When We Lose (Part 3) ­– Perfect vs. Good-Enough

When We Lose (Part 3) ­– Perfect vs. Good-Enough

A friend worked in high tech until an acquisition helped him bail out.  Now he toils in metaphysics.  Struggling to define what we really know, he has settled on references.  Rather than knowing the cup before us, he figures, we perceive features that have meaning only in reference to past perceptions.  Our window of current experience keeps moving with new perceptions, so the references keep changing.  As a result, perfect knowledge is unstable if not impossible.

Periodically I encourage him to go easy and accept good-enough.  The cup now is similar enough to the cup an hour ago.  They really are the same cup.  Have some faith, I urge him.

Not so much a battle between the forces of good and evil, whistleblowing is a contest between perfect and good-enough.

Wrongdoers are forever claiming that their behavior is good-enough.  Approaching his trial, Jeffrey Skilling, one of the worst, asserted in his innocence as CEO of by-then-defunct Enron.  But he was convicted anyway.

Davita, Inc. is another interesting example.  In 2014 Davita agreed to pay $389 million to settle kickback allegations without admitting guilt.  In 2015 it agreed to pay $495 million to settle claims it only partially dispensed medications charged to the government.  Again it admitted no guilt.  Now in 2017, it agreed to pay $64 million to end another whistleblower suit.  Without admitting to doing wrong it bragged, “We take full ownership and continue to embrace transparency and rigorous compliance.”

When I revealed HomeFirst broke a California licensing law, CEO Niklaus defended the behavior.  Strict enforcement could close shelters across the State and put more homeless on the streets, she said.  The State inspectors agreed to delay action against the company so that it could come up with a fix.  HomeFirst was, in its eyes, good-enough.

Whistleblowers look harshly on deviations from perfect.  This can lead to complaints companies insist do not tarnish their good-enough status.

When HomeFirst cut the number of beds in its youth shelter from 10 to 8 in violation of a California loan requirement, Niklaus didn’t think it was a big deal.  I blew a whistle on that.  I also blew a whistle when kitchen workers lacked the required State-issued food safety cards.  The cards could be earned after passing a quick test and paying the $10 fee.  Probably not a huge infraction, really.

I join others who disclose misdeeds that some might think ridiculous.  Joel Allen complained the Philadelphia police didn’t exercise its horses enough.  Two Valley Mills (TX) employees accused the city manager of taking their deer feeders.  Autopsy manager Kevin Gerity said his boss mishandled a bullet fragment.  A Florida police officer attending his son’s Little League game while on duty was something Travis Harper could not accept.  Each was punished.

Our complaints may seem petty to some, but not to us.  The violations often fit patterns of misconduct.  My food safety complaint, on the day I was fired, came after complaints about nine other HomeFirst matters.

Minor complaints could involve simple misunderstandings.  You wonder why we don’t just sit down and talk them over.  Then the table turns.  The organization dumps its stored complaints against the employee to justify disciplinary action.  They, too, can be petty.

An Iowa state agency said whistleblower Susan Ackerman put incorrect information on an insurance application.  The City of Charlotte didn’t like Crystal Eschert’s Facebook post.  Petersburg (VA) Derrick Greer police officer ate a piece of candy he picked off the floor at a crime scene.  Patrick Leonard cursed while working for the City of Bayonne (NJ).  Troy Thompson ate a past-expiration sandwich from the VA kitchen instead of throwing it out. 

Sometimes both sides exchange petty complaints.  Juana Walsh worked at a senior living center in Woodstock (IL).  During one shift a male patient seemed confused.  He told Walsh he was afraid of a nursing assistant in the facility.  The assistant had told the patient to stop bothering him.  Then he was rough putting the man’s head on a pillow.  Walsh wrote up the incident and gave her report to the patient’s brother.  Her boss was upset when she learned about Walsh’s communication.  She fired Walsh for sharing patient information and stealing pencil and paper for her report.

Organizations and individuals are always violating something or another.  They are good-enough until they no longer are.  Rather than reasoned, the distinction is, often as not, emotional.  Morality and ethics have little to do with it.

The whistleblower’s legal case is based on a perceived violation that is properly disclosed.  Whistleblower protection laws demand attention to those specifics and don’t care about the employer's pervasive bad behavior.  Once the disclosure is established, the employer seeks to show she was not good-enough, regardless of her disclosures.  Its petty complaints help that proof.  Then other reasons follow: the usual insubordination, poor performance, and didn’t-get-along charges.

We trust authorities – California’s Labor Commissioner, for me – to sift facts from false claims and get to the real truth.  Their lack of expertise in all laws related to all complaints forces them to be satisfied with a good-enough understanding.  We walk into our whistleblowing hoping for perfection, but we leave dissatisfied.

Big-time players expose extraordinary issues that point to the core problem: the wrongdoer is just no good.  The rest of us are bound to narrow rules and seldom break free.  The organization is judged good-enough, and we are not.

When We Lose (Part 2)

When We Lose (Part 2)

My whistleblowing began in July 2013 when I disclosed government overbilling by HomeFirst Services of Santa Clara County.  After more disclosures, I was fired in June 2014.  My project ended in November 2017 when the State of California decided I was not a whistleblower at all.

