On Not Giving Up

On Not Giving Up

Occasionally whistleblowers speak of feeling vindicated at the end of their ordeals[1].  Their years-long battles testify to whistleblowers’ hope for vindication and their reluctance to give up.  Even where vindication is lacking, there is ample evidence of their determination.

On March 28, 2014, Evan Howington, an oil services contractor employee, boarded an oil rig 100 miles south of New Orleans in the Gulf of Mexico.  He happened to see fluid leaking from the rig into the Gulf water and informed the rig supervisor, who told him not to worry because it was just hydraulic fluid.  A few days later he witnessed three supervisors of the companies that operated the rig intentionally discharge hydraulic fluid and then laugh about doing so.  He not only witnessed the men, he recorded them on his phone.

Fearful that he could be charged with complicity if the company failed to report the discharge, he took his evidence to the Environmental Protection Agency and later spoke with staff at other federal agencies.  An investigation ensued, and a year and a half later Walter Oil & Gas agreed to pay a $400,000 fine for failing to report the discharge.  But this was not enough for Howington.

In May 2017, Howington sued the United States of America for the negligence of the Department of Justice attorney who was in charge of the case against Walters and who negotiated the settlement, which Howington considered an inadequate penalty for its intentional misdeed.  He figured that, according to federal regulations, the fine should be closer to $18 million.

Sometimes suing the federal government pays off although that can take a while.  Robert MacLean was an air marshal when he spoke out against what he believed were unsafe measures taken by the Department of Homeland Security.  He was fired in 2006.  Suits, judgments, and appeals took him to the U.S. Supreme Court, which ruled in his favor in January 2015.  A year later he was back at work, complaining again of retaliations.

Suits against private and non-federal government employers can also drag on through years of appeals by both sides.  North Carolina state trooper Reginald Newberne was fired in 2001 after he spoke out against the misconduct of a fellow trooper, and it wasn’t until 2016 that a jury finally decided in his favor.  Steven Babyak, who disclosed illegal kickbacks paid to doctors by his employer, won only after 8½ years of legal fighting.  Paul Bishop and Robert Kraus had to battle against Wells Fargo and two acquired banks for 10 years before the U.S. Supreme Court decided that their False Claims Act suit could move forward, a suit that may have years more to play out.

Then there are others who engage in extended disputes only to quit in defeat.  Robert Purcell struggled for 18 years before having to give up when the U.S. Supreme Court refused to hear his appeal.  Laura King was fired in 2009 by the St. Tammany Parish (Louisiana) Coroner after she refused to buy him a laptop with grant funds; she finally quit her self-funded appeals in 2016.

Sometimes, even if the whistleblower appears to win, it is not enough.  Howington is one example.  Another is Eric Ben-Artzi, who refused his $8.25 million reward for information against Deutsche Bank’s illegal activities because he thought the wrong people were paying the fine.  Whether the result of his disclosure is successful is, I suppose, a personal judgment that every whistleblower makes – from big-time players like Snowden to the many of us small-time whistleblowers.

When I complained about HomeFirst’s violations of licensing regulations and food handler card requirements, I was vindicated by authorities who judged that the company had operated improperly.  The company was permitted to modify its procedures without penalty, and my complaints led to my termination.  Some my other complaints – the master lease violation, the HUD overbilling, and the County overbilling – I continue to play with even though it is pretty clear after three and more years that no one but me cares.

Throughout our lives we face decisions whether to call out perceived misdeeds.  We sense how far we can push before bad things will happen to us, then we decide what to do.  Usually we stop before we pass the point where the likely blowback is dangerous.  Once we become whistleblowers, though, we are on an unfamiliar path where it is harder to tell when we should stop.  Dropping our unsuccessful complaints negates the value of what we have put into our projects.  Stopping means giving up the pretense of our heroic valor and accepting that we may have had it wrong.  It means getting on with life as lived by others.

An attorney might prod us to continue if he sees the prospect of sufficient contingency fees or thinks we still have funds for the contest.  On our own, as I am now, the thing may eventually yield its disappointing result or starve to death in our arms. Without apology[2], we press on, to ultimate success or failure.

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[1] For example, Theresa Ely, Maeve Kennedy Grimes, Ian Minto, Eric Payne, and Patricia Williams

[2] Cf. Alessandri, Mariana.  “In Praise of Lost Causes.” New York Times.  May 29, 2017.

