‘Concerning behaviour’ from trustee intending to pay Islamic State hostage ransoms

17 Jan 2020 News

The Charity Commission has found that a trustee board was “ineffective” in its oversight of a trustee who misused their position.

An inquiry into the Foundation for Relief and Reconciliation in the Middle East (FRRME) found that one trustee's actions were likely to have caused significant damage to the charity’s income and reputation.

The Commission investigated FRRME after the charity reported that a trustee and employee was believed to have, in a personal capacity, transferred $17,500 to Islamic State to secure the release of two female hostages who were at risk of death or becoming sex slaves.

The money was said to have been raised at a fundraising event for the charity’s sister organisation, FRRME US.

The regulator suspended this trustee, and also a senior employee, who subsequently resigned from their position. 

The regulator shared information with the Metropolitan Police Service which carried out its own investigation into allegations of terrorist financing. The trustee was interviewed under caution but was later informed that no further action would be taken against them.

Trustee intended to secure the release of individuals from Islamic State

The inquiry found emails which confirm that it appeared, on the balance of probabilities, that this trustee had intended to secure the release of individuals from Islamic State. 

For instance, an email sent to the then trustees dated 6 June 2016, stated that “all of these donations were used specifically for the issue of buying back the women who had been taken as sex slaves by ISIS. This money we were specifically told it could not go through the [charity] and we did not want to do it via [the foreign organisation]…”

But despite “intent” the Commission has not seen any evidence that terrorist financing occurred, or that if it did, it was financed with charitable funds.

However, the trustee “repeatedly failed to abide by financial controls put in place by the trustees”. The inquiry found evidence of numerous breaches. 

The inquiry says that the trustee’s failings “are made more concerning” by the fact that they were a senior employee of the charity receiving significant funds for their work. When they were suspended as an employee, the trustee breached the conditions of this suspension by making statements on Facebook advising the public of the suspension and soliciting funds for their own personal expenses.

The inquiry concludes that these problems developed, in part, because the other trustees had ineffective oversight of this trustee’s actions, and “financial controls were not consistently applied robustly”.

The other trustees cooperated with the inquiry and improvements have already been made to the management of the charity, including the appointment of three new skilled trustees and an experienced chief executive.

‘A pattern of concerning behaviour from one trustee’

Tim Hopkins, assistant director of investigations, monitoring and enforcement at the Commission said: “Our inquiry has uncovered a pattern of concerning behaviour from one trustee who put this charity at risk, demonstrating a disregard for the standards and behaviours expected of them. Trustees should honour their responsibility and legal duty to act in the best interests of their charity at all times.

“Although the charity’s other trustees were clearly let down, they failed to intervene effectively as we would have expected. Trustees have a responsibility to safeguard and protect their charity. I welcome the significant progress that has been made here. I hope that these improvements will enable the charity to make a positive difference for the people it was set up to help.”

The Foundation for Relief and Reconciliation in the Middle East (FRRME) accepts the findings of the report on its activities in 2016.

Mike Simpson, the chief executive of the charity, said: “The events of 2016 recounted in the Charity Commission report prompted swift action by the trustees. This included major improvements to the governance of the charity. The Commission acknowledges that the trustees co-operated with the inquiry throughout and recognises the steps taken by the trustees which put the charity in a much stronger position going forward.

“I am delighted to have been able to assist the trustees in making these improvements. I believe that this robust and effective governance enables the charity to move forward with confidence. We have a mission to bring hope, help and healing to the Middle East and we are demonstrating our ability to do that through the generosity of our supporters across the world.”

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