When Whistleblowing Is Foolish

When Whistleblowing Is Foolish

We like to think our whistleblowing is heroic.  We stand by our consciences.  Setting selfish interests aside, we act to benefit the community.  But lots of times, especially in retrospect, it’s clear we are simply fools, going about it as we do.

Terry Albury was born in Northern California in 1979.  While studying at Berea College in Kentucky, he interned with the FBI.  After graduation he joined the FBI, becoming an agent in 2005.  From 2009 to 2010, he served in Iraq with duties that included interviewing Iraqi detainees.  He returned to the US in 2012 and was stationed in the Minneapolis field office where he served in an counter-terrorism squad.

Albury was a straight arrow.  Perhaps because his mother was a political refugee from Ethiopia, he had a well-developed sense of social justice.  He was a Big Brother.  At the time of his arrest he was happily married.  His wife, whose parents were Cambodian refugees, thought of following him into law enforcement but put her career on hold to raise their two children.  He won many awards from the FBI.  At his sentencing, his attorneys described him as a consummate professional. 

Life can be difficult for people of color in America.  Minnesota ranks 8^th among states in the percentage of whites in its population.  The FBI has had issues with diversity, and Albury was the only black in its Minnesota office.  He complained of racial jokes and hazing.  He felt alienated and isolated.

Between February 2016 and January 2017 Albury collected information about how the FBI recruited informants and identified potential extremists.  The tactics reeked of profiling and intimidating minority communities, he thought.  He could have filed complaints with the FBI, but he didn’t believe that would do any good.  So he leaked the documents to a journalist at The Intercept, where it formed the basis for a series on FBI practices.  He became a whistleblower.

Albury could have approached the problem differently.  He might have decided that he was just stressed and the problem wasn’t that big a deal after all.  And not one that he was going to change any time soon.  He could have complained internally if it made him feel any better. 

He might have held on for three years to get his retirement, and then complained to The Intercept or anyone else who cared.  Or he could have helped the people the FBI mistreated.  That might have been good.

Instead he got sucked into the whistleblower role.  Maybe he was going to be the next Daniel Ellsberg or Edward Snowden.  Unfortunately he played the fool, setting the stage for Reality Winner.

Similar to Snowden, Winner was an intelligence contractor who grabbed NSA information. Hers was a May 5, 2017 report on Russian cyberattacks.  Four days later she decided the government was going to conceal the information.  She mailed a copy to The Intercept, which then called the government about its story.  The FBI learned about the call on June 1, and they arrested Winner on June 3.  Her big disclosure was soon common knowledge from a variety of sources.  Winner was sentenced to 5 years in prison.  Burned by The Intercept.  For nothing.

Albury took more care than Winner would, he sent his 25+ files to The Intercept in encrypted emails.  He changed file formats to avoid detection.  But The Intercept burned him too.  They sent a FOIA request to the FBI about two of the secret documents.  The agency was surprised the requester knew the name of a secret document.  It checked who had accessed the files.  A few did, but Albury was the only one who copied portions of the files into another document.  Office cameras caught Albury taking photos of his computer screen while he was accessing other files.  A January 2018 search warrant led to the discovery of more classified files at his home.  In April he agreed to a guilty plea, and he was sentenced to four years in prison.

For some, blowing the whistle is quite rational.  It’s like a business decision to get an expected return.  Maybe their employer cheated them out of wages or illegally discriminated against them, and they want what is due to them.  Or they file an FCA lawsuit hoping to recover a reward.

The rest of us are “ethical” whistleblowers, driven by emotions and moral judgment.  The outcome from our whistleblowing will determine how foolish we were in our projects.

I thought I was justified in my complaints about the behavior of HomeFirst Services of Santa Clara County.  They were all ignored or considered immaterial.  After I was fired, the State of California determined that I was no whistleblower at all and did not deserve the protection I sought.  But I was close enough to retirement to manage, and I stopped legal action before it cost me too much.  I was just a little foolish.

Albury and Winner proved to be quite foolish whistleblowers.  They had a lot at stake because they were both fairly young and Albury had a family to support.  They went up against very powerful organizations that have a sympathetic audience in today’s America.  They used a media outlet that would inadvertently reveal their identities.  Their disclosures were not big news to anyone.  Nor did they disclose striking moral or legal violations.  Although they were both sentenced to years in prison and ruined lives, they accomplished nothing.

Even if other options are available, we are attracted to becoming whistleblowers.  We are pushed by some dissatisfaction.  Maybe some anger.  Possibly a sense that the situation is unjust.  We are pulled along through the dangers by the myth of the idolized whistleblower.  If we are lucky, we stop short of being too foolish.

