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Tag Archives: motive

An Insightful Analysis To The CHC System (Part 4)

16 Monday Sep 2013

Posted by Nailed Truth in C3 & Pringles Associations

≈ 11 Comments

Tags

c3, c3 church, CHC, Christian City Church, City Harvest Church, fraud, kong, Kong Hee, marc ronez, motive, Phil Pringle, Presence Conference, Pringle

Kong Hee says about CHC, Phil Pringle and the C3 Church Movement,

“You can’t talk about City Harvest Church without talking about C3. Or Christian City Church. You know Pastor Phil has been there for me; praying with me; encouraging me; discipling me; telling me how to do the work of the ministry; taught me how to collect an offering; how to give an altar call; how to build a church; build a team. So Pastor Phil, from the depth of my heart, for Sun and myself, we wouldn’t be where we are today without you and Pastor Chris. Let’s give Pastor Phil and Pastor Chris a big clap.” – Kong Hee, Session 8: (00:24), Presence Conference 2010.

The above quote is something to think about while reading the below article by Marc Ronez. Before reading this fourth article, make sure you have read his earlier articles:

An Insightful Analysis To The CHC System (Part 1)
An Insightful Analysis To The CHC System (Part 2)
An Insightful Analysis To The CHC System (Part 3)

Here is Ronez’s fourth article analysing the CHC situation:

City Harvest Case part 4: Can you Rationalize a Crime to be Beneficial to Society?

Every week Pastor Kong Hee and Pastor Tan Ye Peng both preach eloquently about good ethical principles solidly grounded in the Bible. Through many sermons, they have warned repeatedly the faithful crowd convincingly about the deadly power of sin and how easy it is to be tempted and fall on the wrong side. How could the same men of God, as the COC Report and the prosecution claim, be doing the contrary of what they preach? And if so, how could so many of the smart people that follow them, have ended up closing one eye and sometimes even both eyes to avoid seeing all the wrong things supposedly being done?

First we need to keep in mind that after all, in the eyes of the faithful members of CHC, both Pastor Kong Hee and Pastor Tan have supposedly been anointed by God in their positions. They also have long track records of spiritual enlightenment and good deeds with many testimonies to speak for them. Hence it is understandably really hard to imagine that people with such high apparent moral standing could succumb to self-interest and greed. But… is it still possible?

Could Somebody Considered a “SAINT” Commit a SIN?

Let’s try to answer that question rationally, looking both at the secular and spiritual perspectives. Spoiler alert: the answer to the above mentioned question is unfortunately unequivocally YES from both perspectives.

From the secular perspective, according to psychologists, while people are not usually born with a criminal fraudster mindset, practically everybody could gradually become one as a consequence of a succession of inappropriate decisions and actions. So we should postulate that most people start out in life with reasonably good, solid value systems. However confronted with ethical dilemmas, some of them will make the wrong decisions and from then on will gradually slide to the “dark side”. It may not necessarily happen overnight, sometimes it will take many years of small steps to move further and further away from commonly accepted moral values and principles. Yet interestingly, no matter how far you end up to be from these values and principles, in order to be able to function in society, you will have to maintain the superficial appearance of righteousness. As by definition you cannot be a successful fraudster if it is “written on your forehead” that you are or have become a criminal. A fraudster must appear to be a highly trustworthy character to various key stakeholders in order to be able to pull out his fraudulent schemes. For example, Bernard Madoff was a highly respected figure before he was exposed as a fraudster for building a USD 50 billion ponzi scheme. Prior to that revelation, many investors would queue up to have their money invested in one of his apparently so reliable and profitable investment funds. While there had been negative rumors flying around about Madoff for years, his faithful investors had brushed them off, finding no reasons to question such respected person with a long successful track record to prove his achievements. Does this story sound familiar? We may wonder how many persons and leaders in this world who appear to be good and upright on the surface, really are that way in their hearts…

What about from a Christian spiritual perspective? Here the answer is also very clear as all of mankind has been corrupted by Sin through Adam’s disobedience to God’s command. While according to the Christian faith, Jesus Christ has, by his sacrifice, broken the power of sin and freed mankind from it, the power of the temptation of Sin is still very much present in this world. So unless you think that Pastor Kong Hee & Pastor Tan are sinless – and by doing so you would be committing a blasphemy- you have to admit that the possibility of unethical and even fraudulent behavior on theirs parts is by definition possible. You should also keep in mind that the Bible provide many examples of “fallen” leaders such as the most famous Kings of Israel i.e. Saul, David and Solomon. While they were anointed by God, they all eventually, to various degrees, succumbed to the temptation of sin and greed.

