A few days ago, I read an article in the Financial Times dated October 15, 2023 (Citibank analyst dismissed for lying about meals expenses claim under €100 limit) about Szaboles Fekete, a senior analyst at Citibank (London). He and his partner went on a three-day business trip to Amsterdam. Fekete submitted his expenses which were below the company’s daily limits. However, a senior manager rejected his expenses because he believed that Fekete’s expenses were for two people and questioned his consuming two sandwiches, two coffees, and a drink during one business day.
Fekete said that he skipped breakfast that day and consumed two sandwiches and two coffees during the workday, not at one meal. The senior manager was not satisfied and escalated the matter to Citi’s ethic office which questioned Fekete again. Eventually, Fekete admitted that some of the food was consumed by his partner. Citi fired Fekete for violating the company’s expense policy and lying about his expenses.
If you think this was the end of the story, you would be wrong. Fekete sued Citi for wrongful dismissal. He claimed that he was on medical leave and medication when he first falsely replied by email to his senior manager. Fekete also had recently lost a family member. The UK judge ruled against him stating that Fekete “was employed in a position of trust in a global financial institution.” The case “is not about the sums of money involved.” The judge’s ruling was about Fekete’s not being honest.
The article cited several other bank professionals who were dismissed for small policy infractions, such as stealing food from the office canteen. Fekete’s story sparked off a flurry of reader responses that were primarily directed at Citibank, not Fekete’s dishonesty. One reader wrote: “You can’t lie in a bank, unless it’s a really big lie.” Readers were responding to Citibank’s fines to settle the 2007–2008 financial crisis, the 2018 manipulation of foreign exchange markets, and other banking abuses.
I submitted and reviewed at least a thousand business expense claim forms over my 34 years of employment. These expense reports took time to complete and review. Once I reached the managerial levels, I gave all my business receipts to an administrator who entered them into the company’s business expense software and returned the paper forms for me to verify and sign. Why didn’t I do my own business expenses? First, I wanted an independent person to review the expenses. I was fearful of making an inadvertent mistake that resulted in my dismissal. Second, I would be embarrassed to show any questionable business expenses to my administrator. I took the view that if the expense was not strictly business (hotel, plane travel, taxis, reasonable food), I would not give it to another person to administer. Why destroy a well-paid job on questionable expenses? Third, if questioned, I had a third-party involved rather than just my word.
As a supervisor, I reviewed all my direct reports’ business expenses. Sadly, not all employees were as rigorous as I was. One employee purchased an unusually large number of financial books and claimed the books were work-related. The occasional book is understandable. However, he must have been a speed reader by the volume of books claimed as business expenses. The same person claimed his frequent flyer yearly credit card dues because he said it allowed him to purchase lower priced business flights. It also gave him milage points that he redeemed for personal flights.
Another employee took the opposite approach. His business expenses were so low that I questioned him because he regularly interacted with customers. I learned that he was a very frugal person who just didn’t spend money. He once took a personal international flight and wore several layers of clothing just to save the baggage fees. Unfortunately, he became overheated when the plane sat on the hot tarmac.
During my career, I noticed a trend from loose business oversight to strict, almost crushing oversight. When I first became an energy trader, there were excessive, though not illegal, business practices: alcohol, expensive sporting events, high-priced meals, and other ‘business perks.’ These industry ‘freebies’ were primarily passed out to employees who normally would not be able to afford such luxuries. Over time, my company banned employees from accepting these kinds of gifts except token swag, such as a ballpoint pen or baseball cap with a logo. Even these minor items had to be entered into a tracking company database. If I bought coffee for a person in government, I had to enter it into the company’s database. Over time, I learned not to pay for anything when dealing with public officials.
Only once was I questioned on my business expenses. My Calgary office hosted an internal dinner at a restaurant after I flew there for an all-day review meeting. When I arrived at the restaurant, the restaurant owner asked me if our large group wanted to pour wine from larger wine bottles to save money. Being cost conscious, I agreed. Since I was the senior person at the dinner. I paid the bill that the Calgary office had arranged. The wine cost $2000 and upon inquiry, the Calgary office was not made aware of the wine cost. The restaurant owner refused to make amends. I had to report the wine expense to my manager who was rightly, very upset. I told him directly before my business expenses were filed and took the heat. The restaurant was banned for future business functions.
I have long advocated for honesty when mistakes are made. Lying or covering up mistakes usually results in worse outcomes than upfront admission of guilt. “So now, O Israel, what does the Lord your God require of you? … to keep the commandments of the Lord your God.” (Deut. 10:12–13) What is required? “You shall not steal; you shall not deal falsely; and you shall not lie to one another.” (Lev. 19:11) Scripture does not state that lying on small matters is acceptable. All dishonesty is unacceptable. I believe that had Fekete initially told the truth, grace would have been offered and he would have been allowed to resubmit his business expenses. At the same time, Citi and other large banks have a much larger cultural issue to address: trading risk and compliance. Their financial risk issues will be much more difficult to correct and far more costly, both internally and externally, than the time and money spent in court defending their business expense policy.