James Comey as Whistleblower

James Comey as Whistleblower

All whistleblowers have stories.  They report how they came to observe and then disclose suspected wrongdoing.  Their narratives explain honorable reasons for their actions and the dishonorable actions taken against them by their organizations.  James Comey, former FBI Director, spins such a narrative in his book, A Higher Loyalty: Truth, Lies and Leadership.

Comey begins with Salvatore “Sammy the Bull” Gravano who flipped to tell Comey, then a US Assistant Attorney, about Mafia life.  The “made men,” loyalty, and lies.  We know where this is headed: Donald “The Bully” Trump is going down, at least on paper.

Comey has worked for great leaders, he says.  Like the grocery store owner who didn’t ball him out for mistakes he made.  His experiences and personal study formed a philosophy: great leaders are decent, humble, kind but tough, and transparent.  They have integrity.  They listen and want to hear the truth.  They do not lie.

That philosophy has guided him.  No matter how he felt, he tried to walk with a bounce in his step, standing straight, and smiling at those he passed.  He never cut in line.

He knew bullies, too.  In middle school, well before he had grown to 6’8”, he was bullied.  In college he briefly joined in harassing a fellow student.  He regretted his participation, though, and vowed not to surrender moral authority to the group again.

He believes in balance: family is important to him.  His wife is a great leader, he says.  He had not supported Obama’s election, but he grew to admire the man after Obama named him to lead the FBI in 2013.

Comey’s narrative sets us up to like and believe him.  He has foibles but they are small and often amusing.  We can wince in sympathy when he bangs his head in a doorway while rushing for a meeting with President Bush and then tilts his head to direct the flow of blood away from view.

Whistleblowers often relate appealing narratives.  Cynthia Cooper[1] came from a small town and was supported by religion, family, friends, and staff on her way to becoming VP of Internal Audit at WorldCom.  Then she blew the whistle on that fraud.  I like to point to my long, modestly successful career in finance and to helping turn HomeFirst around before disclosing its misdeeds.  We want to be seen as honorable; we want our complaints to be heard.

With the stage set, Comey arrives at the controversial heart of his story: his announcements about the Hillary Clinton emails.  In July 2016, Comey announced that the FBI had closed its investigation of Clinton’s possible mishandling of confidential emails on her personal server.  Deviating from usual FBI practice in such announcements, Comey discussed at length the results of the investigation and called Clinton extremely careless.  On October 28, 11 days before the election, Comey announced the FBI had reopened its investigation of Clinton.  This announcement was also out of line with the usual FBI practices concerning investigations.  Then, two days before Election Day, Comey made another announcement: the FBI found nothing to change its July decision.

He made three disclosures.  Three instances of Comey wanting to be transparent, truthful, protective of the FBI and the country, and unwilling to grant moral authority to the group.  He stood up for what he believed despite the likely firestorm of opposition and criticism.  He is like other whistleblowers, including me, except he is big-time.

He recognizes other reasonable people might have handled matters differently.  He is nauseated by the possibility he might have influenced the election, he says.  He has been over those announcements hundreds of times.  He is convinced that if he had to do it all again, he would act just as he did given the role he played and what he knew at the time.

We whistleblowers are nearly all like that.  We all have months and years to reconsider what we did and why.  We retell our stories in legal filings, to friends and family, to ourselves, on silly blog posts.  Nearly all of us conclude we did the right thing.  Often we categorize it as something we had to do based on a higher loyalty, as Comey does.  Most of us don’t get paid for our retelling.  We must settle for narratives that justify our actions, explain how honorable we are, and demonstrate how our lives are all of a piece with our brave undertaking. 

On occasion, though, we see through our attempts at self-justification.  We admit we could well have acted differently.  We concede our purity was fiction.  When we do, we don’t excuse those who did us wrong or those who failed to support us when we hurt.  Lowering ourselves from a pedestal does not raise the wrongdoers.  It just clears away the gases of our bloviating. 

Once those fumes dissipate, though, a sadness remains.  The purpose is gone.  A career is done.  We are alone to rehash our losses, our embarrassment, and our final insignificance.  The evident emptiness of our actions is dismaying. 

Even though I sympathize with Comey’s desire to re-inflate himself, I can’t take his narrative seriously.  His attempt to rationalize his actions seems too transparent.  But maybe not to him.  The whistleblower industry is filled with organizations and individuals who lionize the act of whistleblowing.  I wonder whether I would feel better if I could still hold myself up as Comey does.  That possibility is gone for me.

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[1] Cooper, Cynthia. Extraordinary Circumstances: The Journey of a Corporate Whistleblower. Hoboken, N.J.: John Wiley & Sons. 2008

Discouragement

Discouragement

News about whistleblowers can be disheartening.  We want to believe that what we did had social value even if it resulted in our being fired.  Like other whistleblowers, I wanted to see the world change, but it ignored my effort.

