Whistleblowing & Villains

Whistleblowing & Villains

Two key parties play in the whistleblowing myth.  The first is the hero, who does what is right despite the cowardly behavior of those around him.  The second player is the villain, greedy and duplicitous, who commits a shameful deed.

The reality of most whistleblowers stands in the way of seeing them as heroes.  Their selfish streaks may manifest differently from those they denounce and they may do better at staying within the lines of lawful activity, but they are so sufficiently flawed that some observers may find the retaliations they experience understandable.

In the stories of actual whistleblowers, people accused of violations seldom come across as heinous, at least with respect to the deeds that we disclose.  For example:

Fred Czerwonka was hired as superintendent of the St. Joseph (Missouri) School District in July 2013, the month after Beau Musser started as district CFO.  Czerwonka’s background included a PhD from St. Louis University, several years as principal, assistant superintendent, and superintendent in the smaller West Plains (Missouri) School District, and 11 State awards for education performance.  A few months into his job, Musser discovered that Czerwonka, without Board approval, had used an unexpected insurance refund to pay special $5,000 stipends to 54 of the district’s administrators, principals, and assistant principals.  A year and a half after he was hired, Czerwonka was fired due in part to his whistleblower retaliation against Musser.   In 2015, the Missouri State Auditor found numerous control problems going back years (including payments of millions of dollars in stipends), some of which continue according to a recent Board member statement.

From the published reports, a plausible, human story emerges:

(a) Czerwonka and Musser found that the district was a bigger mess than they had anticipated when they accepted their positions;

(b) Czerwonka wanted to be a nice guy using the stipend technique employed by his predecessors, including one who later got jail time for it;

(c) Czerwonka screwed up when he suggested that Musser resign in exchange for dropping the sexual harassment charges that surfaced after he blew a whistle on the stipends – that misdeed plus Musser’s suspension and termination cost the district a $450,000 lawsuit settlement;

(d) Czerwonka’s relatively successful years before St. Joseph and his apparently happy time at the much smaller Caruthersville School District after St. Joseph is not that of a villain, even if he wronged Musser.

Viewed now from a distance, the life of Jenny Niklaus, HomeFirst’s CEO who fired me after I disclosed suspected legal violations to her, the Board, and external authorities, seems to me that of a generally likable person, not a demon.  Except for undergraduate years in Davis, California, Niklaus has lived and worked her entire life in Santa Clara County, California.  Her mother assisted her move into each new living arrangement.   Her Friday girls’ night out get together included friends drawn from local nonprofits and government agencies.  A few days before she went to Acapulco to celebrate her 45^th birthday with a group of girl friends from college, she celebrated in San Jose with a larger group of mostly women, including those from her class at the American Leadership Forum - Silicon Valley.

A licensed clinical social worker, Niklaus had spent her entire career trying to help people.  She would sometimes cry when she spoke of the homeless served by HomeFirst.  She told of her brother who was occasionally homeless as a consequence of a mental disability.  She insisted that homelessness was a community problem that could be solved through the coordinated efforts of nonprofits, government, foundations, and businesses.

Seven months after firing me, Niklaus left HomeFirst to become a vice president at tiny ALF-SV, which arranges networking among community leaders.  Although she traded her work with the poor and vulnerable for associations with the locally powerful, she continued to pursue the community building to which she had devoted much of her time at HomeFirst.

Far from being villains, perpetrators can find ample reasons to excuse their actions – the action was not really so bad, the victim was partly to blame, bygones should be bygones[1].  For the broader society, social scientists have identified numerous explanations for why basically good people do bad things[2].  Research discovered causes in personal and institutional biases, insufficient information, impulsive decision-making, the “want” self vs. “should” self, slippery slopes toward wrongdoing, faulty incentive systems, environmental uncertainty, resource limitations, inflated self-perceptions, focus on outcomes rather than the methods used to achieve them, motivated blindness, failure to see through indirect relations, ethical “fading” – a complete list would go on and on.

These apologia leave the villain in the whistleblower myth empty.  No person remains to blame for the crime.  Whistleblower Eric Ben-Artzi’s frustration that the SEC did not punish executives at Deutche Bank wins our sympathy.  Basically nice as he may be, the fact that the St. Joseph School District (or its insurance company) paid $450,000 and wrongdoing Czerwonka skated away unharmed undermines our concept of personal responsibility.  That Niklaus escaped so easily from any penalty for HomeFirst’s (alleged) wrongs and her retaliation against me likewise offends.

The whistleblowing project is endlessly ambiguous: whistleblowers are tainted by complicated motivations, and they can be said to bring their troubles on themselves; the alleged wrongdoers are not clearly villainous, and they are seldom punished

Roy Baumeister observed[3] that victims view the time frame of a crime differently than do perpetrators, who feel that the incidents are isolated affairs.  Victims see the long lead up to the event more clearly and feel the painful effects for far longer.  The torturously slow regulatory and legal proceedings involved in whistleblower cases encourages us to consider the situation longer, in contrast to corporate perpetrators who can deal the transaction off to attorneys for handling.  But many whistleblowers just take a long time to get the meaning of all the bastards did to us.