In the CHC case, using the Fraud Triangle Risk Assessment model to guide this analysis, I have highlighted in my previous posts, “City Harvest Case part 2: If There is a Fraud What would be the Motives?“ and ”City Harvest Case Part 3 – The Opportunity Makes the Thief“, that the environment in CHC was very favorable for unethical/fraudulent behaviors.  Indeed a careful  examination of the factors leading to unethical and even fraudulent behaviors showed that the defendants had the incentive or felt the pressure to break the rules (Fraud Triangle Factor 1), and they also had the opportunity to do it and the ability to conceal their actions (Fraud Triangle Factor 2). Now, last but not the least, we will examine in this post the Fraud Triangle 3rd Factor i.e. RATIONALIZATION. This factor implies that the accused CHC leaders would need to find a way to somewhat justify (or RATIONALIZE) their behaviors to be able to break the rules. Why? Simply because almost nobody likes the very negative feeling of thinking about himself as being an unethical person or even worse a fraudster as this would create a painful cognitive dissonance.

Cognitive Dissonance & Rationalization

Indeed the last issue to address in this analysis is the fact that people engaging in unethical and even fraudulent behavior (unless they have a criminal mind from the beginning) will usually be subjected to what can be termed as a strong cognitive dissonance. A dissonance is a state of internal disharmony that happens when a person faces a situation of conflict between moral values and/or when he acts in a way that is inconsistent with his beliefs or moral values. This dissonance can be a very disturbing, unpleasant and even painful psychological experience, usually leading to strong negative emotions such as anxiety, fear, frustration and anger. The stronger the potential dissonance, the less likely the person will engage in the unethical or fraudulent behaviors. So even when the pressures and incentives are strong (Fraud Triangle factor 1) and easy opportunities are available (Fraud Triangle factor 2), the person tempted to engage in unethical and even fraudulent behaviors will usually experience a painful psychological dissonance. Hence he will feel the intense need to remove the pain and restore internal harmony by somehow “reducing” the dissonance (Fraud Triangle factor 3).

How Can You Reduce The Dissonance?

The best is obviously that you make the decision not to engage in the behavior that create the dissonance in the first place. However if you are in a situation where you still feel compelled or even actually want to do it (because of the benefits you will get), you will need to RATIONALIZE your unethical or fraudulent behavior in a way that is congruent with commonly accepted values and principles. So that you will be able to alleviate the feeling that you are doing something really wrong or that the wrongdoing is somehow justified for example as a mean to achieve a much “greater good” like saving souls with the Crossover project.

Let’s take some examples from the CHC case to illustrate what Rationalization means. After a careful review of the case, a few “difficult issues” that could have created strong dissonances for the accused church leaders and members have been identified. I will list the “difficult issues” in the form of questions as follows:

Question 1: Why choose Sun Ho as the main focus and vehicle for the Crossover project?
Question 2: How does Sun Ho’s U.S. musical career fit with the objectives of the Crossover project?
Question 3: How does Sun Ho’s U.S. stage personae fit with the objectives of the Crossover project?
Question 4: How was the financing of the Crossover project arranged?
Question 5: What are the real fruits of the Crossover project?

Because each of the above questions are about important moral and spiritual issues that can create strong dissonances, there was a crucial need for the CHC leadership to rationalize the answers to those questions to justify their behaviors to make them at least acceptable by the church members and preferably even to win their support.

However, interestingly, it appears that for many years the church communication about Sun Ho’s Crossover had actually been quite limited, essentially consisting of victory announcements when one of Sun Ho’s singles reached the top of the U.S. dance charts or was invited to sing or attend some A-list events. There were also regular glowing reports about her achievements on the humanitarian fronts. Suddenly everything changed when the case broke out in 2010. After a few initial months of confusion and disarray, the church leadership started to communicate intensively about the Crossover project, particularly on the origins, method and fruits, through preaches, videos, information booklets and lastly through the recently launched CHC Crossover website early this year.

From a Crisis management perspective, this flurry of communications and the Crossover website in particular, appear to be a carefully planned and quite well-executed crisis communication strategy to provide the church members with the leadership’s answers to most of the above mentioned “difficult” questions 1 – 5. I can analyse the underlying key objectives of this crisis communication strategy as follows:

    1. To write (or rather rewrite) the narrative (story) of the case from the CHC leadership’s perspective to counter-balance the storyline that has been emerging from the COC & CAD investigations over the past 2 years.
    2. To focus first on CHC members, the objective is to take control of and frame the way CHC members will interpret the facts gradually unfolding to push them towards the narrative developed by the CHC leadership. The ultimate goal is preserve member’s loyalty and even build retroactive support for the new narrative.
    3. Finally to turn the tide in the “battle of mind” with the prosecution by changing the perception of other key stakeholders. How? By building a strong and offensive defense based on a now well-constructed narrative explaining the behavior of the CHC leaders in a positive light.

