The Serious Fraud Office is fighting for its very life. It's hard to imagine it's the same agency that recently made headlines with dawn arrests of property tycoons Robert and Vincent Tchenguiz and five other men, and raids on their offices. Difficult, too, when you consider the SFO is due to begin one of its most high-profile trials ever in October, of the former Polly Peck chief and fugitive from justice for many years, Asil Nadir.
Scarcely believable, as well, given the SFO conviction rate has risen from a poor 62% to a creditable 90% in the past few years. Its workload has also shot up - from 63 cases in 2006-07 to just over 100 on its books at present. Yet, within Whitehall, there is a determined move afoot to break up the watchdog and fold its investigative activities into the National Crime Agency when that new body gets underway and also to hand its prosecution function to the Crown Prosecution Service.
Originally, the plan was to create a new Economic Crime Agency, putting the SFO and the enforcement sections of the Financial Services Authority and Office of Fair Trading together in the same super-agency.
But the FSA managed to cling on to market abuse and insider trading after a ferocious rearguard action. The reaction among officials was to propose abandoning the Economic Crime Agency before it was born and to carve up the SFO's remit - putting investigations into the National Crime Agency and prosecutions into the Crown Prosecution Service.
This has prompted SFO chief Richard Alderman to mount a stirring defence. 'My view is that the prosecution-led approach with integrated teams of lawyers and investigators is needed in this very specialist and complex area. No evidence has been produced to show that separating investigators and prosecutors will improve the approach to complex economic crime. In my view, the effect will be damaging.'
The truth is there has always been something in the British mindset that doesn't take white-collar crime as seriously as other crimes. This is disputed by the authorities, naturally, but you only have to compare this country with others, notably the US, where the sight of executive felons being led away in chains is commonplace. There, if found guilty, they receive long sentences (Bernie Madoff is doing 150 years). Here, we're more laid-back.
And, often to the fury of US investigators, who point out that New York and London are of similar size in terms of business activity and occupy identical positions in the international firmament, the Manhattan courts are crowded with large-scale fraud cases; here they remain rare. Are we to imagine that American businesspeople are more crooked than their Brit counterparts? Or, do we have a very different, hands-off approach?
The SFO is based in an anonymous office block off Gray's Inn Road in London. With its low-key lack of grandeur and tucked-away position, Elm House says much about how fraud prosecution is regarded. Some countries site their SFO equivalents in large, unmissable premises. Not in the UK.
Its director is pleasant and clever, blessed with a sharp mind and able to argue his corner. But Alderman is also understated in that very British manner - a high-profile, tough-talking Eliot Ness figure he is not. Indeed, when Alderman publicly went on the offensive, he soon came unstuck. Having said he would charge BAE Systems with bribery and seek to recover £1bn in compensation, he ended up accepting a £30m penalty and a guilty plea to a minor accounting offence over the sale of radars to Tanzania. Not for the first time, the monicker of Serious Farce Office was applied.
Such criticism, say those close to Alderman, is unfair. What we saw then was the UK end - the SFO was also working with the Americans on another BAE case in central and eastern Europe. And that resulted in fines totalling more than £280m in the US.
Alderman and his colleagues go into battle weakened. In the BAE case, for instance, they found themselves locked in a fire-fight with the company that went on for years (five in all). When the final settlement came, Alderman would have liked a judge to have ruled on the punishment - to say loudly and publicly that in their view it was the best that could be achieved for the authorities. That option wasn't available to him, and instead a combination of BAE public relations and unfounded comment did its worst.
A former barrister who specialised in tax prosecutions for the Inland Revenue, Alderman is no stick-in-the-mud. He has been a surprisingly pragmatic head of the SFO. He's keen, for instance, to bring the US system of deferred prosecutions of corporations to the UK and is pressing the Government to make the change.
What he'd like is for companies to own up, pay restitution and move on - and not for both company and the SFO to become bogged down in a tit-for-tat legal struggle. If they re-offend then the case will be prosecuted. Otherwise, it remains deferred. That's a much quicker, smarter system than having investigations that drag on for years while the company operates under a cloud and the only people who make money from the tortuous process are the lawyers.
In the US, they use deferred prosecutions as a matter of course. Not here. Alderman is pushing for a speedier clear-up rate and has scored notable success in this regard. He has brought down the length of time from when the SFO is called in to someone being charged from four years to just over a year. His aim is for 15 months on top of that as the time it takes from someone being charged until trial.
He has also been keen to open a dialogue with business, to get it to air its concerns and to refer suspected fraud instances to the SFO - an initiative that has been well received by companies. In the past, there was a mental barrier between the SFO and the City and business, and consequently many frauds were not dealt with in the criminal courts.