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[1] Baumeister, Roy F., Arlene Stillwell and Sara Wotman. “Victim and Perpetrator Accounts of Interpersonal Conflict: Autobiographical Narratives about Anger.”  Journal of Personality and Social Psychology.  59.5 (1990): 994-1005.  Baumeister, Roy F.  Evil: Inside Human Cruelty and Violence. New York: W.H. Freeman.  1997

[3] Baumeister, 1990

What Do We Hope To Achieve? (Part 2)

What Do We Hope To Achieve? (Part 2)

Whether our preferred story is that of the whistleblower who hopes to do good or of one who wants only to hurt the employer to whom she owes her loyalty, the conclusion is most often not what the whistleblower sought.

When Eric Ben-Artzi was a risk officer at Deutsche Bank, he observed overstatements of the bank’s credit derivative portfolio.  After reporting the violations to an internal hotline and the bank’s top compliance attorney, he was fired.  As a result of information he and two others provided to the SEC, the bank was fined $55 million, of which Ben-Artzi was awarded $8.2 million.  He refused the award because he wanted the government to punish the responsible executives, not the bank and its shareholders.

JPMorgan urged its brokers to pitch its proprietary products to all customers.  Johnny Burris objected that the high-commission investments were inappropriate for many of his elderly clients.  After he was fired, JPMorgan was fined $307 million (about .5% of its total noninterest expense) for similar sales tactics, and Burris won $164,462 in back pay and damages.  That was not punishment enough, though, to satisfy Burris, who claimed JPMorgan had no right to fire him.

David Shepard and Bill Marvel filed a False Claims Act suit alleging that Grand Junction Airport had misused FAA funds by falsely claiming the construction of a perimeter fence.  The suit triggered an FBI investigation into numerous other possible illegal actions by airport executives.  

Although the CEO was terminated and the airport agreed to surrender $500,000 in future FAA grants and pay a fine of $16,500, Shepard and Marvel opposed the settlement.  They contended that the airport and its contractors should be liable for $5 million, of which they might claim 15% to cover their legal costs.

Rodney Lipscomb was fired after he objected to the way ITT Technical Institute lured students to enroll.  The law firm of Martin & Seibert fired Christine Blanda after she alleged it had overbilled clients.  Both ITT Technical Institute and Martin & Seibert were shut down in the midst of investigations and lawsuits.  The corporate failures make uncertain the prospects for lawsuits by Lipscomb, who thought ITT’s failure offered some sense of justice, and Blanda.

The effectiveness of our revenge can be limited when large companies are involved.  After Diana Duenas-Brown and others complained about fraudulent, Illegal, and deceptive practices by Wells Fargo and were fired, they sued the bank.  Wells Fargo was eventually fined $185M for its misdeeds, and it agreed to review and modify its sales practices.  But Senator Elizabeth Warren and others have questioned the bank’s commitment to making meaningful changes.  Even multi-million dollar settlements, which rarely include admissions of guilt[1], amount to minor costs of doing business for companies like Wells Fargo, JP Morgan, and pharmaceutical companies who sign settlement agreements with the government.

Although payouts are touted, few actually benefit from federal whistleblower reward programs.  For example, the Dodd-Frank Commission, which covers financial whistleblower tips about publicly owned companies, received 4,218 tips in FY16 and made 13 awards during the year.

None of my ten complaints against HomeFirst resulted in any harm to the company.  Most of them were ignored by authorities; a couple were rejected by the agencies I approached; and two resulted in minor adjustments by the company.  The Board Chair, who had directed me not to make any more external disclosures and who argued for mytermination, remains Chair Emeritus.  She became CEO of American Leadership Foundation – Silicon Valley, a $1.5 million nonprofit that arranges for meetings among local executives.  The HomeFirst CEO, who fired me, left to become Chief Impact Officer, whatever that could mean, of ALF – SV.  HomeFirst has managed to survive without me.

Although rewards have increased the number of whistleblower tips in programs that provide them, like the SEC, IRS, and FCA, some still prefer to think that whistleblowers are not doing it for money[2] or glory.  Although it is accepted that wrongdoers are in it for financial benefit, extrinsic rewards are said to attract the wrong types of whistleblowers and encourage frivolous, unsubstantiated complaints.

C. Frederick Alford[3] wrote, based on his interviews, that the whistleblower is launched into battle by her ego ideal: the best, most nearly perfect part of herself.  What she wants, he concluded, is to achieve that moral perfection.  But the whistleblower morality story emerges at the end of her battle, not the beginning. 

The whistleblower’s fight is typically long.  Crowley’s whistleblower fight lasted 7 years; Ben-Artzi’s lasted 6 years.  Burris’ went on for 4 years, as did that of Shepard and Marvel.  The cases of Lipscomb and Blanda were apparently cut short at two years when their employers went out of business.  Robert Purcell’s case ended at the door of the U.S. Supreme Court after 17 years.

The years of conflict enable both the whistleblower and her opponent to pass off what actually happened and to confabulate flattering renditions of what happened and why [4].

In HomeFirst’s telling of my story, I did not really believe that the compliance issues I raised were violations of regulations.  Some were not even confirmed violations, they noted.  If I had been honest in making my complaints, I would not have just pointed out problem after problem; I would have worked diligently with staff to correct them; I would not have reported them so abruptly to outsiders.  According to their account, I was on my way to being fired anyway and I played the whistleblower card only to get a more lucrative severance package. They did what they had the right and business obligation to do.