I hope movements like MeToo and BlackLivesMatter succeed, in part because their gains can help validate resistance by peanut whistleblowers like me.  Yet over the past few years the public’s interest in whistleblowing has diminished, if anything, at least judging by Google searches.  Sympathy may persist, but we are no leading edge of a revolution in corporate management.

The 2016 Retaliation Complaint Report from California’s Department of Industrial Relations (DIR), which enforces California’s whistleblower protection law, was discouraging.  While complaints of retaliations[1] tripled over the 2011 level, the number of determinations made by the DIR dropped by a third.  In 2016, 1,486 whistleblower complaints were received and only 141 determination letters were issued.  Of the determinations issued from 2011-2016, just 21% were in favor of the whistleblowers[2].

While I waited for DIR to respond to my complaint, I had examined determination letters from 2014.  At the time, I was optimistic although I saw risks.  HomeFirst was a nonprofit, and only 9% of those who complained about nonprofits were successful that year.  HomeFirst said they fired me because of my job performance, and just 15% of those accused of poor performance won their cases.  I was called insubordinate, a company defense that convinced the DIR 92% of the time.

The 2016 determination letters showed even greater risk.  Just 4% of claimants against nonprofits won, and the poor performance defense worked for companies 90% of the time.  Whistleblowers who identified legal problems, like those I alleged against HomeFirst, lost their cases 93% of the time.  In 2017 my own determination letter arrived and killed my dream.  The DIR believed HomeFirst, not me.

These letters can be depressing.  Lawsuits give voice to the whistleblower’s side of the story even if it loses in the end.  But in the letters, the DIR generally embraces the companies’ claims.  In the decisions we hear echoes of our own stories among the losers’ cases.

Take Alice Voluntad, whose experience parallels mine.  She was working for nonprofit United Health Centers of San Joaquin Valley in November 2013 when she saw what she thought were violations of Women, Infants and Children (WIC) regulations.  She raised the issues with her managers then and again in December.  She warned them she would report them to the State.  But she didn’t do that right away.

Instead, she waited.  The violations stayed uncorrected.  Relations with her team went south.  At her annual performance review in April 2014, she complained about her treatment.  She used a profanity to describe how the team leader made her feel.  Her language was inappropriate, she was told.  She was insubordinate.  She was written up and suspended.  Two weeks later she met with managers, and again she acted inappropriately, they thought.  Finally she sent her disclosures to the State.  The following week she was presented with a performance improvement plan.  Pissed off, she was insubordinate again and refused to sign the PIP.  So they fired her.

Like mine, Voluntad’s complaint to DIR seems doomed from the start.  Our adversaries were organizations that claimed to do great good.  United Health Centers was not just a nonprofit, it was exemplary.  It provides critical health care to rural poor in that agricultural region; 91% of its patients are Latino.  Similarly laudable, nonprofit HomeFirst serves the poorest of the poor – the homeless.  Our disclosures involved arcane legal violations.  Both companies called us insubordinate after we objected to their inaction on our complaints.  Both pushed us until they got what they needed.

The DIR concluded our terminations were justified and non-retaliatory.  HomeFirst ended my career.  Voluntad worked a couple of years more for Kings County as a part-time nutritionist, then retired back to her home in Oklahoma.

As statistics and our individual results make pretty clear, statutory protections against retaliation are no sure path to justice.  Big-time whistleblowers Edward Snowden and Thomas Drake questioned protections available to intelligence community members, but we are all vulnerable.  The inequity can make us angry.

HomeFirst did to me and United Health Centers did to Voluntad what companies usually do to employees who resist organizational misbehavior.  They fired us and cited familiar justifications.  They didn’t need a reason, though.  We were at-will employees who could be eliminated without cause, as HomeFirst was quick to point out.

We differed from other unhappy employees only in that we happened to see and disclose potentially illegal activities.  That chance circumstance[3] transformed HomeFirst’s CEO and board members[4] from effective to unethical managers.  It shifted Voluntad’s managers from good people to bad.

Voluntad and I did what many employees do when their situations no longer please them.  Feeling unable to leave, we pushed back and spoke out.  We converted our discontent into moral objection after witnessing our employers’ misdeeds.  

Then DIR tossed out our moral claims.  I was not a “good faith” whistleblower, it said, because I had objected too often.  Voluntad’s long wait before reporting the violations to authorities voided her claim on whistleblower status.

When I blew the whistle on HomeFirst, I performed a moral act that I hoped would produce social benefit.  Just as much, though, I did it for other personal reasons.  I thought the CEO was incompetent and the company would benefit if my whistleblowing led to her departure.  She insulted me more than I did her.  She made the final years of my career painful.  It sounds petty, I know.

