Tuesday, May 22, 2018

Whistleblowers as Rebels


Whistleblowers as Rebels

I like whistleblowers.  I admit being a little envious of those who are successful.  I am sympathetic to those, like me, who lose.  I believe them.  I am fascinated by all who struggle for years.

Sabina Burton has struggled since 2012.  She was an associate professor of criminal justice at University of Wisconsin-Platteville when a female student came to her with a complaint.  During class, the male professor had given the young woman a note that said, call me tonight! and included his personal phone number.  The incident disturbed the student.

Burton reported it to the school dean and the department head, Thomas Caywood.  Caywood explained the student had misunderstood: the professor was conducting an experiment.  Burton was not satisfied.

A week later Caywood sent a memo to all staff ordering them to refer student complaints to him, not to anyone outside the department.  A rebuke of her, Burton thought.  Then Caywood and the dean pulled support for a cybersecurity curriculum she was developing.  Other retaliations followed, Burton said.  She filed a grievance with the university.  Right after she complained to the EEOC about sex discrimination and retaliation, the dean sent her a “letter of direction” describing a pattern of unprofessional and inappropriate behavior.  He gave her five specific directions, which she didn’t appreciate.  Allegations in the letter were false, she would claim.

Her grievance was rejected.  The EEOC didn’t support her.  So she filed a civil lawsuit in 2015.  That lost, and she asked the university to reinstate her grievance. She demanded removal of the false and defamatory letter of direction from her file.  It rejected her request, and in 2017 she sued again.  That lawsuit lost, too.  But she is appealing the decision.  Meanwhile she has been locked out of her office, denied access to campus, and removed from teaching an on-line course. 

The story is further complicated by the fact that the department was dysfunctional even before the errant professor’s note.  And some believe Burton’s harsh treatment stemmed from her conservative politics at the liberal school.

How do we understand Burton’s tenacity and UW-P’s ungenerous response?

Harvard professor Francesca Gino’s new book, Rebel Talent: Why It Pays to Break the Rules at Work and in Life, builds on her years of research into how people make decisions.  Our biases and emotions lead us to suboptimal results, she says.  Like those reached by Burton and UW-P.  To do better, we must become rebels.

Non-rebel employees who act by rote are threats to their organizations.  They need to be fully engaged if the business is to thrive.  She offers advice: 

1.       Seek out new ideas, new ways of doing things.
2.       Encourage constructive dissent, not yes-people.
3.       Open conversations and listen to others.  Do not shut them down or ignore them.
4.       Be authentic in relations.  Build trust with others.
5.       Learn everything you can about an activity, but do not be wed to what you think you know.
6.       Recognize constraints and work creatively within them.
7.       Do not seclude yourself in some corner office.  Work with the people you lead.
8.       Welcome accidents and turn them into successes.

The problem is that this advice sounds so reasonable that most companies already claim to follow it.  HomeFirst Services of Santa Clara County (previously called EHC LifeBuilders) espoused values of creativity, openness, respect, and teamwork.  Then it fired me after I identified and blew the whistle on several violations.

For its part, UW-P has a Division of Diversity and Inclusion with an executive director and chief diversity officer to make sure problems like those identified by Burton do not happen.  Still, she was fired.

Organizations admire new ideas until there are just too many and it’s time to get the work done.  Dissent can be constructive until it becomes disruptive.  Listening to others is fine unless, like Burton and me, they don’t stop talking.  Authenticity is great until it irritates, and trust should not get in the way of at-will employment.

Gino offers a test to understand what kind of rebel you are and how you can improve.  She arrives at a neat 2-by-2 matrix of rebel types:


In describing rebellion as resistance to external and internal pressures, she echoes David Riesman’s other-directed and inner-directed American characters.  But Gino takes the idea in a different direction.

While she assures us there is no good or bad rebel type, she encourages Pirate-leanings (“you don’t let bad psychological habits hold you back”) that resist all pressures.  And she cautions Guard-types (‘you may be missing opportunities to develop as a person and to challenge others to do the same”), who are less able to resist any pressure.

