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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
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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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Nigeria: Corrupt Auditors and Auditing Practices

* (en) Nigeria Location * (he) מיקום ניגריה
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Sometimes its good to read about the auditing profession in other countries to get a sense of perspective about auditing in the USA.

This story published in the allAfrica.com News Service provides a good sense of the lack of ethics, oversight and reliability of auditors in Nigeria. I’ve always wondered (and sometimes admired) how some companies do business in places like these and consistently stay in compliance with the FCPA.  At other times I just wonder how it is that half of the officials in these places are corrupt, but the foreigners who do business with them are always ethical and lawful.   After you read the excerpt below, you can read the complete article by clicking on the link at the bottom of the post:

“Abuja – When the EFCC carried the anti-corruption war to the Federal Ministry of Agriculture and Water Resources recently, it yielded good results. The head of internal audit received marked bills totalling N2 million as a bribe from some contractors. He was caught in the act!

The story has not attracted undue attention, partly because it is common and “normal” in government ministries, departments and agencies. Auditors are envied even by other corrupt colleagues. They obstruct free flow of files so that contractors, suppliers and even workmates are forced to offer bribes to them. Often, they do not act alone: they have the backing of their bosses who also have itchy fingers. In the private sector, internal and external auditors collaborate to doctor the books of quoted and unquoted companies.”

To finish reading the story from the allAfrica.com News Service, click the link below:

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*** Important Update ***

Soon after I posted the article above, I was contacted by a Nigerian person who directed me to a Nigerian Blog that carried a story on the subject of fraud, auditors and the Nigerian Oil and Gas Industry.   Although, I am not a follower of business, political or social events in Nigeria, I found it appropriate to add information about this story, and link it for the benefit of those interested.    The story shows how real efforts are being made in Nigeria to combat corruption and how local auditors are not all corrupt.  Below is an excerpt of the story, posted in the Nigeria General Discussion Blog Website which you can read in its entirety by following the link on the bottom of this update:

“How Corruption, Theft Ruin Nigerian Oil and Gas Industry.  Is PIB the Way Out? – From DENNIS MERNYI, Abuja.

The high level corruption and theft in the extractive industry particularly the oil and gas industry has been exposed for the second time by the Hart Group and Sam Afemikhe group of auditors that carried out the audit report on the activities of the multinational firms in the oil and gas sector, the Nigerian government institutions responsible for both revenue, tax collections and regulations of all financial transactions in sector.

The auditors were commissioned by the National Stakeholders Working Group of NEITI under the chairmanship of Professor Assisi Asobie and their report was unprecedented for their independence and comprehensiveness. In that report, both financial and physical audits were carried out. Nigerian National Petroleum Corporation, NNPC, Central Bank of Nigeria, CBN, several government institutions as well as oil companies were indicted for stealing chunk of moneys either during crude production or refined oil product export or supply.

In the report also, the auditors found some discrepancies among the Petroleum Profit Tax (PPT), royalties and gas flaring penalties the companies declared they have paid and what the CBN said it had received.

NNPC’s reported cash calls were reconciled with receipts by the joint venture operators, but when the audit moved away from the CBN to focus on PPT and royalties in more detail, it ran into several problems because the companies’ assessments of production differed from the Federal Inland Revenue Service others’ records.

NEITI was created in 2004 essentially to develop a framework for and ensure transparency and accountability in the reporting and disclosure by the extractive industry companies, of revenue, owing to or paid to the government. As a subset of the global Extractive Industries Transparency Initiative, EITI, the main task of NEITI is the reconciliation of payment s made by the extractive industry companies with receipts recorded by public agencies.”

The article goes on to mention the challenges faced by the auditors who undertook the investigation, attempts to influence or derail their report by political forces, the large amounts of moneys involved and identifies some of the the foreign companies investigated.

To read entire article, please follow this link:

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Help Wanted: Homeland Security Seeks Cybersecurity Pros

Reenactment of a Roman legion attack.
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I think everyone agrees that America’s IT Security posture needs improvement.  This initiative from the Obama administration, in my opinion will help us harden our vital communications infrastructure making life harder for future Cyber attackers.  It is also a great way to stimulate the economy by spending money on hiring some of the young sharp CISSP’s I see loitering around in NYC IT Security conferences.    Below is the excerpt from InformationWeek.com:

“The Obama administration has given Department of Homeland Security the go-ahead to hire up to 1,000 new cybersecurity pros over the next three years, secretary Janet Napolitano said today.

The new hiring authority will let DHS, a key agency in the nation’s cybersecurity strategy, fill positions in risk and strategic analysis, incident response, vulnerability detection, intelligence, investigation, and network and systems engineering.”

To read the rest of the report follow the link below:

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The guys in the photo above are CISSP candidates in training, at a state of the art training facility on 34th Street in NYC.

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GovTrack: H.R. 2152: Text of Legislation, Introduced in House

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From time to time Today’s Audit Journal will post information on legislation passed or under consideration, of relevance to our professions.   This post provides information on a bill that may change the FCPA into a more aggressive and enforceable law.

Foreign Business Bribery Prohibition Act of 2009.

This bill under consideration in Congress can change the way the FCPA is enforced.  If your work includes reviews / investigations relating to the FCPA, read the full text of the bill by following the link from GovTrack.us below:

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