Believing What Is Obviously Untrue

Believing What Is Obviously Untrue

By the time he felt forced to quit in 2015, Thomas Sargent had spent 24 years as environmental safety and health specialist at Sonoma (California) State University.  Except for a performance improvement plan issue in 2002, he had been a solid, technically skilled employee.  A 2013 report commissioned by the university found asbestos dust in some buildings, and later in the year a report from the State’s Office of University Auditor identified a few materials handling weaknesses at the university, including the need for hazardous materials inspections.  Sargent took that finding and ran with it.

For two years, Sargent pressed for management action on the issue and, he felt, they resisted.  He said the asbestos concentrations were really high, and the university said they were not.  The university paid for another inspection, which did not find a big problem, but Sargent said the inspection was faulty.  Money was not available to eliminate asbestos from the buildings, but the university took other actions, such as sealing surfaces, to contain the problem.

Relations between Sargent and his boss deteriorated.  Sargent reported violations externally.  He accumulated six reprimands and two suspensions.  Then he quit and sued the university.

In “Why We Believe Obvious Untruths,” Philip Fernbach and Steven Sloman suggest that all of us are ready to believe things that are patently untrue – for example, in the case of Donald Trump, the prevalence of voter fraud, extraordinary attendance at his presidential inauguration, the birth place of Barrack Obama – because we satisfy ourselves with what we think individually.  We refuse to accept the analyses of others who disagree with us.

Whistleblowers are among those who go off on their own to come up with their complaints.  That individual initiative in support of what they believe makes them so attractive to many.  But it is sometimes hard to know if they aren’t just crazy or motivated by some hidden agenda.

The university believed its evidence made its position patently true, and Sargent rejected that position, not unlike the way Donald Trump rejected evidence that no significant voter fraud existed in the 2016 presidential election.  It is difficult for nearly all of us to independently evaluate Sargent’s contention that potentially dangerous asbestos risk was present or the university’s contention that no significant risk existed.  We have trouble distinguishing the deluded from the honest reporters.

Something similar goes on with other whistleblowers.  Few readers of Edward Snowden’s documents could personally assess his claim that the government acted illegally.  When Sharon Watkins described reporting irregularities at Enron, they seemed suspicious but few could know for sure how improper they were.   No readers of my complaints can easily determine if I had a reasonable basis for presenting them or if HomeFirst was right in ignoring them.

Fernbach and Solman contend that what makes humans exceptional is not our individual mental capability, but our ability to think in concert with others.  You know that the earth revolves around the sun, but only by virtue of others’ astronomical observations and calculations.  You know that smoking causes cancer, but without knowing precisely the effects of smoking on our cells, how cancer develops, and why some smoke is more dangerous than others.

The problem, of course, is that groups also go cockeyed, believing things that are quite, even patently, untrue.  Anecdotes – the sun rising in the east each morning or a relative who lived to old age despite being a heavy smoker – may confuse us.  Religious doctrine leads some to make statements – for example, concerning the age of humanity – that are obviously inconsistent with reality.  Then, members of close-knit groups can fall prey to groupthink and ostracize those who challenge the group’s norms and beliefs.

Defending themselves, organizations commonly accuse their whistleblowers of not being able to get along with others in the group[1].  Sonoma State University said Sargent showed resentment and malice toward his manager and mounted a campaign to get him fired.  HomeFirst board members decided to fire me because I was insubordinate and a “loose cannon” who could not get along with others on the team.

In the Fernbach and Sloman framework, Sargent is the individual – operating alone as most whistleblowers do – who strongly believes what is, to the university, obviously untrue.  The university represents a community of shared knowledge that enables its members to feel that they understand things that, in Sargent’s view, they don’t.  The fact that group members – those in Sonoma State University, HomeFirst, or even the whistleblower community – affirm each other’s beliefs makes them feel smarter when they may really be quite dim.