When big-time players are denounced as not really whistleblowers, we know better.  Some called Edward Snowden nothing more than a traitor, but that was silly.  The same goes for calling Chelsea Manning just a traitor.  When little guys like me are denied the whistleblower title, it’s harder for others to judge.

California’s Labor Commissioner decides against most people who complain they were fired because they disclosed wrongdoing.  My public records request for copies of the 158 determination letters issued in 2015 yielded 100 actual letters.  Of those, 80 favored the employers.

From this lot, some arguments siding with employers seem stretched.  For example, letters written to five fired welders[1] at Newton, Inc. (dba Newtron Electric) acknowledged safety issues they raised.  The company was not prepared for the welders it hired, the Commissioner allowed.  There wasn’t enough safety equipment.  Welding hoods were not fitted.  Their foreman didn’t know much about welding.  There were problems with scaffold adjustments; on-site welding procedures were missing; and inappropriate staff were hired for electrical welding.  The employees raised concerns to management.  OSHA complaints were made, but ineffectively.

The State felt Newton knew about the problems and tried to fix them.  Surely it wasn’t in Newton’s interest to fire welders without good reason, it presumed.  Most likely Newton had fired them for poor performance, as Newton asserted.  Maybe the logic made sense to some.

Mostly, though, the determination letters present plausible explanations supporting the employers.  My letter did that pretty effectively: I was rude and could not or would not do my job.  True or not.  Raymond Gomez’s hours were cut not because he complained about being short-paid but because of a reorganization.  Marvin Gilbert was not really fired by his security company employer because he called the fire department about a possible violation.  He was fired at the request of the security company’s client who didn’t appreciate the call.

When a decision is made against us, our whistleblower status is thrown into doubt.  The Labor Commissioner’s office determined I wasn’t one because I lacked a good faith belief that I was disclosing violations.  Wisconsin’s Supreme Court ruled that Joell Schigur was no whistleblower since her bosses knew about the potential violation.  A jury decided that Jason Blasdell, a former SpaceX employee, never had any reasonably-based suspicion that SpaceX violated a law.  The State Bar of California won over its former executive director Joe Dunn.  He failed to specify which laws had been violated, so he was never a whistleblower, either.  Natasha Henderson’s disclosure of suspected corruption by the Flint (MI) mayor didn’t make her a whistleblower because she was acting as a city employee.  Schigur was demoted, and the other three were fired.

We can spend years on our whistleblower projects.  They come to define a big chunk of our lives.  Then it ends not just in defeat but in denial that we ever were what we supposed.

After the first few months following my termination, I did not talk much about my whistleblowing.  Except for family, most people who remembered my claim at all probably figured I had moved on.  They were not aware how stuck on it I was.  I was embarrassed by my obsession.

The violations we disclose are often very technical.  Only someone with the right background and access to relevant documents can figure if we are correct in our claims.  It’s even more difficult for others to evaluate why we were fired or demoted.  They rely on authorities to investigate and decide.  But authorities rule against most of us.  Then, on what basis can we still claim our allegations were true and we were retaliated against?  On what basis can we claim we were whistleblowers at all?

At least publicly, we must eventually admit our project is ended.  Our dream of a whistleblower’s victory is dead.  We follow a different grieving course from those who grieve the death of a loved one.  Our loss is not as great; that is clear.  Our time of denial, anger, and bargaining is long past.  After investing years into our project, deflation and maybe depression may follow.  But acceptance is difficult, at least for me now.

I can accept that my whistleblower complaint is dead.  There’s no forum where I can press it further.  Accepting the world revealed by my project, though, I cannot accept.  Not that nonprofits generally depend on deceit and shading the facts of their performance.  Not that government agencies chartered with managing nonprofit contracts willfully abandon their responsibilities.  Not that we are unable to rely on auditors and oversight agencies to find and correct misbehavior.  Not that the premise of social cooperation and support falls so far short.

Some big-name whistleblowers persist.  They do not accept.  They call out continuing wrongs.  People like Daniel Ellsberg, Edward Snowden, and Chelsea Manning earned a platform, and they use it.  Small-time folks like me and millions of others have no such platform.  Each time we object, we start again from the beginning.

Let us do that.

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[1] Joest Camacho, Curt Hawley, Charles Howell, Richard TenEyck, and Michael Viscardi

When We Lose (Part 1)

When We Lose (Part 1)

We whistleblowers always believe we have a case.  We think we will win. But we seldom succeed.

In 2014 California’s Department of Industrial Relations (DIR) received 1,290 whistleblower complaints, including mine.  It decided that only 47 complaints from 2014 and prior years were valid.  The vast majority of complaints were rejected at once.  Of those that made it as far as getting a determination letter, only 21% were decided for the employee.  In 2015, the most recent year reported, results were even more discouraging: 1,696 complaints, 27 valid cases, and 17% of determinations in favor of employees.

Despite history most whistleblowers expect they will be different.  We think we have something that others didn’t.  Some egregious wrong outed, or serial wrongs in HomeFirst’s case.  Some special evidence, like the emails I presented.  Still we routinely lose.

