1st Issue: County Overbilling &
Government Indifference (Part 2)
Going into my
whistleblowing adventures I assumed that right and wrong were fairly clear
matters. I found, though, that more typically
some authority is empowered to decide on which side of the line separating
right from wrong an act fell[1]. Behavior becomes wrong because someone in
power says it is wrong, or it is acceptable because the power says so. Over time governmental agencies, responding
to their competing constituencies, can shift that line, making wrong what was
right in the past or making acceptable what was once wrong. Nudging the ethical line and shading the
vigorousness of enforcement can advance the interests of different players in
society. Taxpayers are among the
players, but so are government employees, health workers, clients of nonprofits,
donors to charities, the charities themselves, and many others.
When an industry
or a company causes a regulatory body, which acts with such authority, to favor
the regulated party over the public interest, it is called regulatory
capture. In the 2000s, The Minerals
Management Service (subsequently renamed Bureau of Ocean Energy Management), an
agency of the Interior Department, was captured by the oil and gas industry in two
ways: using the time-honored tools of sex, drugs, and graft[2],
and using contemporary tools of social networks and revolving employment doors[3]. The result was the 2010 Deepwater Horizon oil
rig fire and subsequent spill of 4.9 million barrels of oil into the Gulf of
Mexico[4].
Capture can be
subtle, too. In the 2000s, financial
regulators were captured by the banking industry in part because both groups
shared similar social backgrounds and networks, the regulators envied the
bankers’ higher financial and social status, and the regulators needed the
knowledgeable cooperation of the banks in order to do their jobs[5]. The result was lax financial market controls
that facilitated the financial crash following 2007.
Capture can generate neat
benefits for the regulated firms, including lax supervision, protection from
competition, bailouts, and unmerited contracts. The reward to regulators may be material in
the form of lucrative post-government employment, political contributions, and
favors to family and friends. Or the benefits may be intangible, like the
esteem of others, pride, and validation.
The problem of regulatory capture extends beyond heavily regulated
industries. As
nonprofits interact with their government funders, exchanging employees,
helping to guide social policies, and cooperating with resource starved
government monitors, regulatory oversight risks being co-opted.
The authority in the case of HomeFirst’s County
overbilling was a complex of governmental offices: the County Mental Health
Department, the County Attorney, the County Chief Executive, the County Board
of Supervisors, the Accountability Commission, the State Attorney General, and
ultimately the Governor. State officials
yielded to the judgment of the County, and County officials yielded to those
further down in the hierarchy so that inaction by the Mental Health Department
effectively shifted the line between right and wrong. The interests of the County and HomeFirst
were not cleanly separated because former HomeFirst employees’ managed
HomeFirst’s contracts with the County, and the County regularly renewed
HomeFirst’s annual contracts without the benefit of regular monitoring.
When I embarked on my whistleblowing, I envisioned only my
confrontation with HomeFirst, and I expected that would be supported by the
governmental powers that HomeFirst had betrayed. Instead I found myself in opposition to both
the company and its affiliated governmental partners.
In addition to disclosing issues to the authorities, some
whistleblowers take the more aggressive step of blowing the whistle to the
media. That did not work for me. The reporter I emailed at the Center for Investigative
Reporting, a nonprofit that aspires to pursue and reveal injustices that might
otherwise remain hidden, replied that she and another reporter who might have
interest were both slammed and could not take the project on. She recommended a San Jose Mercury News
investigative reporter who never replied to my email. When I tried again eight months later, a
different reporter at the Center for Investigative Reporting promised to return
my contact but never did. A columnist at
the San Francisco Chronicle did not reply either.
By March
2015, HomeFirst had not come up with a plan to repay the overbilled amount,
which had been revised to $140,000, and the County considered it very nearly
insolvent. Because the company provided
valuable services, the County did not want to force it into bankruptcy by
demanding any repayments. It would just
wait until the organization stabilized, but if HomeFirst failed, it figured it would
recover its money by withholding amounts it owed to HomeFirst at that
time. County Supervisor Simitian
declined to comment on the County’s new wait-and-see strategy.
The
County then decided to provide a $300,000 bailout to HomeFirst, spread in
declining amounts from April 2015 through June 2016 according to a contract
that was prepared and would be monitored by now-ex-Program Officer Hilary. Asked about the still unpaid overbilling,
Simitian was concerned by this turn of events and forwarded my letter to the
County attorney for comment. My new
complaint to the Accountability Commission was forwarded to the County for
action. The County did not act on either
referral, and both offices ignored my follow-up messages as did Simitian.
I included
the issue in two communications to Governor Brown’s office, but neither was
acknowledged.
In January
2016, I made another FOIA request to see if the County had attempted to collect
any of its money. The request was
misplaced until I followed up. Maybe I
will learn something if I wait longer.
The County overbilling experience generated some lessons for
me and other whistleblowers:
11. Even a relatively straightforward compliance
violation can involve technical complications that make understanding
difficult.
22.
Layers of oversight and monitoring confound how complaints
are handled and extend to frustrating lengths the time required to resolve a
complaint.
33.
One arm of government may be ill-equipped or
disinclined to question closely another arm.
44.
Claims for confidentiality and simple
unresponsiveness make it difficult or impossible to determine the status of any
complaint.
55.
Government agencies may change the standards for
compliance without communicating their reasoning.
66.
Political interest may vanish when the amount at
stake in the complaint is small compared to other matters considered by the
governmental agency.
77.
Public support may be inaccessible because media
do not find the violation of significant general interest.
88.
The responses by authorities can fade to nothing
as repeated complaints and follow-ups are presented.
99.
The whistleblower confronts not just the
corporate wrongdoer but a political structure that resists correction.
[1]
[2]
[4]
[5]
No comments:
Post a Comment