This communication strategy has already met some successes. A large majority of CHC members have so far, closed ranks rallying faithfully around their leaders with many church members even claiming that they implicitly approved of their leaders’ spending because they have supported the crossover project all along.

This makes this risk assessment analysis all the more interesting and I will now explore more in-depth each of the above mentioned difficult questions in my next few posts. My objective will be to find out 1) why these issues can create dissonances, 2) what are the ways they were “rationalised” by the CHC leadership and 3) to critically analyze them to highlight potential weaknesses (if any) in the argumentation used.

Source: Marc Ronez, City Harvest Case part 4: Can you Rationalize a Crime to be Beneficial to Society?, The Risk Management Paradoc, http://marcronez.wordpress.com/2013/08/10/city-harvest-case-part-4-can-you-rationalize-a-crime-to-be-beneficial-to-society/, 10/08/2014. Accessed 15/09/2013.)

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An Insightful Analysis To The CHC System (Part 3)

14 Wednesday Aug 2013

Posted by Nailed Truth in C3 & Pringles Associations

≈ 1 Comment

Tags

c3, c3 church, CHC, Christian City Church, City Harvest Church, fraud, Kong Hee, motive, Presence Conference

Kong Hee says about CHC, Phil Pringle and the C3 Church Movement,

“You can’t talk about City Harvest Church without talking about C3. Or Christian City Church. You know Pastor Phil has been there for me; praying with me; encouraging me; discipling me; telling me how to do the work of the ministry; taught me how to collect an offering; how to give an altar call; how to build a church; build a team. So Pastor Phil, from the depth of my heart, for Sun and myself, we wouldn’t be where we are today without you and Pastor Chris. Let’s give Pastor Phil and Pastor Chris a big clap.” – Kong Hee, Session 8: (00:24), Presence Conference 2010.

The above quote is something to think about while reading the below article by Marc Ronez. Before reading this third article, make sure you have read his earlier articles:

An Insightful Analysis To The CHC System (Part 1)

Here is Ronez’s third article analysing the CHC situation:

City Harvest Case part 3 – The Opportunity Makes the Thief

Social scientists, psychologists and criminologists generally agree that human behavior is the product of a complex interaction among a wide range of factors. Some of those factors are personal to the individual and others are related to the environment in which the individual evolves. The Fraud Triangle Risk Assessment model that I have been using for this analysis of the CHC case categorize these factors into 3 groups: Pressure, Opportunity and Rationalization. In my previous post, “City Harvest Case part 2: If there is a Fraud what would be the Motives?“, I focussed on the PRESSURE factors and we were able to identify the incentives and the pressures that could have MOTIVATED the prosecuted CHC leaders to commit the unethical or even the fraudulent actions that they are accused of. Now it is time in this post, to shift our attention to the OPPORTUNITY, i.e. environmental/contextual factors and I would start by referring to an old saying:

“The OPPORTUNITY makes the thief”

This saying seems to imply that OPPORTUNITY factors are possibly the most important among the 3 groups of factors of the Fraud Triangle, as indeed the saying says: they ‘MAKE the thief’. An important body of research works has produced empirical evidences that support this assumption. Researchers point out that most criminals do behave rationally when they decide go ahead or not with a crime. It means that they will evaluate whether the benefits outweigh the costs or risks of committing it. Hence, it is important to understand that whatever the strength of somebody’s motivations to commit a crime, he cannot do it if the environment is not favorable. On the contrary, easy opportunities may create temptations too attractive to resist and hence may spur people into criminal actions. So we can postulate that environmental factors for crime opportunities are key necessary causes of unethical and fraudulent behaviors, as they are the catalysts that translate motivations into unethical or even criminal actions.

The findings from these research works have important practical implications for fraud crime fighting policy and practice. They especially highlight the importance of focussing on the treatment of environmental/contextual factors so as to ensure a more effective fraud risk management system by:

  1. removing the opportunities or at least making it as difficult as possible to commit the crime, and
  2. making the costs of a crime greater than the benefits by ensuring a high risk of being exposed and hence punished for it.

Therefore based on these research findings, every organization must establish a solid governance & risk management control system aimed at enhancing the honesty, integrity, transparency and effectiveness of its management practices (see an example using King III report as a basis). So I will evaluate the strength and deterrence of the governance & risk management control system of CHC by assessing, whether the accused leaders had the OPPORTUNITY to “break or bend the rules” and the ability to CONCEAL their activities to try to avoid getting caught and punished for it. 

