Failed Whistleblowing – Correcting the Problems
My whistleblowing was a failure: it led to my being fired, and after almost three years my complaints were ignored, dismissed, or
rejected.
By HomeFirst’s account, this was as it should have
been. I, not HomeFirst, was the problem:
I failed to do my job; and I was a destructive personality from which the
company had to protect itself. That
authorities did not act proved my complaints were frivolous and HomeFirst
acted appropriately.
In my telling, the story begins with a nonprofit’s failure to be
internally and externally accountable.
Government agencies joined in dangerous collaboration with the nonprofit
and failed to monitor its activities adequately. Corporate controls that appeared expansive on
the surface were no match for countervailing internal forces. The whistleblower was not protected, and the
problems he identified were left unaddressed.
The legal system played out in favor of the greater economic and
political power of the corporate perpetrator.
I was defeated, and my adversaries were unmoved.
A whistleblower’s project is smothered in the inactivity of
the accused wrongdoer and its allies.
HomeFirst’s foot-dragging on the way to correcting its violations may
elicit sympathy in some. To act promptly
to remedy the overbillings, the licensing violation, the payroll problems, and
the rest would risk an adverse result that was better forestalled. Its inaction bled into its attorney’s incomplete
replies and her indifference to requests for information from the City of San
Jose and the State. The apathy of government investigators
validated HomeFirst’s inaction.
In my view, the problems are immense, the systems have great
inertial weight, and quick solutions are unlikely. I propose that a number of problems facing
the whistleblower can be solved though the dissemination and discussion of
information, but the challenges are many.
1.
Problem: An indifference to nonprofit
accountability encourages belief that the company does good and the
whistleblower is suspect.
Solution: As a first step,
those with the money should stand up and say, enough. Donors, board members, employees, volunteers,
and government agencies should withhold their resources until adequate
reporting of activities, results, and finances is forthcoming. To nudge donors in that direction, the
tax-deductibility of charitable contributions should be eliminated.
Standards for nonprofit accountability
are elusive, and control and reporting systems are costly to implement. But failure to demand accountability exposes
funders, employees, and other stakeholders to fraud.
2.
Problem: After the whistle has been blown, politics
and personal relationships between the accused and the arbitrator too often determine
whether a violation has been committed, leaving the public out of the decision
process.
Solution: The alleged
perpetrators, accusers (with limited exceptions such as sexual abuse or
discrimination), adjudicators, and the alleged violations should all be
subjected to public disclosure and discussion.
Arguments defending the privacy of substantially government-funded
companies are without merit.
3.
Problem: Corporate governance is biased in favor
of the CEO and against critical parties
Solution: Boards, donors
and other stakeholders should demand that internal corporate communications and
decision-making be open to alternative voices.
Board minutes (with few exceptions) should be made public although that will
be no panacea if minute taking conceals the actual decision-making
process.
4.
Problem: A corporate sense of entitlement to the
dedication and loyalty of its employees creates an environment that discourages
critical thinking as well as whistleblowing.
Solution: Public discussion
should acknowledge that while loyalty may have value for employees and employer,
it is too often an ideal that is self-serving in the short-term and
counter-productive in the long-term.
Management should accept that freedom is not a problem to be solved[1]. Public acknowledgment of the sometimes
conflicting interests of the corporation and its employees should open the door
to finding value in contrariness.
5.
Problem: Ineffective government oversight
of nonprofit operations and finances, even when government provides a dominant proportion
of revenues and assets, encourages noncompliance with the public’s reasonable expectations.
Solution: Public
institutions should invest in monitoring compliance and the uses of their funds
and in public reporting of the results of that oversight. While legitimate concern for the
confidentiality of the personal information may inform reporting, forthright
discussion of failures to perform should be part of the public debate over the
use of public funds and compliance with regulations.
6.
Problem: The close bond between government and
nonprofits – at institutional and personal levels – suppresses effective
investigation of wrongdoings.
Solution: The
government-private dynamic should shift from “partnership” to “contract-based”
by acknowledging that government agencies and their nonprofit contractors have
conflicting objectives, and mutual trust is not warranted unless amply supported
by objective evidence.
7.
Problem: Despite their claims to the contrary, neither
companies nor government arbitrators provide effective protection for whistleblowers. Even anonymous whistleblower hotlines can
fail to protect during the investigation of complaints. The legal playing field is slanted to favor
the company, which has far greater resources to apply in its defense, over the
lone whistleblower.
Solution: Government and charitable funding should
provide additional pro bono legal and technical supports for individuals who
have filed or are considering filing whistleblower claims. Fears that such supports would result in
frivolous complaints pale in comparison with legitimate complaints that wither
without support.
8.
Problem: Lack of accountability in the reporting
of whistleblower activity unfairly protects the accused and their government partners,
and it depresses future whistleblower activity.
Solution: Local, state and
federal governmental agencies should publicly disclose whistleblower
complaints, including names of the accused and the nature of complaints
received, actions taken, and the backlog of complaints. Agencies should be staffed adequately so that
complaints are resolved in a timely fashion.
9.
Problem: Nondisclosure provisions of employment
and settlement agreements isolate whistleblowers from each other and the general
society, dampening the positive potential of whistleblowing.
Solution: In addition to
public disclosure of whistleblower complaints, the results of civil actions on
retaliation complaints should be publicly disclosed. Disclosure of whistleblower complaints and
their resolutions should be protected from the requirements of employment and
settlement related non-disclosure agreements[2]. The formation of groups in which
whistleblowers can safely share information about their cases should be
fostered.
10.
Problem: Guided by unreasoned assumptions, authorities
protect nonprofits that that abuse their legal status.
Solution: We should all
acknowledge that the right of nonprofits to exist is dependent on their public
benefit and that the liquidation of a nonprofit, through the transfer of assets
and contracts to a more worthy entity, need not have dire public cost.
These proposals ignore
some commonly prescribed techniques[3]
that have proven ineffective over the 40 year history of business ethics. Improved control systems and incentives
within corporations and government entities too often are obstacles to be gamed,
or they impose costs that are outweighed by the benefits of wrongdoing. Moral training for managers relies ultimately
on an unrealistic belief that ambiguities can be clarified to reveal right
action. Our boundless capacity for
self-deception inevitably defeats our hope that awareness of our psychological
weaknesses will steer us from error[4].
Solutions to the
whistleblower’s dilemma will be disruptive and will be challenged by opponents
as unnecessary. But without meaningful changes,
whistleblowers will continue to suffer retaliation without justice, and wrongdoing
will prevail.
[1] Koestenbaum, Peter and Peter Block. Freedom
and Accountability at Work: Applying Philosophical Insight to the Real
World. San Francisco: Jossey-Bass/Pfeiffer. 2001
[2] Garfield, Alan E. “Promises
of Silence: Contract Law and Freedom of Speech.” Cornell Law Review 83 (1998): 261-364
[3] De Cremer, David and Henri-Claude de
Bettignies. “Pragmatic
Business Ethics.” Business Strategy Review 2 (June 2013): 64-67
[4] Lawton, Graham. “Interview
with Robert Trivers.” New Scientist.
212.2833 (October 8, 2011): 32-33
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