Thursday, March 22, 2018

Life after Whistleblowing


Life after Whistleblowing

Wells Fargo Bank’s phony customer accounts trouble started back in 2005.  That was when Julie Tishkoff started to complain internally about the bank’s improper procedures.  Fired in 2009, she appealed to the U.S. Department of Labor.  DoL ruled against her so she sued the bank in 2011.  The bank replied vigorously.  Discussion of her case stopped short in 2012 when she accepted $200,000 to settle her wrongful termination suit.  These settlements typically come with nondisclosure clauses.  So her difficulties after Wells Fargo fired her didn’t come to light until she had tax problems involving the payment.

Yesenia Guitron did not go so quietly.

Wells Fargo hired Guitron as a personal banker in March 2008.  Personal bankers’ compensation was driven by daily quotas particularly for new accounts – the bank inspired its employee misconduct.  Two months later she noticed that another personal banker, Corina Zavaleta, was opening and closing accounts without the customers’ permission.  She criticized Zavaleta’s behavior for months.  In August 2009, Guitron received a negative performance review, and in November Zavaleta was selected to be Employee of the Month at the St. Helena (California) branch.  The following January Guitron was dismissed for insubordination or put on leave – the story is unclear.  In any event she was fired in February 2010.

Then began Guitron’s legal fight against the bank.  Wells’ first reply to her complaint denied most of her claims and listed eighteen additional defenses.  Their scuffle went on for another five years before the U.S. Court of Appeals refused her in 2018.

Guitron’s story might have died away quietly if her attorney, Peretz & Associates, had been as faint-hearted as mine was against HomeFirst.  Or if she had settled as Tishkoff did.  She could have been silenced by a non-disclosure/non-disparagement clause like the one HomeFirst proposed to me. 

We might have lost interest in her story if Wells Fargo had been a small-time wrongdoer like HomeFirst.  Or if it had not persisted in its wrongdoing and its retaliations against employees who resisted.  Instead, it went on until 3.4 million false accounts were created.  It went on until it fired at least 5,300 employees who were involved.  Until hundreds of whistleblower complaints were made about its sales tactics.  Until it was fined $185 million and repaid customers more than $140 million.  And still the bank did more bad stuff.  Its mortgage loan fraud, for example.

Guitron spoke out in her legal filings.  She also went on CBS News.  She appeared in the New York Times, the local press, and banking media.  She was subpoenaed by the Department of Justice in its Wells Fargo probe.  She still wins an occasional award for her whistleblowing.

Her story not only persisted but it grew in value because she continued her life after her battle with Wells Fargo.  No longer in banking, she has worked in property management for the past several years.  She raises her children.  Last year she got married.  The loss of her whistleblower case did nothing to end her life.

Whistleblowing is often described as a personal disaster for those who speak out[1].  Hoped-for financial rewards[2] are seldom received, and comfort from our moral purity can be paltry.  Our heroes risk, and sometimes suffer, jail time, and others must live in exile.

This storyline is outdated because whistleblowing has been democratized.  The number of whistleblowers increased as legal and social boundaries multiplied.  In a world crowded with self-concerned people, we are more likely to step on others’ toes.  When more corporations perform the work of government, more rules are written and violated.  Misdeeds are quotidian, so we need to abandon the idea our adventures are uniquely heroic.

Not only should our dissent be commonplace, we should expect retaliation, however wrong, to be routine as well.  We must plan to minimize the personal effects of retaliation and to live afterward.

Guitron’s life is different from what it might have been if she had not testified against Wells Fargo.  But she demonstrates that those who call out wrongs can survive.  Less dramatically, I survived my own whistleblowing at HomeFirst.  Like Guitron, I suppose, and most whistleblowers described by Alford[3], I suffered various retaliations though surely less severe than others’.  My life changed after whistleblowing as all lives change.

Companies defend themselves by asserting we are not really whistleblowers[4].  We are just disgruntled, poor performing employees, they say, or not employees at all.  They lie, of course.  But we are not whistleblowers in the old-fashioned sense.  We are everyday whistleblowers who must go on after this particular adventure has ended.


[1] For example, Alford, C. Fred. Whistleblowers: Broken Lives and Organizational Power. Ithaca, NY: Cornell University. 2001
[2] See Kohn, Stephen Martin.  The New Whistleblower’s Handbook.  Guilford, CT.  2017, and my earlier comment
[3] Alford, ibid.
[4] See, for example, HomeFirst’s response to my complaint.

Thursday, March 15, 2018

Losing and Winning


Losing and Winning

Imogene Redwine was hired as a special education teacher in the Atlanta Public Schools in 2001.  This was a few years before the Atlanta schools cheating on CRCT[1] assessment tests came to light.  She had a hand in disclosing the scandal, and then she lost.