To do so, I will review the following areas to compare CHC practices with recommended risk management best practices:

  • Governance Structure
  • Board Role & Dynamics
  • EMs and AGMs Role & Dynamics
  • Information Transparency & Disclosure to Stakeholders
  • CHC Organizational Culture & Influence on Members’ Behaviors

Governance Structure

The governance structure refers to the distribution of roles and responsibilities between the various key groups of internal & external stakeholders of an organization. The governance structure in CHC before the beginning of the case appeared to have been, at least on the surface, pretty ‘standard’ although on the lower range of the Governance Maturity spectrum.

justice statue with sword and scale. cloudy sky in the backgroundFirst, CHC has a Church Board. The Church Board is overall in charge of ensuring proper management and oversight of the church activities. In organizations, among other things, the Board is supposed to be the First Line of Defense against inappropriate top management behaviors.

Second, there is the AGM of the Executive Members (EMs).They elect the board members and are supposedly in position to question, discuss and approve (or reject) the orientations, objectives and activities of the church that are proposed by the Leadership.

Third, of course, CHC also has an Internal Audit Department who, on an on-going basis, is supposed to (1) monitor operating results, (2) verify financial records, (3) evaluate the effectiveness of internal controls, (4) assist with improving efficiency and effectiveness of operations, and (5) detect fraudulent behaviors.

Finally, CHC has External Auditors, who are responsible for determining, among other things, whether (1) the accounting records are accurate and complete, (2) prepared in accordance with the provisions of applicable regulations, and (3) the statements prepared from the accounts present accurately the organization’s financial position and the results of its financial operation.

However, we should also highlight some WEAKNESSES in the CHC Governance Structure as follows:

  • There did not appear to be any Board Level Committees dealing with Risk, Ethics & Compliance management issues.
  • There are no traces of any Remunerations Committee that would have been in charge of reviewing how leaders & top management are compensated.
  • There was apparently no risk & business continuity management departments that would have been in charge of designing and implementing GRC (Governance, Risk & Compliance) Framework in the organization.
  • There was no Whistle Blowing hotline system that would allow any member to raise the alert about any unethical or fraudulent behaviors they may have been witnessing,

These committees, departments & systems are usually necessary fixtures of a proper governance structure as they allow more focus, on-going scrutiny and granular management of important issues that affect the performance & sustainability of an organization.

We should also mention the peculiar and “vulnerable” situation of Ordinary Members (OMs) who are ”Common” Worshippers in CHC. There are OMs who provide generously their time (through volunteer works) and money (through tithes and donations) to the church. In a way, they are both members and “customers” of CHC. However, their level of access to information and ability to control the management is extremely limited as they have no right to attend the AGM and hence, have no voting rights. Practically, their only rights is to use their voice to ask questions or complain if they are not happy with something. But to do so, they would need to know what is going on and have the capability to “make themselves heard” by the leadership.

Finally, we can also observe that CHC is an independent non-denominational Church. That means that there are no other formal external authorities – apart from the regulator, i.e. the Commissioner of Charities (COC) – that could have had the power to exercise monitoring and control over CHC’s spiritual and managerial directions. Pastor Kong Hee does have spiritual mentors he refers to occasionally, however it seems that he has changed mentors at key crossroads of CHC development. Hence, the extent of the real influence that those mentors can exercise on Pastor Kong Hee, especially if they were to disagree with some of his important decisions, is difficult to evaluate. Would Pastor Kong listen to them and change his ways or would he simply choose a new mentor that tells him something that aligns with what he wants to hear?

Church Board’s Role & Dynamics

While there is a Board supposed to be the first line of defense of the Church with the role of ensuring proper management and oversight of the church activities, according to the evidences brought forward by the Commissioner of Charities (COC) and the Commercial Affairs Department (CAD), CHC Board members “have been less than prudent in the discharge of their duties toward the Charity and its members” (See COC Portal). In short, it means that the control exercised by the Board was deficient. From the information made available during the first week of trial, it looks like many important decisions were actually made by a very small group of insiders, apparently centered around Pastor Kong Hee and Pastor Tan Ye Peng, who were respectively the Chairman and Deputy Chairman of the CHC Board. The rest of Board members appeared to have played more of a supporting role, as a willing “rubber stamping chamber”, approving formally decisions already made by the top leadership sometimes months after those decisions had been executed by the operational management.