Figuring Who Is Right in Whistleblower Cases

Figuring Who Is Right in Whistleblower Cases

Suzanne E. Esserman had worked for 23 years at the Indiana Department of Environmental Management (IDEM) when she was made a Senior Environmental Manager in December 2011.  In her new role, she reviewed planned reimbursements to residents for costs associated with the cleanup of underground contamination.  Esserman got a new boss in July 2012, and he put her on a performance improvement plan three months later.  The problem, as he saw it, was she wasn’t working fast enough to complete her assignments.

During early 2013, Esserman was out on medical leave for surgery.  When she returned to work in June, she was assigned a monthly review quota.  She went out on leave again in September and October.  In December, the month before she was fired, she exchanged snarky emails with her boss: he told her to speed it up; she replied that the taxpayers would pay too much for the cleanups – she pointed to one nearly $1,000 adjustment – if she didn’t continue her thorough reviews, but thanks for your feedback. 

IDEM wrote that she was terminated in January 2014 for failing to meet work expectations, and it opposed her request for unemployment benefits.  The Indiana Department of Workforce Development rejected Esserman’s application, noting that she had failed to meet her quotas because her investigations went beyond what her employer asked her to perform.  Esserman argued that she always gave her best effort on the job and she could have been held personally responsible for submitting false claims if she believed that the planned payments were not properly reviewed before they reached her desk.

The Indiana Court of Appeals wrote that, like all employers, IDEM needed to decide on an appropriate balance of efficiency and thoroughness in areas like Esserman’s.  But estimation of that balance is often controversial.  In light of Esserman’s 25 years of service, the Court decided that IDEM had failed to meet its burden of proof that Esserman should have understood that her conduct violated her duty to her employer.  It warned the parties, however, that a claim for unemployment benefits should not be confused with a wrongful termination lawsuit.

After Esserman was fired, she did sue for wrongful termination under Indiana’s False Claims and Whistleblower Protection Act and the State Employees’ Bill of Rights.  The suit was complicated by the fact that no false claims were made or even attempted.  The trial court accepted IDEM’s argument that the Act applied only to private employees, not to someone in Esserman’s position.  Her appeal for reconsideration was accepted, and the case is on its way to being heard in the Indiana Supreme Court.

A key question in Esserman’s whistleblower complaint is whether IDEM was misusing government funds.  If it was, then her objections would be protected activities and she may succeed in her lawsuit.

The answer hinges on the balance issue raised in her unemployment claim dispute: if the expected cost of making excessive payments exceeded the social benefit of achieving complete payment accuracy, then IDEM arguably did misuse state funds by diverting Esserman from her personal mission to get it right.  On the other hand, if the cost of exceptional accuracy outweighed the probable benefits, then IDEM acted reasonably.

Many whistleblower cases involve this problem of finding a fair balance.  If, for example, Wells Fargo’s sales goals and control systems – however faulty they have been found by press, courts, and government agencies – produced (as the bank effectively claimed) greater social benefit, in the form of new services and greater business effectiveness, than social costs, then employee complaints of wrongdoing amounted to a misunderstanding of the nature of that balance.  Or if, as the federal government claims, the NSA surveillance techniques exposed by Edward Snowden provided social benefit (e.g., in fighting terrorism) that outweighed their social cost (e.g., loss of privacy), then Snowden misperceived the balance.

My lack of success in arguing my complaints against HomeFirst may imply that I misread the balance.  Some authorities clearly weighed the factors differently than I did: The Department of Justice attorney warned that the DoJ didn’t like to hurt companies that did good; neither Santa Clara County nor HUD wanted to risk stopping the company’s good work by demanding the return of improperly obtained money.  The California licensing department and the Santa Clara County food inspection group both allowed the company to explain how it had fixed the problems that I identified.

Powerful organizations are constantly playing that balance, and they rigorously defend their view of the scale[1]. HomeFirst echoed the conclusion of Professor Sissela Bok[2] when it claimed that my allegations of the company’s misdeeds were offensive and I had no right to suppose that I was right in my allegations.

As social complexity deepens and groups grow intensely interconnected, more competing perceptions of the proclaimed benefits and charged costs must be weighed.  Multiplying laws and regulations provide an ample context for disputes; expanding government purchases of goods and services unaccompanied by a commensurate investment in resources to test the fairness of the balances leave the determination to the most powerful. 

