Meaning in Whistleblowing

Meaning in Whistleblowing

People have long found the motivations of whistleblowers intriguing[1].  They seem to be champions of doing the right thing despite the risks.  But what happens to their noble aspirations when the possibility of success is stripped away? 

Dan Ariely’s research into dishonesty helps explain reasons why people misbehave so often and the explanations we offer to justify our ethical failures[2].  He describes the terrain we whistleblowers cross on our projects.  In his recent book, Payoff, he discusses how a sense of meaning and purpose – more than money and status – leads us to be more productive in our jobs.  Presumably including our job as whistleblower.

In a 2008 study, individuals in two groups were told to build Lego models and they were paid for the number completed.  In the “Meaningful” group each model was set on a table until the participant said she was done making them.  In the “Sisyphus” group, the models were disassembled as soon as they were completed.  The Meaningful group produced significantly more models than the Sisyphus group.  Ariely and his co-authors concluded that was because Sisyphus modelers were slapped in the face by the pointless of their work when it was immediately discarded.  Meaningful members and their witnesses could appreciate the results of their effort for at least a time.  They felt motivated to continue their work.

For us, the question is how we can be productive and satisfied in our lives as whistleblowers when everything indicates that our efforts will probably be futile.  Where can we find purpose in our act and sacrifice?

Michael Winston joined Countrywide Financial Corporation in 2005 as an executive vice president.  He soon realized Countrywide was creating mortgages that stood no chance of being repaid and then selling them to unsuspecting investors.  He pointed out the problem to his bosses.  They were unhappy with him.  When asked to falsely certify the mortgages for Moody’s, he refused.  The retaliations increased.  When Bank of America acquired Countrywide in 2008, he was fired. 

He has spent $1 million suing the bank for the retaliation.  That looked prescient in 2011 when a jury awarded him $3.8 million.  It looked less wise when an appeals court reversed the judgment in 2013 and ordered Winston to pay nearly $100,000 of the bank’s legal fees.

In 2014 Bank of America was ordered to pay $1.27 billion for Countrywide’s fraud, which Winston had warned about.  It looked like the whistleblower might fare poorly, but justice would win out against the wrongdoer.  Sadly no.  In 2016 that decision was thrown out.  The bank’s intent to defraud had not been proven, the appeals court ruled.  Winston had lost both of his fights against the bank.

This happens a lot: we complain about wrongdoing and absolutely nothing comes of it except we get fired.  I complained that HomeFirst had kept $138,000 the City of San Jose had advanced to it years earlier.  So the City decided HomeFirst could keep the money and threw in another $25,000. I complained that HomeFirst had overbilled Santa Clara County by $140,000.  The County let that slide and gave the company another $300,000 to make payroll.  I complained that HomeFirst had not begun to repay the $1.2 million it overbilled HUD in 2003-2006.  To finally address the matter, HUD is now working with HomeFirst to apply the amount to other expenses so the company won’t have to repay anything.  What’s the point in blowing a whistle?

Some, like Dan Bethards, decide there is no point.  Bethards, a 14-year undercover drug agent with the Wisconsin Department of Justice, reported that his boss sold weapons without a license.  One customer was the state Attorney General.  His boss admitted making the sales, but an investigation ended without charges against him.  Bethards was fired.  He lost his house in foreclosure.  He lost his whistleblower lawsuit because he didn’t make his disclosure the right way.  After the experience he concluded, “the chances of getting heard are minimal and the chances of winning are miniscule.”  He would not do it again, he said.

I suspect that most whistleblowers, though, get something positive from their whistleblowing.  For some it is a financial award that might even fairly compensate them.   A personal favorite: Michele Gutierrez.  Gutierrez was CFO at Fine Arts Museums of San Francisco when she disclosed that Dede Wilsey, the board chair and CEO, had ordered a $450,773 payment to a former employee without board approval.  Gutierrez was fired.  At the end of it all, Dede is President of FAMSF, she arranged to cover the $450,773, and the City of San Francisco decided she broke no law.  Dede warned “you can’t beat me,” but Gutierrez got $2 million in settlement from FAMSF[3].

For some others, the benefit is a new career they had not planned.  Michael Winston runs a consulting business focused on strategy, organization and leadership.  Many have gone on to advise individuals and organizations on whistleblowing issues: famously Daniel Ellsberg (Pentagon Papers), Sherron Watkins (Enron), plus Richard Bowen (Citigroup – mortgages), Harry Markopolos (Bernie Madoff), and more.

For still others, benefit from the work is non-material, as Ariely reported.  Some seek and find vindication[4].  Some believe they are serving a higher good.

Or maybe whistleblowers are just slow on the uptake, as C. Frederick Alford said.  Everyone else gets it.  Power wins, and blowing a whistle is probably not going to work out well.  That’s the lesson Bethards learned.  But whistleblowers go ahead anyway. 

Meaning or no meaning, I would do it again.  I admit I didn’t pay the high costs that Bethards, Winston, and lots of others did.  I was right and, anyway, HomeFirst irked me in many ways.  I didn’t see another option.  Like Sisyphus, I think would have pushed my case even if I saw it would come back on me eventually.

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[1] See, for example, Melnick, Meredith.  “What Motivates a Whistleblower?” HuffPost.  October 10, 2014; Montagne, Renee, Host.  “Why Do Whistle-Blowers Become Whistle-Blowers?”  NPR Hidden Brain.  May 28, 2013; and Dungan, James, Adam Waytz, and Liane Young.  “The Psychology of Whistleblowing.”  Current Opinion in Psychology 6 (December 2015): 129-133.

[2] Ariely, Dan. The (Honest) Truth about Dishonesty: How We Lie to Everyone – Especially Ourselves. New York: Harper. 2012; Gino, Francesca, Shahr Ayal and Dan Ariely. “Self-Serving Altruism? The Lure of Unethical Actions that Benefit Others.” Journal of Economic Behavior and Organization 93 (2013): 285-292

[3] Gutierrez used Joseph Cotchette to negotiate with FAMSF.  I used Stephen Jaffe far less effectively.  Cotchette’s firm wasn’t available to me because a former HomeFirst board chair is partner there.

[4] James Holzrichter was vindicated in his fight against Northrup.  While the cost might have been high, he did share with Rex Richardson’s family a $12 million from the settlement.  And he does a little consulting.