Adventures of a Small-Time Whistleblower: Wrongdoing and Intentionality

Wrongdoing and Intentionality

The ten HomeFirst issues that I reported over the course of a year were impressive in their number. The potential financial exposure was nearly $4 million, more than enough to trigger bankruptcy if repayment were demanded although there was no reason to think that prompt repayment would be necessary. How could a respected nonprofit have strayed so far – as I claimed to be the case – from expected norms?

The Finance Committee met in April 2014 to discuss the results from the compliance program. My presentation referred to 17 compliance problems that I had identified during my reviews since October, not counting the County overbilling (1st Issue), the HUD liability (5th Issue) and the City of San Jose advance (7th Issue) but including some that were more minor. The scope and intentionality of the violations was startling, I said. After the meeting, the team that had decided two weeks earlier to fire me – CEO Jenny and the Executive Committee of the Board – crafted an email from the Treasurer asking whether I had information to support my allegation of intentionality.

Social psychology has grown an industry to describe how people who are basically good can do bad things. Sometimes people commit wrongs because of those around them (the “bad barrel” theory)[1]. People are driven sometimes by selfish emotions and other times by reasoned good intentions[2]. Or maybe they lack some necessary information[3]. Or they fall as innocent victims of their natural egocentricity[4]. After the fact, the behavior can be rationalized as not so wrong, not so harmful, or not so uncommon[5]. A long list of explanations is available to dissolve the assignment of intentionality.

HomeFirst staff and Board members wanted to help the homeless. If wrongs were done, they were intended to help the clients, even if a secondary effect was harm done to different sets of clients, funders or employees. We did not conduct the New Start program in order to deny individuals compensation (10th Issue), even though we recognized that a significant consequence of the program was to minimize our costs. We did not keep the money from HUD, the County and the City of San Jose maliciously, but because giving it back would harm our clients by damaging HomeFirst. We acted as we did in the shelter not in order to violate licensing regulations (3rd Issue); that was just collateral damage.

Whether HomeFirst’s intent to do good demonstrated the absence of simultaneous intent to do harm can be debated. Justice Oliver Holmes contended, “if the manifest probability of harm is very great, and the harm follows, we say that it is done maliciously or intentionally; if not so great, but still considerable, we say that the harm is done negligently; if there is no apparent danger, we call it mischance.[6]”

The Food Handler Card issue (8th Issue) was small and little considered so perhaps it fell into the mischance category. In the years leading up to my internal disclosures, we had little perception of the harm we might be doing in overbilling the County, in not licensing the shelter, and in not compensating the New Start clients, so perhaps they too were mischance events even if they had larger consequences. On the other hand, the EHAP violations (6th Issue) might have been foreseeable, so maybe we crossed into negligence there. The violation of master leasing requirement and the failure to return the HUD money and the City of San Jose’s advance at the end of its contract were committed knowing that one party would be harmed in order to benefit the company, and we were deeper into malicious territory, it seemed to me.

In 1995, Francois Holloway and an accomplice were arrested for stealing three cars from drivers at gunpoint plus other related crimes. They were charged with carjacking “with intent to cause death or serious bodily harm,” a federal crime. Holloway admitted that they stole the cars and would have used the gun if the drivers had given them any trouble, but he claimed that they did not undertake the crimes with the unconditional intent to shoot the drivers and so were not guilty of the federal crime. Justice Stevens, writing on behalf of the majority of the U.S. Supreme Court, concluded that Holloway bore a conditional intent to cause serious harm to the drivers if they refused to surrender their cars and upheld Holloway’s conviction of the federal offense[7].

Unlike Holloway, HomeFirst desired to do good, not to steal. On the other hand, like Holloway, we were willing to harm, if necessary, by denying wages to employees, or by using deceptive means to take taxpayer money; we would do so to avoid costs that would worsen our financial position.

My April 2014 response to the Treasurer’s email contended that our intentionality was demonstrated, if not proven, by several behaviors:

· Failing to comply with a requirement because it would be expensive to do so

· Deciding not to address one violation until another violation was resolved

· “Forgetting” to take corrective actions that were known to be required

· Demanding an extended investigation to delay addressing a violation, and

· Delaying corrective action until after an action by another entity, who was reasonably judged unlikely to act

In a message crafted again with the rest of his team, the Treasurer replied that compliance was important to HomeFirst and management was working through violations diligently based on their seriousness and clarity and on available resources. Others on the team would express similar sentiments to me in the coming weeks, speaking in a professional voice as to a public audience.

On the same day the Treasurer sent his reply, Jenny forwarded to him job references for the woman who would replace me.

Lesson for the whistleblower: those accused of wrongdoing will insist they had no intent to do wrong, if wrong was done, and they are diligently pursuing corrective action, as appropriate.