The Centre for Humanitarian Dialogue (CHD) an international mediation organization, announced Saturday 28 August that it has been the victim of a CHF3.8 million fraud engineered, it says, by its former director of finance and administration, who held several other international posts before joining the Centre.
“A number of different schemes” were used, since 2004, to carry out the theft, says the organization.
Executive Director Martin Griffiths, who has headed the the CHD since it was created in 1999, has stepped down, “because he felt morally responsible,” the official announcement notes. “The Board accepted the resignation in order to put in place a new senior management. In recognition of his experience and knowledge of mediation, the Board has asked Martin Griffiths to dedicate his time fully to the mediation activities of the organization.”
Griffiths, a lawyer, worked for the UN as director of the Department of Humanitarian Affairs (which became OCHA) in Geneva and from 1998 to 1999 he was deputy to the UN Emergency Relief coordinator in New York, when he was also the UN regional coordinator in the Balkans (1999) with the rank of UN assistant secretary-general.
KPMG brought in to determine extent of fraud
The fraud was discovered in June 2010 by senior management, at which point the CHD hired audit firm KPMG to investigate. The announcement comes six weeks after the former finance director was stripped of his right to sign for the organization. Criminal charges have now been filed against the former director, and the group is “taking steps to recover the stolen sum.”
The organization is funded by several governments, private foundations and philanthropists, all of which have been informed about the fraud.
The former director, who cannot be named under Swiss law, lists, on online networking sites and as part of his CV, work done with a number of organizations, in Geneva, the UK and the US.
These include the World Bank and the IMF as an external auditor, finance positions with the Asian Development Bank, the British Embassy in Kathmandu, Arthur Andersen and, on one site, a fictitious trucking company. He appears to have served as an outside expert involved in approving funding for at least one international organization in the past year and has participated in a tax justice network as well as a corporate governance organization, both of which hold discussions on fraud.
Centre involved in several key African, Asian conflicts
It describes itself as an independent body that is “dedicated to improving the global response to armed conflict. It attempts to achieve this by mediating between warring parties and providing support to the broader mediation community. The HD Centre is driven by humanitarian values and its ultimate goal to reduce the consequences of violent conflict, improve security, and ultimately contribute to the peaceful resolution of conflict. It maintains a neutral stance towards the warring parties that it mediates between.”
Major mediation projects in which it is involved currently are in Somalia, Sudan, Kenya and the Central African Republic in Africa, as well as the Philippines NDF, Philippines Nindanao and Myanmar/Burma.
In 2010, the HD Centre brokered a historic agreement between the most heavily armed opposition movement in Darfur, the JEM, and the United Nations on the protection of children caught up in the conflict.
It has been active in Somaliand’s elections, training 600 national monitors/observers as well as working on resolving election disputes.
The official notice about the fraud notes that “The HD Centre has financial policies and procedures in place which govern financial transactions and accounting and which fully conform to generally accepted standards including Swiss legal requirements for Foundations. It has also received clean external audits every year since its establishment. As a result of this fraud, the HD Centre has already begun putting in place additional measures to strengthen control and compliance systems.”
Angelo Gnaedinger, director general of the International Committee of the Red Cross (ICRC) until 30 June 2010 has been appointed interim executive director, effective 6 September, while the organization undertakes a search for a new executive director.
Video, CHD, work in the Philippines