I lost.  The determination letter I received last week informed me I had failed to provide sufficient evidence to refute HomeFirst’s contention they had good reason to fire me.

DIR’s conclusion drew heavily on HomeFirst’s claims from three years earlier.  I had not got on well with CEO Jenny Niklaus for more than a year before I was fired, Joan Healy wrote from the Labor Commissioner’s Office.  Beginning in October 2013 my relations with Niklaus and the Board deteriorated quickly.  The violations I cited had existed for years.  I had lived with them until my relationship with Niklaus fell apart.  When I identified compliance violations, I failed to offer solutions, as was my responsibility.  If a solution emerged, I still complained.  Most of my complaints were unfounded.  I wasn’t a whistleblower because I believed there were violations but because I refused to act in the company’s interest.  Healy used HomeFirst’s phrasing: I “could not or would not” do my job.

In September 2016, DIR staff had recommended finding in my favor.  Healy reviewed the draft determination for 14 months. Still her letter contained startling factual mistakes.   

Some were silly: she wrote that I chaired the Audit Committee.  Everyone else knew that was untrue.  The California Nonprofit Integrity Act prohibits staff from being on audit committees.

Some mistakes were substantial.  She wrote that the violations I alleged had been evident for years.  In fact, three[1] arose for the first time during the few months before I was fired.  Two[2] had occurred earlier but were detected recently, and three possible problems[3] had breached our awareness only recently.  She said the violations were all within my area of responsibility.  In fact, Niklaus and her Chief Program Officer were directly responsible for most[4] of them.  Healy wrote that I did not offer solutions when I called out violations although I recommended corrective actions with each internal disclosure.  Just not actions Niklaus wanted to hear.

Some mixed silly and substantial.  Healy wrote that I continued to complain about the County overbilling even though HomeFirst and the County had arrived at an amicable solution.  In fact, no solution had been found before I was fired in June 2014.  By March 2015 the County decided that HomeFirst financial position was so terrible it could not immediately repay the overbilled amount.  In June 2017, HomeFirst was still trying to wriggle out of any repayment.

Many incidents are debatable nearly 4 years after they occurred.  Did I tell Board member “cash forecasts” were a waste of time?  Or did I warn them a particular 12-month forecast would be a waste of time because the Chief Development and Chief Program officers refused to cooperate?  Did my relations with Niklaus and the Board deteriorate quickly after July 2013?  Or did they deteriorate gradually due to my repeated comments about compliance violations and HomeFirst’s weakening financial position?

Debatable, too, is her legal argument.  Was my belief in the many violations reasonable enough to satisfy California’s whistleblower protection law?  Or did I need, as Healy seems to imply, a good faith belief in the organization, too?

Most painful for me, Healy completely ignored my email evidence.   I thought they made clear Niklaus and Board decided to fire me in direct response to my admitting I blew the whistle on two issues.  She didn’t explain why she didn’t consider them.  Whether that was due to incompetence or conscious decision, I will never know.  There is no chance to challenge their exclusion.

The California’s whistleblower protection process offers no opportunity to cross-examine witnesses or even to know who they are.  It doesn’t permit any examination of the retaliator’s evidence or a chance to challenge that evidence.  Healy’s conclusions are well beyond discussion.

In June 2017 California Labor Code 98.7 was amended from the 2013 version that applied when I filed my complaint.  The old law permitted complainants like me to appeal determinations.  The DIR seldom changed its mind, but reversals occurred on occasion.  Under the new law, Healy’s decision is final.  There is no appeal.  Regardless of factual errors.  Regardless of injustice or illegality.

Healy assured me that I could still sue HomeFirst.  Given my unsuccessful first try with an attorney, I can’t imagine a second try would work out better, especially with my ugly determination letter in hand.

It doesn’t feel fair.  I find that I am no exception to the norm for whistleblowers.  I am not cleverer than the others.  Perhaps I’m demonstrably dumber than most.  My adventure cost me $8,000, and I refused a $45,000 offer.  HomeFirst and those who joined in firing me or in watching it happen, they all roll happily along.  A few are relieved that it’s ended, but most don’t care at all.

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[1] EHAP loan, master leasing, and bid collusion.

[2] County overbilling and food handler cards

[3] Licensing, payroll taxes, and minimum wages.

[4] Licensing, EHAP loan, master leasing, food handler cards, and bid collusion

Wrongdoers Who Drive You Crazy

Wrongdoers Who Drive You Crazy

People who can say things that are obviously untrue but get away with it drive me crazy.  I am not alone.  Paul Krugman goes bonkers sometimes, too.  In the field of science, there are tricks to fight false statements presented as true.  But in the whistleblowing business, brazen lies by our adversaries are especially infuriating.

Some of that lying describes us.  Hoping to justify their retaliation, organizations say we performed poorly, we were insubordinate, we broke rules, we did not get along with others, and on and on.  Mostly lies.  Even when companies are caught doing wrong, they dissemble.

When JP Morgan agreed to pay $13 billion in settlement of claims from its fraudulent sale of mortgaged-back securities, it admitted no wrong.  CEO Jamie Dimon just said they were pleased the dispute was concluded.  The folks at Better Markets thought the deal stank.  They sued the Department of Justice, but their suit was dismissed.

