Campaign wrong to bank on NatWest Three

London Briefing:In a Texas courtroom last week, three British bankers finally admitted their part in the web of deception that brought down US energy giant Enron six years ago.

David Bermingham, Giles Darby and Gary Mulgrew - the so-called NatWest Three - pleaded guilty to a $20 million fraud cooked up with Enron's former chief financial officer, Andrew Fastow, and his colleague Michael Kopper.

The millionaire bankers persuaded their former employer, NatWest, to sell its interest in an Enron business - Cayman Islands-based Swap Sub - for just $1 million.

What NatWest didn't know was that the stake was worth far, far more, and that it was bought by a company secretly set up by Fastow. It was swiftly sold on to Enron for $20 million, netting a profit of more than $7 million for the three dishonest bankers. They quit their jobs shortly after the illegal deal.

Fastow is now serving a six-year jail sentence in the US, and the NatWest Three will soon be joining him inside, although, thanks to the plea-bargain deal agreed with the US authorities last week, they are expected to serve much of their time in a UK jail.

Thus Bermingham, Darby and Mulgrew join the ranks of crooks that have been caught with their fingers in the corporate till. For years, however, and despite some damming evidence against them, they had protested their innocence, fighting a high-profile battle against extradition to the US.

They were keen not to be tried in Houston, home to Enron, where thousands of employees lost their jobs when the company collapsed.

Led by the Daily Telegraph, the campaign to save the NatWest Three being exported to the US to face justice there won support from leading figures in the British business community, including GlaxoSmithKline chairman Sir Christopher Gent; British Airways chairman Martin Broughton; Chris Gibson-Smith of the London Stock Exchange; Icap's Michael Spencer, retail billionaire Sir Philip Green and former CBI boss Lord Digby Jones, now trade minister.

They were joined by dozens of others, including the human rights group Liberty. Petitions were drawn up and there was even a march on Westminster.

But as the bankers admitted their guilt in Houston last week, there was a deafening silence from their former supporters back in Britain. Those who could be persuaded to talk insisted that the campaign centred on the inequity of the controversial extradition arrangements between the US and the UK, rather than the innocence or guilt of greedy bankers.

The campaign for a fairer deal with the US, which under the Extradition Act 2003 can use hearsay rather than firm evidence to extradite while the UK must show "probable cause", has been set back by its association with the NatWest Three. Even without the benefit of hindsight, the bankers always had a case to answer. Indeed, one of the defendants, Bermingham, admitted at one stage that the deal looked "really smelly" and that they made for unsympathetic victims. Anyone reading the indictment would, he conceded, think: "'These guys are guilty.' Even I thought I was guilty when I read it."

The guilty men are now each expected to serve three years and one month in jail and must repay the proceeds of the fraud to their former employer, now part of Royal Bank of Scotland.

Their former supporters, meanwhile, are left looking embarrassingly gullible - it may be some time before they get whipped up into a frenzy of indignation before examining the facts a little more closely.

Retail warning

Christmas 2007 will be the traditional white-knuckle ride for Britain's retailers, with dire warnings of the worst festive spend in decades as shoppers leaving their purchases until the 11th hour in the hope of picking up some bargains.

This year, though, the nerves are more frayed than usual. Jewellery group Signet (Ernest Jones and H Samuel) has already warned on profits and there have been gloomy forecasts for 2008 from a number of other store groups, including electricals retailer DSG International, which owns Dixons, Comet and PC World.

In the end, whether or not the Bank of England cuts interest rates tomorrow, Christmas spending will almost certainly hit a new record once again this year.

But the festive cheer will not be evenly spread - the online retailers will take a bigger share and those retailers who fail to hold the line on prices before the big day will see their margins suffer accordingly.

As usual, then, there will be winners and losers on the high street this Christmas. But the one thing that they are already all agreed on is that it will be very much tougher again next year.

Fiona Walsh writes for the Guardian newspaper in London