In 2007 Donell Underdue moved from Connally Elementary to be principal at Brown Middle School where Redwine taught.  Underdue was soon making comments that Redwine read as encouraging teachers to cheat on the tests[2].  The next year Redwine talked about the CRCT pressure to a former Brown Middle School principal and a news investigator.  When Underdue found out, he reassigned her.  She filed a grievance.  She received a poor evaluation because her CRCT scores were not high enough.  Underdue put her on a performance development plan.  She filed another grievance.  She complained to Underdue’s boss about cheating.  She was accused of threatening the assistant principal, which she denied doing.

In 2009 Redwine took FLMA time off for health problems.  Her union told her school officials seemed to be planning to fire her.  When she returned, Underdue assigned her to teach math despite her limited experience in that area.  She objected and filed a grievance.  The following year Underdue gave her a performance evaluation that threatened her teacher’s license.

In 2011 as the State investigated reports of cheating on the 2009 CRCT tests, Underdue was promoted to Executive Director of Schools.  The next year Redwine testified for the prosecution before the grand jury that considered the cheating.  A week later the school system’s legal office said her contract would not be renewed for the following year.  The union intervened, and she received one more renewal.  Then she was out at the end of the 2013-14 school year.

She sued the Atlanta school system, and three years later a jury decided to believe that she had been fired because of her poor performance.  Her whistleblowing and support of investigators were not the cause at all.  After ten years of fighting – including three years in court – she lost.  If my attorney agreement is any indication, Redwine still paid for mediators, court fees, and other costs even if her attoney worked on a contingency fee.  After being fire, she needed months to find even a lower paying job.  Now 62, she will never fully recover financially from her project.

Weak evidence of crime may have contributed to her loss.  She spoke out about cheating, but the problems at Brown Middle School were not as bad as elsewhere in the 2009 testing.  Although she heard about meetings at Underdue’s home to fix tests, she did not witness the cheating.  Underdue skated from one job to another higher up in Atlanta, then Chicago and now Florida. 

But, as in most states, Georgia law doesn’t demand the alleged crime be proven.  Those who retaliate, though, like to claim their accusers had things wrong.  HomeFirst did that in its defense against my complaint.

Unlike the losers, those who win can feel society backs them.  Even if the award is smaller than it should be and you must share it with attorneys, it is easier to feel vindicated when you win.

For those, like Redwine and me, who win nothing, loss can tempt us to regret we ever became whistleblowers.  Dan Bethards lost after he blew a whistle on illegal gun sales by his boss in the Wisconsin Department of Justice.  He lost his job and his house. He lost his case before of the state Court of Appeals.  Given the choice again, he would not blow the whistle, he says.  The organization is just too powerful.

Many whistleblowers who are fired by large organizations engage attorneys.  The attorneys deal with the organization’s lawyers.  Settlement offers are solicited.  Money is offered in exchange for silence.  HomeFirst offered an agreement to me.  I’d be surprised if Atlanta schools didn’t offer one to Redwine to avoid years of legal expenses. 

Whether or not she was offered a settlement, Redwine went the lawsuit route believing she had a case.  My attorney told me I had a case too.  But I didn’t try suing after the settlement disgusted me and the State of California disappointed me.  We make our choices.  Maybe Redwine was more of a fighter than I was.

We whistleblowers also make choices earlier in the game.  We recognize that the organizations we work for are dicey.  They cheat and lie to others, but they pay well.  Well enough, it seems, as long as it lasts.  The thousands of Wells Fargo bankers – and hundreds of whistleblowers – who witnessed the creation of fraudulent customer accounts were well paid.  That’s why they worked at Wells rather than someplace else. 

In 2007 Redwine sensed the corruption of Atlanta Public Schools, but she stayed for the pretty decent salary.  I knew years before I was fired that HomeFirst was ethically sketchy and refused to honestly report its effectiveness.  I knew its CEO was inept and arguably an idiot.  But I stayed because the salary was good enough.

When we see a whistleblower lose, it’s easy to find unfairness in the situation.  Redwine’s courage brought her legal costs, lost wages and emotional stress.  But she also took in several years of income from an organization she knew was corrupt and was targeting her.  I did the same at HomeFirst as did those Wells Fargo bankers.

Organizations like Atlanta public schools, Wisconsin Department of Justice, Wells Fargo, and HomeFirst are guilty of unjust use of power.  But we are not mindless victims.

We won for a while.  Many of us for years.  Then we lost the bets we made.  Weep for us only a little.  Pity more those who never object at all.



[1] Criterion-Referenced Competency Test given to all public school students in Georgia.  The test was used to measure schools’ academic progress as required by the federal No Child Left Behind Act.
[2] By erasing incorrect responses and marking the correct answers.  State investigators would identify cheaters through erasure analyses that exposed the basis for significant improvements in school-wide scores.