Whether or not the complaint of Suzanne Esserman, me, or any whistleblower is justified in an unbiased court – if such a place can be found – should not be our determining concern.  What counts for the individual and society is our independent assessment of benefits and costs of organizational actions.  

Organizations already enjoy great power to wreak havoc on individual lives.  In judging cases of retaliation against whistleblowers, the scale must be weighted to favor the whistleblower; we should not pretend that failing to favor the whistleblower is in any way fair.

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

[2] “The whistleblower hopes to stop the game; but since he is neither referee nor coach, and since he blows the whistle on his own team, his act is seen as a violation of loyalty.”  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

The Punishment for Whistleblowing

The Punishment for Whistleblowing

News reports on whistleblowers tend to describe three kinds of cases: (a) False Claims Act suits, which focus on the accused organization’s overcharging the government and care little about the whistleblower except as a source of evidence; (b) complaints involving private companies, which are usually settled out of court to limit the availability of information; and (c) disclosures by employees who accuse public agencies or employees of wrongdoing.   

The retaliations against the whistleblower described in these reports come in waves.  First come the usual informal[1] organizational actions – such as different forms of ostracism and modifications of the protester’s job.   Examples from articles over the past month or so:

Joel Allen – mental health was questioned by his boss in a large setting

Steven Babyak – sales region reduced but quota increased

Joann Brown – verbal abuse, exclusion from leadership training event,

Sabrina Burton – lost university grant and committee seats, physically threatened.

April Grundfor – assigned to work area with no private phone access, no adequate computers/printers, denied access to patient medical records.

Dale Klein – stripped of hospital duties.

Kim Martin – stripped of supervisory responsibility.

Walter Tamosaitis – moved to basement office with no meaningful work for 15 months.

Barbara Temeck ­– office moved to basement

Pamela Treadwell – threatened with jail time for the misdeed she disclosed.

Richard Trusz – limited exposure to clients, reduced responsibilities,

Occasionally, informal actions assume extreme forms:

Kim Martin – cardboard rats place on her desk.

Joe Crystal – a dead rat placed on his patrol car windshield.

Then come formal actions that typically involve official documentation:

Jonathan Blaylock – challenged on sick time & hours worked, unusual discipline for alleged mistakes, performance improvement plan.

Joann Brown – critical performance review, vague & impossible performance improvement plan (fairly common retaliations; also see: April Grundfor)

Dale Klein – lost patient contact and hospital privileges; the VA closed his pain management clinic

Joseph Lovelace – coded language in performance appraisal that made promotion impossible

David Scrip – disciplined for trivial infractions.

Jerry Speziale – denied security credentials, work vehicle taken away, denied medical leave benefits for terminally ill wife.

Barbara Temeck ­– demoted, clinical privileges withdrawn.

Frank Timek – suspension without pay, job changed.

The final formal action is termination, which leads to some sort of complaint by the whistleblower.  The accused organization sometimes responds with its own explanations that the whistleblower without disproving his allegations.  These false criticisms will be used to fight the whistleblower’s application for unemployment benefits and will complicate his personal relations and his search for a new job.

Joel Allen – vandalism, threatened other employees, made false allegations.

Svetlana Blackburn – ongoing performance problems (a common accusation).

Jason Blasdell – disruptive.

Sabrina Burton – behaved unprofessionally, disrespectful, harassing and intimidating behavior (another common complaint).

Glen Brooks – lying.

Johnny Burris – complaints from customers.

John Connors – violated media policy.

Stephen Furst – obscene photos on his computer.

Woody Hildebrandt – stole from school.

Kuaahtemoc Rodriguez – violated privacy policy.

Walter Tamosaitis – lack of work (another common explanation; for example, Tracy Woodward).

Robert Trojan – boss sent email to broad list suggesting he’d been fired for cause

Even after termination, the organization may instigate further retaliations against the whistleblower.  It may informally discourage other organizations from hiring the whistleblower, or it may take more aggressive actions against him:

Craig Price – employer held him responsible for $14,000 customer loss, comment on the financial industry’s U5 record (the U5 record comment is a common technique of banks: Jeremy received one after being fired by Wells Fargo; Johnny Burris also was hit by comments that kept him from being hired at other financial firms).

