It is not necessarily all about the money
By way of introduction, I will kick off our public fraud investigation blog in a somewhat unorthodox fashion with some comments on an article in Swimming World Magazine entitled, "Doing the Right Thing" (Jason Marsteller, January 2015, pp. 18-19).
The reason for choosing this article about cheating in athletics is to emphasize that we are going to be using a more broad use of the term "fraud" than is often associated with certified fraud examiners (CFEs), auditors, and others who are usually in the front lines of fraud investigation. For those professionals, it can often seem like it is all about the money. But there is a lot of fraudulent activity that, while it may have financial implications, is more concerned with other types of deceptive taking.
What happened to the swimmers?
Concerns were first raised by those most victimized by the fraud - female swimmers of the 1976 U.S. Olympic team. The issue probably should have been more obvious to others given that the circumstances could have been characterized as one of those "too-good-to-be-true" moments that raise the antennae of trained fraud investigators:
"The women's swimming events at the 1976 [Montreal] Olympic Games began with a six-and-a-half-second whipping by the East Germans over the Americans in the 400 meter medley relay. ... The performance of the women of the German Democratic Republic (GDR) in Montreal was arguably the most dominating by any women's squad in Olympic history. Their rise to the top of the sport had been shockingly abrupt." Chuck Warner, Swimming World Magazine January 2015, p.27.
Since this is a fraud blog, we'll present yet another of the indicia that something might have been amiss:
"While the U.S. women struggled to get on the award platform, the [U.S.] men were enjoying their most prolific performance in Olympic history." Ibid.
Thus, in contrast to their female counterparts, the East German men's team did not show such an improvement, at least not relative to the American men.
There could have been several reasons for such a difference between the performance of male and female swimmers from the same team. One important observation made by the U.S. female swimmers, who initially thought that males were in their locker rooms, was the deep baritone voices of the East German women. The response by East German officials apparently was "we came here to swim, not to sing". (Brent Rutemiller, "Doping's Darkest Hour", November 2013, Swimming World). Nevertheless, it was a piece of evidence that something might have been amiss.
It was not until after the fall of the Berlin Wall and the reunification of East and West Germany in 1989 that the files of the Stasi, East Germany' secret police, became available. In those files was evidence of an East German national athletic doping program in which thousands of East German athletes were subjected to doping, often without their knowledge. Included in that group were East German female swimmers who competed in the 1976 Montreal Olympics.
There were some negative consequences of the East German deception by which the public falsely concluded that East German swimmers had won through fair competition and adherence to the rules. The American female swimmers on the 1976 Olympic team, some of whom like superstar Shirley Babashoff were expected to be huge winners, were branded sore losers by the press for complaining about the very muscular appearance and low voices of the East German female swimmers. Babashoff, in particular, specifically stated her concern that the East German swimmers may have doped.
Swimming World Magazine has for years been pushing to have the record corrected. Given Swimming World Magazine's influence, including by their awards system, in December 2013, they stripped several of the East German female 1976 Olympic swimmers of their World Swimmer of the Year Awards and European titles. For those scientific researchers who might be following this, Swimming World's actions would be roughly equivalent to a retraction initiated by a scientific journal. Scientific journals, however, are often very resistant to taking such a step.
I doubt anyone would be investigating fraud if he or she did not get a positive feeling when justice was served. It can help keep the fraud investigator hunting. Swimming World seems to have the spirit of setting wrongs right as well. In addition to the award retractions noted above, they also tried to make things right for those swimmers who had been cheated by issuing corrected awards:
"Although long overdue, Swimming World's panel of international swimming experts has voted and has selected who it believes to be the rightful winners. At the same time, the magazine continues to call on the IOC [International Olympic Committee] to make things right by awarding the appropriate Olympic medals (1976-88) to those who deserve them." (Marsteller, op. cit.)
Perhaps most impressively, Swimming World took all these actions even though the events occurred almost three decades ago!
Can doping really be considered a fraud?
The definitions of fraud that we will employ in this blog go beyond solely those directly related to financial misconduct.
The term "fraud" (noun) is derived from the Latin "fraus" which means a "deceit, injury" (OED) or a "cheating".
In today's general English usage fraud can mean:
1) "wrongful or criminal deception intended to result in financial or personal gain";
2) "a person or thing intended to deceive others, typically by claiming or being credited with accomplishments or qualities"
The second usage, when applied to a person, is also known today as a "fraudster". (Oxford English Dictionary, "OED")
A "deception" is "an act or statement intended to make people believe something that is not true" (Merriam-Webster Dictionary).
The Association of Certified Fraud Examiners (ACFE) cites Black's Law Dictionary (8th Ed, 2004) for its "Fraud 101" definition of fraud:
"A knowing misrepresentation of the truth or a concealment of material fact to induce another to act to his or her detriment".