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For the Love of the Game: Corruption & Sports NGOs

tennis-player-1246768_1280This article, written by GRC Solutions Expertise Panel member Jeremy Sandbrook and co-authored with Liz Burton,  examines some of the types of corruption that has taken place within sports NGOs, why they are so susceptible to it, and what some of the potential solutions are to solving the problem.

While sport is now the dominating source of entertainment worldwide, it has a darker, shadier under-belly it just can’t seem to shake-off – Corruption.  Sports NGOs are particularly vulnerable with bribery, match-fixing, extortion, doping and money laundering now common place.

 

Sports NGOs and ‘Corruption as usual’

It seems that barely a month passes without yet another report of corruption in sports being splashed across newspaper headlines.  These include members of FIFA’s executive committee accepting bribes, a former president of CONCACAF charged with fraud and money laundering, hosting nations paying bribes to win Olympic hosting rights, match-fixing, and the IAAF’s involvement in corruption and cover ups.

This phenomenon isn’t just limited to football and athletics however, with the following examples showing just how wide spread the issue is:

  • Cricket has witnessed allegations of both spot-fixing and match-fixing involving players from Pakistan, England, New Zealand, India, South Africa, Sir Lanka and Kenya.  There have also been on-going match-fixing allegations made in relation to the Indian Premier League (the most lucrative cricket event in the world), with two of the league’s eight teams recently suspended for two years over a corruption scandal;
  • Tennis is also currently undergoing a crisis as allegations of match fixing engulf the sport;
  • Cycling has for many years been dogged with allegations of illegal doping, with the issue only coming to a head when the International Cycling Union was accused of knowingly protecting Lance Armstrong – cycling’s long time poster boy – against doping allegations; and
  • Badminton, boxing, handball and other sports, including US collegiate sports, have all suffered from similar credibility gaps.

It is clear from this that there are serious underlying issues that sports NGOs need to address in order to clean up their respective sports.

World Bank ban damages Chinese suitor’s chances

fraud
The recent signing of a free-trade agreement between China and Australia has made investing in Australian companies more attractive to Chinese buyers. But one Chinese construction company faces significant challenges as it tries to purchase one of Australia’s largest contracting businesses.

China Communications Construction Company (CCCC) is believed to be the front runner to purchase Leighton Holding’s John Holland Group. But CCCC is the successor to China Road and Bridge Corporation (CRBC), which was debarred by the World Bank in 2009 after an investigation suggested it had engaged in fraudulent conduct concerning road tenders in the Philippines. CCCC was itself banned in 2011 due to its relationship with CRBC.

CCCC’s ban from World Bank projects raises concerns for Australian government bodies seeking to award infrastructure projects. Amar Flora, Chief Operating Officer at the University of Sydney’s John Grill Centre for Project Leadership, has argued that Australian governments should be wary of foreign investors with chequered pasts in the industry.

According to the Financial Review, Mr Flora has asked, “Is the Australian government willing and capable of providing quality assurance on Chinese investment, and in ensuring that the Chinese investment complies with Australian regulatory frameworks?”

If CCCC wins its bid for John Holland, it is unlikely that the scrutiny of its past will stop any time soon. The case highlights the significant financial and reputational damage that can result from allegations of bribery and corruption, even if unproven.

Talk to us today about our Fraud AwarenessAnti-bribery and Corruption and Anti-money Laundering courses.

Source: Australian Financial Review

Scams reported amount to $90 million in 2013

The Australian Competition and Consumer Commission’s Targeting Scams Report 2013 reveals over 90,000 Australians reported scams to the ACCC last year, with $89,136,975 million reported lost.

Telecommunication companies, banks, online dating sites and money remittance agencies are most frequently used by scammers to facilitate their fraud.

The report highlights the relationship scams cause the most significant emotional and financial harm to victims.” These scammers invest time and effort into a fake romance, a fraudulent business partnership or a complex investment scheme. Their ultimate aim is to build your trust so they can steal your personal details and money.” ACCC Deputy Chair Delia Rickard said.

Let’s lay out the stats on scams from 2013.

fraud awareness
  1. Dating and romance scams are listed as causing the most financial losses with over $25 million reported lost.
  2. Dating and romance scams make up 3% of all scam reports
  3. 43% of people approach by a scam admirer also lost money
  4. Phones are the preferred delivery method for scammers, 52%
  5. Online scams caused the greatest financial harm $42 million reported lost

This year, relationship scams are a compliance and enforcement priority area for the ACCC with their targeted scams intervention project. The project will use financial intelligence to identify and warn suspected victims.

Preventing fraud is a shared responsibility between governments, industry, companies and individuals. Fraud awareness and prevention systems is an area that business are beginning to invest a lot of time and money into. They need to help detect and disable scams before they reach their targets. Ms Rickard states that “all businesses should be considering how they can be proactive in taking effective steps to minimise the likelihood that they or their customers will fall victim to a scam.”

Our fraud awareness training course may be a course which you organisation would like to consider. In the meantime, the ACCC has provided Australians with the following scam identifier list:

  1. You’ve never met or seen them: scammers will say anything to avoid a ‘face-to-face’ meeting, whether it be in person or over the internet via a video chat – don’t excuse it away.
  2. They’re not who they appear to be: scammers steal photos and profiles from real people to create an appealing facade. Run a Google Image search on photos and search words in their description to check if they’re the real deal.
  3. They ask to chat with you privately: scammers will try and move the conversation away from the scrutiny of community platforms to a one-on-one interaction such as email or phone – ‘walk’ away if this happens to you.
  4. You don’t know a lot about them: scammers are keen to get to know you as much as possible, but are less forthcoming about themselves. Ask yourself, ‘how well do I really know this person?’
  5. They ask you for money:  once the connection has been made – be it as a friend, admirer, or business partner – scammers will ask you to transfer money. Don’t fall for a tall tale, no matter how plausible it sounds.

 

Source: ACCC