In my own narration, I became fed up with mismanagement and disclosed externally what I thought were violations.  After sensing that they suspected my turn of heart, I admitted having blown the whistle.  Then they formed their plan to fire me.  I did what I had a perfect right, and even an ethical duty, to do.

The two perceived realities are seldom squared.  The truth of what we want seems inaccessible.

Where whistleblowing exemplifies ethical courage[5] and young people are trained to view standing up to illegal behavior as the product of a moral struggle[6] the crass reality of whistleblowing is underappreciated.  Even when we are in the business of disclosing wrongs, at least in part, for selfish reasons, we still serve the public good, our complaints still deserve impartial investigation, and we deserve meaningful protection under the law.

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[1] The January 2017 Deutche Bank settlement was remarkable in its amount and in the bank’s admission of misconduct.  More typical was the nuanced “without admitting or denying the findings of facts and conclusions of law” language of Wells Fargo’s September 2016 consent agreement with the Consumer Financial Protection Bureau.

[2] For example, Ebersole, Dave.  “Blowing the Whistle on Dodd-Frank Whistleblower Reform.” Ohio State Entrepreneurial Business Law Journal. 6.1 (2011): 123-174.  Soloman, Steven Davidoff.  “Whistle-Blower Awards Lure Wrongdoers Looking to Score.”  New York Times.  December 30, 2014.

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

[4] French, Lauren, Maryanne Garry and Elizabeth Loftus.  “False Memories: A Kind of Confabulation in Non-clinical Subjects.” In Confabulation: Views from Neuroscience, Psychiatry, Psychology and Philosophy by William Hirstein (ed.) New York: Oxford Press. 2009. Pp 33-66

[5] Mullane, Susan P.  “Ethics and Leadership.” The Johnson A. Edosomwan Leadership Institute University of Miami.  White Paper Series.  2009

[6] Comer, Debra R. and Gina Vega.  “Using the PET Assessment Instrument to Help Students Identify Factors that Could Impede Moral Behavior.” Journal of Business Ethics 77 (2008): 129-145

What Do We Hope To Achieve? (Part 1)

What Do We Hope To Achieve? (Part 1)

Whistleblowers and their supporters hold that whistleblowing is a prosocial activity[1] undertaken to benefit nearly all of us by identifying wrongs so they can be corrected, making the world a better place.  Those who justify retaliation against whistleblowers argue that those do-good contentions are a ruse and the real reason for disclosures is to harm the organization and benefit themselves.  For them, whistleblowers are loose cannons from whom the organization must protect itself[2].

When I launched what would become my whistleblowing venture, my interest was technical rather than either prosocial or harmful to the company.  I had identified a billing mistake that simply needed to be fixed.  Like many who become whistleblowers[3], I was just doing my job.

HomeFirst’s CEO and Board Chair responded to the overbilling problem, which could have led to a $140,000 repayment, by trying to limit future disclosures in order to protect the financially vulnerable company.  Early on – some ten months before she would fire me – an adversarial relationship formed between the company and its whistleblower.  On neither side was morality or ethics a determining factor.

Four weeks after identifying the billing violation, I raised the question of licensure at a large HomeFirst location.  Again, the issue was a peculiar one that the CEO saw as a threat to HomeFirst.  This time, however, I was aware that I was stepping into a dark territory, and she blew up, as might be expected under the circumstances.

Nearly all of the misdeeds identified by whistleblowers are violations of law, regulation, or contract.  As such, they lead us to a technical question: does an activity violate some rule or another?  As for any white collar criminal[4], HomeFirst’s intention to violate rules was ambiguous and could only be teased from its past actions.  Whether or not legal guilt was proven by its intent, the organization would be harmed in some fashion if forced into compliance.   

While it fends off harm from the whistleblower, the organization denies that any rule was broken.  The issue is a mere technicality; it belongs to a world of banalities[5], not ethics.  Managers begin an investigation that could last indefinitely, and they likely retaliate against the whistleblower.  Their decisions feel tactical, not ethical.  When HomeFirst’s attorney Bob Shuman advised Board members to fire me, no moral analysis was involved.  His was a business decision to rid the company of someone who could sabotage the company by revealing more violations.

When I poked at the CEO with the licensing problem, I followed a pattern of jabs I had made earlier concerning what I considered unrealistic budget assumptions; digs about the company’s failure to disclose disappointing client results from its social service programs; and cuts about the continuing financial losses.  I was evidently no ethical soldier doing my duty; baser motives were at stake.

Once we set aside the notion that the whistleblower is a moral hero who speaks truth to power and exposes corruption, we are left to wonder what whistleblowers hope to achieve. 

Beginning in frustration, we whistleblowers may hope to wreck a sort of vengeance on the organization or its leaders, and we may succeed to a great or lesser extent.  During the past five years, the Securities and Exchange Commission awarded whistleblowers more than $100 million out of more than $500 million in sanctions against companies.  Since 2007, the IRS has collected $3.4 billion as a result of whistleblower tips and paid out $465 million in awards to tipsters.  In 2016 alone, the U.S. Department of Justice collected $4.7 billion from companies as a result of False Claims Act suits by whistleblowers; $31.3 billion has been collected from offenders since 2009.

Those global successes sum the happy results of many individuals.

