In the first post of this three part series about the scandal of the Post Office’s Horizon IT system I explained the concerns I had about the approach to errors and accuracy. In this post I’ll talk about my experience working as an IT auditor investigating frauds, and my strong disapproval for the way the Post Office investigated and prosecuted the Horizon cases.
Evidence, certainty and prosecuting fraud
Although I worked on many fraud cases that resulted in people going to prison I was never required to give evidence in person. This was because we built our case so meticulously, with an overwhelmingly compelling set of evidence, that the fraudsters always pleaded guilty rather than risk antagonising the court with a wholly unconvincing plea of innocence.
We always had to be aware of the need to find out what had happened, rather than simply to sift for evidence that supported our working hypothesis. We had to follow the trail of evidence, but remain constantly alert to the possibility we might miss vital, alternative routes that could lead to a different conclusion. It’s very easy to fall quickly into the mindset that the suspect is definitely guilty and ignore anything that might shake that belief. Working on these investigations gave me great sympathy for the police carrying out detective work. If you want to make any progress you can’t follow up everything, but you have to be aware of the significance of the choices you don’t make.
In these cases there was a clear and obvious distinction between the investigators and the prosecutors. We, the IT auditors, would do enough investigation for us to be confident we had the evidence to support a conviction. We would then present that package of evidence to the police, who were invariably happy to run with a case where someone else had done the leg work. The police would do some confirmatory investigation of their own, but it was our work that would put people in jail. The prosecution of the cases was the responsibility of the Crown Prosecution Service in England & Wales, and the Procurator Fiscal Service in Scotland. That separation of responsibilities helps to guard against some of the dangers that concerned me about bias during investigation.
This separation didn’t apply in the case of the Post Office, which for anachronistic, historical reasons, employs its own prosecutors. It also has its own investigation service. There’s nothing unusual about internal investigators, but when they are working with an in house prosecution service that creates the danger of unethical behaviour. In the case of the Post Office the conduct of prosecutions was disgraceful.
The usual practice was to charge a sub-postmaster with theft and false accounting, even if the suspect had flagged up a problem with the accounts and there was no evidence that he or she had benefitted from a theft, or even committed one. Under pressure sub-postmasters would usually accept a deal. The more serious charge of theft would be dropped if they pleaded guilty to false accounting, which would allow the Post Office to pursue them for the losses.
What made this practice shameful was that the Post Office knew it had no evidence for theft that would secure a conviction. This doesn’t seem to have troubled them. They knew the suspects were guilty. They were protecting the interests of the Post Office and the end justified the means.
The argument that the prosecution tactics were deplorable is being taken very seriously. The Criminal Cases Review Commission has referred 39 Horizon cases for appeal, on the grounds of “abuse of process” by the prosecution.
The approach taken by Post Office investigators and prosecutors was essentially to try and ignore the weakest points of their case, while concentrating on the strongest points. This strikes me as fundamentally wrong. It is unprofessional and unethical. It runs counter to my experience.
Although I was never called to appear as a witness in court, when I was assembling the evidence to be used in a fraud trial I always prepared on the assumption I would have to face a barrister, or advocate, who had been sufficiently well briefed to home in on any possible areas of doubt, or uncertainty. I had to be prepared to face an aggressive questioner who could understand where weak points might lie in the prosecution case. The main areas of concern were where it was theoretically possible that data might have been tampered with, or where it was possible that someone else had taken the actions that we were pinning on the accused. Our case was only as strong as the weakest link in the chain of evidence. I had to be ready to explain why the jury should be confident “beyond reasonable doubt” that the accused was guilty.
Yes, it was theoretically possible that a systems programmer could have bypassed access controls and tampered with the logs, but it was vanishingly unlikely that they could have set up a web of consistent evidence covering many applications over many months, even years, and that they could have done so without leaving any trace.
In any case, these sysprogs lacked the deep application knowledge required. Some applications developers, and the IT auditors, did have the application knowledge, but they lacked the necessary privileges to subvert access controls before tampering with evidence.
The source code and JCL decks for all the fraud detection programs would have been available to the defence so that an expert witness could dissect them. We not only had to do the job properly, we had to be confident we could justify our code in court.
