Release of KPMG Forensic Review and IPI Probity Review

Statement by the International Peace Institute
22 December 2020

The International Peace Institute is an independent, not-for-profit think tank that has been instrumental in promoting peace, security and sustainable development by contributing to informed and effective international policy since it was established in partnership with United Nations Secretary General U Thant in 1970.

On October 29, 2020, the IPI Board accepted the resignation of its former president and CEO Terje Rød-Larsen.

At the same meeting, the Board decided to commission global accounting firm KPMG to undertake an independent forensic review to address its concerns about Mr. Rød-Larsen’s interactions with Jeffrey Epstein. These concerns included donations Mr. Rød-Larsen accepted from Epstein-affiliated foundations on IPI’s behalf, a short-term loan from Epstein to Mr. Rød-Larsen personally, and whether IPI was involved in other transactions related to Epstein.

The KPMG Forensic Review team was instructed to ensure IPI had fully accounted for all donations received from either Epstein or his entities, so that the total amount could be donated to support victims of human trafficking and sexual assault in accordance with the Board’s direction of December 4, 2019. In issuing this instruction, the Board was conscious that different Epstein-related foundations had made donations to dozens of non-profit institutions totaling tens of millions of dollars over many years.

KPMG was also asked to confirm IPI’s finding that the organization at no stage made any payments to Epstein.

The KPMG Forensic Review analyzed more than 152,000 transactions between January 2010 and October 2020 to identify any payments involving Epstein or 56 entities reportedly affiliated with him.

In summary, the KPMG Forensic Review found:

• No donations or reimbursements related to Epstein or his entities were received by IPI beyond those that have already been publicly disclosed by IPI;
• No payments were made by IPI to Epstein, either directly or to his entities;
• No transactions related to Mr. Rød-Larsen’s personal loan agreement;
• No IPI expenses related to Epstein, except for a $122 meal charge by Mr. Rød-Larsen in 2011; and
• All donations were properly disclosed to the US Internal Revenue Service.

We are releasing the KPMG Forensic Review in full so that IPI’s supporters, partners and staff can continue to have the same confidence in IPI that they have had for the past 50 years.

>>Download KPMG Forensic Review<<

All donations and reimbursements identified by the KPMG Forensic Review have been previously identified and publicly disclosed by IPI. They include five donations from Epstein-affiliated foundations totaling $650,000 between 2011 and 2019, reflecting approximately 0.9% of IPI’s total revenue over that period. IPI also paid the upfront cost of an airfare for economist Lawrence Summers during his engagement on an IPI project on the proviso that IPI was swiftly reimbursed. That reimbursement of $14,158 was made by an Epstein-affiliated entity.

In addition to the KPMG Forensic Review of IPI’s accounts, the Board requested a Probity Review to examine whether any IPI policies, regulations or laws had been breached, and to recommend how existing policies and procedures could be strengthened. This Probity Review was conducted by Mr. Cliff Perlman, Attorney-at-Law, who has more than 25 years’ expertise in the governance of non-profit institutions and serves as Treasurer on the IPI Board of Directors.

The Probity Review found:

• No evidence that any laws or regulations were breached in the course of IPI and Mr. Rød-Larsen’s contact with Epstein and his entities;
• No evidence of Epstein deriving any personal benefit from IPI in exchange for his donations; and that
• Mr. Rød-Larsen, while not technically breaching any IPI policies that existed at the time, should still have informed the Board of his decision to secure donations from Epstein-related entities and should not have taken a personal loan from him.

>>Download Probity Review<<

The Board has also directed IPI, based on this experience, to revise its policies and procedures over the past year. These include:

• A new Gift Acceptance Policy, adopted in December 2019, which requires IPI to consider whether potential donors are of sufficient good character;
• An updated Conflict of Interest Policy, which is being further updated to directly address reputational risk and any business dealings with donors and their affiliates;
• Updates to IPI’s Ethics Policy, Whistle-blower Policy and its new Anti-Fraud Policy; and
• Educating IPI’s staff and Board on how to recognize and respond to any future potential conflicts of interest.

As noted above, Mr. Rød-Larsen tendered his resignation as president and CEO on October 29, apologizing to the Board for his grave error of judgment.

We – the Board, management and staff of IPI – remain dismayed that a character as detestable as Epstein was permitted to associate himself with this proud and respected organization. Epstein’s crimes, which have destroyed so many lives, are inexcusable and reprehensible. They are in opposition to IPI’s core values.

It is our sincere hope that the institution will learn as much as possible from this disturbing episode and move forward with the essential work of supporting the international community to address the great challenges facing the peoples of the world and our planet in the decades ahead.

In this time of rising competition and growing division, IPI’s work to advance thinking on concrete ways to build and sustain peace, provide opportunities for dialogue, and generate objective, evidence-based research on issues of concern to the multilateral system has never been more necessary and important.

We look forward to continuing to work in partnership to realize our goal of creating a more peaceful and prosperous world now and in the years ahead.

For further information:
Dr. Adam Lupel
Acting President and CEO