self-censorship4How could the kind of situation we just described be possible? Part of the answer may lie with the composition and the repartition of the roles in CHC board, which I would characterize as highly problematic from a Corporate Governance perspective. First of all, examining the role the Chairman of the Board, I should stress that it is a very important function because the Chairman sets the agenda and he is in a position of authority that can strongly influence the outcomes of the discussions and decisions made by the Board. That’s the reason why Corporate Governance best practices recommend that the Chairman of the Board should not cumulate his role with any direct managerial or other responsibilities in the same organization so as to avoid conflict of interests and ensure he is able to fulfill his controlling duties without undue biases. However, in CHC case, Pastor Kong Hee was at the same time, in charge of pastoral duties, directly involved in executive management decisions and overseeing the executive management of the church through his roles as Senior Pastor of the Church and Chairman of CHC Board. While this kind of situation is actually quite common in many charities, it is potentially very unhealthy and can open the door to a wide range of ethical and managerial problems as the Chairman could easily abuse his powers. Hence in order to counter balance the power of Chairman of the Board, Corporate Governance best practices would also dictate that there should be a strong and independent element on the Board with independent Directors able to challenge forcefully the Chairman and the Executive Management. In practice, independent Directors should make up at least half of the Board, especially when the Chairman of the Board is cumulating this role with other important executive leadership or managerial functions in the same organization as this was the case in CHC.

Unfortunately, it seems that there was no real independent element in the CHC Board. Indeed the CHC board members may not have been truly in the most favorable position to exercise independently their oversight duties due to the peculiar nature of their respective relationships with Pastor Kong Hee. To put it simply, he was their trusted spiritual leader and hence it seems indeed that all the board members submitted willingly to his spiritual and temporal authority. In essence, they were loyal followers of Kong Hee and his wife, Sun Ho. As a result, they were devoted to the realization of their vision for the future of the church. Therefore, when the same man of God told them that the crossover is a direct mission given by God to Sun Ho and that it has been confirmed by signs and prophets, it is understandable that they may have found it very hard to question the wisdom of this decision. We can conclude that Pastor Kong Hee and his trusted Deputy Senior Pastor Tan Ye Peng had both a strong temporal & spiritual authority in the Church and were subjected to very little (if any) human control at board level.

The Executive Members (the EMs) and AGM’s Role & Dynamics

censorshipCHC Executive Members (EMs) have the right to participate and vote at the AGMs. They are electing the board members and are supposedly in position to question, discuss and approve (or reject) the orientations, objectives and activities of the church. Unfortunately, from the information available, it appears that the same kind of loyalty and submission to authority principles, we have already observed and described in the previous section about the CHC board members, also applies here for the vast majority of the EMs who seem to believe that they are duty-bonded to show support for their Spiritual Leaders without asking questions and without having second thoughts. However as also demonstrated by the Milgram experiment (where a minority of participants refused to continue the experiment despite the pressures exerted on them), not everybody will follow the ‘flow of the herd’. In a large body of people (about 700 EMs), statistically, some are actually bound to ask difficult questions to the Church leaders, disagree and resist.

Nevertheless in most instances, challenging the  the wisdom of certain decisions made or proposed by the church leaders appeared to have been a futile endeavor.  According to testimonies from church insiders, the EMs who asked “difficult” questions during AGM were perceived negatively as rebellious by the leadership and even by the vast majority of the EMs body. In such a case, what can you do when the majority is against you? These ‘rebellious’ EMs would usually be rebuked, singled out for spiritual counseling and often would end up being sidelined with not many options left but to stay and keep quiet or leave the Church without making noise. At least not until somebody blew the whistle to the COC.

Information Transparency & Disclosure to Stakeholders

It is widely recognized that having access to the right information at the right time is essential for effective decision-making. However, information asymmetry naturally happens in organizations among different groups of stakeholders, with the ones in charge of the management typically having access to more quality information than others. Hence, there is always a risk that they would take advantage of this situation to exploit other stakeholders. Therefore, it is important to have mechanisms that redistribute the relevant information to the various stakeholders who need it so as to ensure appropriate level of transparency necessary to support effective integrity and accountability by the leadership. So what was the situation in CHC in this regard?

Looking at how the communication about the Crossover project has been managed as an example, it can help us understand the characteristics of information sharing and stakeholders communication’s practices in CHC.

Positive spin truth1. Trust in Leaders Rather Than Disclosure of Information

When I examined the church communication over many years it became quite clear that it is built on one key assumption: There is an expectation that church members should have strong faith in the goodness and wisdom of their spiritual leaders. In other words, church members should TRUST that their spiritual leaders, being men of God, will do the right things and hence church leaders can decide what information to share or not. Church members should not feel the need to ask additional questions. Pastor Kong Hee in his preaches had many times used the metaphor of the sheep and the shepherd, explaining that a sheep must trust and follow the shepherd because he loves the sheep and knows what is best for them.

