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WikiLeaks, Censorship and the Right to Publish

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Readers to this blog know that back in October 2009 I wrote two articles commenting on the WikiLeaks organization.   As an auditor having been exposed to ethical issues in corporate America, and having seen cases where transparency in practice does not always follow documented policies, I felt that WikiLeaks could serve a valuable role in the corporate world, simply by being the place where whistleblowers could expose their concerns without fear of reprisals, especially when they exhaust normal channels.  Today, a year after having written those articles, I feel the same as I did then.  But, in this article I will venture to share some political  observations about the context  in which the planned release of over 350,000 reports, dubbed ‘The Iraq War Logs’, documenting the war and occupation of Iraq from 1 January 2004 to 31 December 2009 is  taking place.   It is up to the reader to determine if any of my observations have future implications for their work in the corporate world.

Thinking about the WikiLeaks media extravaganza brought back memories of my childhood in Cuba, where there is no Freedom of the Press or Freedom of Speech and journalists are regularly jailed for criticizing the government or expressing dissent from the accepted socialist dogma.  In places like Cuba, controlled by dictators or one party systems, the pursuit of the truth, the right to protect the identity of sources, the right to publish free of censorship and the ideals of transparency are often thought of as unachievable dreams.   Because of my personal experiences regarding the value of speaking freely, and memories of the killing, jailing, intimidation, beatings and exile of relatives for the simple reason of “political disagreement,” my support for publishing the leaked Afghan war documents and now the Iraq War Logs may be a bit more complex than that held by the average person.

As an American citizen, with various family members currently and previously in the US military, I support 150% the sacrifices that our service members make on a daily basis.  However, I do not hold similar admiration and trust for our political leaders and the political elites that (unfortunately) send our military men and women to war.  The lies, cover-ups, corruption, greed and incompetence that have occurred during the last fifty years, from the Bay of Pigs, Vietnam, the Middle East, Latin America, and within our own borders in our inner cities, does not lead me to believe that this political culture (of the right or the left) can be trusted, especially when dealing with matters of life or death.   It has become clear that there is a huge and growing socio/economic chasm in America, with those at the top of the pyramid no longer acting for the benefit of the society, but for their narrow selfish interests. Whether this happens by accident or as part of a conspiracy, does not matter.  We have a political elite where its members spend their entire lives in “public office” with many of their children and grandchildren succeeding them to the same or similar offices.  We have billionaires who live in 15 million dollar mansions who spend 35, 50, or 80 million dollars in political campaigns for offices that pay annual salaries of less than $250,000.  And, they tell us they do it for the love of serving the poor and ensuring equality.  We have a two party system monopoly that plays musical chairs getting its members elected by less than 50% of voting adults nationally, and less than 30% of voting adults in local or state elections.   We have a media that repeatedly reports on the same politically correct subjects 24 hours a day, from the same ideological perspective and the same prejudices, by reporters that previously worked for or will work for, the very political or financial elites they are supposedly providing unbiased reporting and coverage on.  Our multinationals  conduct business all over the world  and when cases of corruption surface, our guys are always found to be ethical and within the law, while the foreigners are almost always found to be guilty of all sorts of unethical, criminal and fraudulent acts.  In the name of Globalization our companies ship millions of jobs and capital overseas, but do little to re-invest and create jobs at home, feeding a vicious circle of unemployment, poverty and social unrest.  As the world’s leading superpower, we have no qualms in militarily intervening, threatening and destabilizing other countries when our political and financial elites decide that their arbitrary interests are threatened.  So let there be no doubt, I love America, but I also see its wrinkles and warts.  The America I see today, is not the America I believe our Founding Fathers conceived and wanted.

In this environment and in this day and age, our political elites tell us that it is dangerous to have WikiLeaks publish the leaked Iraq war documents, because it will disclose important secrets that may put the lives of our troops in danger.   It is hard to believe this claim, since it has been used so many times before by the same political culture every time someone published or threatened to publish government wrongdoing.  It was used with the Pentagon Papers and the Watergate leaks.   What seems to be more credible is that the danger is to the political elites and not so much to our troops. The fear of showing the world and the American people the mistakes, incompetence, injustices, arrogance, bullying and waste perpetrated by our top level leaders and institutions is what is at the heart of this call to stop Wikileaks.  If we were living in a totalitarian regime like Cuba or North Korea, this sort of reaction would be expected, but aren’t we in an open democratic society?  What the political elites are telling us is that we have to accept a conditional version of Freedom of Speech, Freedom of the Press and Transparency in government.  They are saying that we have Freedom of Speech only when it does not offend them, that we have Freedom of the Press only when it does not challenge mass media and commercial interests and we have Transparency in government only when the government tells us it’s OK, for our own good!