Our natural state is ignorance, Fernbach and Sloman write, and we should be cautious and evaluate what we think.  If we care to find the truth.

Stepping away, even momentarily, from our irrationality to bathe in rational evaluation is problematic.  The whistleblower’s frustrations may bias his investigations.  The organization’s retaliation against its whistleblower takes place in an arena not of truth-seeking but of power plays.  Both sides are driven more by emotion than by reasoned analysis; they seek to win, not to be right. 

Organizations often retaliate quickly against those who break ranks to complain[2] rather than investigate the alleged problem.  A few hours after I revealed to HomeFirst that I had reported possible violations externally, the CEO and Board members decided I should be terminated and, on advice of their attorney, they lost interest in discussing whether the company’s actions needed correction. 

Communication between the whistleblower and the organization ceases.  Any collaborative search knowledge is abandoned.  The whistleblower is fired for insubordination and poor performance, an end that should have been seen early on. 

But on occasion, a court or a jury steps in to judge the matter and describe the truth when the parties are unwilling to do so themselves.  That was the happy ending for Thomas Sargent.

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[1] For example, Keith Allard, Ralph Bailets, Jason Blasdell,  Brandon Coleman, James Cryer, William Drake, Daryl DuPage, Kevin Gerity, Danny Hollister, Ronald Klym, William Plouffe, Stacie Plummer, Melissa Reimer,  , Brenda Taylor, Sandy Wadler, Barry Wilson, Brett Wingo

[2] For example, an unnamed Amtrak supervisor, Sandra Black, Anthony Tenny

Roles Overrule Reason

Roles Overrule Reason

Daryl DuPage began working for the Clay Township, a 9,000-resident community about 50 miles northeast of Detroit, around 1990.  He became Chief, the only full-time employee, of its Fire Department in 2002.  In 2014, he obtained a two-year, $691,980 federal grant from FEMA for additional fire fighter staffing in the Township.

In January 2016, the Township Clerk sent DuPage detailed expense information to present to FEMA for reimbursement under the new grant.  DuPage questioned the Clerk’s inclusion of $16/day/firefighter ferry fees for the trip to nearby Hansens Island, which he believed were not allowable under the terms of the grant.  The following quarter’s billing information did not include expense details, but in July DuPage again saw that ferry fees were included in the charge, even for firefighters who lived on the island and had not taken the ferry. 

On November 28, 2016, DuPage had a long conversation with the Clerk about how she had handled ferry charges and allocated health benefits.  He told her that her accounting for the expenses was wrong.  Then he approached Township Trustees to complain about the matter.  On December 12, he was fired because, he was told, he didn’t get along with anybody.  DuPage filed his wrongful termination suit against the Township on February 2, 2017.

Whistleblowers are often associated with big events – mass surveillance systems (Snowden), government deceptions about wars (Ellsberg & Manning), Big Tobacco’s efforts to make cigarettes even more addicting (Wigand), vast financial deceptions (Watkins at Enron).  But most whistleblowers’ complaints involve smaller matters.  Sometimes so small that interest in them nearly defies explanation.

DuPage confronted no great moral issue in his complaint about charging (maybe) a few thousand dollars a year of ferry fees to the grant.  He was no financial expert; he had little experience with government grants; he could have simply excluded the ferry fees from the reimbursement requests that he submitted to FEMA.

The relative insignificance of Dupage’s disclosure is not unique.  The majority of whistleblower accounts that have been reported over the past year are ambiguous examples of wrongdoing.  My own claims of HomeFirst’s misdeeds were disputed, and few were officially decided against HomeFirst.  Some were wrongs that I might have corrected myself[1], as DuPage could have done in his situation.  HomeFirst’s food handler card violation was even less significant than the Clay Township ferry fee misbilling.

On the other hand, DuPage’s complaint, each of mine, and those of other whistleblowers were based on honestly formed opinions of organizational violations of laws or contracts.  The organizations’ claims that they did not commit wrongs or that the actions were appropriate should not surprise anyone.