Anonymous whistleblowers provided information that led to the conviction of Dr. Robert Windsor for filing medical claims for services he did not provide.  In addition to taking a jail sentence, Windsor agreed to pay the U.S. Department of Justice $20 million in settlement of whistleblowers’ suits under the False Claims Act case.  A portion of the amount will be paid to the whistleblowers as a reward for their information.

James Crowley, an attorney and manager at Chicago State University, was fired after he identified misdeeds by the university president and responded to an FOIA request concerning the actions.  The president retired in the hubbub.  Although not involving a government reward, after seven years Crowley's suit resulted in a $2 million win, which was later increased by $1 million after the university failed to pay as ordered.  The university is suing its attorneys for their performance in the case.

The less satisfying results of other actions test our hopes for retribution.  [To continue.]

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[1] For example, Dozier, Janielle Brinker and Marcia P. Miceli.  “Potential Predictors of Whistle-Blowing: A Prosocial Behavior Perspective.”  Academy of Management Review 10.4 (1985): 823-836.  Miceli, Marcia P., Janet P. Near, and Terry Morehead Dworkin. Whistle-blowing in Organizations. New York: Rutledge. 2008

[2] For example, Sanford Wadler and comments by HomeFirst’s CEO to its Board and the advice of its attorney.

[3] For example, Sandra Black, Richard Bowen, Cynthia Cooper, Mona Hanna-Attisha, Jesselyn Radack, Curtis Rookaird

[4] Friedrichs, David O. Trusted Criminals: White Collar Crime in Contemporary Society. 3^rd ed. Belmont, Cal.: Thomson Higher Education. 2007

[5] Arendt, Hannah. Eichmann in Jerusalem: A Report on the Banality of Evil. Revised and enlarged edition. New York: Penguin Books. 1994

“How America Lost Its Secrets” – Snowden, Spies, & Whistleblowers

“How America Lost Its Secrets” – Snowden, Spies, & Whistleblowers

Edward Snowden is for many a hero who revealed the unconstitutional surveillance activities of the federal government[1].  Others consider him an enemy of, even a traitor to, his country[2] or a mix of hero and traitor[3].  In How America Lost Its Secrets: Edward Snowden, the Man, and the Theft, Edward Jay Epstein describes Snowden as both a whistleblower and, effectively, a spy.

Epstein makes a point that is important for understanding whistleblowers.  Snowden was not a whistleblower or a spy or even a mix of the two.  Instead, his nature evolved over time, and the camp to which he truly belongs will always be uncertain.  Like Snowden, many begin ingenuous and turn whistleblowers before they aim to harm their organizations.

At the start, Edward Snowden’s story is like that of an ordinary whistleblower.  His background has its messy spots: dropping out of high school, nerdy or excessively introverted computer interests that swell into real skills, spotty early job history.  According to Epstein, Snowden’s well-placed grandfather may have helped him jumpstart his career with a computer job at the CIA.  His libertarian ways and high sense of his own value (to judge by some profanity-sprinkled social media posts) may have made him a challenge for bosses.  Apparently Snowden poked around where he should not have and lost the CIA job.  Although annoyed, he recovered with a system analyst job at Dell SecureWorks, which did contract work for the National Security Administration.

The Dell position gave him access to secret NSA files.  Those documents, combined with what he obtained by hacking classified systems, enabled Snowden to picture a surveillance network that was both unethical and illegal.  His special knowledge revealed that statements of intelligence officials to Congress were lies.  The complex he confronted was rotten; that was clear to him. 

The web of wrongdoing that Snowden discovered has counterparts in other organizations with whistleblowers.  It was small surprise, for example, that news of Wells Fargo’s fraudulent sale of insurance products to its customers followed discovery of its creation of phony customer accounts.  After I found one then two compliance violations at HomeFirst, it was to be expected that I would keep finding more violations until I was finally fired.

He had raised security concerns to his management, Snowden claimed.  Later, Dell management would deny those reports, but that sort of denial is a common experience for whistleblowers.  HomeFirst dismissed my internal complaints of wrongs, and several of my external complaints were lost or ignored.

That Snowden did not force his internal complaints made historical sense: whistleblowers who pursued the approved channels at NSA did not fare well.  Thomas Drake, John Crane, and Bill Binney were among earlier NSA employees who had identified problems and were punished for their efforts.  While he was gathering evidence at Dell to support his disclosures, he decided to take a route used by other whistleblowers, famously including Daniel Ellsberg, and turned to journalists.

Snowden’s plan to disclose NSA documents would violate his oath to protect national secrets, yet that offense is analogous to the violations of company loyalty and (sometimes) confidentiality that all whistleblowers commit.  As many of us do[4], Snowden pointed to a higher obligation in justifying his action.

Epstein contends that Snowden moved outside the ranks of whistleblowers with his decision to quit Dell and work for Booz Allen Hamilton in order to get access to a more highly classified group of documents not available at Dell.  While his security access was limited during his probationary period at Booz Allen, he obtained entry into highly classified caches of documents through, Epstein speculates, the cooperation of unidentified others in the firm – not a traditional whistleblower procedure.  Then he copied onto thumb drives roughly a million secret documents from domestic and international sources – a mammoth undertaking, even with Snowden’s skills, that smells of something other than merely gathering evidence to support a theory of wrongdoing.

