22 November 2002
Mr. James Copeland
Chief Executive Officer
Deloitte, Touche, Tohmatsu
New York, New York 10019-6754
United States of America
RE: Deloitte’s continued failure to clarify its role in Liberian audit
Dear Mr. Copeland,
Global Witness and the International Transport Workers’ Federation write to express their extreme displeasure with the lack of public action taken by Deloitte to address concerns over an agreement between a Ghana-based Deloitte subsidiary and the Government of Liberia. In this new era of corporate social responsibility, with particular regard to auditing firms, it is remarkable that Deloitte would not be more forthcoming regarding its work for a rogue government that is currently under United Nations sanctions.
Global Witness first contacted Deloitte by fax and telephone on 15 October, followed by numerous attempts to reach Deloitte staff by telephone and email. In the five weeks since our first communication, however, despite repeated attempts on Global Witness' part, we have only been contacted by a Deloitte representative, Ms. Oriana Pound, once. After an initial conversation in the week of 18 October there has been no follow-up, as promised by Deloitte, and no response to numerous attempts made to contact Deloitte. This raises grave concerns about Deloitte’s commitment to fulfilling its promises and fully investigating its subsidiary’s deal with the Liberian Government.
As previously communicated, the contract purports to fulfil a UN Security Council order to audit Liberia’s logging and shipping registry revenues; an order instigated by evidence provided by Global Witness, the ITF, and Security Council Panel of Experts that documents how these industries finance the illicit arms trade and paramilitary militias that are destabilising West Africa. As the project was ordered by the UN Security Council, the lack of transparency shown by Deloitte concerning the contract’s terms of reference is perplexing.
Moreover, according to local news sources, a Liberian national, Deloitte partner and Deloitte African Board member, Mr. George Fonderson, has arranged for his own private Monrovia-based auditing firm, Voscon, to perform a portion of the work. This is a clear conflict of interest, and casts grave doubt over the legitimacy and accuracy of any results.
As the Liberian Government has a history of circumventing Security Council attempts to audit the timber industry and corporate and shipping registries, it is the concern of Global Witness and the ITF that the Government of Liberia will abuse the legitimacy a Deloitte audit brings in order to further forestall punitive measures by the Security Council and to distract attention from its continuing violations of existing Security Council sanctions. For its part, Deloitte has done nothing to clarify the terms of reference and thus avoid charges of unwitting complicity with the Liberian Government.
Global Witness and the ITF again call upon the leadership of Deloitte to make public the agreement’s terms of reference, as well as to fully declare all parties to the contract.
By making public the terms of reference for the contract, and stating clearly which companies and their representatives are involved in the project, Deloitte can uphold its reputation as a responsible international auditing firm and further the cause of peace and stability in West Africa.
We therefore urge you to clarify Deloitte’s position on this issue as a matter of urgency.
We look forward to your prompt reply.
Alice Blondel, David Cockroft,
Campaigner, General Secretary,
Global Witness International Transport Workers’ Federation
Global Witness, Ltd. International Transport Workers’ Federation
PO Box 4062 ITF House
London N19 5WP 49-60 Borough Road
United Kingdom London SE1 1DR
Tel: +44 (0)20 7272 6731 United Kingdom
Fax: +44 (0)20 7272 9425 Tel: +44 (0)20 7403 2733
www.globalwitness.org Fax: +44 (0)20 7357 7871
22 November 2002