We hear that Wikileaks should be an exception to the rules used with other media outlets.   That Freedom of the Press protections allotted to other publishers and information distributors should not be extended to it because it is an open forum of information provided by unanimous “uncontrolled” and “un-vetted” individuals from around the world who may harbor anti-American sentiments and that the organization may be influenced by our enemies.   Doesn’t this claim then support the notion that the American mainstream media has legal protections because it subjects itself to a sophisticated form of  censorship, indirectly in the hands of the political and financial elites who determine the financial viability and licensing of these media conglomerates?  Doesn’t this in turn put into question the integrity and reliability of the information analyzed and distributed by the mainstream media?  What does this do to the claim that there is no censorship in America?

In an unprecedented manner, the left and the right, Democrats and Republicans want to crush Wikileaks and its founder.  No one is talking about the original reasons why Wikileaks was founded and what it set out to do.  It was a simple attempt to provide an alternative vehicle to corporate level “Whistleblower” programs, that were seen by many as ineffective and flawed.  The fact that people of all persuasions, from all over the world, jumped on the opportunity to share uncensored information via the platform is evidence of the pent-up hunger there was and there is for such a tool.   The majority of early Wikileak releases were not from disgruntled ex intelligence agents or unhappy consultants informing on government covert operations.  They were articles and confidential papers on corporate fraud, unethical business practices, exposes on dangerous products, corporate bribery, insider trading, multinational tax evasion, unfair labor practices, consumer safety  and so forth.  As a corporate whistleblowing tool, it took a while to take off, but when it did, it quickly became an irritant to many large global organizations.  Wikileaks did not choose or tell a global audience what they should submit for distribution in its platform.  The material was and is submitted at the will and following the motivation of whomever has something they want to submit.  And, this is how politically charged information has made its way to Wikileaks, and how ‘The Iraq War Logs’ found their way to the platform.  These politically charged releases have also created a perfect distraction away from the original goals and objectives of Wikileaks. That of becoming a global corporate whistleblowing vehicle.  Now, these things are forgotten and when Wikileaks is brought up in conversation, we hear instead about spies, the Russians, the Chinese, the North Koreans, traitors and hacking.  It is truly an interesting turn.  The complexity and legitimacy of Wikileaks as a whistleblowing service has been transformed, by very smart and sophisticated media and political experts, into a very simple and primal concept.  Wikileaks equals treason!

By diverting public opinion away from the original subject, the legitimate need for some form of global corporate whistleblower is postponed.  The global tax dodgers are safe, details on dangerous environmental risks in parts of the world will remain unknown and those who fund the arms trade will continue to be nominated for Nobel Peace Prizes.  However, the genie is out of the bottle.  Even if the current Wikileaks is shut down and its founder jailed, what we are experiencing is a high profile confirmation that such a public service is needed.   Future incarnations will be more sophisticated and will likely be designed to withstand the types of technical and legal attacks we have recently seen.  The days of secrecy as we used to know it are over.  In this age of Social Media, cameras in every Smart-phone, instant messaging and millions of blogs, the existence of a Wikileaks type of service is likely to have a deterring impact on the way irresponsible and/or corrupt politicians and corporate executives do business.  And, that’s not a bad thing.

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Response from Senator Bob Menendez to the “Dumb Auditor” Article

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Senator Bob Menendez

Dear Mr. Font:

Thank you for contacting me to express your opinion on banking reform.  Your opinion is very important to me, and I appreciate the opportunity to respond to you on this crucial issue.

I appreciate you taking the time to provide your ideas on how we can make changes to the banking industry to improve its efficiency and transparency.  Every day New Jerseyans are working very hard to provide for their families, but current market conditions have made it difficult for families to save or access credit.  The financial collapse last year demonstrated the need for increased transparency to protect investors and consumers from fraud and irresponsibility.  Americans simply cannot afford the risks associated with widespread economic instability such as losses of jobs, savings, and benefits.  I am committed to ensuring that our financial markets are fully regulated and operate in the best interest of the American people.

As a member of the Senate Banking Committee, I have long stood for financial reforms that promote smart, healthy, and sustainable development. I rely on the important communications I receive from my constituents to guide my work in the United States Senate.  On this, as with any issue, there are many different view points, but please rest assured that I will continue to work diligently to respond to the many valuable insights I receive from New Jerseyans like you.

Finding solutions to the issues you raise is what drives me to keep standing up for New Jersey families.  Again, thank you for sharing your thoughts with me.  Please do not hesitate to contact me if I may be of more assistance.

I invite you to visit my website http://menendez.senate.gov to learn of other important issues in New Jersey.

Response to Comments from the “Dumb Auditor” Article

Old Compass
Image by Sebastian Niedlich (Grabthar) via Flickr

To all the readers who left comments regarding the “Dumb Auditor” article.   Thank you for visiting the blog and taking time to share your excellent ideas with the group.  The “Dumb Auditor” article has been read by thousands of interested people from around the world, indicating that the issues discussed are of serious importance to our profession.  Most of your comments clearly show “battle scars” resulting from real life work situations,  making them more valuable than I ever expected.