2. Public Relation Exercise Not Information

For example, for many years the essential purpose of communication about the Crossover project was not to provide information, but rather to convince church members that Sun Ho’s Crossover was a success story.  It essentially consisted of victories announcements when Sun Ho’s singles reached the top of the US dance charts or was invited to sing or attend some A-list events. There were also regular glowing reports about her achievements on the humanitarian fronts.  

This is clearly not information when you carefully select and put a positive spin on some news items to frame what people see and how they will see it, while avoiding talking about some of the less favorable or negative news items.

Here I must stress that this kind of PR communication practices are not specific to CHC. Indeed in the political arena, the business marketplace and media, exaggerations and spins in communication are commonplace.

3. Crossing the Thin Red Line between PR Spins and Outright Deception?

Being commonplace does not make it right, especially for charities and religious organizations that are supposed to abide by much higher level of principles and values systems. Furthermore, there is a very thin “red line” between an exaggeration or a spin and an outright deception.  Was the line crossed in CHC, when from the facts and many testimonies, it appears clearly that the general body of Church members was led to believe that Sun Ho’s crossover was NOT financed by the church? Pastor Kong Hee himself had repeatedly claimed that his wife was very successful and was making a lot more money than him, that her music career was her own business and it is independent from the Church. How do you interpret that?

We can conclude that there was a clear lack of transparency and strict information control organized by the leadership, who could decide what information can be shared or not for whatever reasons, deemed appropriate by the leadership. Even at the Church Board and AGM levels, the trial proceedings have revealed that the information provided to at least some board members and EMs was not always timely and complete.

CHC Organizational Culture & Influence on Members’ Behaviors

The corporate culture is one of the key drivers of people’s behavior in organizations. People’s behavior will tend to conform to the values deeply rooted in an organizational culture. Therefore, to support effective checks & balances in the governance system, you will need to nurture a proactive and risk-aware culture, that promotes information transparency, responsibility and accountability. So what was the situation in CHC?

Herding BehaviorAs already mentioned in previous sections of this post, CHC members may have been bound and blinded by a strong sense of loyalty to their spiritual leaders and subjected to the natural principle of submission to authority. Indeed the natural respect that the worshippers/learners have for a their spiritual leaders/teachers led primarily to a one-way and downward communication that left little (if any) space for questions and discussions. Furthermore, as mentioned in the previous section, public expression of negative feelings or reservations held or felt against church leaders or church policies and activities have been strongly discouraged (if not prohibited) in CHC, as they are considered as gossip leading to disunity. The church has “strict teachings” on it and Pastor Kong Hee in his preaches said a number of times that Gossip is Satan’s lethal weapon. It seems that the proper course of actions (in CHC) if a member is unhappy or has questions about something is to ask his cell group leader privately and be contented with whatever answer he gets. If they are still not happy, spiritual counseling is available for “difficult” cases, apparently usually to convince them that they are in the wrong at least according to some testimonies you can find on CHC confessions Facebook page (a forum for people claiming to be former or current members of CHC, where they can share their experiences). Not following that course of actions would be considered as gossiping, creating disunity and hence going Satan’s way. This is obviously not really an option for a good christian. Here again the options are limited: to stay and keep quiet, or leave the Church without making any noise.  In this regard, it must be noted that actually a large number of members have left the church over the years, it is reasonable to assume that most of them left because they were unhappy with something about the church and/or its leadership.

In summary, putting it all together, one-way communication, selective information disclosure, strong peer pressures and church leaders’ close supervision of church cell groups have been working very effectively to promote a culture of OBEDIENCE and CONFORMITY in CHC. Voting with their feet by leaving the church quietly often ended up to be the only option out for the so-called “rebellious” characters.

Conclusion on the Opportunity factors and Fraud

As highlighted by the COC report on CHC and as actually at least partially acknowledged by CHC management themselves as well, the oversight and control structure and prevailing culture in CHC, before the start of the case, appeared clearly to have been on the weaker side leaving the church very VULNERABLE to possible unethical or even fraudulent activities.

However we must stress that having both the motivation and the opportunity may still not be enough to ensure that unethical or fraudulent acts will be committed.  This is because human behavior is also influenced by the values system of the individual considered. A values system forms a moral code of conduct, a sort of compass that helps people in differentiating what is right or wrong, what is good or bad and hence guide an individual’s behavior in society. So should somebody tempted  to commit unethical or fraudulent acts, he would need to find a way to justify his behavior to be able to Break the Rules without feeling that he is doing something really wrong by breaching commonly accepted values and principles.