In this scheme, many whistleblowers would probably be often categorized as Travelers, driven by internal pressures and resistant to external pressures.  That’s how I tested.  It is also consistent with Professor C. Fred Alford’s conclusion, based on his interviews of whistleblowers: we are driven by moral narcissism[1].

To me, though, Gino does a disservice to people of all sorts.  In her model we are blown one way by external forces and another by internal forces.  Self-aware, the best of us can escape those influences.  The rebel is sui genesis.

But no one truly escapes determination.  We think we resist pressures, but others see more clearly how we serve ourselves.

Rebels might be better categorized as Actors along different dimensions.  Say, “disposition to act” and “sense of agency.”  The whistleblower, motivated by myriad influences, acts with full intent.  Successfully or not, she acts.  She perseveres.


[1] Alford, C. Fred. Whistleblowers: Broken Lives and Organizational Power. Ithaca, NY: Cornell University. 2001, p. 79.

Tuesday, May 15, 2018

Problems Ignored by Whistleblowers


Problems Ignored by Whistleblowers

U.S. unemployment peaked at 10.0% in October 2009.  Silicon Valley, where Second Harvest of Santa Clara and San Mateo Counties is located, suffered even more.  There the rate reached 11.3%.  That year Second Harvest, one of the country’s largest food banks, distributed 45.5 million pounds of food and served 231,000 persons a month – roughly the number of those earning less than the federal poverty level in the region.  It was a valued asset in the community.

By the time Second harvest closed its books on 2017, Silicon Valley unemployment had dropped to near 3%.  The number of people earning less than the federal poverty level dropped 3% below the 2010 level and 12% below the 2012 peak.  Still, Second Harvest’s CEO found poverty persistent in the midst of a soaring economy.  The hunger paradox, she called it.  In response, in 2017 the company served 11% more people than in 2010.

Second Harvest’s fundraising went into overdrive during the recession.  Rather than decreasing by 3% (with poverty) or growing by 11% (with persons served), fundraising rocketed up by 65% (adjusted for inflation) between 2010 and 2017.  With those extra funds, two things happened.  First, cash and investments increased by $27 million to $44 million – four times as much as Houston Food Bank, the country’s largest.  Second, it pushed more food through its distribution channels.

This is how that plays out: Tiny St. Vincent de Paul in East Palo Alto is one of Second Harvest’s 320 distribution partners.  When I began delivering food for SVdP 19 years ago, we carried a several pounds of packaged goods in two paper bags per family.  As the group acquired space and refrigerators, we gave more and healthier food.  We now lug boxes of food weighing 75 pounds and more to families.

Another place where I volunteer is the Palo Alto Food Closet, which is now a program of Downtown Streets Team.  DST is also a Second Harvest partner.  Second Harvest asked the Food Closet to boost its distribution of food.  Increasing the number of hours the Food Closet is open didn’t change the number of visits.  Then, we increased the number of times clients can receive food from 2 to 3 times a week, hoping to move more food.

Second Harvest and its partners are far from unique in the hunger business.  Feeding America coordinates a nationwide network of some 200 food banks, including Second Harvest.  The network distributed 4.9 billion pounds of food in 2017, up 63% from 2010.  One consequence of that growth was a $50 million increase in Feeding America’s cash and investments over the period.

It doesn’t have to be that way.  Feeding America and local food banks have a key food source in the Department of Agriculture’s Emergency Food Assistance Program (TEFAP).  Prior to the recession, TEFAP distributed about 340 million pounds a year to states and nonprofits.  By 2010 distributions had more than doubled to 905 million pounds[1].  But in contrast to Feeding America and Second Harvest, its shipments then dropped 20% by 2017[2].

If Second Harvest takes in more private contributions than it really needs, a whistleblower might call that out.  But none has.  If St. Vincent de Paul gives out wasteful amounts of food, a whistleblower might call that out, too.  Same thing for the Palo Alto Food Closet.  We generally ignore these problems.  Like the Department of Justice and other enforcement agencies, we don’t want to hurt organizations that do good.

Certainly all of these organizations believe they are acting appropriately, just as Enron and any number of corporate miscreants did.  Feeding America, Second Harvest, SVdP, and Food Closet all claim the need is great despite a strong economy – 30% more people live in poverty than before the recession, they note.  They claim morality demands generous action in support of the poor.  That could be true.