Not Becoming a Whistleblower (Part 2)

Not Becoming a Whistleblower (Part 2)

We love an ideal form[1] of whistleblowing, not the reality.  According that ideal, those who blow the whistle are moral actors.  We all benefit from their acts because fraud and other lawless behavior are reduced.  Whistleblowers are protected against retaliation by their employers.  Offending organizations are punished.  The process of fair investigation, analysis, and conclusion proceeds promptly and reasonably.

A few writers, including C. Fred Alford (2002), caution that this ideal is far from realistic.  Alford argued that organizations are predatory and will always make their whistleblowers’ lives miserable.  And whistleblowers are not the moral beacons they pretend, he said.  Moreover, whistleblowers will pay a high price, sometimes sacrificing their lives to save ours. 

The ideal, even if false, serves a socially useful purpose.  It gets people to speak up.  And despite all warnings, the gap between ideal and real may be narrow enough to work for society. 

Some folks do make their disclosures on moral grounds even if Alford calls them moral narcissists.  The public sometimes gains from the correction of bad behavior.  Small changes, at least, followed Edward Snowden’s massive disclosures, for example.  Even if they are not always protected, some are fairly compensated for retaliation they suffer.  Take Sanford Wadler, former General Counsel at Bio-Rad Industries.  A California jury awarded him nearly $15 million in 2017 because he was fired for raising concerns over violations of federal laws.

After whistleblowing started up five decades ago, we came to recognize that all the parties – discloser, organization, and legal enforcement – play in a more complicated setting than the ideal assumes.  We operate with opposing values, understandings of fact and legal precedent, emotions, and authorities.  A fair conclusion may be displaced by one that is expedient or responds to influence and bias.  In this environment, whistleblowing may not be the right approach for many who observe wrongdoing.

A whistleblower and others helped push Theranos toward dissolution after years of fraud by the company’s CEO Christine Holmes and her accomplices.  In John Carreyrou’s telling, Theranos’ collapse resulted largely from the most basic of business problems: its blood testing device didn’t work.  As at Enron, fraud entered the picture when management tried to keep the struggling operation from sinking.  Holmes, looking sharp in her Steve Jobs black mock turtleneck, pitched her deception to the U.S. Army, Walgreens, Safeway, and the FDA.  She was impressive, but she flopped.

Tyler Shultz was Theranos’ traditional whistleblower.  Shultz suspected the company was misrepresenting lab results.  He took his concern to Holmes who brushed him off.  He spoke to his grandfather, George Shultz, who was a Theranos board member and also a former Secretary of State, former Treasury Secretary, and former Labor Secretary.  The elder Shultz assured his grandson he was mistaken.  Tyler eventually reported his suspicions to the New York State Department of Health.  He resigned.  Theranos unleashed powerhouse attorney David Boies to sue him.

The company had other employees – 10 notable ones by Carreyrou’s count – who responded to the obvious craziness at Theranos by quitting.  They withdrew their technical support for its fraud and didn’t get sued.  They acted ethically without becoming whistleblowers.

Jack Paulson at Google is another corporate dissident.  Google is reported to be developing a censored search machine for the Chinese market.  Although it complied with Chinese law, the project offended Paulson.  So he quit rather than support behavior that offended his ethics.

Another approach: on September 5, 2018 the New York Times published an anonymous op-ed by a senior official in the Trump administration.  The author claimed to be part of an internal group that keeps Trump from implementing dangerous parts of his agenda.  The group’s members believe they are acting nobly, the author says.  They are protecting America’s democratic institutions.

Our traditional view of whistleblowing has always been wrong.  The gap between ideal and reality had seemed small enough not to matter.  When the gap widened, the system was patched.  Whistleblower protection laws were introduced to cover new employers.  Systems were developed to collect complaints anonymously.  Governing bodies called for new reports.  Rewards were offered.  More attorneys were needed.  Organizations introduced ways and still more ways to improve whistleblowing.  I even offered my own suggestions.

These are fixes made chiefly by legislators and senior managers of organizations.  The examples of Theranos employees, Paulson, and the anonymous op-ed writer show individuals acting on their own.  They resist misbehaving organizations as people did before our whistleblowing complex was constructed.

But merely quitting, as Theranos employees did, doesn’t seem strenuous enough to make a difference in every case.  If Snowden had simply quit his Booz Allen Hamilton job in protest against NSA practices, government surveillance would have continued secretly and unchecked.