This will be the purpose of my next post on this case entitled “CHC Case – Can you rationalize a Crime to be a Benefit to Society? ”. It will focus on the third question of the the Fraud Triangle, i.e. the RATIONALIZATION Factor. We will assess from the facts how it could be possible for the accused CHC Leaders to RATIONALIZE their behavior.

Go to Next Post: City Harvest Case Part 4 – Can You Rationalize a Crime to be a Benefit to Society? 

Source: Marc Ronez, http://marcronez.wordpress.com/2013/08/04/city-harvest-case-part-3-the-opportunity-makes-the-thief/, 04/08/2013. (Accessed 07/08/2013.)

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An Insightful Analysis To The CHC System (Part 2)

12 Monday Aug 2013

Posted by Nailed Truth in Uncategorized

≈ 1 Comment

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c3, c3 church, CHC, Christian City Church, City Harvest Church, fraud, Kong Hee, motive, Presence Conference

Kong Hee says about CHC, Phil Pringle and the C3 Church Movement,

“You can’t talk about City Harvest Church without talking about C3. Or Christian City Church. You know Pastor Phil has been there for me; praying with me; encouraging me; discipling me; telling me how to do the work of the ministry; taught me how to collect an offering; how to give an altar call; how to build a church; build a team. So Pastor Phil, from the depth of my heart, for Sun and myself, we wouldn’t be where we are today without you and Pastor Chris. Let’s give Pastor Phil and Pastor Chris a big clap.” – Kong Hee, Session 8: (00:24), Presence Conference 2010.

The above quote is something to think about while reading the below article by Marc Ronez. Before reading this second article, make sure you read his first article:

An Insightful Analysis To The CHC System (Part 1)

Here is Ronez’s second article analysing the CHC situation:

City Harvest Case part 2: If There is a Fraud What Would be the Motives?

As already mentioned in my previous post “City Harvest Case Part 1: Following God or Mammon?“, the COC and the prosecution claim that at least SGD 24 millions were illegally diverted from the church building fund and channelled to finance Sun Ho’s attempt to breakthrough on the Hollywood music scene. In order to find out whether there could be any real substance (or not) in the allegations made against the CHC leaders, I will explore this case using a well-tested and recognized Fraud Risk Management Analytical Framework: The Fraud Triangle. So starting the analysis with the first factor of the Fraud Triangle model, we should ask ourselves what would be the motives of the accused CHC leaders to commit the crime they are accused of?

It is a well-known principle in criminal investigations that when trying to identify possible suspects, looking for whoever benefited from the ‘crime’ is a good starting point. This is simply because the benefits (obtained or expected) can often explain what could have motivated the individuals to engage in the unethical or illegal activities. “Benefits” can be defined either as gaining something desirable (money, power and other gratifications) or avoiding something negative (loosing money, job, reputation, etc). This is the purpose of the first question of the Fraud Triangle risk assessment model to identify and analyse those benefits or incentives. Beside the INCENTIVES, we will also look at any form of  PRESSURES that could have motivated the accused CHC leaders to find a way – and possibly any way – to get the necessary funds to finance Sun Ho’s music career in the US.

Who Are The Key Beneficiaries  of The Crossover Financing Scheme? 

Looking at incentives side first, the main “beneficiary” of the Crossover’s funds is Sun Ho, wife of CHC senior pastor Kong Hee. As reported in the news, thanks to at least SGD 24 millions provided indirectly by the Church, Sun Ho had access to everything that money can buy to support her attempt to breakthrough on the US musical scene. She financed the expensive production and marketing costs of her singles and albums with top music producers such as renowned rapper Wyclef Jean. She bought her way to the appearance of a “super star” status with a luxury mansion in a plush Hollywood district, clothes from top fashion designers, a large entourage of helpers (primarily members from the church) and the participation to A-list events. Interestingly, she is not part of the group of the 6 CHC leaders being prosecuted in this case.

PK TimesWhile Sun Ho was the main direct beneficiary of the funds of the Crossover project, her husband, Pastor Kong Hee also benefited tremendously both directly and indirectly from arranging the financing of his wife’s musical career by the Church he was (and still is) leading. On the material and social sides, they both enjoyed the luxury lifestyle of socialites in Hollywood, mixing with the rich and famous people both from the secular and Christian elite crowd. This environment and the connections that came with it may have contributed to Pastor Kong Hee’s tremendous increase in reach and influence over the same period of time. He became a renowned international preacher and motivational speaker, also gaining in the process more and more lucrative speaking engagements. Could the above benefits have influenced pastor Kong Hee’s decision to finance his wife’s music career? What about his natural desire, as a loving husband, to help his wife achieve her stardom dreams? Those are fair questions to ask. As indeed the quest for Fame, Money and Power has been a driving motivation for countless people generations after generations all over the world. History has also shown that when those goals are too hard achieve by legitimate means, the temptation to cut corners can quickly become unbearable especially if the other 2 Fraud Triangle factors are also present in the situation considered.