When the new Bribery Act comes into force, Alderman wants companies to turn to the SFO for guidance and advice. Far from being an obstacle to commercial life in the UK the legislation should be viewed as a prop, he says - for the first time, the SFO can follow up claims of fraud levelled at foreign firms with offices here which have committed fraud in order to win an order over a British rival.
Alderman has been criticised for being too willing to do deals with firms - in the case of Innospec, the chemicals company, a judge ruled that the SFO had overstepped the mark to become judge as well as prosecutor.
Morale at the SFO has been a cause for concern. A recent internal staff survey highlighted a number of questions. But that is not earth-shattering either, because of the backdrop of uncertainty and structural change and the lack of cash.
Not surprisingly, the watchdog has struggled to hang on to senior staff. Less than three weeks after the Tchenguiz raids, Mick Randall, the SFO case officer in charge of the inquiry, resigned.
Randall was not alone: in all, six senior SFO staff members, including the heads of policy and anti-corruption, have also quit in the past few months. Kathleen Harris, the SFO's head of policy, went to US law firm Arnold & Porter; the chief information officer Josh Ellis moved to Goldman Sachs; the anti-corruption chief Robert Amaee left for Covington & Burling; Charlie Monteith who oversaw the SFO's involvement in the drafting of the new Bribery Act, was off to White & Case, and experienced investigator Kwadjo Adjepong also departed for the private sector. The SFO's budget has been slashed, by 26% since 2008-2009, to £39.5m, and by another 25% to £30.5m, by 2014-2015.
Law firms moving into the fraud investigation area are able to pick off their choice recruits one by one. That's understood to be the case with Randall. He was leading the Tchenguiz investigation but his departure had been in the pipeline for a while. 'It's got absolutely nothing to do with the case or how well that is going,' said an SFO source.
'The arrests and searches were planned some time ago. It was always known that he would carry them through then leave.'
At the time of writing, Randall is still there - he did not go straightaway and is working out his notice. 'It's his choice. He wants to go. His plan is to go into private practice,' said the source.
Relations between Alderman and some of his colleagues have never been comfortable. Things had become so bad at the SFO that, before his arrival, the body was made the subject of an unprecedented review by former New York lawyer Jessica De Grazia - she was asked by the attorney general to look at the SFO's operations.
What she found was an inefficient old boys' club with a heavy drinking culture. When he came in, Alderman cracked down heavily. He also altered how investigations were viewed, so the SFO focuses on the victims of fraud and getting justice for them - and recovering their lost cash. As well as the BAE and Tchenguiz investigations, Alderman has a third case underway which has attracted much publicity - and upon which much of the SFO's battered reputation similarly depends. This is the pursuit of Nadir. Over decades, the ex-Polly Peck boss stayed holed up in northern Cyprus, after fleeing there to avoid prosecution.
He made repeated noises about returning one day. He never did, but when it was suggested the authorities would not resist bail, Nadir decided to chance his arm and fly back. He maintains his innocence and he may also have been taking a calculated gamble - that witnesses have died or grown a lot older, that the SFO could have lost some of its evidence, that there wasn't the stomach for a scrap and if he should be found guilty, at his age the sentence he received would be greatly reduced.
There are those who criticise Alderman for allowing the bail card to be played. They reckon the SFO could come to regret the move and it would have been far better if Nadir had remained a wanted man rather than someone who may walk free when the trial eventually gets underway.
That, though, is not how others view it. For them, Nadir's escape and his presence in northern Cyprus was a blight on the SFO, a constant reminder of an especially embarrassing chapter in its history. This way, win or lose, there will at last be closure.
The Nadir trial, when it starts, will also highlight once again the difficulty we have in dealing with allegations of fraud. The trial will drag on for months and it will be heard by a jury. Alderman is a defender of our traditional system, believing that juries have an instinctive ability to determine if a witness is telling the truth. But, while he is deciding what tactic to adopt against Nadir, Alderman must battle for the future existence of his organisation. Ministers stress their minds are not made up and there has not been any singling out of the SFO, that the slashing of the budget is not sinister but in line with the austerity measures imposed on other public services.
The omens are not good. Alderman is basing his case on the specialised nature of the SFO's work - arguing that the CPS staff are not experienced in complex fraud.
He has a point: in the US, they have lawyers working alongside investigators to enforce their bribery and corruption laws - the Department of Justice is also investigator and prosecutor. 'It's the best model. We want to replicate the DoJ,' said an SFO insider.
In other words, Alderman would like us to become more like the US in how we investigate and prosecute fraud. For those who have criticised our approach to financial crime as being too soft and not American enough, that is music to their ears.
But if the roles are separated and the SFO is disbanded they will see that as further evidence of our absence of seriousness - another sign that we lag behind the US.
Whoever wins, one thing is sure: Alderman will not be around next year - he is due to retire in 2012 when he reaches 60.