And wide-spread rebellion of the sort described by the NYT op-ed writer would lead to chaos.  We could never trust anyone to do what they promise.  The prospect of anarchy might make us yearn for Professor Bok’s faith in loyalty to the organization and one’s colleagues[2] even if we abandon our disclosures.

Whistleblowing didn’t work for me.  I lost my job at HomeFirst Services and accomplished nothing.  What else could I have done?  Sabotage would have been easily detected and punished with a vengeance.  Quitting is exactly what HomeFirst’s CEO wanted me to do.  Quitting after I gathered documentation to prove the violations and performing my whistleblowing from outside was possible.  But it would have meant giving up my salary earlier than I planned.  Greed trips many whistleblowers. 

The troubling gap between idealistic whistleblowing and reality may be unbridgeable.  It’s nonsensical to expect that one person could defeat an organization representing hundreds or thousands of people.  We may have to accept that the handling of our disclosures will always be flawed. 

The ideal is so simple.  But an array of clashing motives drive us.  When we blow a whistle, we are certain we are right in our claims but also fearful we’ve got it wrong.  We both understand and disdain those who do not support us.  We want to win even though no win will satisfy us. 

If we cannot handle these breaks from the ideal, we should probably not consider becoming whistleblowers.  We should find an easier path.

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[1] Cf. Appiah, Kwame Anthony.  As If: Idealization and Ideals.  Cambridge, Mass.: Harvard University Press.  2017.

[2] Bok, Sissela.  “Whistleblowing and Professional Responsibilities.” In Ethics Teaching in Higher Education. Daniel Callahan and Sissela Bok (eds.).  New York and London: Plenum Press. 1980. 277-295.

Not Becoming a Whistleblower (Part 1)

Not Becoming a Whistleblower (Part 1)

According to accepted wisdom – at least among whistleblowers and our supporters – whistleblowing is important to society.  We are vital to the public interest.  We deserve respect.  We are encouraged to brave the consequences and disclose wrongdoing.  But what if all that is just wrong?  How would we respond to misdeeds?

Whistleblowing is a relatively new phenomenon.  Before the 1970s, little was written about it.  The number of research papers mentioning the topic since 1920:

The percentage of books that mention it from 1920-2008 also took off after about 1975 (per Google Ngram):

Early on, whistleblowers were limited to current or past members of the wrongdoing organization who lack authority to correct the wrong[1].  This internal status distinguished them from muckraking journalists, like Ralph Nader, and other outsiders, like Daniel Ellsberg.

As insiders who rat on their employers and colleagues, whistleblowers have long been exposed to criticism for being disloyal.  Theorists devised moral rules for whistleblowing.  Professor Sissela Bok demanded that ethically correct disclosure must be in the public interest, expose a significant danger, and be likely to lead to a better situation[2].

Whistleblowing grew with the attention.  More people reported wrongdoing: increasing from 8 per 1,000 employees in 2004 to 14 per 1,000 in 2017, according to NAVEX Global, a large provider of corporate hotlines.  Qui tam suits under the False Claims Act increased from 30 in 1987 to 675 in 2017.  In California, whistleblower complaints filed with the State increased from 88 in 2005 to 2,022 in 2017.

Seeing a social benefit in all this, legislators passed laws to protect whistleblowers.  The Whistleblower Protection Act of 1988 initiated protection for federal employees.  After the Enron and WorldCom scandals, Congress enacted the Sarbanes-Oxley Act of 2002 to address corporate fraud.  Eventually all states offered some form of legal protection for whistleblowers.

Organizations formed to support the whistleblowing enterprise.  The Government Accountability Project started in 1977.  The National Whistleblower Center began in 1988.

Whistleblowers became iconic.  Films about them won awards: On the Waterfront (1954), Serpico (1973), All the President’s Men (1976), Silkwood (1983), The Insider (1999), Erin Brockovich (2000), The Informant (2009), and Snowden (2016).

Then over the past twenty years, our understanding of what leads to ethical and unethical behavior shifted.  Philosopher George Sher (2001) argued that our moral decisions were the result of our background and experiences[3].  Whether we are courageous whistleblowers or misbehaving organizational managers depends on the luck of our draw.  We can even flip between the roles as we go through life.

Social scientists, including Dan Ariely (2012), Max Bazerman (2011), Jonathon Haidt (2001), Daniel Kahneman (2011), and Ann Tenbrunsel (2009), conducted research into moral decision-making.  They found that each person’s choices, whether organizational wrongdoer and noble whistleblower, are more often the results of emotions and their immediate situations than reasoned analysis.  Whistleblowers act like anyone else: they aim, consciously or not, to serve their own interests rather than the public’s.