It is also clear from your comments that auditors would like some resolution to these problems. Or, at least some structural changes in the industry that lead to diminishing auditor exposures, while they do their jobs protecting shareholder interests.  Although, many in the business world share similar situations, risks and moral dilemmas, it is the auditor who is expected to uncover fraud and other illegalities with few or no legal and financial protections for themselves.    And, few are similarly bound to maintain confidentiality about their work and the very things that often get them fired.   It is not unusual to hear Internal Auditors tell of stories where they “uncovered to much” and got fired for it, but can’t talk about it!   What does this tell us from a legal, societal and ethical perspective, and where does it put the professional organizations that are supposed to provide guidance and protections for the profession?

From the more than 30 comments left in the blog by readers to date, I am particularly impressed and grateful for the following:

1) From Felix, on November 30th.

Excellent proposals with excellent potential.  Felix discusses four items that  should be considered at the highest levels.  Item # 4 on his list is something I had thought about in the past (and, I suspect other auditors have as well), dealing with Professional Liability Insurance “provided by the PCAOB (or other body holding CFO’s/auditors to ethical/moral standards) for auditors and CFO’s. If a CFO or auditor is fired due to claimed unethical reasons, they are eligible to receive 100% of what they were making.”

There are countless types of liability insurance for professionals, such as errors and omissions for attorneys and accountants and medical malpractice.  Why not develop one that insures against wrongful dismissal of auditors, specially when the dismissal involves a dispute with management due to the normal performance of the auditor’s duties, ethical or fraud related matters?

2) From Mark Pennington, on November 30th.

I was impressed with the brevity, the directness and the underlying picturesque quality of Mark’s comments.

Disregarding his tone….  I think he is correct in that there is a very large segment in management that does not care.  Why should they?  They do not perceive to be negatively affected, and their personal bank accounts keep increasing instead of decreasing with the status-quo.

3) From Rodney Kocot, on December 2nd.

I think Rodney’s comment is the most eloquent posted in terms of describing a situation where auditors get fired for trying to do the right thing.  I think that everyone who has been an auditor for several years recognizes this type of story, either from first hand experience or because it has happened to a peer.  Unfortunately, because of confidentiality agreements and fears of being black listed, these stories rarely get out to the public or beyond auditor circles.

4) From Adis Vila, on December 5th.

I appreciate the visit from Adis, a person that has done a great deal of work in the corporate governance and ethics areas, as well as in government.

The need for “Ethics Training” is clear and I am glad someone with a strong background in this area brought it up.  However, my sense is that ethics training yields future results and it’s something that impacts entrants to the business world, with limited impact on the “old dogs” running lose right now in positions of authority.  Training someone like a Bernie Madoff in “Values” and “Ethics” would be an interesting effort probably yielding few good results.  We auditors are in the trenches dealing with societal and organizational challenges as they are now, not as they should be.  Most auditors I know view compliance training as something that goes hand in hand with ethics.

I agree with Adis that we should concentrate more on a “Values-Based” ethical culture, because I believe that as a society we dropped the ball on this one a long time ago.  I will refer to a few comments posted by Felix on November 30th which reflect my views on this issue:

“What is for sure is also that some crooks would not be crooks if society would not accept as “good” many things that are NOT good. The unfortunate relativism that we live in now a days is contrary to how the United States was founded. It was founded on deep moral principles and as a result there was a key ingredient that was not there in many other countries or societies throughout history: trust. Trust can only exist when the society is a morally correct society that has not transformed values. In other words when a bad act is considered OK by many and vice versa. The problem we are facing in the United States of today runs deeper than audits and rules.

The problem goes to the core of the humanity of our country.”

5) From Ben, on December 8th.

Ben’s comments are well thought out and clearly come from experience.   His suggestion that auditors take a more careful and inquisitive approach during their job interviews in order to improve their chances of accepting jobs in organizations that more closely reflect their ethical values, is excellent.

I also agree with Ben regarding the approach with mid-level management and the need to invest time educating folks in Risk Management.  His humorous call for prayers, relaxation and meditation techniques during audits of sales functions is also unique and worth considering!

Prior to the popularity of “Social Media,” blogs, Twitter and the web, most controversial issues impacting an industry or profession remained in a semi-secret state.  Today, they can be known to thousands of people instantly.  The power of knowledge or as they used to call it, “The Pen” is stronger than the “Sword,” and in most cases it is also stronger than the “Dollar.”  Because of this, I believe that the “Dumb” auditor article will make a positive contribution to the efforts being made to resolve the issues cited in the article.  At minimum, there will be more awareness of the problems from the perspective of the auditor.

Thank you again for visiting, reading and leaving your comments.

