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Greenpeace says rogue employee lost $5.2 million on currency hedge gone wrong

FILE - In this Tuesday, Sept. 24, 2013 file photo, Greenpeace ship 'Arctic Sunrise' is escorted by a Russian coast guard boat, in Kola Bay at the military base Severomorsk on the Kola peninsula in Russia, at dawn. Greenpeace has suffered a 3.8 million-euro ($5.2 million) loss on an ill-timed bet in the currency market by a well-intentioned — if reckless — employee in its financial unit. The environmental group, which is based in Amsterdam, said Monday, June 16, 2014, the employee — who had bet the euro would not strengthen against other currencies in 2013, when it did — had acted beyond the limits of his authority. (AP Photo/Efrem Lukatsky, File)

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FILE - In this Tuesday, Sept. 24, 2013 file photo, Greenpeace ship 'Arctic Sunrise' is escorted by a Russian coast guard boat, in Kola Bay at the military base Severomorsk on the Kola peninsula in Russia, at dawn. Greenpeace has suffered a 3.8 million-euro ($5.2 million) loss on an ill-timed bet in the currency market by a well-intentioned — if reckless — employee in its financial unit. The environmental group, which is based in Amsterdam, said Monday, June 16, 2014, the employee — who had bet the euro would not strengthen against other currencies in 2013, when it did — had acted beyond the limits of his authority. (AP Photo/Efrem Lukatsky, File)

AMSTERDAM - Greenpeace has suffered a 3.8 million-euro ($5.2 million) loss on an ill-timed bet in the currency market by a well-intentioned — if reckless — employee in its finance department.

The environmental group, which is based in Amsterdam, said Monday the employee — who had bet the euro would not strengthen against other currencies in 2013, when it did — had acted beyond the limits of his authority.

Greenpeace International fired the employee, whom it did not identify, but said there was no evidence of fraud.

"Every indication is, this was done with the best of intentions but not the best of judgment," said spokesman Mike Townsley in a telephone interview from Mexico.

He said the organization was deeply concerned that the incident would offend its supporters, and apologized. Greenpeace does not accept contributions from companies or governments and is funded entirely by individuals.

Responsibility lies partly with the employee and partly with the organization, Townsley said.

The employee was a financial expert whose job included currency trades to protect the organization from fluctuations in the market. He was not qualified, however, to undertake trades on the scale he did, Townsley said. In addition, he ignored company rules, under which he should have checked with supervisors and probably hired an external expert for advice on how to manage risks, Townsley added.

"Hindsight is 20/20, but we believe if he had followed rules and procedures this wouldn't have happened," said Townsley.

He said the employee was fired for ignoring rules, not for the loss itself, which — although sizeable compared with donor contributions — amounts to a fraction of the organization's annual revenues of around 300 million euros ($406 million).

Gerald Steinberg, the president of NGO Monitor, which studies accountability at non-profit organizations, said he wasn't familiar with Greenpeace's finances. But he said 300 million euros is "a huge amount of money," and it puts Greenpeace in the first rank of international non-governmental organizations in terms of size.

He said it would be normal for a non-profit organization that large to turn to external experts to oversee at least some of the more complex aspects of its finances.

In the 1970s, human rights groups and environmental groups may have been "mom and pop operations with a lot of volunteers and limited budgets," he said. Now any image of head offices filled with "T-shirts and jeans" should be discarded.

"It's big business," he said. "But what you see sometimes at an organization like this is that its ability to manage finances has lagged behind its ability to solicit and raise funds."

Townsley of Greenpeace said the organization has already taken steps to strengthen financial controls to prevent such incidents in the future.

The group said it would absorb the loss by cutting planned investments in "infrastructure" and pledged not to reduce spending on campaigns and protest actions.

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