Nick Ramler – sued by the organization; Thomas Guilfole was also sued by his former employer after his whistleblower complaint was dismissed.

The combined effects of these retaliations can make whistleblowers regret that they ever made their disclosures:

Lisa Magin – “It has been hell”, almost lost her home, no medical insurance.

Research[2] on the experiences of whistleblowers has found similar types of retaliations across broader populations.  My own experience at HomeFirst, though far less harsh than that of most whistleblowers, included many of the same elements: the ostracism, exclusion from meetings, reduction in responsibilities, reprimands for actions that might not have earned reprimands for others, termination without notice, and later the threat of a lawsuit if I continued to complain about the company’s behavior or if I contacted anyone at the company.

Just as the misdeeds disclosed by whistleblowers are common in corporations, these retaliations resemble actions that organizations regularly take against employees they no longer appreciate and would like to see leave, even without whistleblowing as a factor.  Thus, it is no surprise that the organization claims that the whistleblowing did not influence its behavior – the wrongdoing and the behavior toward an unwanted employee are actions the organization takes all the time.

Although the personal pain they cause can be intense, retaliations against whistleblowers are commonplace.  By themselves, they raise no one to an exalted status; they surprise no one.  Likewise, the organization’s disingenuous defense of its attack on an employee who speaks up should surprise no one.  Yet its claim on the loyalty and commitment of employees too often garners sympathy[3].

The decision to blow a whistle changes the game for both parties.  It moves the organizational misdeed from the routine to the noteworthy and actions against the employee from conventional to unlawful (or at least reprehensible). Whistleblowing shifts the expression of an employee’s displeasure from simply leaving a nasty situation to malicious behavior that may be protected by law.

The punishment dealt to the whistleblower provides a shortcut for each side: the tedious dickering over relations and behavior that should be improved is exchanged for a high cost transaction in which both sides claim, without convincing justification, to take the higher ethical ground.

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[1] The distinction between informal and formal control systems is discussed in Campbell, Jamie-Lee and Anja S. Goritz. “Culture Corrupts! A Qualitative Study of Organizational Culture in Corrupt Organizations.” Journal of Business Ethics 120 (2014): 291–311

[2] For example, Devine, Tom and Tarek F. Maassarani. The Corporate Whistleblower’s Survival Guide. San Francisco: Berrett-Koehler Publishers, Inc. 2011.  “12 Most Common retaliation Tactics.” Forbes.  See also my earlier post.

[3] For example, Schrag, Brian.  “The Moral Significance of Employee Loyalty.” 11.1 (January 2001): 41-66; and Goldsmith, Marshall. “How to Increase Employee Commitment.” Harvard Business Review. January 28, 2008

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.

Whistleblowing and Sisyphus

Whistleblowing and Sisyphus

The whistleblowing project can be a depressing one.  Initially, it is far from that: we find it exciting, challenging intellectually and emotionally.  The thrill stems from our sense that we are doing something good and we demonstrate a moral courage that others lack. 

Maybe it remains exciting for big-time whistleblowers, who receive media attention and whose complaints are echoed by millions.  I wouldn’t know.  Media had no interest in my case; authorities didn’t care, either.  The National Whistleblower Center didn’t respond to my email.  I attended no congressional hearings about my complaints, and I published no much-read opinion pieces. 

For me, the project became the long slog it is for all who don’t reach a quick settlement.  Soon after I filed my wrongful termination complaint with the State of California, I was told that it would be acted on within 6-8 months.  Instead, 15 months passed before my case was assigned to an investigator.  It took her 6 months to write a report, which has been under review for 7 months now, as the third anniversary of my termination approaches.

Many whistleblowers keep fighting for years.  Some continue unsuccessfully until no court remains to which they can appeal or they have run out of money.  But others, seeing the battleground ahead of them, just give it up.

Nothing came of my ten disclosures of suspected wrongdoing.  Even where there was no debate – the HUD and Santa Clara County overbillings, for example – the government agencies took no action against the company.  They considered HomeFirst too valuable to disturb with retribution.  Instead, the County granted the company a bail-out so it could make its payroll and then advanced more money on its contracts.  HUD stopped replying to my FOIA requests about the repayment that the company claims it continues to negotiate ten years after discovery.

