ONE of Cambodia's leading human rights organizations is being investigated by auditing
firm Price WaterhouseCoopers (PwC) for fraud and misuse of donor funds.
Staff at the Cambodian Institute of Human Rights (CIHR) also told the Post that death
threats had been made to discourage people from speaking out on the issue.
Allegations have been made that thousands of dollars were fraudulently charged as
expenses to donors for items such as translation fees and vehicle hire. At least
$20,000 also ended up, unknown to donors, in an off-budget bank account. A source
at CIHR, which is headed by Kassie Neou, said it might never be known how much money
was involved.
The Post has obtained a copy of the minutes of a January 14 meeting between CIHR
and donor representatives from Canada's CIDA, the EU, the Japanese Embassy, ForumSYD,
and the Asia Foundation.
At the meeting Kassie, who is also the vice-chair of the National Election Committee,
accused CIHR's finance officer, Nhim Sakal, of fraud and said his director of operations,
Steven Pak, had signed fake staff contracts and other incriminating documents. Both
men have been suspended from their duties pending the outcome of the investigation,
as has Kassie.
At a staff meeting February 6, Kassie told his employees he had borrowed around $20,000
from an "off-budget account", known as a "Social Account".
Kassie confirmed to the Post March 14 that donors were unaware of the existence of
the account, but insisted any involvement he had with the account was done properly.
He said the money in the account had come from commissions on printing contracts
and on the rental of CIHR's office.
Rather than individuals pocketing the proceeds, Kassie said he agreed to set up the
Social Account to deal with loans to staff, funeral expenses of staff family members,
medical expenses, and small entertainment expenses which were not payable using donor
funds.
"That was our mistake," he said of the way the account, which was set up
around 1996, had been handled away from the view of donors. "We didn't know
how to do it, so we did not inform our donors." Kassie said he currently owed
around $1,000 and strongly denied any impropriety over the allegations sweeping the
NGO.
CIHR staff have established a committee to deal with the issue, and are reportedly
adamant that anyone found defrauding the NGO be sacked. The Post understands that
the head of the staff committee is Kassie's personal secretary.
At the January 14 meeting, donors brought up the issue of intimidation. CIDA's Michael
Barton told the meeting that it was "ironic" that there was staff intimidation
within a human rights organization. When the Post contacted him, Barton stressed
that talk of intimidation was "not substantiated".
"It's just what some of the staff have commented on," said Barton, "so
in that meeting I just raised the question to the CIHR management as to their position
and what they thought about it."
"We are waiting to see if [the alleged fraud] is just poor financial management
and poor accounting principles or something more serious," he said. "If
there is evidence that there has been misuse of our funds then we won't be advancing
any final disbursements until we are satisfied that the funds that were allocated
for the project were used appropriately."
Kassie said he had heard nothing about threats beyond the usual infighting common
to staff members in any organization.
"You are the first [person to mention that to me]," Kassie said of the
alleged threats. "I have not been given a copy [of the minutes]; I have not
been given a chance to see them. It is very unfair."
The Post has ascertained that there have been concerns about CIHR's financial management
for some time. A March 2001 study commissioned by Sweden's development arm SIDA criticized
CIHR's lack of transparent policies on financial administration, as well as Kassie's
method of managing his employees.
"The management style constrains participation of staff in organizational matters,
and the restricted access to financial information inhibits program managers to plan
efficiently," the report stated. "Further, such lack of transparency is
contradictory to the promotion of good government (sic)." It goes on to state
that CIHR's management had not been forthcoming with providing financial information
during SIDA's research.
At the meeting a ForumSYD representative said management issues had been present
at the NGO for several years, but few changes had come from the "numerous promises"
made. Kassie left donors surprised when he countered criticism of his management
style by telling them there were "limits to human rights" when dealing
with his staff.
"I prefer the control style of management. . . If I were to exercise 100 percent
of the rights [contained in the Universal Declaration], would that result in better
management?" he asked rhetorically. "If it is necessary to give up some
rights in order to maintain order, is that a violation of the rights of the staff?"
PwC's Sally Reth said the firm had been engaged to complete a report of its findings.
It was not a full investigation, she said, and was restricted to "specific points
given to us by [CIHR]". She said it was difficult to tell how long the report
would take as that depended on cooperation and whether CIHR chose to expand the terms
of reference.
Kassie told the Post he was extremely keen for a full investigation - "from
A to Z" - if the auditors deemed it necessary, and would push for it to happen.
"I would like them to find out everything, because I too would like to know
everything," he said.
One ironic aspect of the recent events is that good governance is at the core of
CIHR's mission statement. Another is that some of the money apparently went missing
from a CIDA-funded project set up to promote good governance.
The minutes stated that senior advisor John Lowrie has been tasked with various responsibilities
to keep CIHR running while the investigation proceeds. In a brief written statement
to the Post, Lowrie confirmed an external investigation was underway "following
allegations of serious financial irregularities against the senior management".
"[CIHR's] donors and its Board of Directors have been informed and measures
taken to protect the interests of donors, staff, and most importantly the client
groups served," Lowrie wrote. "These include assigning to me temporary
responsibility for finance, personnel and control of assets pending the outcome of
the investigation."
"When we receive an authoritative report on the outcome, decisions will be taken
on what action will be necessary to preserve the reputation of the Institute, and
its unique human rights education role in Cambodia," he concluded. Lowrie declined
further comment.
One long-time human rights observer told the Post the investigation might result
in a better NGO culture in Cambodia.
"One thing I hope comes from all this is that civil society in Cambodia will
emerge as a stronger, ethical and more effective advocate of human rights and good
governance," the observer said.
Kassie Neou, who holds joint US-Cambodian citizenship, fled Cambodia after the Khmer
Rouge regime. He set up CIHR in 1993 to continue the human rights education program
run by UNTAC. CIHR employs 90 staff at four offices in Cambodia and receives around
$1 million a year in donor funding.