Wells Fargo opened 3.5 million unauthorized accounts, fired whistleblowers right and left, paid $185 million in fines, but never admitted doing wrong.  Except for saying some employees didn’t live up to its values.  It drives me crazy.  One U.S. House subcommittee said the Consumer Financial Protection Bureau fine could have been $10 billion, not just $100 million.  Crazy-making because we’re powerless to make it right.

In November 2007 Dr. Darren Sewell began working as a senior manager at Freedom Health and Optimum Healthcare (co-owned by a third firm, they operate as basically one company).  By fall 2008, he was aware they were fraudulently overbilling Medicare.  A year later he had filed his False Claim Act complaint, and he started cooperating with government investigators into the crimes.  In 2012, the government’s questions alerted Freedom’s and Optimum’s management that they had a serious problem and Sewell was the cause.  They stripped him of responsibilities, put him on leave, forced his resignation, and then defamed him.

This year, Freedom Health agreed to pay $31.7 million settling the claims.  They didn’t admit guilt.  They settled only to avoid the time and cost of more litigation, they said.  The Department of Justice (DoJ) demanded Freedom Health sign Corporate Integrity Agreement to force better behavior.  But the company pitches compliance as its way of improving the healthcare system. 

Sewell died in 2014.  His estate could receive something like $5 million from the settlement.  The reward doesn’t make the situation feel any saner.

Another case: Dr. Viran Roger Holden was hired as an oncologist by a Catholic-affiliated clinic in Springfield, Missouri, in 2005.  After some name changes it became known as Mercy Clinic Springfield Communities.  He learned that two doctors at the Clinic were providing unnecessary treatments and charging Medicare for them.  He complained internally about the two in 2011. 

One of the two offending doctors was put on a performance improvement plan, but the behavior continued.  In May 2012, Holden discussed the possible Medicare and Medicaid fraud with the Mercy Clinic general counsel.  As a result, he was demoted from Chair of Medical Oncology.  He began cooperating with State and Federal investigators in late 2013.

After he testified in favor of another wrongfully terminated Mercy Clinic employee, he was fired in May 2015.  The supposed cause was his past personal relationships with two Mercy Clinic employees and a narcotics prescription he wrote.

Mercy Clinic and Mercy Hospital settled Holden’s False Claims Act lawsuit with the payment of $34 million – paltry against their $1.5 billion in revenue.  Like Freedom Health, Mercy admitted no wrongdoing in its settlement agreement.  Mercy’s regional president said, “We take this situation very seriously. We made a regulatory mistake and we are working hard to make it right.”  It was just a technical problem.  Like Freedom Health, it signed a Corporate Integrity Agreement with the DoJ, but Mercy keeps its out of sight.

Holden won $5.4 million from the Mercy settlement, taking some sting from the incident.  But a few days before the DoJ’s announcement, Holden settled with the Missouri State Board.  He admitted Mercy’s allegations against him; his disciplinary action is public knowledge. 

There's no comfort for Holden in news that the former Mercy employee he testified on behalf of was awarded $1.5 million and a former Mercy nurse was awarded $751,000 in her wrongful termination lawsuit.  Mercy’s depiction of its holy service guided by nuns in habits drives me crazy.

Then there is HomeFirst Services, which fired me for whistleblowing.  HomeFirst had taken government money it didn’t deserve.  It overbilled the U.S. Department of Housing and Urban Development (HUD) by $1.2 million in 2003-2006.  It used for general purposes $138,000 the City of San Jose had advanced for a specific housing program.  And it overbilled the County of Santa Clara $140,000 for two housing programs.  My telling the County about the last problem started the ball rolling toward my termination.

I disclosed the County overbilling in July 2013.  Until I left a year later, HomeFirst tried unsuccessfully to get the County to forgive the liability or repurpose it for another program.  Then the County wanted to confirm the amount.  By March 2015, both sides had agreed on the amount due, but HomeFirst, being nearly insolvent, could not afford to repay it.

A year later, HomeFirst’s CEO, who had been on board in March 2015, asked for documentation supporting the amount “we were told we owed the County.”  In 2016 the company sent the County long analyses in hopes of whittling down the amount.  By mid-2017, the CEO called the overbilled amount “back debt that HF supposedly owed” the County.  She proposed reallocating it to the company’s other expenses.

The back-and-forth drives me crazy.  It’s the simplest of things: if you overbill by accident, you repay the excess. 

It bugs me HomeFirst got the City of San Jose to retroactively charge the advance to different programs.  And it is trying to get HUD to do the same with the $1.2 million overbilling.  I’m disheartened governments can’t be trusted either.

It drives me crazy that the State of California has had my whistleblower complaint for three years without making a determination.  It will be even worse if it does not decide in my favor.

Whistleblower Complaints Unbound

Whistleblower Complaints Unbound

Most whistleblowers proceed in a disciplined manner.  They observe, investigate, suggest corrections internally, and file complaints externally.  If their employers retaliate, they hire attorneys to protect their rights and win fair compensation.

Big-time whistleblowers perform on a grander stage.  Ellsberg, Snowden, and Manning are star examples.  But we small-time players generally stick to the forum that has promised us fair treatment.  Kevin Whaley took an approach that prefigures a different future.