Or maybe their claims are based on a different reasoning.  After all, most people think they are more moral, more honest, and more deserving than others[3]. 

Researchers have found many alternative explanations for behavior than reason and moral considerations[4].  People tend to be biased in favor of actions that benefit themselves.  For example, the salary of Second Harvest’s CEO rose at the same excessive rate as its revenue, and Feeding America’s CEOs received bonuses based in part on revenue and pounds of food distributed.

Wrongdoers and whistleblowers are both affected by the slippery slope phenomenon.  If behavior is only slightly offensive in one period, and the next is a bit more offensive, and so on, the actor never feels regret.  And the insider has trouble deciding when the wrong justifies the consequences of blowing the whistle. 

HomeFirst’s defense against some of my complaints moved along this slippery slope: the alleged wrongs had been going on for years, so what’s the problem now?  And the State of California bought that argument when it decided against me.

So as Second Harvest got more and more money than it really needed, when did their greed become egregious?  When should a whistleblower have said, enough?

Much has been made of cognitive dissonance in explaining why presumably good people misbehave.  Researchers argue that people rationalize their misdeeds or they find mental tricks that help them ignore misbehavior. 

In this age of Donald Trump, we can posit another explanation: they lie and just don’t care about our response.  Perhaps they calculate they have the power and see no reason to fear being called out.  The result is, corporate offenders seldom admit to their crimes and they are rarely punished severely[5].  Or perhaps they are not good people, after all.

We can try to change organizations from within.  We can leave when they fail to respond.  We can blow a whistle.  We can refuse to support them.  We have choices, but we must object to what seems wrong.



[1] TEFAP and SNAP data are found in reports on this USDA web site.
[2] The poor were not abandoned by the federal government, though.  Supplemental Nutrition Assistance Program (SNAP – food stamps) participants increased from 26.5 million in 2007 to a high of 47.7 million in 2013 before dropping to 42.2 million in 2017.
[5] Garrett, Brandon L.  Too Big to Jail: How Prosecutors Compromise with Corporations.  Cambridge, Mass.:  The Belknap Press of Harvard University Press.  2014

Tuesday, May 1, 2018

Whistleblowing against the Grain


Whistleblowing against the Grain

Brandon Garrett’s 2014 book, Too Big to Jail: How Prosecutors Compromise with Corporations, takes its title from complaints the banks responsible for the 2007-8 financial crash were never properly punished.  Going into the recession, the government had feared that if a major bank failed, the economy could tank.  It was a short step from “too big to fail” to “too big to jail.”  And whistleblowers lost as a result.

Garrett studied reports from federal lawsuits against all sorts of offenders.  They included banks but also others accused of fraud, safety, environmental and other federal violations. 

According to Garrett, many reasons explain seemingly weak-willed actions against wrongdoers.  First, there’s the deniability of guilt.  White collar crime has long been considered difficult to prove[1].  Garrett points to layers of corporate organization and decentralized decision-making that complicate prosecution.  Violations are committed in distant offices, divisions, or subsidiaries over which control is ambiguous.  Senior managers claim they were unaware of misdeeds as junior managers maintain they only did what was expected of them. 

In my small HomeFirst world, I admitted intent is difficult to prove.  HomeFirst claimed it really wanted to address the violations I identified.  But each time it tried to fix one, I came up with another.  The board aimed to act properly, but they relied on advice from the CEO who said things were fine. 

Organizations also protect themselves with written policies that demand ethical behavior even where culture expects the opposite.  Before its problems were obvious, Enron famously had an ethics policy.  As did Wells Fargo Bank before its fraudulent accounts came to light.  HomeFirst had one when it fired me.

Second, prosecutors may go easy on offending organizations because they need insider help to get evidence against guilty parties.  Or because they decide the community could lose more than it gains by punishing the organization.  

Whistleblower John Kopchinski sued pharma giant Pfizer for illegally marketing its painkiller Bextra.  While Pfizer paid $2.3 billion in fines and penalties in 2009[2], the one convicted of felonies was a subsidiary.  Pfizer itself avoided conviction, which would have meant a devastating disbarment from Medicare/Medicaid business.