What About The Other Prosecuted Leaders Who Did Not “Benefit” Directly From The Financing Scheme?

What kind of incentives or pressures they might have had that led them to support a possibly unethical or even fraudulent scheme? Analyzing various possible scenarios, we can postulate that some of them may have benefited indirectly through “give and take” dealings. For example, they could have been rewarded for their support in other ways such as promotion, business opportunities, gifts, etc. Indeed according to the information revealed by the COC report and also during the first week of trial, there were apparently quite a number of conflict of interests situations in CHC. It appears that a number of CHC Leaders cumulated their church leadership roles with their own private businesses as suppliers or service providers of the church in the same area of responsibility. Those are extremely problematic situations as the risk of abuse of position to use church’s resources (people, equipment & finance), gain guaranteed business and secure favorable financial terms for their own personal benefits is ever present.

Another important reason that can explain why other leaders might have supported a possible unethical or fraudulent scheme is what we could call the principle of submission to (pressures from) authority figures. This principle was uncovered by the famous 1961 Milgram Experiment.

Milgram ExperimentConsider the following scenario: What if a person in a position of authority ordered you to do something that your moral conscience tells you is bad, like for example in the experiment to deliver a deadly 400-volt electrical shock to another person. Would you follow this order? I guess that asked in that manner, practically everybody would answer this question with an resounding NO. However Stanley Milgram, a Yale University psychologist, conducted a series of experiments that delivered shocking results. During the experiment, a large majority (65 %) of ordinary people ended up torturing other people with what they were believing to be deadly electrical shocks just because an authority, a scientist in a laboratory they had JUST met, told them to do so. While most participants were conflicted with the experiment, they still obeyed to the orders given by the scientist. The Milgram experiment demonstrated that most people, whatever their backgrounds, will quite naturally submit to authority and the problem is that even when “they are asked to carry out actions incompatible with fundamental standards of morality, relatively few people have the resources needed to resist the pressures from authority and to be able to say No”. This experiment provided a powerful and disturbing insight into the power of authority and the role of obedience in shaping behavior in human societies.

Spiritual AuthorityThis characteristic of human behavior under pressure submitting quite naturally to authority applies in any organizations and hence should quite clearly also apply in the CHC case. We are even talking about Divine Authority in this case as Kong Hee is a Pastor and has professed repeatedly in front of his congregation that he has been chosen by God to lead a Christian renewal in Asia. In such a case how could worshippers resist the pressures from a charismatic, God anointed leader who insisted that financing Sun Ho career (under the guise of the crossover project) is the Will of God and ask them to trust him by faith? There is a hidden danger here, as many Christians may think that they are putting their faith in God when in fact, practically they are putting their faith in their preacher and spiritual leaders. Hence, we have to keep in mind that when you do that, there is always the risk that you put your faith in the wrong person. During all my years investigating fraud cases in many different kinds of organizations, I have often observed how many ordinary people have felt compelled to engage into inappropriate activities due to misplaced and blind loyalty (or submission) to the wrong authority figures.

Personal & Environmental Factors Leading to Fraudulent Behavior

So based on the information available, we can observe that the accused CHC leaders had the incentives or were under the pressures that could have led them to commit unethical or even fraudulent actions. However please note that it is NOT enough to conclude that they necessarily did so as whatever the strength of somebody’s motivations, he cannot commit a crime if the environment is not favorable for it and presents no crime opportunities. Indeed it must be noted that individual behavior is the product of an interaction between personal and environmental factors. Hence as a matter of fact, no crime can occur without the environmental opportunities to carry it out. This makes environmental factors for crime opportunities a necessary cause of unethical and fraudulent behaviors.

So to conclude, in this post we have focused on the personal factors, asking ourselves what could have “motivated” the accused leaders to engage into committing unethical or even fraudulent acts. It is time now look at the environmental factors that can help to translate motivations into unethical or even criminal actions.

This will be the purpose of my next post on this case entitled “CHC Case – The Opportunity Makes The Thief”. It will focus on the second question of the the Fraud Triangle, i.e. the OPPORTUNITY (environmental) Factor. We will assess from the facts whether the accused leaders had the OPPORTUNITY to “break the rules” and the ability to CONCEAL their activities.

Source: Marc Ronez, http://marcronez.wordpress.com/2013/07/17/city-harvest-case-part-2-if-there-is-a-fraud-what-would-be-the-motives/, 17/07/2013. (Accessed 07/08/2013.)

 

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