Today, only a handful of HomeFirst’s 14 Board members and few current employees would recognize my name.  My retaliation complaint is reduced to a one-sentence mention in the company’s audit report.  It is common, of course, for boards to shuck their whistleblowers: a footnote to Wells Fargo’s 110-page internal investigation report said it discovered no any intent to harm those who objected to fraudulently opening customer accounts; the HomeFirst board considered my complaint of retaliation and found no big problem.

My whistleblowing project failed in key respects – it achieved nothing beyond causing me pain.   But I had reason to expect failure.  Like nearly all whistleblowers, I sensed what I was getting myself into before I started.  Arguably total failure is unique to my case or perhaps to small-time whistleblowers in general.  But I don’t think so.

Daniel Ellsberg, for example, ranks among the most famous of U.S. whistleblowers for his 1971 disclosure of the Pentagon Papers, which revealed government lies in support of its conduct of the war in Vietnam.  However, by the time of his disclosures the public had already endured years of vocal protests that caused President Johnson not to seek reelection in 1972.  The bombing of North Vietnam, which Ellsberg hoped to stop, continued well after the disclosures, and the U.S. did not withdraw from Vietnam for three more years.  From this perspective, Ellsberg achieved nothing at all.

The case of Eric Ben-Artzi demonstrates that even a multimillion dollar win against a big international bank can feel like failure.  Another high-ranking whistleblower, Sharon Watkins, who blew the whistle on Enron’s fraudulent accounting, “succeeded” only by causing the collapse of a 10,000-employee company and its top-tier auditor.  Ellsberg, Watkins and Ben-Artzi have since converted whistleblowing into speaking opportunities, if not whistleblowing successes.

Whistleblowing is, at base, meaningless; it is absurd.  We can hope to drown out that absurdity by blathering about how we will make the organization or the world a better place.  We can praise the heroism of the whistleblower, but the absurdity of the role remains. 

The only path available to one who is conscious of an organizational misdeed – and not every observer is conscious of the wrong – is a sort of death.  She may kill her career by speaking out or her moral self by remaining silent.  Whistleblowers revolt through our disclosures.

In The Myth of Sisyphus, Albert Camus wrote of the person who faces the meaningless absurdity of life without yielding to the temptation of suicide, “That revolt gives life its value. Spread out over the whole length of a life, it restores its majesty to that life.”  He declared three consequences of the absurd: “my revolt, my freedom, and my passion.  By the mere activity of consciousness I transform into a rule of life what was an invitation to death—and I refuse suicide.”

The whistleblower’s motivation comes not from the moral egoism that C. Frederick Alford identified in his whistleblowers but from a choice to live.  That is our revolt, freedom, and passion.

Fighting Secrecy

Fighting Secrecy

Defenders of whistleblowing support their argument by pointing to the individual’s right to free speech and the social benefits that result from whistleblowing.  They contend that when whistleblowers shine a light into dark spaces we all benefit from what is seen.  Notwithstanding their justifications, it is a deeply opaque business when organizations demand confidentiality, as the case of Ben Barlyn demonstrates.

Following 11 years as New Jersey Deputy Assistant Attorney General and 2 as head of the State Commission to Review Sentencing, Barlyn joined Hunterdon County (New Jersey) as Assistant Prosecutor in 2007.  In May 2010, Hunterdon County Sherriff Trout and two of her staff were indicted after a grand jury identified 41 counts of official misconduct and other crimes.  Governor Christie, who had political ties to Trout, put his Deputy Attorney General O’Grady in charge of the Hunterdon Prosecutor’s Office, and the indictments were dropped three months later.

On August 23, 2010, Barlyn approached O’Grady and objected to his dropping an ironclad case for, he believed, political reasons.  The next day he was suspended and escorted out of the building.  On September 15, he was fired.

When Barlyn sued for wrongful termination, he requested copies of the grand jury evidence.  The State fought the request and suit for three years.  Then interest in the case was displaced by the Bridgegate scandal – in which Christie appointees conspired to cause a traffic jam in Fort Lee, New Jersey, as reprisal for that mayor’s refusal to endorse Christie for reelection.

In early October 2016, the public learned of Barlyn’s settlement with the State of New Jersey, which agreed to pay him $1.5 million after expending $3.8 million for its own legal fees.  The contents of that settlement, however, were concealed by a confidentiality clause in the agreement.  The following week, the New Jersey Assembly began work on Bill 4243, which would require that settlement agreements and related claims involving government employee whistleblowers be made public.