History presents many cases of far more offensive actions whose perpetrators considered them perfectly justified.  Serbian Slobodan Milosevic, who caused the deaths of more than 200,000 Croats, Bosnian Muslims, and Albanians in the 1990s, claimed repeatedly that he only responded to past aggressions against innocent Serbs.  In interviews, dictators – including Idi Amin, Jean-Claude Duvalier, Mira Markovic, and Jean-Bedel Bokassa – claimed that their crimes against their citizens were done for the good of their countries[2].  The narrative of the powerful – whether big- or small-time – includes a denial of guilt and a reframing of its accuser’s complaint.

After I admitted that I had disclosed two suspected violations, HomeFirst’s attorney advised the Board that I was following the standard steps for whistleblowers.  Shortly before firing me, the HomeFirst CEO told the Board that I was only trying to protect my job by setting myself up as a whistleblower.  Later, in its defense against my claim of retaliation, the HomeFirst attorney claimed that I was just crying whistleblower to escape the consequences of my own misbehavior.

It can be difficult to separate our “real” motivations from motivations implicit in the increasingly popular whistleblower role we fill.  Google searches of “whistleblower” have doubled over the past ten years, attesting to the attraction of the whistleblower narrative.  Edward Snowden won awesome fame just five months before I decided to become a whistleblower myself.  The whistleblower-protagonist can be an attractive role, especially to someone, like me at HomeFirst, who has become dissatisfied with the organization for any of a multitude of reasons.

The organization’s managers, too, find a role to play.  Within a few hours of my informing the HomeFirst CEO that I had disclosed potential violations to government agencies, the chair of the Development Committee declared that my disclosures amounted to insubordination, an argument that the CEO praised.  The job of the CEO and Board was to protect the company from enemies, and I was destructive of it, their attorney advised.

In our respective narratives, we have our quests – to do the right thing or to protect an indispensable organization; we encounter obstacles along our way; we have second thoughts about our undertaking; and we persist.  In so doing, we create ourselves[3].

There was no good reason why DuPage should have been fired for making much of the ferry fees.  Not after working for the Township for more than 25 years and recently obtaining a large grant to expand its services.  Nor was there good reason why DuPage should have been made a big deal out of the expenses.  They were no fodder for a splashy False Claims Act lawsuit.  They were trivial, and he might have gotten it wrong anyway.

There was no good reason for HomeFirst to fire me.  I was possibly months or at most a couple of years from retirement anyway.  I was generally competent and efficient, even if not always lovable.  HomeFirst came to no harm from my complaints, and they broke the law with my termination.  Nor was there great reason for me to go as far as I did reporting possible violations externally.  I had raised them often enough with the Board.  I might have gone on doing so without the public being injured.

Still, we fell into our roles – attracted by their popular images and impelled by our discomfort for life as it was – we blew whistles and were fired; they took offense and retaliated.  Reason and ethics had little to do with it.

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[1] I could have repaid the amount I overbilled the County of Santa Clara, or I could have refused to bill ineligible expenses on contracts requiring master leases.  Either action could have caused the company’s financial collapse, and I could have reasonably expected to be fired as a result.  But I could have done it.

[2] 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

[3] Bruner, Jerome.  Making Stories: Law, Literature, Life.  Cambridge: Harvard University Press.  2002

The Problem of Knowledge

The Problem of Knowledge

Those whom we accuse of organizational wrongdoing are sometimes quite clearly and knowingly guilty of the misdeed.  Debra Halbrook observed that two district attorneys in adjacent North Carolina counties each agreed to hire the other’s wife to work in his office, receiving full pay for less than full-time hours[1].  And Dr. Theodore Schiff figured out that from 2008 to 2014 dermatologist Gary Marder billed Medicare for medically unnecessary treatments.  After more than three years of litigation, the court ruled against Marder and he agreed to pay $18 million to the Department of Justice in settlement of the allegations[2].

