By Ng’ang’a Gicumbi
The recent National Hospital Insurance Fund controversy caught the country by storm. It included twists and turns that drew in the fund’s board, the Medical Services minister, acting Head of the Civil Service and the Prime Minister.
Undoubtedly, it is a scandal that should not be wished away by the appointment of a caretaker committee, however salutary the intention may be. It is also an excellent study on how not to steal State’s millions.
I am confident there will be pressure from several quarters to have the stolen State funds, if any, returned and due process of law followed to publicly name the fraudsters and at the same time exonerate innocent officials.
The NHIF and similar Government frauds have the hallmarks of the concept of ‘Fraud Triangle’ that was first developed by American criminologist and sociologist Donald R Cressey, renowned for his extensive research into the minds of white-collar criminals.
Frequently referred to as Cressey’s Triangle, the theory articulates three critical elements that must be simultaneously present for a typical individual to engage in fraud.
According to this construct, the first necessary condition is that the prospective criminal must be under personal financial pressure that he or she cannot or will not disclose. The pressure element in the Fraud Triangle is conceived as the problematic personal financial circumstances that motivate one to commit fraud.
The second prerequisite for fraudulent financial conduct is that the criminal must have the ability to rationalise his or her dishonest actions. Rationalisation refers to the failure of those who commit white-collar fraud to assume guilt or culpability for their actions. Instead, such individuals tend to see themselves as victims of unfair accusations by their real or imagined, political or organisational enemies or cite circumstances that are beyond their control.
This form of rationalisation often stems from the criminal’s belief that he or she has not been properly compensated for work performed or perhaps from a misguided belief that he or she is somehow entitled to borrow or appropriate Government funds to fulfill personal financial obligations.
The third key element of the triangle is the opportunity to commit the contemplated crime. The opportunity element in Cressey’s Fraud Triangle refers to the potential criminal’s access to the literal and logistical means to commit the fraudulent act.
In general, this requires the offender to identify some way to exploit their insider status within a government, corporate or business environment and to act accordingly.
White-collar criminals might take advantage of their superior knowledge of internal operations or their access to important accounts or assets to facilitate their schemes.
In many cases, such individuals are under the impression that their detailed personal knowledge of internal operations and procedures greatly minimise the danger of being caught.
This is best summarised by the aphorism ‘while the cat is away, the mice will play’. In other words, if people think they can get away with stealing something, then they will often do so. According to Cressey’s Fraud Triangle theory, for a typical person to engage in financial crimes, all three of the above conditions must be present.
Should any of the elements be absent, fraudulent activity is far less probable. In the case of the NHIF scandal, the Government may not have control of the social pressures of the fraudsters or their rationalisations but for heaven’s sake, it has complete control over people’s opportunity to steal from State coffers.
There is need for President Kibaki and PM Raila Odinga to read the mood of Kenyans and read the riot act against the real perpetrators of such crime. One way to show they are serious about embezzlement of Government funds is for them to activate the new Ethics and Anti-Corruption Commission before the President’s economic legacy and the Prime Minister’s presidential bid can be sullied.
In future, there should never occur theft of Government funds justified by cover-ups akin to Goldenberg and Anglo Leasing. Moreover, the Government needs to borrow a leaf from the private sector organisations, who expend a sizeable portion of their financial resources in introducing strict screening processes and technologies for their employees, irrespective of rank, especially those who are likely to be granted access to sensitive information and assets.
The writer is a behaviour scientist
