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Financial Scandal: Greenpeace In Disarray

Michaela Schiessl, Spiegel Online

Last week, news emerged that a Greenpeace employee had lost millions in donor money through ill-conceived currency deals. Now the environmentalists are in danger of losing their biggest asset: their credibility.

On the day the scandal hit newspaper headlines, Greenpeace International Executive Director Kumi Naidoo didn’t panic. A South African with Indian roots who grew up in a township under the Apartheid regime, a couple million missing euros was far from the worst Naidoo had seen.

Instead of tearing out his hair, Naidoo twittered cheerfully about a lecture he was giving on the dispersal of power. He wished other climate activists happy birthday and counselled “young people out there” not to “put any faith in the current generation of adult leaders.”

Unfortunately, Naidoo hasn’t been particularly committed to following his own advice. Had he been, the organization he leads, Greenpeace International (GPI), might not have found itself facing a crisis last Monday after having lost €3.8 million ($5.2 million) through currency trading.

Acting independently and in violation of the organization’s regulations, a finance department employee signed forward currency contracts worth €59 million to minimize Greenpeace’s currency risks. But when some of the contracts came due, the European currency had — contrary to expectations — risen against many others.

The damage extends far beyond the lost millions. Greenpeace has been careful to cultivate an image as intrepid defenders of the environment. Calling themselves the rainbow warriors, activists hang from factory chimneys, throw themselves in front of whaling ships or risk jail time in Russia by calling attention to the plight of the Arctic. Now, another activity has been added: playing the financial markets. For an organization almost entirely financed by donations, the revelation is a PR disaster, endangering from one day to the next the greatest asset Greenpeace possesses: its credibility.

Greenpeace’s New Direction

This scandal is about much more than one person’s momentous mistake, it’s about an entire organization in a state of upheaval. Naidoo wants to shift Greenpeace’s focus from the industrialized countries to Africa and countries like Brazil, China and India. That, he argues, is the only way to counteract the threat of climate change. “We need to create an understanding in the developing countries that we will lose our planet if they follow the example of the industrialized nations,” Naidoo says.

Since he took the job in 2009, Naidoo has put all of the organization’s efforts into raising sustainability-awareness in the world’s emerging economies. It’s a huge effort that is plunging Greenpeace into disorder.It’s also expensive: In 2012, Greenpeace spent close to €90 million on fundraising — one third of all expenditures. And that’s not the only thing angering critics. Naidoo also envisions future campaigns no longer being coordinated from Amsterdam, but delegated to various national offices, requiring more coordination and communication. Just integrating the different cultures involved in the organization requires so much effort that other things have been neglected, like financial oversight.

If GPI was still the tightly run organization it once was, the risky investment strategy would never have come to pass, or at the very least, a professional crisis management apparatus would have been on hand to deal with it. Instead, Naidoo rushed to Boston to receive a prize for his civil disobedience-related pursuits.

When Naidoo returned to Amsterdam on Thursday, Greenpeace Germany, the branch that attracts the most donations, had lost 700 supporting members. Greenpeace Switzerland, which is just as financially robust, wrote a dismayed letter to its supporters asking “for forgiveness, from the bottom of their hearts.”

But while the national bureaus were placating enraged donors, top staff members were meeting in Arnheim to discuss staffing issues, leaving many of the desks at Greenpeace headquarters empty. At least one staffing issue has been cleared up though: The finance-department employee who finalized the contracts was fired.

Vacuum Led to Mistake

The lack of supervision is a direct result of Greenpeace’s restructuring. Because the campaigns have been delegated to individual countries, Greenpeace headquarters has become less important. Kumi Naidoo is rarely present and doesn’t even have his own office there. He confirmed that many of the 150 people who work at headquarters will have to go; the main office is dissolving.

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