The Role of False Memories

The Role of False Memories

Elizabeth Loftus’s research into human memory sheds light on the whistleblower’s long battle with her accused wrongdoers over their recollections of events. 

In “Brief Exposure to Misinformation Can Lead to Long-Term False Memories” study participants were shown slides depicting two incidents – a man breaking into a car and another man taking a woman’s wallet.  Thirty minutes later some participants were given false narrations of the incidents (e.g., the man placed the wallet in his jacket rather than his pants).  The participants were asked shortly afterward what they remembered from the incidents, and 1.5 years later they were asked again.  Loftus and her fellow researchers found that the mistaken memories were retained just as well as the correct memories were.

In “Make-Believe Memories,” Loftus observed that memories are malleable.  After-the-fact suggestions can contaminate what is recalled, and false memories can be implanted as though true.  Her controversial conclusion has been that eye-witness evidence of a wrongdoing – say, sexual abuse, corporate misfeasance, or individual misbehavior on the job – is not reliable on its own.

Attorney Joanne Hoeper disclosed fraudulent billings of sewer repairs and was fired by the City of San Francisco.  After a jury decided unanimously to award Hoeper $2 million at the end of her three-year long retaliation suit in March, the City’s attorney said, “We are surprised and disappointed.  We take our responsibilities to our clients and to the public seriously.”  In this instance, her recollection held.  Hoeper celebrated, “The 12 jurors looked at the same thing I saw back in 2012.” 

Sometime around 2005, Wells Fargo Bank began to form its narration of employees who revealed the opening of false customer accounts: they were not friends of the bank.  The creation of up to 2 million unauthorized accounts continued, of course.  By the time of its $35 million settlement with the U.S. Comptroller of the Currency in 2016, the bank was proud to say it “neither admits nor denies” an assortment of misbehaviors, including having engaged in reckless, unsafe or unsound banking practices that were part of a pattern of misconduct.

Corporations accused by the government of wrongdoing frequently settle the matter with the payment of a large sum of money but without admitting they did anything wrong[1].  Wells Fargo’s recollection of the facts was so well shaped – and so contrary to, for example, Senator Elizabeth Warren’s view which calls for criminal prosecution – that its board-sponsored investigation could conclude the problem was merely one of lax oversight, particularly on the part of former CEO Stumpf and former head of Community Banking Tolstedt.  There was no evidence, the report said in a passing footnote, of systematic retaliation against the employees the bank hurt after they reported the misconduct.

In my dance with HomeFirst, two sorts of recollections came into play.  The first was small and discrete: in August 2013, shortly after I disclosed the County overbilling externally and the licensing violation internally, the board’s executive and finance committee members met.  There, Board Chair St. John-Crane told me not to reveal any more problems externally. 

Separately after the meeting, Audit Committee Chair Scordelis confirmed the directive, but he encouraged me to talk with him on such matters.  A November letter from Scordelis and St. John-Crane (responding to my whistleblower complaint to Scordelis) again tacitly affirmed the directive.  The day after my March 2014 admission that I had reported the bid collusion issue externally, Board director Chin suggested to other directors that I had disobeyed the order.  St. John-Crane then informed their attorney that the board members had decided I should be fired for insubordination.

The attorney warned that the word “insubordination” should not be used when dealing with a whistleblower.  The facts then changed.  When St. John-Crane recalled the August incident three weeks later, she had not told me not to report compliance problems; quite the contrary, compliance was a top priority.  HomeFirst’s recollection continued in that vein a year-and-a-half later in their response to my retaliation complaint.

A second, more conventional strategy for molding memories is the organization’s repeated pronouncement of its honesty and integrity.  Faced with a new lawsuit relating to its improper opening of customer accounts, this time on behalf of immigrants, Wells Fargo declared, “These allegations are inconsistent with our policies, values and the relationships we work hard to build with all parts of our community.”  Echoing HomeFirst’s reaction to my complaints, Wells Fargo felt, “These assertions are offensive.”  The bank had similarly proclaimed its virtue in this matter in 2013, 2015, and 2016.

Since 2003, HomeFirst has publicly declared as its purpose to end homelessness in Santa Clara County.  Also since 2003, the company has advertised the value of the housing first model it says it employs today to house the homeless.  The fact that area homelessness remains epidemic has not discouraged HomeFirst’s insistence on the value of its work. 

Like Wells Fargo’s delusional assertions – perhaps made with an eye toward a defense against possible lawsuits – HomeFirst’s contentions would be of no consequence if they were not reflected in public policy.  But Santa Clara County and HUD both relied on their recollection of HomeFirst’s good work to defer demanding repayment of money unfairly taken from them by HomeFirst.

While whistleblowers are no less susceptible to misremembering the past, the scale and reach of organizations enables them to use flawed descriptions to do far greater harm to those who challenge them and to the public in general.  The cases of Bill Bado, the whistleblower whom Wells Fargo fired, and the people associated with the 2 million accounts that Wells Fargo opened without proper authorization provide examples of that organizational misuse of power.

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[1] Cf. Khuzami, Robert.  “Testimony on ‘Examining the Settlement Practices of U.S. Financial Regulators.’” Committee of Financial Services, U.S. House of Representatives.  May 17, 2012.  See also the recent case of whistleblower Dr. Lance Garber.