Tuesday, March 6, 2018

Employing Potential Whistleblowers


Employing Potential Whistleblowers

Tricia Mullins took a risk when she joined Aegerion, a biopharmaceutical company, in September 2012.  Its only product, Juxtapid, would not get FDA approval until December.  It had had no revenue and $60 million a year in expenses.  It stayed afloat only by issuing debt and equity securities, and its ability to do that depended on Juxtapid’s prospects.  At $311,000 a year per patient, the drug could turn the business around.  Mullins’ job was to find customers in New York City.

Unfortunately the market for Juxtapid was extremely limited[1].  If the company was to survive, the drug had to be sold for “off-label” purposes – patient uses not approved by the FDA.  There are legal problems with doing that, though.

By March 2013 Mullins was butting heads with her boss who set sales goals that were impossible to meet within the law.  At a sales meeting in April it was clear her peers were making their goals with off-label sales.  She spoke out against the illegal practice.  One week later she was told her sales performance was disappointing.  In June her boss told her again.  She complained to the CEO in July.  He didn’t reply. 

At the end of July Mullins and two other sales reps filed a false claims suit against Aegerion because many off-label customers were on Medicare.  Mullins was stressed and went out on medical leave.  Aegerion said she abandoned her job.  It stopped paying her and cut off her emails and other communications. 

In April 2014 Mullins started a new job, in patient advocacy not sales.  She got on with life.  Her lawsuit continued for another three plus years.  Then it succeeded in a big way.  Aegerion agreed to pay $35 million to settle criminal charges and false claims allegations.  Mullins and her co-relators were awarded $4.7 million. 

It seemed like a happy ending to a whistleblower’s story.  Mullins observed wrongdoing.  She was offended and spoke up, trying to change corporate misbehavior.  She suffered retaliation, but stood up again.  As Stephen M. Kohn’s The New Whistleblower’s Handbook promised, she emerged victorious.

This telling simplifies some elements of her story.  She knew what she was getting into when she joined Aegerion.  The company needed to push edges of the envelope, or it was dead.  She was in the thick of things as sales rep for a new product that had to move.  And she was no naïf.  She’d worked for 6 biotech companies before Aegerion.  Still, her awareness did nothing to reduce the company’s culpability.  The story turned out as it was supposed to.

When the Department of Justice announced its settlement with Aegerion in September 2017, it named Mullins as one of the whistleblowers.  Her 23-year career to that point included jobs at ten companies.  Loyalty was not an obvious strength, but public fame at whistleblowing marked her as a potentially dangerous employee.

To protect her position at her new employer, Horizon Pharma, her attorney sent the company a letter.  He enclosed DoJ’s news release and reminded them they would be sued if they retaliated against her in violation of the False Claims Act.  In December the company fired her supposedly for violating confidentiality rules.  As promised, her attorney filed suit against Horizon Pharma.

Whistleblowers are often morally ambiguous characters.  We often suspect we are joining up with scumbags before we dream of whistleblowing.  We squeeze out enough personal benefit even if they are scum.  In one big-time case, Sherron Watkins surely was aware of Enron’s unethical culture[2] before she discovered its accounting fraud.  She was paid well, but Enron still did wrong.  Whistleblowers, big-time and small, need jobs.  We put up with imperfection.

Like Mullins, I had worked at enough companies to establish I was not an unreservedly dedicated employee.  Worse, in the view of HomeFirst’s CEO, I had spent most of my time with for-profit companies.  I lacked sufficient passion for HomeFirst’s mission.  We both knew this before my whistleblowing project.

Like Aegerion, HomeFirst operated at the ethical edge almost by necessity.  It had a history of compliance problems.  The $1.2 million HUD overbilling was one.  There was also its 2007 licensing problem[3], well before issues I disclosed.  HomeFirst also had a history of financial challenges beginning before I joined in 2007.   I became its CFO because I thought I could deal with them.  Conditions improved but then worsened again under CEO Jenny Niklaus.  I was aware of all this and, like Mullins, I stayed with the company.  Maybe I thought I could help fix things.  Maybe I decided the job paid well enough and I would retire before anything disastrous happened.  Probably a little like Mullins.

We often bring unhappy conclusions on ourselves.  We could avoid them by leaving earlier, but we stay for reasons often selfish.  And our employers know well in advance of our whistleblowing what could happen.  Signs may be there before we are hired, as they were with Mullins.  They may even plan for it.

It looks like Horizon Pharma didn’t recognize the signs when they hired Mullins.  Her lawsuit will test whether their suspicious claim will win.  HomeFirst’s did against me.



[1] Juxtapid was approved to treat homozygous familial hypercholestrolemis, a rare lipid disorder inherited from both parents that results in a limited or complete inability to remove low-density lipoprotein from the blood.  Aegerion’s price for the drug, which was taken once a day, was $311,000/year.
[3] EHC LifeBuilders changed its name to HomeFirst Services in 2014.