While whistleblowing has continued to increase in some circles, in others it may be slowing.  False Claims Act qui tam lawsuits have been basically flat since 2011.  And in Santa Clara County (California) where I worked, complaints have declined 30% since 2011[4].

There may be good reason for whistleblowing to decline in the future, if not now.  For example, the lack of effective protection from retaliation can discourage some from speaking up. 

That protection comes from a patchwork of local, state and federal laws.  Each state employs its own mix of common law and laws specific to certain industries and sectors.  Burdens of proof, enforcement standards and remedies all vary, complicating anyone’s search for coverage.  Perfecting a claim can be dicey.  Some who make disclosures, like those in the intelligence community, receive no protection at all.

California promises protections in its robust Labor Code 1102.5, but over the past 10 years only 5% of retaliation complaints were found to have merit.  And it takes 2-3 years on average for complainants to get their sorry news[5].

Employees can also be discouraged when their disclosures don’t lead to the correction of bad behavior or reasonable punishment of bad actors.  Based on my investigations, I alleged several legal violations by HomeFirst Services of Santa Clara County.  One was particularly telling: HomeFirst overbilled Santa Clara County by about $133,000 in 2010-2012.  After I informed County officials informally in July 2013 about the accidental overbilling, they took no action.  I filed a whistleblower complaint with the County on February 12, 2014.  Follow-up communications with County and State officials led nowhere.  The County decided my complaint was “not sustained” on March 3, 2015.  Three years later the overpaid amount had not been recovered from HomeFirst, but the County said it still intended to get it back.

The treatment of my complaint, frustrating though it was, appears consistent with Santa Clara County practices.  From January 2013 through October 2016, the County resolved 256 whistleblower complaints.  Of those, just 14% were sustained wholly or partially.

Even when companies are caught, they seem to escape real punishment.  In settlements of FCA lawsuits, they seldom admit guilt[6].  Instead their fines become just another cost of doing business.  Or the real culprits manage to escape punishment, as in the case of Ben-Artzi v. Deutsche Bank.  After Wells Fargo Bank was caught repeatedly, it launched an ad campaign to tout its recommitment to the customers it cheated.  We can become cynical.

It’s painful to realize that after so many headaches we obviously achieved nothing.  Even the successes of famous whistleblowers can be debated.  Daniel Ellsberg released the Pentagon Papers only after years of public opposition to the war in Vietnam.  Still, the war continued for another three years.  By the time Sherron Watkins warned CEO Kenneth Lay about fraud at Enron in August 2001, the company’s stock had already dropped 30% from its March level[7] and its accounting frauds were multiplying to hide burgeoning debt.  It probably would have crashed even without her famous disclosures.

Despite the failures and injustices, whistleblowing maintains its idealized form: a hero up stands up to bad actors and her courage benefits all of us.  But the gap between this ideal and reality has widened[8].

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[1] Near, Janet P., and Marcia P. Miceli.  “Organizational Dissidence: The Case of Whistle-Blowing.”  Journal of Business Ethics 4 (1985): 1-16

[2] Bok, Sissela.  “Whistleblowing and Professional Responsibilities.” In Ethics Teaching in Higher Education. Daniel Callahan and Sissela Bok (eds.).  New York and London: Plenum Press. 1980. 277-295.  See also De George, Richard T.  Business Ethics.  6^th edition.  Upper Saddle River, NJ: Pearson Education.  2006.  307-313

[3] Cf. Very Bad Wizards, September 19, 2018

[4] See my summary of the County’s 2016 report here.

[5] In 2017, 39% of the determinations related to complaints filed in 2014 or earlier.  Two determinations related to 2010 complaints.  See also this.

[6] For example among recent cases, Health Management Associates (9/25/18), East Texas Medical Center Regional Health Services (8/27/18), Reliant Rehabilitation Holdings (8/23/18), Post Acute Medical (8/15/18), Royal Bank of Scotland (8/14/18), Richard A. Olsen (8/7/18), Grenada Lakes Medical Center (8/6/18), Prime Healthcare Services (8/3/18), William Beaumont Hospital (8/2/18), and Wells Fargo Bank (8/1/18)

[7] The S&P 500 was mostly unchanged over that period.

[8] Cf. Appiah, Kwame Anthony.  As If: Idealization and Ideals.  Cambridge, Mass.: Harvard University Press.  2017.