The New Jersey law, which still requires a Senate vote, covers only government employees and, of course, applies only within the state.  Nationally, the Securities and Exchange Commission has addressed confidentiality requirements embedded in the employment agreements of publicly traded companies.  In April 2015, the SEC announced an enforcement action against KBR Inc., its first defense of whistleblower protection.  

KBR had warned witnesses in certain internal investigations that they could face discipline and even be fired if they discussed the matters with outside parties without the prior approval of KBR’s legal department.  That confidentiality could impede the investigation of security violations, giving the SEC authority under the Dodd-Frank Act to intervene.

Since the KBR case, the SEC has challenged other companies’ confidentiality stipulations, including severance agreements at BlueLinx, Health Net, Merrill Lynch, and Anheuser-Busch InBev, and an undisclosed matter at Barnes & Noble.  But its interest in confidentiality is limited to securities-related issues at public companies.  Further, its ability to investigate confidentiality agreements is severely constrained by its limited resources to pursue more than 4,000 whistleblower tips a year.  It is, then, an open question whether other companies – for example, Wells Fargo, Advanced Micro Devices, and Fifth Third Bank – have violated SEC guidelines in their severance agreements.

Why do confidentiality agreements offend?  My attorney advised me that the deal he arranged with HomeFirst was typical of settlement agreements he worked on.  What he proposed included:

“Veuve agrees to regard and preserve as confidential and will not divulge, at any time after his employment, information, or anything of a secret, confidential, or private nature connected with the business of HomeFirst without the written consent of HomeFirst’s Board President, or unless required to do so by legal process or court order.  Included within the meaning of the foregoing are matters of a technical nature, such as computer programs, software and documentation; matters of a business nature, such as information about programs, costs, profits, markets, and employees (including salary, evaluation, and other personnel data); plans for further business development; and any other information of a similar nature.

“Veuve agrees that he will make no disparaging comments about HomeFirst, its officers, directors, or employees. Veuve agrees that he will not speak or write disparagingly about any programs of HomeFirst, nor will he encourage others to do so.

“Veuve acknowledges the confidential nature of this release, and agrees that the existence and terms are to be treated as confidential.”

These agreements can be infuriating.  This one angered me, anyway, by threatening me with a lawsuit if I ever said anything about my experience at HomeFirst.  The millions that the State of New Jersey paid for legal fees fighting Barlyn is one example of the expense that organizations are willing to incur in dealing with their whistleblowers.  After I refused their offer, HomeFirst sent a letter in March 2015, responding to my continued pursuit of my complaints, threatened lawsuit again.

Other than commonly ignored internal policies, the two main approaches to encouraging whistleblowers have been penalties imposed on organizations that retaliate against whistleblowers and rewards for relators from the fines and penalties imposed on wrongdoers.  These approaches fail to recognize whistleblowing as a game of information. 

New Jersey’s Assembly Bill 4243 and the SEC’s actions against restrictive employee agreements are two examples of ways in which the effectiveness of whistleblowing can be enhanced by promoting the flow of information.  Over the past 40 years, disclosures have increased as supportive technologies have advanced. 

In 1969, Daniel Ellsberg laboriously photocopied batches of 7,000 pages of the Pentagon Papers and concealed them in his briefcase as he left his office each night, but Edward Snowden and Chelsea Manning were able to copy electronically hundreds of thousands of classified documents in moments.  From my office desk, I reviewed emails of the HomeFirst CEO colluding with the President of a competing nonprofit and planning with the Board to fire me.  Although documents may be disclosed through trustworthy established media, they can also be released anonymously through Wikileaks, which claims to have a store of 10 million documents, and an assortment of other sites.

As new technologies emerge, whistleblowing is likely to increase.  Government agencies can boost the effectiveness of these disclosures by publishing on a timely basis more information about complaints.

But agencies too often stumble in reporting these matters.  An example: the 2014 Retaliation Complaint Report (the most recent available) of the California Department of Industrial Relations, with whom I filed my complaint, stated that it had closed 1,508 cases in the year.  Of those, only 227 resulted in determinations by the Department and just 47 – 3% of closed cases – concluded in favor of complainants.  Details about the parties, complaints, and final actions are not published.