Another theoretical possibility was that another employee had logged into the accused’s account to make fraudulent transactions, but we could match these transactions against network logs showing that the actions had always been taken from the terminal sitting on the accused’s desk during normal office hours. I could sit at my desk in head office and use a network monitoring tool to watch what a suspect was doing hundreds of mile away. In one case I heard a colleague mention that the police were trailing a suspect around Liverpool that afternoon. I told my colleague to get back to the cops and tell them they were following the wrong guy. Our man was sitting at his desk in Preston and I could see him working. Half an hour later the police phoned back to say we were right.
In any case, fanciful speculation that our evidence had been manufactured hit the problem of motive; the accused was invariably enjoying a lifestyle well beyond his or her salary, whereas those who might have tampered with evidence had nothing to gain and a secure job, pension and mortgage to lose.
I’ve tried to explain our mindset and thought processes so that you can understand why I was shocked to read about what happened at the Post Office. We investigated and prepared meticulously in case we had to appear in court. That level of professional preparation goes a long way to explaining why we were never called to give evidence. The fraudsters always put their hands up when they realised how strong the evidence was.
Superusers going “off piste”
One of the most contentious aspects of the Horizon case was the prevalence of Transaction Corrections, i.e. corrections applied centrally by IT support staff to correct errors. The Post Office seems to have regarded these as being a routine part of the system, in the wider sense of the word “system”. But it regarded them as being outside the scope of the technical Horizon system. They were just a routine, administrative matter.
I came across an astonishing phrase in the judgment [PDF, opens in new tab, see page 117], lifted from an internal Post Office document. “When we go off piste we use APPSUP”. That is a powerful user privilege which allows users to do virtually anything. It was intended “for unenvisaged ad-hoc live amendment” of data. It had been used on average about once a day, and was assigned on a permanent basis to the ID’s of all the IT support staff looking after Horizon.
I’m not sure readers will realise how shocking the phrase “off piste” is in that context to someone with solid IT audit experience in a respectable financial services company. Picture the reaction of of a schools inspector coming across an email saying “our teachers are all tooled up with Kalashnikovs in case things get wild in the playground”. It’s not just a question of users holding a superuser privilege all the time, bad though that is. It reveals a lot about the organisation and its systems if staff have to jump in and change live data routinely. An IT shop that can’t control superusers effectively probably doesn’t control much. It’s basic.
Where I worked as an IT auditor nobody was allowed to have an account with which they could create, amend or delete production data. There were elaborate controls applied whenever an ad hoc or emergency change had to be made. We had to be confident in the integrity of our data. If we’d discovered staff having permanent update access to live data, for when they went “off piste”, we’d have raised the roof and wouldn’t have eased off till the matter was fully resolved. And if the company had been facing a court action that was centred on how confident we could be in our systems and data we’d have argued strongly that we should cut our losses and settle once we were aware of the “off piste” problem.
Were the Post Office’s internal auditors aware of this? Yes, but they clearly did nothing. If I hadn’t discovered that powerful user privileges were out of control on the first day of a two day, high level, IT installation audit I’d have been embarrassed. It’s that basic. However, the Post Office’s internal auditors don’t have the excuse of incompetence. The problem was flagged up by the external auditors Ernst & Young in 2011. If internal audit was unaware of a problem raised by the external auditors they were stealing their salaries.
The only times when work has ever affected my sleep have been when I knew that the police were going to launch dawn raids on suspects’ houses. I would lie in bed thinking about the quality of the evidence I’d gathered. Had I got it all? Had I missed anything? Could I rely on the data and the systems? I worried because I knew that people were going to have the police hammering on their their front doors at 6 o’clock in the morning.
I am appalled that Post Office investigators and prosecutors could approach fraud investigations with the attitude “what can we do to get a conviction?”. They pursued the sub-postmasters aggressively, knowing the weaknesses in Horizon and the Post Office; that was disgraceful.
In the final post in this series I’ll look further at the role of internal audit, how it should be independent and its role in keeping an eye on risk. In all those respects the Post Office’s internal auditors have fallen short.