The chief executive of a major global aid charity is on administrative leave after she approved the use of an intermediary to make monthly payments to an armed opposition group in a conflict zone.
Third Sector has learned that Nancy Wilson, who has been the US-based head of Relief International since 2014, went on administrative leave shortly before Christmas after it emerged that she approved payments worth about £6,000 a month to an armed opposition group to protect workers in a conflicted region.
Eric Fullilove, the charity’s chief financial officer, left the charity at short notice in the summer after a payment from RI-UK, worth the equivalent of about £365,000 and intended for Unicef, was accidentally sent to fraudsters, Third Sector understands.
Relief International, which has its headquarters in Washington DC, with offices in London and Lyon, France, has about 7,300 staff and volunteers delivering aid projects in challenging situations around the world.
In late 2019, an armed opposition group in a conflict zone made demands for payment from RI and a partner organisation, or face having their activities in the area stopped.
Failure to pay would lead to the two organisations’ staff being considered targets, the charities were warned, and workers were immediately withdrawn for their safety.
Third Sector has agreed not to name the groups in question, or the location of the projects, in order that frontline staff are not put at risk.
It is understood that to resolve the situation, RI agreed to engage an “access consultant” who would be sent the equivalent of about £5,800 a month, plus a small handling fee, to pass to the armed opposition group.
This meant the payments would not be made directly by RI, would be less obvious on its financial statements, and would not be visible to the donor.
It is understood that the arrangement was agreed by Wilson in consultation with a small number of staff, but without consulting the charity’s board.
The payments, which began in April last year, were made from the charity’s unrestricted funds and kept as confidential as possible internally.
The move enabled staff to return to their offices and for work in the regions to resume.
Despite the charity’s audit and risk committee being informed of the suspension of programmes in the wake of the threats being made, it was not told about the decision to make payments through the access consultant, Third Sector understands.
Once the immediate danger passed, RI made no attempt to address this issue until it came to light late last year, it is understood.
The nature of the armed opposition group meant the payments constituted a clear breach of internal policies and a potential breach of a range of donor rules and statutory obligations, an internal investigation found.
That led the board to instruct an external firm to thoroughly investigate the issue and outline the ramifications for the charity.
It has left the charity and and its partner organisations open to accusations of breaching anti-terrorism legislation, donor rules and RI’s internal policies guarding against bribery, corruption and terrorist financing.
Wilson went on administrative leave at the end of December and the charity has employed legal counsel to advise on the steps forward.
RI has informed a host of international organisations and regulators about the situation, including the Charity Commission, the National Crime Agency and the Foreign, Commonwealth and Diplomatic Office in the UK.
The charity's leaders are understood to be concerned that donors and regulators will take action against the charity which could cause cashflow difficulties because of a loss of funding or cash being withheld.
The charity has withdrawn from signing any new USAID agreements as a result of the crisis, it is understood.
But there is also concern that a termination of the payments would put staff in the projects at risk.
In July last year, RI-UK was due to make a payment of $500,000 to Unicef but, as a result of poor financial controls, the money ended up in a fraudster's UK bank account.
The charity has been unable to recover the funds.
The following month, the departure of Fullilove, the US-based chief financial officer, was announced. He left just two days after staff were informed, having been with the charity for two years.
There is no suggestion of any illegal activity on the part of Wilson or any other member of RI personnel.
Ann Koontz, acting chief executive of Relief International, said in a statement: "During regular reviews at the end of 2020, Relief International uncovered past actions that may violate some of its most important core principles and policies.
“We started an investigation with outside counsel, self-disclosed to governments and donors, and continue to work to maintain transparency with impacted parties.
“We are co-operating fully with any government inquiries. While we do not have all the facts yet, Relief International will do whatever is necessary to right any wrongs.
“RI is using this as a chance to reinforce its total commitment to duty of care to team members, adherence to humanitarian principles and compliance."
The charity declined to answer questions in areas including whether Fullilove was asked to leave, and what it was doing to try to recover the funds sent to the fraudsters.