Monday, 30 November 2015

Christian Integrity (Dec 2015-Jan 2016)

Good Practice Across Sectors
Being Your Best or Your Worst?

“This is a world that is not seeing the best of human nature."
Margaret Chan, Director General of WHO, 12 November 2015
“The Sustainable Development Goals and the Game Change in Global Health,” Graduate Institute, Geneva

 This entry continues the emphasis on practicing the highest standards of transparency and accountability in the international church-mission community (CMC). It provides new resources from five different sectors to support good governance and anti-corruption efforts (judicial, United Nations, humanitarian, NGO, and business sectors). It also gives updates on the international Nordic Capital Investment KB et al. fraud (NCI): specifically the recent exchanges with Youth for Christ International in response to the request for assistance from the Shine the Light—Together (STL) petition and its signatories. Building on Dr. Chan’s comment above, we ask this question: Will the world see the best or the worst of human nature in the CMC’s response to NCI and the STL petition?

Part One: NCI Updates
---It has been over eight years since the NCI fraud began to be publically confronted (2007).  At that time, organizations and people affected began to be asked for assistance through disclosures, transparency, and accountability. Thousands of pages of documents from the Swedish court case were made available to the public in 2010 and 2011.  

--It has been over one year since four of the organizations included in the Shine the Light—Together petition and several of their leaders were formally presented with the petition and the names/comments of its over 100 signatories (August 2014). The organizations are Youth With A Mission, Mercy Ships, Youth for Christ, and Crossroads Chruch in Ferney-Voltaie, France. Previous entries have discussed this further and included links to the names of current leaders and Board members.

--Two organizations have responded so far, with one person in each organization doing internal research and offering some brief summary statements and general assurances (Mercy Ships International in 2014 and Youth for Christ International (recently, 2015). The specific, long-standing, and court-documented concerns however, have yet to be clearly addressed via verifiable disclosures and independent investigations. 
-- Earlier this year, Youth for Christ International (YFCI) did archival research about how it may have been affected by NCI. As seen in the paper trail (pages 19-31), a brief summary letter about this research was sent to a senior YFC leader in April 2015. Later that month, this leader sent the brief summary letter to an obsolete email address of a PETRA People Network member.  The mistake was eventually discovered by the leader and the letter was resent in early October 2015.

--This research by YFCI is appreciated. However, and as stated in the 15 November 2015 response to YFCI (see paper trail starting on page 26), it falls very short of the good practice standards that are relevant for situations like this and as requested in the STL petition: conduct thorough internal and independent investigations, verifiably disclose, and address the specific concerns about YFC Switzerland’s connections with a major NCI promoter (as per documents in the Swedish court case).  As noted in the 15 November 2015 response to YFCI:
"One of the major problems in this entire protracted scandal is that ‘internal’ individuals have covered bases in order to conceal the truth, and court papers shine light on this. There has also been no overseeing regulatory organisation, or advising body, with a backbone to coordinate an independent investigation, including the investigation of the discrediting and dismissing of those that have asked for transparency and accountability (a term now coined ‘whistleblower’ in a positive light) - a huge problem in the CMC. I have found that so many individuals know each other and cover for each other, so that it is impossible to find the truth. An independent investigation is sorely needed, and certainly in addition to the Swedish court case which focused primarily on one person. This case very helpfully exposed a lot of the paper trails and boxes of information are sitting in Sweden.” (pp. 28-29)
--We believe this is an important opportunity for YFCI to take the next important step in good practice: Authorize an independent review—for its own sake as well as for the sake of the CMC and the general public. Although it has taken several years to get this far, this respected organization can helpfully model good financial practice and integrity that is sorely needed. We encourage YFCI, as we do all the organizations and people affected by NCI, to pursue the highest standards of transparency and accountability. We encourage them to act beyond reproach so that the world can see the best of human nature in its actions.

