK for five years and knows Bermingham’s wife. Shannon Stegeman says she was wary at first, because by instinct she wanted to defend her own country. “But seeing the way the case has evolved, I’ve been disgusted. If an American was waiting to be extradited to the UK, there would be so much outrage – it just wouldn’t happen. If the two countries have such a wonderful relationship as we hear, this is a terrible example of that. It’s just so one-sided.”

It is possible that none of these developments will save the three, who remain in a state of great uncertainty. Mulgrew has sought assurances that nobody will come to his house early in the morning to arrest him, but no assurances were given. “So I had to tell my son that there might be some people coming to the house. And I’ve had a suit packed and ready for months.”

Meanwhile, the men get on with everyday life.

Darby continues to manage his engineering firm. “It’s doing all right,” he says. “Not great, but it ain’t losing money.” Mulgrew runs a construction business in Brighton. Bermingham still works in film, as a consultant to producers whose names he asks me not to publish: “They’ve been incredibly good to me, when other people would have dropped me.”

One significant hardship, he adds, has been staying away from friends and former colleagues who might conceivably be needed as defence witnesses.

Whatever the three men have done, they say, turned out to be wrong. Not just investing in Southampton, but also speaking voluntarily to the FSA about it. “Every American lawyer I have spoken to,” says Mulgrew, “has said we were fucking insane to give that evidence… I had to laugh when I heard [an Enron executive] talking about how he smashed up his computer and shredded all his documents.”

Throughout their ordeal, the three have stuck by each other.

Each has come under pressure to plea-bargain and provide evidence against the other two. So far, none has done that. It is impossible to say whether extradition will drive them apart, but Darby says that’s unlikely. “I don’t see how one of us can get off. Either we all did this, or we didn’t. The allegation is that we undersold this. It’s impossible to see how one of us can say, ‘Those two did it, and I didn’t.’”

The other men, likewise, insist they will stick together. “It’s not about trusting the other guys not to turn on me,” says Mulgrew. “It’s the principle. I wouldn’t perjure myself against anyone. I wouldn’t do it to Fastow. And I wouldn’t do it to you.”

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