Rather than remain in the U.S. after his disclosure (understandably) or exit to a neutral country that lacked an extradition treaty with the U.S., such as Brazil, (not so understandably) he left for China on his way to Russia, both adversary countries to the U.S.  Epstein goes on to question Snowden’s unexplained first 10 days in Hong Kong, the ease with which he left for Russia without valid travel documents, and the cordial support he has received from Russian intelligence for the past three years.  He wonders too about the disposition of the 1.2 million classified documents that Snowden copied but did not provide to the journalists he met in Hong Kong.  All of that is far from typical whistleblower behavior and disturbingly close to the expected behavior of a traitor, Epstein concludes.

Epstein and others describe an arc to the Snowden story: from loyalist to disgruntled whistleblower to possible sympathizer with, or even supporter (intentionally or not) of, enemies of the U.S.  That path was traversed by American traitors in the past, Epstein writes: William Martin, Bernon Mitchell, and Victor Norris Hamilton were all former NSA employees who defected to communist Russia.  Critically, in Snowden’s case we are unlikely ever to know his motivations, and we cannot rely on his own explanations, which are as self-serving as those any of us give for our actions.

Each whistleblower gathers a personal momentum, becoming first disaffected, then bothered by misdeeds that may have been present all along, then angered enough by organizational responses to disclose confidential material.  Suspicion that a web of wrongdoing exists leads to more investigations and more whistleblowing.  The fatigue and costs of defeated revelations may discourage the whistleblower from continuing.  But success, such as Snowden achieved, or the luxury of forced retirement, such as mine, may inspire further action.

In its 2016 audit report, HomeFirst restated its 2015 presentation of administrative costs, which had significantly understated those costs and gave the impression of great efficiency.  My April 2016 complaint on the 2015 misstatement had gone unnoticed by the AICPA.  Now, though, with the new 2015 information, I may be able to find evidence that HomeFirst improperly billed government contracts again[5] in 2016.

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[1] For example, ACLU, Amnesty International, Glenn Greenwald et al, Ewen MasAskill, New York Times Editorial Board, Wired

[2] For example, Fox News,  Malcom Gladwell, Walter Pincus, U.S. House of Representatives Select Committee on Intelligence

[3] For example, Al-Jazeera, Ronald Goldfarb

[4] For example, Johnson, Roberta Ann. Whistleblowing: When It Works and Why. Boulder: Lynne Rienner Publishers. 2003.  Miceli, Marcia P., Janet P. Near, and Terry Morehead Dworkin. Whistle-blowing in Organizations. New York: Rutledge. 2008

[5] Following the 2003-6 overbilling of HUD by $1.2 million and the 2010-13 overbilling of Santa Clara County by $140,000.

Why Do We Do It?

Why Do We Do It?

Given the high probability of retaliation and the low probability of success, why do people become whistleblowers?

One line of analysis searches for individual predictors of whistleblowing[1].  Demographics, such as age and sex, proved to be unreliable indicators of future whistleblowing.  Some situational factors provided small predictive value but seemed consistent with plausible theory: longer tenure implied access to incriminating information as did certain positions (like internal audit), greater commitment to the organization might imply a desire for the organization to act properly although it might incline an observer to conceal a wrong out of loyalty.  Conflicting situational factors could both be predictive: a sense of personal victimization from company retaliation appeared to encourage whistleblowing as did company policies that supported ethical behavior.

A second approach to understanding why people disclose organizational offenses is to ask them.  In response to a 2013 survey[2], whistleblowers said they reported misdeeds externally for many reasons: the problem continued and an outsider might stop it; insiders had not proven trustworthy in fixing the problem; the reporter feared retaliation; the reporter might get a big reward.  Other than the possibility of a reward, the responses left unclear the whistleblower’s internal motivation for making the disclosure.

Moral reasoning could be what leads whistleblowers to action, at least according to some.  James Rest[3] proposed a four-step process – involving moral sensitivity, moral judgment, moral motivation, and moral commitment – to arrive at ethical action, including blowing the whistle on a wrongdoing.  By alluding to something greater, philosophical analysis can also be handy in countering a demand for company loyalty that makes the whistleblower the greater villain in the situation[4].

Others[5] have observed that moral judgments seem to come a lot faster than Rest’s measured steps allow.  They contend that emotions and philosophical intuitions precede our philosophical judgments, which follow by way of rationalizing what we have already decided.

Another interviewer, C. Fred Alford[6] concluded that whistleblowers are driven by a “choiceless choice,” as a consequence of their accumulated experiences and prior judgments.  They feel forced to act as they do, whether by strongly held moral ideals or moral narcissism, Alford decided.  News reports of whistleblowers[7] sometimes convey that sense of nearly compulsive pursuit of their projects.

I confess that none of these explanations seem to match perfectly my path as a whistleblower.  While our personal motivations are always difficult, maybe impossible, to figure, perhaps the passage of three years has sufficiently clarified my perception of the experience.

Why I Did It

Jenny Niklaus became HomeFirst’s CEO a little more than a year after we had almost turned the company around, by cutting expenses, selling assets, and convincing funders to stay with us.  A generally pleasant, voluble young woman, she was light on experience and seemed to me to lack the intellectual toughness needed to deal with HomeFirst’s remaining problems.  Quite sociable, she was keen to make HomeFirst a leader in the community.  She cried at the plight of the company’s homeless clients, conveying her and the company’s dedication to those disadvantaged folks.

