The Cambodian Institute for Human Rights’ former finance director, who originally alerted international donors to an embezzlement scam inside the NGO, was arrested and charged on Monday with forging documents and “breach of trust” for his alleged role in stealing around $214,000 in aid money from the organization.
Nhim Sakal was charged by the Phnom Penh Municipal Court Monday and is currently being detained by authorities, said a court official and a legal observer, both of whom declined to be identified.
The evidence against Nhim Sakal, who was the subject of an investigation by the international auditing firm PriceWaterhouseCoopers, was supplied by CIHR Director Kassie Neou, who was also targeted in the PriceWaterhouseCoopers inquiry.
“It’s not just Nhim Sakal—he was the whistle blower in this case,” said one former adviser to the CIHR.
A Western adviser with knowledge of the case said that on Dec 31, 2001, Nhim Sakal sent a letter to donors detailing financial improprieties—such as keeping undisclosed bank accounts with CIHR money and taking personal loans—allegedly committed by Kassie Neou.
Immediately after, Kassie Neou allegedly accused him of fraud.
The PriceWaterhouseCoopers investigation started in February 2001, and was initiated in part because of Nhim Sakal’s letter to CIHR’s main donors; the Asia Foundation, Forum Syd, Canada and others, the Western adviser said.
The charges against Nhim Sakal are not new. In September, Kassie Neou filed a lawsuit in municipal court against him, alleging that Nhim Sakal—operating alone—hid more than $200,000 in donor money from the CIHR.
However, in Nhim Sakal’s letter to donors, he outlines similar accusations against Kassie Neou, such as setting up “illegal” cash accounts, which he claimed were for Kassie Neou’s personal use.
He accused Kassie Neou of using $22,000 from a secret fund made up of donor money to buy a new house in Kandal province, which, Nhim Sakal claimed, he took more than two years to repay.
These accusations are also listed in the PriceWaterhouseCoopers investigation.
Kassie Neou on Tuesday admitted to setting up the secret funds, but said they were used only for CIHR activities.
However, he acknowledged that the $22,000 house he built with donor funds was not used for CIHR purposes. All that money has been repaid, he said.
A draft of an audit of the CIHR from September 2001 to June 2002—which has not been released publicly—shows an organization that was, at the very least, severely mismanaged, the adviser said.
The audit states that the CIHR did not perform cash counts regularly, had no monitoring for cash advances given to employees or even a cash advance policy, and shows some inconsistencies in the expenses of employees.
The audit also looks at Kassie Neou’s employment records, which show he was overpaid at least $9,870 for seven months, the Western adviser said.
Nancy Hopkins, assistant representative with Asia Foundation, declined to comment on the arrest of Nhim Sakal on Tuesday, as did Forum Syd’s officials Luz Baastrup and Canada CIDA’s Michael Barton.
(Additional reporting by Nhem Chea Bunly)