Part Two: Multi-Sectoral Resources
This section includes materials from the judicial, United Nations, humanitarian, NGO, and business sectors. The materials offer perspectives, current cases, and guidance on good financial practice. As you will see from the excerpts below, the materials are relevant for understanding the global context of corruption and for dealing with fraud cases such as NCI. Building upon the two main resources in the previous entry (from the Lausanne Movement and the United Nations), these materials collectively call people, organizations, and governments to resolutely prevent and confront corruption in all of its forms (not just financial corruption) and to act with the highest levels of integrity. We also encourage you to do the same.
 1. Judicial
Lessons from the City Harvest Church (CHC) Case, Singapore
--A Culture Where Asking Difficult Questions Was Taboo (article), AsiaOne‎ (26 October 2015) “…six CHC leaders were convicted of varying counts of criminal breach of trust and/or falsification of accounts….At the centre of their offences lie the illegal methods in which the Crossover Project - fronted by Kong's wife, Ms Ho Yeow Sun, to evangelise through her pop music career - was financed. Following whistle-blower Roland Poon's allegations that church funds went into Ms Ho's albums, Kong decided to keep the financing of the Crossover Project "discreet"."This was merely a euphemism for a culture of insecurity mired in secrecy and opaqueness where asking difficult or awkward questions was taboo," said Judge See. He added that the accused chose to fall back on their biases, beliefs and the people they trusted.
 Judge See said: "The more committed the five accused persons (other than Kong Hee) became to the Crossover vision, the more obedient they became. They fell within the 'circle of trust' which enjoins those who are trusted and trusting to commit themselves unquestioningly to support the cause. "But when they go further to convince themselves that the end justifies the means, and consciously choose to support both the means and the end, and play an active role in executing those means, their conduct can only be characterised not merely as being misguided but dishonest."

 Judge See brought up the ring of Gyges—a mythical artefact mentioned by Greek philosopher Plato that grants its owner the power to become invisible at will–to illustrate the cover-ups that the CHC leaders were guilty of. "The allure of power that can be exercised in secrecy is difficult to resist. When shrouded under a cloak of invisibility, much like the mythical ring of Gyges, persons in such positions of power have no fear of accountability and tend to become their own worst enemies."It has thus been wisely said that the real tragedy is when men are afraid of the light, and if they choose not to come into the light, they do so for fear that their deeds will be exposed, as they surely will in time," he said.”

See also:
--Judge Convicts All Six City Harvest Church Leaders (article) The Online Citizen (22 October 2015)
--CHC Slammed for 'Secrecy, Culture of inseciurity (article), Singapore Law Watch (23 October 2015)
--Integrity Should Never be Thrown Out for Expediency, Pragmatism (oped) Singapore Straits Forum (25 October 2015)

 2. United Nations
--United Nations Office on Drugs and Crime. Click HERE to access the TRACK Portal and Anti-Corruption Library, including the UN Convention Against Corruption. “Corruption is a complex social, political and economic phenomenon that affects all countries. Corruption undermines democratic institutions, slows economic development and contributes to governmental instability. Corruption attacks the foundation of democratic institutions by distorting electoral processes, perverting the rule of law and creating bureaucratic quagmires whose only reason for existing is the soliciting of bribes. Economic development is stunted because foreign direct investment is discouraged and small businesses within the country often find it impossible to overcome the "start-up costs" required because of corruption.”
--See the short statement on The Sustainable Developoment Goals: Steering the United Nations Towards 2030 (25 September 2015). Excerpts: “For the next decade and a half, the [newly adopted] Sustainable Development Goals (SDGs) will guide the overarching work of all Governments, aid providers, UN entities and third parties such as the civil society and private sector….Yet experience demonstrated that while the [previous Millennium Development Goals] show a remarkable success, challenges remained through the destabilising effects of transnational organized crime, terrorism, corruption, money laundering, violence, exploitation, cybercrime and piracy, undercutting aid delivery and good governance.…For the first time, the new global development agenda explicitly affirms that development requires peaceful and inclusive societies. SDG 16 - 'Promoting peaceful and inclusive societies for sustainable development, providing access to justice for all and building effective, accountable and inclusive institutions at all levels' - specifically ensures that the rule of law, peace and security are an integral part of the framework.”

3. Humanitarian
--How Can We Curb Corruption in Humanitarian Operations? Humanitarian Accountability Report (chapter nine). Core Humanitarian Standard Alliance (September 2015). “Corruption undermines the quality and effectiveness of humanitarian operations. Promoting integrity measures, including setting up transparency and accountability systems, not only helps to identify corruption cases, but also helps to address corruption risks and reduce the pressures, opportunities and rationalisations that drive humanitarian aid staff and other stakeholders to engage in corrupt practices.
 When most people think of corruption, they imagine financial fraud, bribery and extortion, perpetrated by greedy public officials, often in collusion with venal contractors. Surely these kinds of practices would not be found in the provision of humanitarian assistance, where actions motivated by the humanitarian imperative are delivered by committed humanitarian staff? And yet the noble intentions that underpin humanitarian aid programmes do not always protect them from corruption.” (p. 73)
“Internal controls and regulations alone are not sufficient to prevent and detect corruption. They should be combined with transparency and accountability initiatives to ensure communities can participate and provide feedback at all stages of the humanitarian intervention.” (p. 77)