After graduation from University of Arkansas, residency at University of Rochester, and a fellowship in Virginia, Dr. Whaley became Assistant Chief Medical Examiner in Virginia’s Office of the Chief Medical Examiner in 2007. 

Certified in anatomic and forensic pathology, he worked the morgue.  The Office’s task was to determine the causes of suspicious, unusual or unnatural deaths.  He liked his job.  He saw himself as an advocate on behalf of the dead.  He taught some classes at Virginia Commonwealth University.  With his wife and three children, he hoped to retire there in Richmond someday.

In 2008 Marcella Fierro, the Chief Examiner who hired him, retired.  Then Whaley thought the Office began to deteriorate.  He witnessed a lot of things that disturbed him.  HIPAA violations under the watch of Fierro’s successor, for example.  Payments to medical examiners for work they did not perform.  And the brain sales.

The Office contracted to provide brains of the deceased to the National Institute of Mental Health (NIHM) with their families’ consents.  Whaley figured the Office was paid $150,000 a year for this service.  The families were ignorant of this trading in their beloveds’ body parts.  Whaley was offended.

Then, Office morale was low.  The new Chief’s bias in favor of law enforcement was part of the problem.  Favoritism infected hiring decisions.  Besides that, one Assistant Chief Medical Examiner hadn’t passed the required proficiency exam despite multiple tries.  Whaley was asked to coach him, but he still couldn’t pass it.  Even after the two-year provisional period, his failure was ignored by management.

Ten years in, Whaley was not happy any more.  He complained about problems, but nothing got fixed.  He decided it was time to leave the morgue, and he became a whistleblower.

He did not follow the approved path: filing an official complaint with the Virginia Internal Audit Department or via the employee hotline.  He did not reach out to legislators, as some do.  Instead, on March 31, 2016, he posted a 20-minute video on YouTube revealing extensive corruption in the Office of Medical Examiner.  That got him a paid suspension while the Office investigated.

Technology has changed whistleblowing.  In 1969 Daniel Ellsberg spent nights at RAND Corporation Xeroxing the 7,000-page Pentagon Papers.  He stuffed copies in his briefcase and snuck them out past the night guard.  He shared excerpts with trusted colleagues until the New York Times agreed to publish them in 1971.

Wikileaks started up in 2006 making purloined documents available for public inspection.  The 10 million released so far include some 750,000 government documents provided by Chelsea Manning in 2010.  Edward Snowden lifted about 1.5 million files from the NSA and in 2013 delivered maybe 300,000 to journalists from various media outlets. 

In addition to greater ease in disclosing vast quantities of evidence, the number of whistleblowers has grown and seems likely to grow more in the future.  Navex Global, a hotline management company, reported that the rate of corporate whistleblowing increased 56% from 2010 to 2016.

Finally, technology has spawned new ways to publicize our disclosures.  There are blogs, like this one, obviously.  Daniel Binswanger took the interesting step of posting his documents to docdroid.  Pages of uncertain provenance by or about whistleblowers pop up on Facebook[1].  Some, like Joel Clement, use Linkedin to magnify their voice.  Twitter is rich with #whistleblower messages.  Now comes Kevin Whaley with his YouTube video.

Figuring what is true in the stories of whistleblowers and their tormentors is always difficult.  Truth may come out after documents are challenged and defended, stories are challenged, and experts evaluate claims by both sides.    Absent those opportunities, we are stuck.  It is nearly impossible to fairly assess documents thrown to the wind.  The few documents in cases like Whaley’s can mislead us.  And even more would the thousands or millions of pages that new modes of disclosure accommodate.

Whaley said his group was paid $6,250 per brain by NIMH, but no.  That amount was actually paid each month.  It turned out that the employee who failed the proficiency tests had been with the Office less than two years.  In any case, the Office can extend the grace period beyond two years if the employee is performing well.  Two independent groups – the National Association of Medical Examiners and the Office’s internal audit office – decided that Whaley’s complaints were unfounded.  Which doesn’t mean he should not have raised them.

Navex Global calculated that about 1.4% of its client companies’ employees[2] reported wrongdoing through its systems in 2016.  If the U.S. workforce is typical, that works out to about 2 million whistleblower calls a year.  Forty percent of the reports were found to be substantiated, meaning that the companies might have done something to fix the reported problems.  That leaves 1 million unhappy whistleblowers in the U.S.   One million people each year who might be inclined to air the company linen someplace on the internet.

Add to them millions who have suffered sexual abuse and harassment.  And millions more who are harmed by racial discrimination.  The river of potential personal testimonies swells.

We whistleblower believe in transparency.  We defend exposures of wrongdoing, and we fight against attempts to conceal misdeeds. When torrents of honest revelations mix with mistaken understandings and fake news, we may move further from the truth, not closer.

Ta-Nehisi Coates writes[3] of America’s deep rooted racism.  It has thrived through civil war, reconstruction, the civil rights movement, legal reforms, a black president, Black Lives Matter, and occasional good will. The problem might have no solution.  America’s racial future might be bound in tragedy.  He finds no reason to suppose it should end well.

