All the Queen’s Horses, an illuminating look at government fraud

One of the most famous stories in all of literature — the tale of Humpty Dumpty — has become a metaphor for the fragile nature of power, a reminder of the catastrophic collapse and irreparable damage that greed can cause. Kelly Richmond Pope’s riveting documentary, fittingly titled All the Queen’s Horses (Horses), tells another such story.

Pope’s film is a story of how one person’s fraud — enabled by poor internal controls — left a humble Midwest city struggling to put itself together again.

How does $53 million disappear?

An award-winning film now available on streaming platforms, Horses documents the largest municipal fraud in U.S. history. The victim: Dixon, Illinois, a modest municipality with a population of around 15,800. The perpetrator: Rita A. Crundwell, the city’s controller and treasurer for close to 30 years. In 2012, Crundwell confessed to embezzling more than $53 million, used to support her championship quarter horse breeding operations and a lavish lifestyle.

To watch this illuminating, sobering film is to witness a shocking institutional collapse. Horses leaves many viewers bewildered that theft of such a magnitude could happen for so long without being detected — especially in a community with a general fund budget of only $8 to $9 million per year. But as the film makes clear, the crime was made possible by basic failures of governance, controls and operations. Specifically, the film demonstrates the following truths:

1. Basic internal controls are an absolute necessity; no matter how trustworthy people seem.

Crundwell was a long-time and trusted employee. She did it all —opening the mail, preparing and signing the checks, and reconciling the bank accounts. As the film shows, entrusting all of these responsibilities to one person was a crucial mistake, a major control deficiency that enabled Crundwell to steal money undetected. Failure to enact basic internal controls like these contributes to 30 percent of the frauds that occur. Below are other control weaknesses governments need to consider.