Over the next three years, HomeFirst continued to lose money.  As cash grew tight, I urged expense reduction measures, which Niklaus rejected.  We fought over the 2013-14 budget, but she prevailed with the Board in June 2013.  When a former HomeFirst development director said to me, “You know Jenny’s an idiot, right?” I could still laugh.

Preparing for the annual audit in July, I compared a per diem contract the company had recently received from the VA to a County of Santa Clara contract that I had billed on a per diem basis.  I came away concerned that the County billing was incorrect.  Although Niklaus and others were aware of the billing approach, I was responsible. 

Nervous, I hurried to research the matter before our auditors arrived.  My contact at the County confirmed that I had used an incorrect method, which had resulted in overbilling the County by about $130,000 over the course of two years.  When I had tried to conceal a minor fraud from auditors at a different company in 2005, things had not worked out as planned so I hoped to fix the problem this time.

Angry, embarrassed, a little frightened, I confessed my mistake to Niklaus the day before she was to leave for vacation in Mexico.  She blew up and said I’d made a big mistake, not for overbilling but for letting the County know about it.  After she returned, she and the program officer would deal with my contact at the County and her boss, leaving me out of the discussion and annoyed.  Maybe discussions occurred, I could not find out for sure, but three years later the amount would still not be repaid to the County.

And so I became a whistleblower.  The trigger was pulled but not because I made some ethical assessment and decision.  Not because I was overcome by a shock of emotion.  Not because I was forced to act by an irresistible internal impulse.  Instead, a gradual buildup of dissatisfaction had reached a level that I was no longer willing to dismiss or laugh off. 

In August 2013 Niklaus, two other executive staff members, and I met on a Monday as usual.  After discussing the overbilling, I raised, almost innocently, a question about our possible violation of licensing requirements at one large location.  Niklaus went ballistic spewing a litany of irrational objections, and it was clear to me, and possibly to all present, that we had carved a deep line between company and whistleblower.

These and each of my ten complaints against HomeFirst presented a potential legal violation.  Ethics were a plausible reason for my whistleblowing every time: taxpayers were cheated, homeless individuals were deprived of their rights or endangered, lies were told.  But just as much, an older, frustrated guy with no place else to go was set in battle against a company and its CEO who were under pressure and also had few easy options.  So the guy discloses deeds that might not certify the company’s guilt, and the company retaliates even if that violates the law.

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[1] For example, Cassematis, P. G. and R. Wortley. “Prediction of Whistleblowing or Non-reporting Observation.” Journal of Business Ethics 117 (2013): 615-634.  Ahmad, Syahrul, George Smith and Zubaidah Ismail. “Internal Whistle-Blowing Intentions: A Study of Demographic and individual Factors.” Journal of Modern Accounting and Auditing 8.11 (November 2012): 1632-1645.  Miceli, Marcia P., Janet P. Near, and Terry Morehead Dworkin. Whistle-blowing in Organizations. New York: Rutledge. 2008.  Mesmer-Magnus, Jessica R. and Chockalingam Viswesvaran. “Whistleblowing in Organizations: An Examination of Correlates of Whistleblowing Intentions, Actions, and Retaliation.” Journal of Business Ethics 62 (2005): 277–297

[2] Ethics Resource Center. National Business Ethics Survey of the U.S. Workforce. 2014

[3] Rest, James with Muriel Bebeau and Joseph Volker.  Moral Development: Advances in Research and Theory. New York: Praeger. 1986

[4] For example, Bok, Sisella. “Whistleblowing and Professional Responsibility.” New York University Education Quarterly 11.4 (1980): 2-10.  De George, Richard T.  Business Ethics.  6^th edition.  Upper Saddle River, NJ: Pearson Education.  2006

[5] For example, Greene, Joshua D. “The Secret Joke of Kant’s Soul.” In Moral Psychology: The Neuroscience of Morality: Emotion, Brain Disorders, and Development (Volume 3).  W. Sinnott-Armstrong (ed.). Cambridge: MIT Press, 2008. 35–80.  Haidt, Jonathan. “The Emotional Dog and Its Rational Tail: A Social Intuitionist Approach to Moral Judgment.”  Psychological Review 108.4 (2001): 814-834.  Knobe, Joshua, Wesley Buckwalter, Shaun Nichols, Philip Robbins, Hagop Sarkissian and Tamler Sommers. “Experimental Philosophy.”  Annual Review of Psychology 63 (2012): 81-99. Alexander, Joshua. Experimental Philosophy: an Introduction. Cambridge UK: Polity. 2012

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

[7] For example, Brandon Coleman, Jennifer Denk, Martin Woods

Giving Up (On Matters Disclosed)

Giving Up (On Matters Disclosed)

As we begin our whistleblowing projects, we do not think about the day when we will have to give them up.  We believe that we are right and the authorities will act against the wrongdoer.  We do not think about how long it will take and what resources will be required of us.  We do not contemplate our eventual failure.

In his 1998 federal lawsuit, Robert Purcell, a former sales vice president of MWI Corp., described how MWI arranged for $74 million in loans from the Export-Import Bank to Nigeria to facilitate its purchase of the company’s water pumps.  Purcell claimed MWI concealed from the Bank that $28 million was an unusually high commission to pay to its Nigerian sales agent.  In 2002 the U.S. Department of Justice joined in Purcell’s suit.