Careers demand that we hunch over much of the time.  We are okay with that when it pays.  We don’t need great courage for our whistleblowing effort: standing up, especially at the end of a career, can feel good. Although we may get angry in our project, we should not be discouraged.  We act for reasons that we need to honor.  We should admit them even in defeat.

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[1] Violations of California Labor Code section 1102.5, which covers complaints like the one I filed against HomeFirst Services of Santa Clara County

[2] Analyses of retaliation complaint reports and the determination letters I obtained from DIR are summarized in this excel spreadsheet.

[3] Cf Latus, Andrew.  Moral Luck.  Internet Encyclopedia of Philosophy. Accessed July 7, 2018. & Williams, Bernard. Moral Luck. Cambridge University Press, New York. 1981 

[4] CEO Jenny Niklaus and, in particular, board members Suzanne St. John-Crane (chair), Gary Campanella (treasurer), Mark Donnelly (audit committee chair), and Linda Chin (development committee chair), all of whom participated in the decision to fire me a day after I admitted disclosing a violation to the California Community Care Licensing Department.

The Significance of Whistleblowing

The Significance of Whistleblowing

In May 2015, Kevin Davis was hired by Matagorda County (Texas) to work on its road and bridge maintenance crew.  After a while, he noticed that residents would sometimes drop off scrap iron at his location.  Then his boss Commissioner James Gibson or his supervisor William Anders would tell him or a fellow worker to sell it to a local scrap yard.  With the proceeds from the sales Gibson set up a Kitty to use as he chose.

In January 2018, Davis, who is African-American, had a car accident that kept him from work.  He asked Gibson if he could use some of the Kitty to help him get by as he had heard some white employees had done.  Gibson said no.  This was not the first time Davis experienced racial discrimination on the job.  So he complained to the County HR department about it.

HR found his allegation interesting and asked him to tell them about the scrap operations.  According to his lawsuit, Davis started thinking the Kitty might not be quite legal.  In February a Texas Ranger contacted him.  Davis wrote up a report on scrap sales, and a day or so later the Ranger took possession of the Kitty. 

After the Ranger’s visit, Davis heard Anders and a co-worker refer to Davis as a “n…r.”  Davis complained to Gibson about the comment.  In the heated discussion that followed, Gibson accused him of telling the Rangers about the Kitty and getting him in trouble.  Three weeks later Gibson fired him, supposedly for insubordination and poor job performance.

Davis appealed his termination, but the County ruled against him.  He had not made his complaint in the proper manner, it decided.  He wasn’t really a whistleblower as far as Texas law was concerned.  His several arguments with Gibson and his deteriorating job performance gave the County good reason to fire Davis, it said.  Last month he sued the County.

Davis’ case illustrates many elements typical of our small-time whistleblowing. 

First, there are the moral issues.   Davis was right: Gibson did violate the law.  But Davis was not pure.  He was fine with the Kitty, which he might have found suspicious if not clearly illegal, as long as he could share in its benefits.  He sued over the squirrely Kitty, not over the more broadly offensive racial discrimination practiced at the county.

Then, as white-collar crime goes, the Kitty was not so egregious.  An organization might even reward an entrepreneurial manager like Gibson.  If the County had included scrap sales in its budgeting and the proceeds were spent for legitimate purposes, then the whole thing might have been of no consequence at all.

Second, as sometimes happens, Davis fell victim to legal technicalities.  It’s clear that he satisfied the general intent of whistleblower protection laws: he disclosed an illegal act to authorities and wanted protection from retaliation for having done so.  But he didn’t disclose it to the right people in the right way.

Third, like me and most unsuccessful whistleblowers, he is accused – maybe even rightly – of being insubordinate and not doing his job in just the way his bosses wanted.  That he may have been right in his insubordination means little.  He provided the justification Gibson needed to fire him.

Fourth, his employer covered its tracks with written policies and procedures.  In this case, the County pointed to policies against harassment.  And at least occasional discipline of bad actors.

Finally, the stakes are so small that few really care.  Davis was paid $13.76 an hour when he was fired.  By the time he filed his lawsuit, he had lost about $7,000 in wages, assuming he had not picked up another job.  It would not be surprising if the county settled, threw maybe $10,000 his way, of which his attorney might take 40%, and inserted a nondisclosure clause so no one will hear about it again.

All this echoes my claim against HomeFirst Services of Santa Clara County and its successful defense.

In the early days of whistleblowing, Ralph Nader[1] focused on big public health dangers.  Moral philosopher Sissela Bok[2] urged potential whistleblowers to reflect on whether the wrong poses a serious threat.  The minor problems Davis and I raised surely fell short of meeting their standards. 