In a similar vein, misdeeds disclosed by whistleblowers are endemic to organizational life[4].   There’s no reason our swelling struggle against that intractable force should move us closer to justice.  We whistleblowers act as we believe appropriate with the resources at hand.  At best, we can hope to achieve our small and local successes.

Coates concludes, “And I don’t ever want to forget that resistance must be its own reward, since resistance, at least within the life span of the resistors, almost always fails.[5]”

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[1] Among the apparently innocent: Lincoln County Whistleblower.  Possibly less reliable is Karen Hudes Whistleblower whose case against the World Bank is pushed by rt.com among others.  RT is, of course, one of Russia’s channels of disinformation.  Ms. Hudes also maintains a robust website about her struggle with the World Bank.

[2] 2,382 companies representing about 38.5 million worldwide employees (82% of reports were in North America).

[3] Coates, Ta-Nehisi.  We Were Eight Years in Power: an American Tragedy.  New York: One world.  2017.

[4] Alford, C. Fred. Whistleblowers: Broken Lives and Organizational Power. Ithaca, NY: Cornell University. 2001

[5] Coates 289.

The Public Face of the Wrongdoer

The Public Face of the Wrongdoer

When companies violate laws, they seldom admit their guilt.  Board members and senior managers are seldom held responsible.  They plausibly deny they ever intended to do wrong.  Maybe most had no such intentions.

Timothy Ross was hired as CFO of Nutmeg State Financial Credit Union (Connecticut) (NSFCU) in July 2015.  Pretty soon, he noticed business and reporting practices that seemed improper.  CEO John Holt’s pay appeared excessive.  Holt controlled loan loss reserves which were too low, Ross thought.  The low reserves increased earnings and senior managers’ retirement accounts.  Holt told him to hold off correcting them.  Ross said two investments were valued too high, and Holt told him his input was not necessary. 

Ross had hired Shannon Hall to be VP of Lending.  During an annual State examination Hall brought up Holt’s rich retirement plan.  Without telling Ross, Holt fired him for not being a team player.  Later that morning, Holt told Ross to do Hall’s job plus his own.  Ross said he didn’t think he could do that because Holt had fired Hall illegally.  After the meeting, Ross emailed Beth Bunko, Chair of the Supervisory Committee.  He told her about his communications with Holt and the credit union’s possible violation of state and federal laws. 

Later that day, Holt asked Ross if he could put Hall’s firing Hall behind him.  Ross pushed back again.  So Holt fired him, too, on January 6, 2016.  

There’s no sign any other Board members heard about possible wrongdoings.  NSFCU’s auditors saw no real accounting problems.  Holt remains CEO, and Bunko still chairs the Supervisory Committee.  Ross is now a commercial lender at a different bank, and his lawsuit may have settled[1].  As often happens, the world moved on, barely noticing the whistleblower.

On occasion, though, the public learns about directors and top managers retaliating against the whistleblower.  Take, for example, Sanford Wadler and Bio-Rad Laboratories.

Wadler had been Bio-Rad’s general counsel for 20 years when the company disclosed in 2010 it had violated the Foreign Corrupt Practices Act (FCPA) in Vietnam, Thailand, and Russia.  A year later Wadler started suspecting similar violations in China.  He could find little documentation supporting hundreds of millions of dollars of company sales in China.  Management obstructed his research, he believed.  After a year of investigation, he finally discovered clear evidence of potential bribery in China.

The law firm Steptoe and Johnson was hired to investigate Wadler’s suspicions.  They had investigated the company’s operations after the first batch of FCPA violations but had found nothing wrong in China.  In a March 2013 meeting, Steptoe and Johnson again reported no problem in China.  Wadler objected.  So the board decided to fire him.  The CEO took care of that on June 7, 2013.  On August 8, 2013, the company admitted having control problems in China.

It’s been four years since Wadler was fired.  Bio-Rad’s business has rolled along.  Its stock price has more than doubled.  The CEO and all but one director remain in place.  While Wadler’s effect on Bio-Rad was as limited as Ross’ on NSFCU, he did far better financially.  He was awarded $5.8 million in back pay (doubled), $5 million in punitive damages, $3.5 million for expenses, plus interest[2].  He did a lot better than most whistleblowers.

Wadler’s case differs from Ross’ in several respects.  Although they were both senior managers, Wadler had been one for 25 years when he was fired.  Ross had been CFO for less than a year.  Bio-Rad’s violations were more financially significant than NSFCU’s and involved major federal regulations[3].  Bio-Rad publicly admitted its weak controls while NSFCU successfully denied any violations.  Ross gave NSFCU a good reason to fire him by refusing Holt’s direction to assume Hall’s responsibilities.  The more experienced Wadler was not so sloppy in his dealings with Bio-Rad.

Finally, Wadler could document involvement by his board in the company’s retaliation against him.  That enabled him to include individual directors in his lawsuit even if they eventually escaped personal liability.  Ross’ evidence suggested only that Holt fired him on his own.  Holt surely consulted the board before hiring Ross and may well have discussed his firing with them.  But Ross had no proof.