For 18 years, Purcell and his attorneys slogged through discoveries, motions, judgments, and appeals.  MWI claimed it didn’t know the commissions were unreasonable and, anyway, no harm was done because Nigeria repaid the loans.  At one point, the U.S. was asking for $229 million.  Following a 2013 jury trial, the plaintiffs were awarded $22.5 million, including treble damages.  An appeals court decided in 2014 that MWI was liable only for $580,000 in civil penalties resulting from its failure to disclose the commissions.  Purcell, facing opposition from the DOJ, appealed that ruling to the U.S. Supreme Court, which earlier this month declined to review the decision.

Unbowed, Purcell, 82, called the result a terrible injustice and complained that he had been unable to introduce evidence of political influence by Governor Jeb Bush and others on the case.  The way government can be bought in our country cuts him to his soul, he said.  He shows, at least in these statements, a passion that I can imagine fueling his pursuit over the 18 years, as well as a cynicism to which I – and probably many whistleblower-losers – can relate.

Mark Grissom, a vegetation inspector in the Oakland, California, Fire Prevention Bureau, complained that the department’s inspections and reports were deficient, creating fire hazards in the Oakland hills that are notoriously susceptible to wildfires.  After two frustrating years of complaints and little response, Grissom left his part-time civilian position in 2015.  Following Oakland’s Ghost Ship warehouse fire in December 2016, Grissom’s emails came to light.  The City’s Fire Chief allowed that there had been some gaps in coverage but they had been filled, and the Mayor said that they took Grissom’s complaints seriously.

Here we have two apparently ethical whistleblowers.  Grissom was very small-time, and his success is impossible to measure because the authorities said what they usually do: the mistakes were minor, we fixed them, and safety is our highest priority.  The deaths of 36 people in the uninspected warehouse fire provide conflicting, albeit inconclusive, evidence.

Purcell’s case was a bigger deal and a clear failure for the whistleblower.  The False Claims Act, which enables the whistleblower-plaintiff to share up to 30% of the proceeds from a suit, encouraged him to go on, and the U.S. Department of Justice’s joining the suit reduced his legal costs.  Still, he might have given up years earlier than he did.

It’s always a question: how far to push when we know the company will resist our complaints vigorously.  From the outside, it strikes me that the Wells Fargo private bankers, for example, should have simply quit when they realized that the accepted way to meet sales goals was to create phony customer accounts.  Maybe they could have complained to government agencies and media after finding more worthwhile jobs.  But it is hard to know what to do when you are in the fog of war.

I should probably give up on my complaint about HUD’s failure to collect any of the $1.2 million that HomeFirst overbilled 10 years ago.  I made three complaints to HUD’s Office of the Inspector General, which is supposed to investigate such things, and got nowhere.  I complained to my Senator Feinstein and got nowhere.  I made four FOIA requests for copies of communications between HUD and HomeFirst on the matter.  The first three generated snippets of information; the fourth yielded no correspondence and a $182 bill for 2½ hours of research with a reminder that I’d have to pay it before any future FOIA requests would be acted on.  I might request a waiver of the fee or send another note to Feinstein, who ignored my last letter, but it’s pretty clear after three years that this complaint is dead and HomeFirst will get away with its misdeed.

I tried even harder with the minimum wage complaint.  I made complaints and paid visits to the State agency that oversees this issue, but they did not respond.  I tried the U.S. Department of Labor, which said it had no jurisdiction.  I tried the office that enforces the City of San Jose minimum wage ordinance, which after a year and a half decided that the individuals were not covered by the ordinance.  I argued against that conclusion to the City, the DOL, and several attorneys without getting a reply.  Two and a half years spent with no effect.  That’s too bad because this is, in Purcell’s words, a terrible injustice.  The hundreds of homeless folks deserved, it seems to me, well over $1 million of unpaid compensation.  I give up.

As in the HUD overbilling case, the government shows no interest in recovering the $140,000 HomeFirst overbilled the County of Santa Clara, but so far it has not billed me for asking for copies of their communications with HomeFirst.  The six other complaints, I mostly gave up on months and years ago.  There seemed to point to pursuing them.

It’s hard to give up after we have spent so much energy and we are so confident that we are right.  The Government Accountability Project maintains a stable of big-time past whistleblowers for hire to speak out on their experiences.  Grissom quit the City of Oakland in December 2015, but he came back again a year later following the Ghost Ship fire.  Purcell seems to retain a passion for his project.

We whistleblowers may be reluctant to accept fact that our efforts have been defeated and we must return to quotidian life.  The selves we found, who rose up heroically in our projects, must be set free so we can find new battles to fight.

Transformations through the Four Phases of Whistleblowing (Part 3)

Transformations through the Four Phases of Whistleblowing (Part 3)

The retaliation that usually follows a disclosure of suspected wrongdoing is the foundation of the whistleblower myth.  Despite coming after the whistleblower’s decision to reveal the misdeed, retaliation serves to confirm the individual’s courage.  Without retaliation, the battle of good and evil would be a tepid affair, not mythic.  The enduring but painful result of retaliation is a transformation of the whistleblower’s relationship with others and her concept of herself.

