Jeremy Warner's Outlook: It may be good business for BP to support Rosneft, but a line has to be drawn somewhere

Sources in MI6 have been good enough to forward me the transcripts to a phone tap they have been conducting at BP's head office in London. I faithfully reproduce one of them below.

"Ah, John. Or should I say Lord John. Privet. Vlad here. We are in a spot of difficulty over our Rosneft flotation, which your free British press is trashing on the grounds that we stole the assets from that vloody man, Khodorkovsky. I told them all, those vloody oligarchs. Pay your taxes, don't kick against me and you'll be OK. He broke the two rules so he rots in Siberia.

"You would do well to remember this, John. You and me, we have an understanding. We like you John, very, very much. But you know they have a saying in Italy which is that in the Mafia there are no favours, only debts. Ha, ha. Only shoking. It was a big favour I paid you when I let you into Russia. I am sure you will not forget this. It would be helpful, John, if you let your interest in the Rosneft flotation be known. The weather in Siberia at this time of year can be particularly unpleasant. Stifling heat, lots of flies. Not fit for humans. Do the right thing, John. Dasvidanya."

BP insisted yesterday that it was still making up its mind on whether to invest in the Rosneft flotation. Advisers to the float were nonetheless more than happy to let the story take flight that BP had already signed a non binding agreement to participate. Whether it is true or not scarcely seemed to matter. The float needed another shot in the arm and this might just do the trick.

OK, so reports of arm twisting are almost certainly exaggerated. Nothing as crude as the telephone call reported above would ever have taken place. Yet oil is a dirty business in more ways than one, and securing supply has a tendency to require dirty deals in dirty places. When Lord Browne of Madingley, the chief executive of BP, bought into Russia, it was an incredibly gutsy deal, the more so as he'd tried once before and ended up having his pocket felt. So far, it's been second time lucky. BP's Russian troubleshooting has paid off handsomely. Yet keeping the Russians sweet must in itself be a full-time job.

Does this run to having to help out in the Rosneft flotation? Whatever Lord Browne's views on the morality of this giant IPO, the real politik of the oil business suggests powerfully that it might. Rosneft is damaged goods. The legitimacy of its business is being challenged right, left and centre.

It is not clear that investors should ever buy into assets which have in essence been stolen from others, in this case, the jailed oligarch Mikhail Khodorkovsky. The manner in which Rosneft was formed owes more to Russia's totalitarian past than the democratic future it aspires to. Mr Khodorkovsky's treatment at the hands of the Putin regime has and continues to be treated as a gross abuse of human rights.

By buying into Rosneft, BP would lend legitimacy to these acts of barbarism. Can Lord Browne afford to be so amoral in his approach? The dictates of his business say that he must, and indeed that he should, for to include Russia is eventually to make its practices more acceptable. But as he signs over the cheque, Lord Browne should dwell long and hard on the image of a hunched, physically abused figure of a man - Mikhail Khodorkovsky, broken and without hope as he serves out his time in a Siberian prison cell. Sweet dreams, as the man who put him there might say.

Why Blair won't give ground on NW3

Ken Lay, the former Enron chairman, has perhaps hit on the only truly guaranteed way of escaping the long arm of the US law - keel over and die. That's, of course, unless the Bush administration hasn't already managed to sign an extradition treaty with the Devil, which should never altogether be discounted, allowing US prosecutors to reach out and snatch Mr Lay from beyond the grave to answer for his role in the Enron scandal. Mr Lay has been tried and convicted, but his death has denied prosecutors the satisfaction of retribution. He wasn't due to be sentenced until October.

None of this helps the NatWest 3, whose hopes of escaping extradition to the US on Enron related charges, must by now be non existent. The top drawer industrialists who yesterday weighed in on their behalf are to be congratulated on their stance. Many of them have extensive interests in the US, so to stand up and be counted in this way is not without its risks.

The treaty agreed in the wake of the terrorist atrocities of 9/11 is a disgraceful piece of legislation which has signed away ancient freedoms and rights to a foreign power and can only be explained by Downing Street's unquestioning support for all that comes out of the White House. In this regard, as in so many others, the Blair government has become little more than George Bush's poodle.

Yet the business leaders - Sir Christopher Gent, chairman of GlaxoSmithKline, and Sir John Sunderland, chairman of Cadbury Schweppes, among others - make a common mistake in a key part of their argument. This is the misapprehension that since the crime was allegedly committed against a British bank, with all the main evidence and witnesses in the UK, it should be tried here if anywhere at all.

Even a cursory reading of the indictment reveals this to be far from the case. If anyone was defrauded, it was Enron, not NatWest, and indeed this is essentially what US prosecutors argued in the extradition proceedings. The details of the prosecution case bear some repeating, for what is being alleged is not some unfortunate accounting muddle, as implied in the supportive articles penned in defence of the NatWest 3, but a straight fingers-in-the-till exercise.

The indictment sets out a chilling account of events. NatWest held a minority interest in a Cayman Islands subsidiary of Enron which became known as Swap Sub. This interest was valued by the NatWest 3 at $1m, a sum eventually accepted by NatWest as consideration for the stake. The three bankers and acquaintances of theirs at Enron had meanwhile acquired options to buy into the company themselves. Enron later paid over $30m in the belief that this was what had been negotiated with NatWest for its stake in the company. In essence, $30m had been paid for something which in fact had been sold for $1m.

The option was then exercised, allowing the NatWest Three and their partners at Enron to pocket the difference. Quite who knew what and when is crucial both to prosecution and defence, but on the face of it, there is little doubt that there is a case to answer here. Given that it was Enron that supplied the money, that case must logically lie in the US.

The seriousness of the allegations have rather been forgotten in all the jumping on high horses about points of principle and the erosion of ancient British liberties. And it is why politically, the Blair government may well be right not to give ground. Interestingly, David Cameron's Tories have yet to swing full square behind the cause of the NatWest 3. This is because they know that it's both a sticky wicket and outside the chattering classes an issue which holds little resonance on the streets of Britain. To the contrary, many would take the view that this is probably just three fat cats getting their just desserts.

No politician can credibly expect to apply a zero tolerance approach to street crime if he is also seen to be soft on middle-class people accused of white collar theft. Post Enron, the Americans get this point in a way which large parts of the British establishment still seem unable to. If they are to survive, free market democracies cannot afford to have one law for the poor and another for the rich. Punishment must be handed down in equal measure.

Looking back on the safe harbour offered by the US against extradition for some of the most bloody terrorists of the 20th century, the routine way in which the present treaty is being used to extradite alleged white collar criminals on the slimmest possible of evidence fair makes the blood boil. Yet if there is a case to answer, it should be answered.

j.warner@independent.co.uk