Bio-Rad publicly brags about its code of ethics, as Enron, Wells Fargo, and many other companies routinely do despite their misbehavior.  HomeFirst also touted its ethics and whistleblower policy.  Treasurer Gary Campanella assured me they valued compliance.  But that was three weeks after the board members agreed to retaliate against me and CEO Niklaus and he began looking for my replacement.  These policies mean little in reality.

Some of my allegations[4] were confirmed, as Wadler’s was.  But accommodations by authorities and loose rules about nonprofit fundraising allowed HomeFirst to avoid public disclosures of its misdeeds. 

With my access to HomeFirst emails, I could document participation by board members in my retaliation.  But I was still unable to make that evidence publicly available.  I couldn’t leverage the information for any real advantage over HomeFirst.

Whistleblowers have two important tasks in our battles against wrongdoers.  First, we must document evidence of the wrongdoing and, particularly, their intent to commit the wrong.  Second, we need to publish our evidence in a way that attracts attention. 

Getting public notice is especially difficult for us small-time whistleblowers.  Big-time players, like Ellsberg, Manning, and Snowden have been spectacularly successful in getting their material into public hands.  They offer models – as well as warnings – for the rest of us.

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[1] Based on his attorney’s statement that the resolution is confidential..

[2] Bio-Rad is still appealing, though.

[3] Sarbanes-Oxley and Dodd-Frank.

[4] For example, the County overbilling, the licensing violation, and the food handler card violation.

Public Statements by the Whistleblower

Public Statements by the Whistleblower

Whistleblowers disclose and then suffer the consequences.  But they – especially the small-time sort –seldom reveal much about their experiences outside of court documents.  Daniel Binswanger is different.

Binswanger was hired in September 2016 to be director of business development at the Port of Port Angeles (Washington).  He was a long-time business consultant who had little experience in public organizations, but he was a local and enthusiastic. 

Things did not go smoothly for him.  On January 26, 2017, his boss, Karen Goschen, laid out to the Board of Commissioners her problems with Binswanger.  He was insubordinate.  He undermined her by saying she didn’t understand how an entrepreneurial operation like the Port worked.  In addition, his work was unsatisfactory.  He failed to give her a list of priorities although she had asked repeatedly.  He didn’t meet deadlines.  He didn’t work well with the team.  It seemed she had pretty good reason to discipline and even fire him.

Except that on January 20 and 23 Binswanger had complained to the HR Manager, Holly Hairell, about Goschen.  He said she created a hostile workplace.  He also warned that a lease signed before he started charged a nonprofit less than the market rate, which was an improper government action.  On the evening of the 23^rd Hairell talked to the CFO; the CFO talked to Goshen; and Goschen put Binswanger on a paid administrative leave.  Goshen fired him a week later.  It sounds as though Binswanger was a whistleblower and then suffered retaliation.

But that’s not how the Washington State Office of Administrative Hearings saw it.  The judge noted that the Port’s investigation found no improper action in the contract since the lease rate was very close to market.  She thought the Port had valid reasons to fire Binswanger, who had not mentioned being a whistleblower until after he was put on administrative leave.  For the whistleblower, Washington is a tough place with few protections against retaliation.

In some ways Binswanger was a typical small-time whistleblower.  The amount at stake was modest – $634 per month and just 7% of the lease amount.  He and his boss weren’t getting along before he raised the lease issue.  There were two sides to the story, and authorities chose to believe the other account.  He suffered but lived through it.  Now he appears to be back at his consulting business.

What is unusual in Binswanger’s case is that he uploaded to docdroid files documenting his experience.  That enabled the Peninsula Daily News to publish a long article about his experience.  He also posted a harsh rendition of the events to a local blog dedicated to Port Angeles news.  Then he made critical comments on a more recent Daily News article.

Big-time whistleblowers, like Daniel Ellsberg, Edward Snowden and Chelsea Manning, can tell their stories in depth and people listen.  Books are published about them.  But small-time players’ stories elicit scant public interest[1].

We often have good reasons not to air our stories in detail.  Public revelations can inspire the companies to threaten lawsuits, as HomeFirst did to me.  Talking out of court can complicate litigation and our negotiation of a rich payoff.  Discussing the case is barred in the nondisclosure portion of any settlement agreement, like the one HomeFirst proposed to me.

Also, the more we discuss our claims, the more trivial they can seem.  Undercharging rent by $634/month, even if true, doesn’t rank as an egregious crime.  My investigating whether clients working in the HomeFirst kitchen had State-issued food hander cards didn’t compare to Karen Silkwood’s investigation of nuclear power plant safety.  But our minor allegations led to terminations for Binswanger and me.

Finally, talking about your case without the discipline provided by an attorney can make you look a little crazy.  You can appear bitter – possibly with good reason – as Binswanger does in his blogpost and his comments to the Peninsula Daily News nine months after he was fired.  Or you can seem obsessed as I might be after 116 blog posts, this one published 3½ years after I was fired.

Those of us who have blown whistles on our employers may eventually realize we need to be a bit irrational to stick with our projects.  The years they require.  The ambiguities we work through.  The costs we put up with.