Exclusion is a conventional retaliation against whistleblowers[1] because it is such a common tactic in all groups[2].  The one who is so disloyal as to criticize and disclose the group’s secrets deserves the ostracism that she receives.  The company chooses among different ways to cut her out.  She may be excluded from meetings she previously attended[3].  She may be reassigned to a location without resources or a job without responsibilities[4].  Many whistleblowers are suspended or placed on leave^[5], marking them as damaged and dangerous.  Then, of course, many are fired.

In addition to simply wanting to hurt the whistleblower, the organization hopes to keep her from information that she might use against the company and to encourage her to quit.  The company can accomplish its objective nearly without penalty.  HomeFirst’s attorney assured its CEO Niklaus that keeping me out of meetings and reducing my responsibilities were nothing I could sue them for as long as my pay and title were left unchanged.

The power of ostracism is not just its deniability by the perpetrator.  Struck to her social core, the target can find the experience painful and distressing[6].  For six years I had enjoyed working with HomeFirst’s Chief Program Officer, who had reported to me for several months after I first was hired as CFO; we had collaborated, joked, and griped together most mornings and evenings.  When she closed the door as I tried to enter the CEO’s office for our regular Monday executive group meeting, I was startled and hurt.  To see the three women gathered together, glancing at my head in the doorway, and to be told by the CEO to leave because I was not needed – my old work-buddy connections turned acrid.

Irritation and distrust that were spawned in the earlier phases of whistleblowing grew and spread to other relations.  When it came time for me to search for another job, I expected other companies to treat me as tainted and I expected I would find them stained by dishonesty.  I anticipated and found instances of dishonesty in the nonprofits where I volunteered.  It was everywhere.

Most of us experience betrayal in our whistleblowing projects – by our employers, others at the company who failed to support us, friends and family who let us down, government agencies that fail to enforce laws we claim our employers violated, our attorneys, and news media.  We experience betrayals in other parts of our lives – sometimes marriages fail, other family members become estranged, career dreams or health fail us – but we chose the whistleblower life after sensing the danger.  Like the others, betrayals that arise from our whistleblowing mark, and possibly embitter, us.

The whistleblower senses that her friends are different after they learn she was fired for blowing the whistle.  They may indeed view her in a new light after she betrays her company and forsakes her responsibility to hold a job.  Or they may simply tire of her assumed status as whistleblower[7].

Not only does whistleblowing, especially in this fourth phase, change the individual’s relationships with others, it changes her conception of herself.  To the extent that she self-identifies as a whistleblower, she buys into the role’s mythic qualities.  She may claim that her exalted professional obligations gave her no choice[8], she was the one who brought integrity to the situation[9], she had to tell the truth[10], she was devoted to the country’s guiding principles[11], she righted a great wrong[12], or she protected those who could not protect themselves[13].   Loath to be called a hero because she was just doing her job, she is open to being a Time “Person of the Year”[14].

If she defeats her attacker, in either court or media coverage, she can find vindication[15] in her role.  If she loses, she may – possibly should – reassess whether she honestly held those ideals or whether baser, less appealing reasons were also at play.  That reassessment can take years: only after 18 years did Robert Purcell lose the final appeal in his suit against the pump manufacturer he accused of making illegal foreign payments.  Resolution of this, the longest-running whistleblower case, was rigged, he concluded.

Maybe I am envious of those with high-blown motives, or maybe with the benefit of distance from the misdeeds and disclosures, I find my own noble motives less convincing.  At the time, I could point to my professional standards, personal integrity, desire to tell the truth, and wish to protect people who could not protect themselves.  My supposed rationales have not weathered well in time, and they no longer press for action against the still uncorrected wrongs.

Over the years of my whistleblowing project, I changed again.  The passion and anger have dissipated, leaving me more analytical in my critiques and more skeptical of claims by companies and government agencies that they are ethical and can be trusted.  On good days, I focus on a smaller circle of family and the people I meet.

Whistleblowing in my narrative is not simply a battle of right against wrong although legality and ethics provide a field for the contest.  The alleged wrongdoer acts selfishly and not as a result of a moral miscalculation.  The whistleblower acts in response to a more powerful entity that disregards her interests in favor of its own.  She reasserts her autonomy in the context of certain established social or legal mores.  Whether or not she does so successfully, she is human, not mythic.

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[1] Ethics Resource Center. National Business Ethics Survey of the U.S. Workforce. 2014

[2] Williams. Kipling D. “Ostracism.” Annual Review of Psychology 2007. 58 (2007): 425–52

[3] For example, Andrew Barcia

[4] For example, Sean Higgins

[5] For example, Derrick Bailey, Bennett Barlyn, Carol Bondy, Bridgette Bott, Julie Han Broderick

[6] Williams, Kipling, D. Ostracism: The Power of Silence. New York: The Guilford Press. 2001. 

[7] Miethe, Terance D.  Whistleblowing at Work.  Boulder, CO: Westview Press.  1999

[8] For example, Jennifer Denk

[9] For example, Dennis Clay, Jeremy Romero

[10] For example, James Holzrichter

[11] For example, Thomas Drake, Edward Snowden,

[12] For example, Glenda Martin

[13] For example, Patricia Williams, Helen Dragas

[14] Cynthia Cooper, formerly of WorldCom

[15] For example, Theresa Ely, Maeve Kennedy Grimes