We Aren't Elected Treasurer As Often Anymore

A respected, security professional posed a theoretical question to me recently regarding ideas on how to provide protection for the integrity of his staff.

Suppose one of his people went to court, representing the institution, and was offered (or given) $5000 reimbursement-in cash-for the theft the defendant was charged with.

The problem lies, of course on whether the $5000 was OFFERED?or GIVEN.

Further suppose that the money was never received by the institution.

This security officer's problem was not of distrusting his staff person-but rather protecting that person from the claim of the accused?who might inform management that payment WAS made to the bank employee prior to the hearing.

Which story would your management believe?

How much trust do we really have in each other?

Something has changed in the financial industry in the past few years in the way we view ourselves and in the way the public views us.

If a banker belonged to an outside organization, he or she was usually elected treasurer, because the banker was assumed to be the most honest member of the group.

That perception is no longer held.

The Federal Bureau of Investigation in their evaluation of the loss figures in the financial industry came up with some very interesting statistics. They estimate that 1 out of every 49 employees in financial institutions will embezzle funds at some time in their career! (They also estimate that in the general public sector, 1 out of every 52 shoppers is a shoplifter.)

Why do we choose to ignore what we see going on around us?

We turn a willful, blind eye to the credit card customer service representative who pockets returned cards; the loan officer who makes risky loans to 'friends'; the branch employee who is so very helpful to customers and accepts 'tips'; the bookkeeping manager who controls and manipulates dormant accounts; and the teller who 'borrows' from the cash drawer.

How many times have auditors heard, as I have in the past, "Oh, I'm so glad you found out about that problem! I knew they were 'stealing/drinking/smoking pot/doing drugs/altering figures/ taking bribes', but I didn't know how to tell anybody!"

Why is it we feel shocked, even betrayed, when one of our co-workers is terminated and charged with embezzlement when we knew nothing about what they were doing.

But if we KNEW what was happening, and did nothing about it, we feel no guilt at not reporting the incident. And even sometimes feel sympathy for the discharged employee.

In 1988 more than half of the financial institution closings were due to what the FBI terms "insider abuse". The only reason the "abuse" went on long enough to cause losses large enough to warrant closing of the institution is because nobody blew the whistle on the people doing the "abusing".

Is it any wonder the public does not eye us with the same trust as in the past?

Is it any wonder that we aren't elected treasurer as often as we used to be?

Copyright © 1990 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 1, No. 2, 2/90