There is father-son team, both of whom were relatively minor whistleblowers.  They put up a website offering support to whistleblowers.  Theirs lacks the sophistication of, say, National Whistleblower Center and Government Accountability Project.  And the pair’s resources are miniscule.  Still, they’ve been volunteering their advice for nearly twenty years. 

They make a helpful suggestion after responding to thousands of emails: “Know when to let go and wisely move on!”  That’s what they say, but they didn’t let matters drop either.

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[1] One book by a small-time whistleblower: Joy, Amy Block. Whistleblower. Point Richmond, California: Bay Tree Publishing, LLC. 2010

After Whistleblowing

After Whistleblowing

To my mind, whistleblowing comes in three phases. 

The core phase is what we usually consider the whistleblowing project.  That includes observing what seems to be a legal or ethical violation.  Evidence is gathered, and the problem is described to management.  They may fix the problem.  Whether the problem is corrected or not, the discloser can suffer retaliations, beginning with ostracism and accelerating from there.  In response to the retaliations or to the organization’s failure to correct the wrong, the whistleblower discloses violations to external authorities.  If things go south, a lawsuit or other complaint follows.  Finally – perhaps as soon as a year, more often after 3-5 years, sometimes after 10 years or more – the issues are resolved.

Before the whistleblowing project can begin, though, preparations must be made.  The soil must be prepared.  The individual must gain the technical knowledge necessary to identify a violation.  She needs the ethical and legal awareness to believe that a violation should be corrected.  And, importantly, she must become sufficiently dissatisfied with the organization that she is willing to deal with the likely consequences of her actions.

Then after the project is resolved, there will be consequences.  Some will be financial.  The whistleblower may lose her job or miss out on raises or promotions because she has proven untrustworthy.  Her disloyalty will infect her relations at work.  Colleagues will know she could betray them again.  She may test some personal relations outside of work.  Marriages sometimes die from the experience.

Critically, I think, our understanding of the world changes as a result of our whistleblowing project.

C. Fred Alford[1] wrote that many of our tightly held beliefs must be abandoned as a result of our whistleblowing.  Among them:

-          The individual matters

-          Law and justice can be relied on

-          Ours is a government of laws, not men

-          Individual will not be sacrificed for the group

-          Loyalty isn’t equivalent to herd instinct

-          One’s friends will remain loyal if colleagues do not

-          The organization is not fundamentally immoral

-          It makes sense to stand up and do the right thing

-          Someone, somewhere, who is charge, knows, cares, will do the right thing

-          The truth matters, and someone will want to know it

-          If one is right and persistent, things will turn out all right in the end

-          Even if they do not turn out all right, other people will know, understand

-          The family is a haven in a heartless world

-          The individual can know the truth of all this and not become merely cynical

Discarding these ideas based on for-profit experiences seems easy to me.  I can quickly accept that greedy Enron management were douche bags.  Likewise, it is obvious that pond scum managers at Wells Fargo pressured employees to open unauthorized accounts and fired them if they complained.  And that managers at Uber were jerks, as Susan Fowler revealed.

Do-good nonprofits should be different.  But you don’t read as much about nonprofits and their whistleblowers.  They need a special hook to get people’s attention, like a former President.   

Sue Veres Royal was Executive Director at tiny Happy Hearts Fund, which rebuilds schools destroyed by natural disasters.  Her boss wanted to get Bill Clinton to its 2014 gala.  Clinton said okay to a lifetime achievement award as long as it came with a $500,000 honorarium paid to his foundation.  Royal objected to that and a litany of self-dealings by her boss. 

A couple of weeks after the gala, she was dismissed with a modest settlement.  She continued to scuffle with Happy Hearts attorneys.  A year after she left the charity, she wrote skeptically about charity fundraising, but she is back in the business, it seems. 

I developed my own cynicism about nonprofits following my HomeFirst experience.  Asked for money to help fire or flood victims, I want to know exactly what will be done with it.  I want accountability that HomeFirst did not provide.  And that few nonprofits offer.

I voted against a Santa Clara County bond for affordable housing because I don’t trust the County anymore after it mishandled HomeFirst’s $140,000 overbilling.  If I had the chance, I would vote against the Department of Housing and Urban Development because of the way it is dealing with HomeFirst’s $1.2 million overbilling.  I am skeptical of whatever the City of San Jose and the State of California might advocate.  I doubt the effectiveness of minimum wage guarantees from the State and local jurisdictions. 

I volunteer in a few organizations, but I don’t trust them as I once did.  I think it would be difficult to work in the nonprofit world again.

I look differently on friends who were not sufficiently sympathetic when I was deep into my struggles with HomeFirst.  Even though, three years later, I am amazed by my own egoism in those days.  Even though my whistleblowing tragedy no longer seems quite as meaning-filled as I once thought it was.  But as I downplay the significance of my act, I am still sickened by those who did nothing.

Whistleblowing can trigger many of life’s most stressful events – being fired at work, a drastically changed financial condition, a divorce, disruption of our usual habits.  If we get through those possibilities without too much damage, I think the biggest life-changing effect comes from our new understanding of the world.  Whether we like it or not.

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[1] Alford, C. Fred. Whistleblowers: Broken Lives and Organizational Power. Ithaca, NY: Cornell University. 2001. P. 49.