4. Non-Governmental Organizations
--Peace and Corruption (report). Institute for Economics and Peace (May 2015). “•There is an empirical link between corruption and peace. Once countries reach a certain level of corruption there is a threshold or ‘tipping point’. At the ‘tipping point’ countries which experience small increases in corruption can experience large decreases in peace. • Corruption is a key explanatory variable in assessing low levels of peace. While it is a key factor, other key factors in the Pillars of Peace are also important and work together to increase levels of resilience and peace as well as creating a conducive environment for lowering corruption. • Perceived corruption in the police and judiciary is much lower in countries above the ‘tipping point’ compared to those countries near or below the ‘tipping point’. • Multivariate analysis provides evidence that improvements in peace are dependent on improvements in corruption; however improvements in corruption do not necessarily depend on improvements in peace. • Countries with the strongest democratic institutions tend to be both the most peaceful and the least corrupt. There are no full democracies below the ‘tipping point’. However, some authoritarian regimes are both low in violence and low in corruption. Most of the countries below the ‘tipping point’ are developing nations. • The police and the judiciary are seen as some of the most corrupt institutions based on global polling. Eliminating police and judicial corruption is critical for improving the peacefulness of societies. • Eight internal indicators from the Global Peace Index deteriorate dramatically once a country moves through the ‘tipping point’. These indicators are political terror, political instability, the violent crime rate, violent demonstrations, organised conflict, access to small arms and light weapons, the homicide rate and level of perceived criminality in society.” (Key Findings, p. 3)

5. Business-Corporate (USA context)
--God’s Money is Now My Money: Why Houses of Worship are Victims of Fraud (article excerpt). Fraud Magazine (July/August 2015) “Houses of worship are havens from fraud, right? Wrong. The author describes how church workers’ erroneous thinking leaves them particularly vulnerable to fraud and what congregations can do to deter and prevent fraudsters’ attacks…..Anti-fraud education and prevention in churches has been one of my top priorities during my 23 years in the ministry. I’ve conducted several fraud examinations ranging from a small $25,000 benevolence fund fraud to a $1.5 million denominational credit union fraud. Many believe that others wouldn’t take advantage of people in houses of worship. Of course, fraud examiners know that all organizations are vulnerable to fraud. Churches, synagogues and mosques are particularly susceptible because trust often replaces basic internal controls. And most houses of worship don’t know how to either prevent fraud or deal with it when they discover losses.”

--Vindication at a High Price (article excerpt). Fraud Magazine (July August 2015). “When James Holzrichter reported some management issues to his supervisor, he had no idea that he would later discover widespread alleged fraud at Northrop. He'd lose his job, health and 17½ years of his life. But he'd retain his integrity and his family's love. v Could there ever be better advice for a whistleblower? "When is it ever wrong to do the right thing?" Simple. Absolute. Definitive. Except when someone puts it into practice. Then it can get messy.”

--The Link Between Corporate Culture and Fraud (article excerpt) Fraud Magazine (November/December 2015). “The importance of the "tone at the top" in deterring fraud is a concept that most of us have read about in articles and studies. However, seeing tone at the top in practice and how it impacts an organization positively or negatively is the best way to understand exactly how this link works…Two recent cases illustrate the importance of the tone at the top by providing examples of how a poor tone can lead to improper financial reporting.”

--Benchmarking Your In-house Fraud Investigation Team  (report). Association of Certified Fraud Examiners (2015). “Every type of department can benefit from a comparison of its structure, resources, and performance to those at similar organizations; internal fraud investigation departments are no exception. Often, when evaluating a fraud investigation team, management has to rely primarily on the organization’s own historical data. And organizations that decide to establish new fraud teams might have very little data to guide them. To address the lack of available benchmarking information for internal fraud investigation departments, we collected data about our members’ internal investigation teams and analyzed how they are structured and how they performed, as well as how they measured their own effectiveness. While the circumstances and needs of every organization differ, our hope is that this report assists our members and others in creating or implementing changes to their internal fraud investigation teams.” (p. 3)

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