How did we get hold of the Sandstorm Report?

The Sandstorm Report (code name for BCCI) is publicly available in the USA even though the UK government regards it as a state secret and a highly confidential document.

After the closure of BCCI by the Bank of England in July 1991, the US Senate Committee on Foreign Relations led by Senators John Kerry and Hank Brown conducted an investigation into the BCCI affair. Its report (The BCCI Affair) was published in December 1992. On page 53, the report notes that

“The Sandstorm Report was provided to the Subcommittee solely in a heavily censured form by the Federal Reserve at the insistence of the Bank of England, which forbade the Federal Reserve from providing a clean copy of the report to the Congress on the ostensible ground that to do so would violate British secrecy and confidentiality laws. Later, shortly before the conclusion of the preparation of this report in late August 1992, the Subcommittee obtained an uncensored version of the report from a former BCCI official, which revealed criminality on an even wider scale than set forth in the censored version”.

The Sandstorm Report was commissioned by the Bank of England. It was the final act in the closure of BCCI. It was prepared by Price Waterhouse. The cost is borne by the public at large.

Under the USA’s ‘freedom of information’ laws, the censored copy supplied by the Bank of England is publicly available. AABA has placed this version on the internet. This version of the Sandstorm Report is incomplete. A number of pages are missing. Some details (names, amounts) have been blanked out whilst others are illegible. The poor quality of the original document has to be seen to be believed. Some example of international co-operation and the UK’s government’s determination to fight organized financial crime!!

The UK government already keeps the public in the dark. For example, the results of investigations carried out under Section 447 of the Companies Act 1985 are not published. The publication of the results of other investigations (e.g. Section 432 of the Companies Act 1985) are dependent on Ministerial discretion. A large number of reports have neither been published nor presented to Parliament (for details see, Sikka, P. And Willmott, H., Illuminating the State-Profession Relationship: Accountants Acting as Department of Trade and Industry Investigators, Critical Perspectives on Accounting,, Vol. 6, No. 4, 1995, pages 341-369). In addition, no report on any investigations carried out under the Insurance companies Act 1982 or the Financial Services Act 1986 are published. None of these reports or the Sandstorm Report would be published even if the government’s recent proposals on ‘freedom of information’ were fully implemented. Meanwhile, Parliament is supposed to blindly scrutinize and enact financial legislation (e.g. relating to the Financial Services Agency), without becoming aware of the past failures and shortcomings, and the public is expected to protect itself from financial crime.