May 2, 2007
Will Lord Browne Be Prosecuted For Perjury?
The resignation of BP p.l.c. CEO Lord John Browne included his admission that he made a false statement to a British court in order to obtain an injunction preventing the publication of an embarrassing story about a personal relationship. In a statement (here) acknowledging the relationship, Lord Browne stated, "My initial witness statements, however, contained an untruthful account about how I first met Jeff. This account, prompted by my embarrassment and shock at the revelations, is a matter of deep regret. It was retracted and corrected. I have apologised unreservedly, and do so again today." He denied allegations that he allowed the person to use company resources, and BP's chairman stated that "[a]t John's explicit request, the Board instigated a review of the evidence. That review concluded that the allegations of misuse of company assets and resources were unfounded or insubstantive." I'm not sure what "insubstantive" means, although perhaps the point is the amount is insignificant and so should not be a concern to shareholders. The problem for the company is that related-party transactions must be disclosed, and any misuse of corporate resources can be a significant concern for regulators.
The British tabloid that broke the story, The Mail on Sunday, issued a statement (here) assailing Lord Browne: "That Lord Browne should have felt free to lie deliberately and repeatedly raises deeply worrying questions about the system of secret court hearings which is increasingly being used by the rich and powerful to prevent the public knowing the truth about their activities." The paper said it would make its evidence available to the Attorney-General for possible prosecution for perjury. The governing statute is the Perjury Act of 1911, which makes it a crime for a witness in a judicial proceeding to "make a statement material in that proceeding, which he knows to be false or does not believe to be true . . . ." That provision is similar to the federal perjury statute in 18 U.S.C. Sec 1621, which makes it a crime to testify about a matter "which he does not believe to be true." Lord Browne's explanation for making the false statement does not negate the intent for perjury, because a violation is based on knowledge of the falsity of the statement, not that the witness had a good explanation for lying. That said, Lord Browne is a highly-regarded business person, and the underlying story has at best a tenuous connection to BP's business, so it may be one prosecutors decide to pass on. (ph)
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