To be effective, Bok counseled, whistleblowing must arouse its audience.  Davis and I have inspired no one.  Davis’ case is still young: he was fired just four months ago.  He and his attorney may surprise yet.  But my whistleblowing began in 2013 and I was fired 4 years ago.  My legal options are dead, and my chance for a following has died as well.

Many whistleblowers regret getting involved after they see how little they accomplish and what they must suffer.  In my case, HomeFirst seems to be rolling along as before.  The then-senior managers moved on to new organizations, unaffected.  All but two of the Board members have left as well.  No one else suffered – or gained – much from my adventure. There is scant opportunity for satisfaction.

If we achieve little or nothing and we lose something or much, why do it at all?  Is it, as some suggest, because we are moral beacons and we fret about the public interest?  For some that may be true.

But I don’t believe that Davis or I got into our whistleblowing primarily because of a desire to do good.  If we could not have lived with ourselves otherwise, as some whistleblowers contend, it wasn’t because we had to be true to our moral selves.

I argue that many – maybe most – whistleblowers do what we do because we can’t stand the organization, the leadership, or our boss or peers any longer.  Every employment involves a trade of personal autonomy for money, prestige, or a different form of power.  When that trade-off no longer satisfies us, we are ready to leave or to blow the whistle[3].

For Davis, that point seems to have come when Gibson rejected his request for assistance and confirmed his sense of racial prejudice at his job.  For me, the irritant was a CEO and boss who seemed intent on ignoring organizational failures, including legal violations.  It’s possible we were wrong in our assessments, but we followed through by acting on them.

Our whistleblowing may have been futile.  As small-time whistleblowers, our achievements were insignificant.  We live with the fact that nearly all of what we do in life lacks lasting significance.  We don’t feel the need to be heroes in the rest of our lives so why should whistleblowing be different?  Although it hurts, we must accept that we chose to stand up even though we failed.

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[1] Nader, Ralph, Peter J. Petkas, and Kate Blackwell (eds.)  Whistle Blowing: The Report of the Conference on Professional Responsibility. New York: Grossman Publishers. 1972

[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

[3] Hirschman, Albert O. Exit, Voice and Loyalty: Responses to Decline in Firms, Organizations and States. Cambridge, Mass.: Harvard University Press. 1970

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.

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

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.

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[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.

[3] Chugh, Dolly, Max H. Bazerman and Mahzarin R. Banaji. “Bounded Ethicality as a Psychological Barrier to Recognizing Conflicts of Interest.” In Conflicts of Interest: Challenges and Solutions in Business, Law, Medicine and Public Policy. Don A. Moore, Daylian M. Cain, George Loewenstein and Max H. Bazerman (eds.) Cambridge, New York: Cambridge University Press. 2005: 74-95;

[4] For example, Bazerman, Max H. and Ann E. Tenbrunsel. Blind Spots: Why We Fail to Do What’s Right and What to Do about It. Princeton, N.J.: Princeton University Press. 2011; Bazerman, Max H. and Ann E. Tenbrunsel. “Ethical Breakdowns: Good People often let bad things happen.  Why?”  Harvard Business Review (April 2011): 58-65; Gino, Francesca and Max H. Bazerman. “When misconduct goes unnoticed: The acceptability of gradual erosion in others’ unethical behavior.” Journal of Experimental Social Psychology 45 (2009): 708–719; Gino, Francesca, Don A. Moore and Max H. Bazerman. “See No Evil: When We Overlook Other People’s Unethical Behavior.” In Social Decision Making: Social Dilemmas, Social Values and Ethical Judgments. Roderick M. Kramer, Ann E. Tenbrunsel and Max H. Bazerman (eds.).  New York: Routledge (2010); Messick, David M. and Max H. Bazerman.  “Ethical Leadership and the Psychology of Decision Making.”  Sloan Management Review, 37.2 (1996): 9–22; Soyer, Emre and Robin M. Hogarth. “Fooled by Experience.” Harvard Business Review.  (May 2015): 73-77; and Tenbrunsel, Ann E., Kristina A. Diekmann, Kimberly A. Wade-Benzoni and Max H. Bazerman.  “The Ethical Mirage: A Temporal Explanation as to Why We Aren’t as Ethical as We Think We Are.”  Harvard Business School Working Paper 08-012.  2009

[5] Garrett, Brandon L.  Too Big to Jail: How Prosecutors Compromise with Corporations.  Cambridge, Mass.:  The Belknap Press of Harvard University Press.  2014

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.

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[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. 3^rd 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.

[3] Cf. Tavris, Carol and Elliott Aronson.  Mistakes Were Made (but not by me): Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts. New York: Harcourt, Inc.  2007