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Enterprise Risk Management – A one-day course led by James Lam, author of Enterprise Risk Management

I took this picture at the 2005 US Open.
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November 4, 2009
9:00 am to  5:00 pm
New York City

WHAT YOU WILL LEARN:

  • Establishing a strong business case for ERM, and overcoming organizational barriers
  • Developing a practical ERM framework and implementation plan
  • Demonstrating tangible benefits from ERM adoption
  • Implementing and integrating ERM into strategic and business decisions
  • Establishing effective risk management policies and explicit risk tolerance levels
  • Developing effective dashboard reporting for senior management and the board
  • Creating an effective feedback loop for ERM performance

For further information on this event from PRMIA, please click the link below:

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The photo above shows the turn out at the last Chess championship between Latvia and Jamaica held in Mozambique last year.    Soon after this picture was taken the audience rioted because the sound system broke down and no one was able to tell when the game was over.   This event is an example of why Enterprise Risk Management needs to be taken more seriously.

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CalPERS Pushes for Change at Texas Industries

VanDyck, Man in armor 1625
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Anyone who knows what the CalPERS Corporate Governance Focus List is, knows that CalPERS is one of those organizations that is not afraid to advocate for changes in corporate America.   Especially if it is a major stockholder in the company in question.   I found this article at Directorship.com and felt it provides an excellent example of the types of conflicts taking place today between those who advocate for systematic changes in Corporate Governance, and those who want to see changes at a slower pace or not at all.   After you read the excerpt below you can read the whole article by clicking on the link at the bottom of this post:

“The California Public Employees Retirement System (CalPERS) has made its case to revamp the board of directors at Texas Industries, according to the Sacramento Business Journal. Texas Industries, which will host its annual shareholder meeting on October 22, is facing a dissident slate of directors from CalPERS through Shamrock Activist Value Fund, which invests $200 million for CalPERS.  “The experienced and diverse Shamrock director slate can more effectively oversee CalPERS interests as a long-term shareowner of Texas Industries by better focusing the board’s attention on optimizing the company’s operating performance, profitability and returns to shareowners,” said CalPERS’s Anne Simpson, senior portfolio manager of corporate governance.”

To read the Directorship.com article, please click the link below:

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The photo above is of Don Pedro de las Marias Heinkel Windham III, the first Texas cowboy in recorded history.   He founded the famous San Antonio tavern “Los Borrachitos” (near River Walk) and fathered 27 children with  Anne Marie Johnston Wyler and 20 other women.  He owned the first rapid fire 67 caliber flintlock outside of New Spain.

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Bernanke Lends Support to Obama Regulatory Reforms

The House Financial Services committee meets. ...
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Did this event actually catch anyone by surprise?   For the last year and a half everyone in America with an education beyond the 7th grade knows that a revamp of the regulatory system in the financial industry is needed and will come in one way or the other.    And, an increased need for “Risk Assessments” by financial regulators?   Well this is outright revolutionary!   The excerpt below is from Directorship.com – to read the entire article click on the link below my additional comments, at the bottom of this post:

“In a speech before the House Financial Services Committee today, Federal Reserve Chairman Ben Bernanke threw his support behind President Obama’s proposals to reform the financial regulatory system, according to CNNMoney. Bernanke spoke on the value of risk assessment for financial regulators, saying, “To further encourage a more comprehensive and holistic approach to financial oversight, all federal financial supervisors and regulators – not just the Federal Reserve –  should be directed and empowered to take account of risks to the broader financial system.”

I hope legislation is passed soon getting everyone on the same page regarding Risk Assessments. This way we can get some serious ERM frameworks in place at most organizations. The days of the “I don’t like that kind of risk assessment, therefore we will decide what the real risks are…” should end.  But, without a clear mandate from the Fed’s it will not.

To read the full article from Directorship.com please click below:

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CPA Exam to Undergo Transformation

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Image by DanDawson via Flickr

To all my young friends procrastinating on taking the CPA exam.   Stop wasting time and get it done before they change the rules and everything you learned gets changed and you have to start killing yourself again to prepare for the new content.   OK?   The excerpt below from the Journal of Accountancy tells the story.  To read the full article click on the link at the bottom of the post:

“The Uniform CPA Examination will be transformed beginning in 2011, with a new structure, format and content and supported by enhanced technology, the AICPA said in a letter Friday to state boards of accountancy.”

To visit the Journal of Accountancy, click the link below:

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I know what you are thinking.  Who is the person in the photo?    Well, I normally do not like to promote the services of folks I do not know first hand, but this is Professor Elena Martina Navrulotova of Kiev University’s accounting department, who is offering tutoring services  for students preparing to take the CPA exam.  Anyone interested needs to contact the Kiev University accounting department directly, since I have no financial gain in providing this information.   Good luck, and let us know how the tutoring works out.

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