Actions by the New Jersey Assembly and the SEC illustrate how more information about whistleblower complaints can serve the public interest.  Although they might do more, states and federal agencies can continue this work by promptly making available to the public detailed decisions and settlements relating to whistleblowers.

When It Comes to Nothing

When It Comes to Nothing

As it faced newly mandated blood testing expenses of more than $1 million a year, the Blood Bank of Alaska announced in 2008 that it would construct a modern Anchorage facility to consolidate its operations and allow space for in-house blood testing.  The building cost, which would eventually run to $45 million, would be paid, management planned, with government grants, private contributions, and the sale of its existing building.

In 2012 – when the building was still four years from completion – Robert Scanlon was hired as BBA’s CEO, and Linda Soriano began working as a consulting grant writer for the company.  BBA’s employment level then began a steady decline, dropping from 120 to 80 in 2016.  Hit by Alaska’s oil-impacted economy, fundraising was not going well, so in 2015 BBA arranged for an $8.5 million loan to cover the final construction costs.  The loan threatened the strapped nonprofit with $450,000 in annual interest costs until it could be paid down; still, it was necessary at that point.

Blood banks occasionally arrange to sell units of blood to other operations rather than let them expire, but BBA went further.  Serving hospitals across the state as the only blood bank in Alaska, in 2015 the company contracted to sell to southern California-based LifeStream one-sixth of its weekly blood collections.  Now an employee, Soriano was skeptical of the arrangement, especially given the low blood stocks that she observed in BBA’s inventories and the company’s urgent calls to blood donors.

Also questionable for Soriano, in light of BBA’s difficult financial situation, was the misleadingly optimistic budget she was given to provide to potential granting foundations.  She informed the CEO that false reports would be fraudulent, and she refused to participate in such deception.  The information seemed to her to confirm the company’s reluctance to be transparent in its communications.

Soriano took her concerns to a BBA board member, staff at a foundation, the Alaskan Director of Public Health, and, finally, the Alaska Journal of Commerce, which published an article in July 2016.  Rather than addressing the problems, management retrenched and attacked those who were critical, she thought.  The following month she sent her complaint to the U.S. Food and Drug Administration, which oversees blood banks.

Soriano’s story presents many familiar aspects of the whistleblower’s experience.  Like HomeFirst, BBA was a company under pressure that cut some corners; like me at HomeFirst, Soriano was an individual unhappy with her workplace who identified possible problems; she took her concerns to senior management, to authorities, and then to the media.  She was unusual in that she collaborated with other employees to compile her complaint.  Also unusual, she resigned shortly after sending her letter to the FDA and before she was identified by management as a whistleblower.

HomeFirst’s board quickly dismissed my complaints, and a special investigating committee of the BBA board concluded that Soriano’s allegations were without merit.  When the FDA conducted its annual audit of BBA operations in March 2017, it found no irregularities and no support for Soriano’s claims.  Authorities reported that HomeFirst broke no rules after allowing the company time to fix its licensure and food handler card problems; my other complaints were dismissed or ignored.

The whistleblower begins his project by identifying suspected a misdeed.  The value of his stepping forward is cast in doubt when his accusations are not found convincing – whether because of biased investigators or insufficient evidence of a violation.  Why he put himself through the painful ordeal and whom he really hoped to benefit then become unclear.  It is little wonder that friends and family abandon him if they suspect that his charges are probably groundless, just as his accused suggests.

Although Soriano’s complaint described dubious business practices, it did not clearly call out current criminal acts.  As a result, Alaska’s limited whistleblower protections might well have left her vulnerable to attack if she had remained an employee.  Her subsequent public notoriety exposed her to the danger, common even to whistleblowers protected by law, that she would be unable to find a new job in the small Anchorage market.

Soriano’s gamble that her act – her disclosure – would amount to nothing is one that we all take all the time.  But whistleblowing makes that risk obvious to an array of people who are not our friends.

Whistleblowers can usually point to the scars from retaliation as proof of our fearlessness.  Whatever legal wins we achieve seldom compensate us fully for our losses.  Soriano gave up that slim chance of vindication and bet all on being right in her claims.  Then, it seems, she lost that wager, and the world moved on.

The whistleblower’s challenge remains how to stand up despite our justifiable fear – even our expectation – that nothing will come from our complaint and we will suffer as a consequence.  The narrative that belongs to us is not that of the hero who triumphs over evil but of Camus’ dogged Sisyphus.