Similar logic can apply in much smaller cases.  The Department of Housing and Urban Development didn’t demand repayment of $1.2 million overbilled by HomeFirst, citing HomeFirst’s critical role in the community.  The County of Santa Clara let $140,446 overbilled by HomeFirst go for the same reason.  Although the County found HomeFirst had violated licensing regulations, it called the company a vital organization and granted a temporary waiver.  After I complained about HomeFirst’s apparently illegal bid collusion, a Department of Justice attorney said they didn’t like to charge companies that do good.

Garrett reported prosecutors often trade heavy penalties for promises to change future behavior.  Pfizer, for example, accepted a 2009 Corporate Integrity Agreement even while denying Kopchinski’s allegations.  Despite its new resolve, Pfizer signed more settlements with the DoJ in 2011, 2012 (2), 2013, 2015, and 2016. 

After HUD discovered HomeFirst’s $1.2 million in overbillings from 2003-2006, it modified its reimbursement procedures.  Still, HomeFirst charged HUD for expenses related to ineligible clients in 2009. 

Third, getting convictions can be tough because corporations have rights, too, and the legal resources they employ in their defense often outmatch their prosecutors’. 

James Garbe discovered Kmart offered cash customers one price for medications and Medicare and other insurance plans a higher price.  That meant it violated the law, charging Medicare more than the usual and customary rate.  Kmart never seriously challenged the facts of the case, but for nearly 10 years it raised various technical legal challenges.  Garbe eventually won.  The DOJ settled for $32 million, not the $100 million it first sought.  Garbe was awarded $9.3 million, of which $7.4 million went to pay his legal costs.  By then, Garbe had developed dementia, so his share went to a guardian for his estate.

It’s not just large corporations that play the system well.  Look at Lance Armstrong. 

Armstrong is famous for his recovery from testicular cancer, seven Tour de France wins, and his eventual admission of having used performance-enhancing drugs.  Not as well-known is the whistleblower who helped bring him down.

Floyd Landis joined the USPS cycling team with Armstrong in 2002, and he ran into his own doping problems in 2006.  He continued to both race and have drug problems for years afterward.  Like Armstrong, he insisted on his innocence, but he was convicted in 2009. 

The big year was 2010.  Landis admitted having doped and he filed a False Claims Act suit against Armstrong, Tailwind Sports, which had the contract with USPS, and related parties.  He charged the defendants billed USPS $42 million from 1996 to 2004 despite contract provisions that barred use of illegal drugs and violation of cycling rules.  On behalf of the government he demanded treble damages – more than $120 million.

Armstrong tried unsuccessfully to stop the suit.  Through 2012 he called all doping allegations heinous and outlandish.  Then in 2013 he admitted using illegal drugs.  He lost sponsorships worth $75 million.  Still he and the other defendants fought for five more years.

After eight years of fights and legal expense, the DoJ settled in 2018.  For $5 million.  Landis will receive $1.1 million, plus $1.65 million for his legal costs.  Armstrong still claims the action was unfair and without merit.

Garrett lays out a case for supposing society – authorities, the powers that be, most people – doesn’t really value whistleblowing the way we hope.  That’s why the organizations we accuse are seldom severely punished while we routinely suffer.  We go into our whistleblowing expecting justice – against our accused and for us.  Garrett suggests justice is messier than that.

Turning from Garrett’s book, we can question our heroic whistleblowing fantasy.  Not only is the offender’s guilt unclear, we are impelled to act by many motivations.  Some are honorable, some base; some social, some personal; some rational, some not; based on accurate or inaccurate understandings.  

If we do not always do the ‘right” thing and if we must occasionally admit we made a mistake[3], in our whistleblowing we lived and acted.



[1] See, for example, Sutherland, Edwin H.  White Collar Crime. New York: Holt, Rinehart and Winston, Inc.  1949; and Friedrichs, David O. Trusted Criminals: White Collar Crime in Contemporary Society. 3rd ed. Belmont, Cal.: Thomson Higher Education. 2007
[2] This amounted to 4.6% of total revenue in 2009.  Despite the charge, 2009 operating income of $8.6 billion was higher than in 2008.