On its turn, HomeFirst knowingly billed the County of Santa Clara and HUD for property rental expenses that were not contractually reimbursable.  In addition, the company knowingly rented apartments to individuals who failed to meet the requirements set forth in loan agreements covering the property.  The money HomeFirst improperly kept from HUD, the County of Santa Clara, and the City of San Jose was obtained innocently, but it was intentionally retained after the impropriety was identified.

Far more often, the accused disputes whether the alleged activities were violations at all, often in ways that critics, especially its accuser, consider disingenuous.  Paul Bishop and Robert Kraus observed that their bank employer (World Savings, acquired by Wachovia which was acquired by Wells Fargo) was misstating its financial position by moving mortgages off its balance sheet.  But the legality of this highly technical operation, which is reminiscent of the accounting fraud that contributed to Enron’s collapse, may be disputed by reasonable people, as Wells Fargo has done for five years and counting.

Or the accused may contend that the alleged actions never occurred at all.  In a recent case, Michael Bachmann and Sarah Steele claimed that the San Francisco Bay Area Air Quality Control District destroyed important documents concerning air pollution.  The District countered that the pair’s allegations had been investigated previously without finding any problem and that the destroyed documents had been duly scanned prior to destruction.

The licensing violation that I alleged HomeFirst had committed involved a technical question concerning when facilities need to be licensed under State law.  I could have been wrong, or the violation could have been, as things turned out, easily fixed, as was the food handler card violation.  What I thought might be illegal bid collusion turned out not to break federal law, but whether State law was violated remains uncertain.  Whether HomeFirst’s payroll tax and minimum wage stance toward homeless workers constituted violations of law is not determined conclusively although evidence so far points to HomeFirst’s innocence, at least with respect to State and local laws.

In her recent New Yorker article, “Why Facts Don’t Change Our Minds,” Elizabeth Kolbert discusses our tendency to attend most closely to information that supports our beliefs.  As a result of this confirmation bias, our own theories are resistant to change, and we are adept at finding flaws in opposing theories.  Our objective, some researchers conclude, is not a search for truth, but winning the argument.  Moreover, our brains are designed so that it feels good to stand up for what we believe, even if we are wrong. 

In whistleblowing cases, both the accused wrongdoer and his accuser are susceptible to the influences that Kolbert describes.  HomeFirst CEO Niklaus was confident that the government agencies' failure to demand immediate repayment of misused funds meant they approved of the situation and that my technical arguments about the alleged violations carried no weight against the good intentions of the company.

For me and most whistleblowers, I suspect, official indifference to our complaints is evidence of greater sympathy with the wrongdoers or incomplete investigations.  Maybe so, or maybe not so much.

The inclination on both sides to continue fighting for our causes, despite growing evidence that we will lose, can lead to absurd results.  For example, whistleblower Robert Purcell fought for 18 years against pump manufacturer MWI, and after his final defeat he still believed that a great injustice had been done. 

An accused-side absurdity: Sanford Wadler was general counsel of Bio Rad Laboratories, a position he held for 25 years, when he observed what he believed were violations of the Foreign Corrupt Practices Act.  After a couple of years of his questions and investigations, Bio Rad fired him.  Wadler sued under federal and State laws and won; Bio-Rad appealed; the case went on for three and a half years after his termination.   Although the company may appeal again, so far its loss is $14.5 million, including $3.5 million for Wadler’s legal costs.  That is in addition to the $14.35 million that it agreed to pay the Department of Justice to settle allegations of its violations of the FCPA.

Kolbert is not optimistic about the prospects for escaping our apparently inbred need to win these fights.  There appears to be small incentive for companies to change their ways – Bio-Rad’s stock price has increased more than 70% since it fired Wadler; if HomeFirst is ever called to pay anything to me, the amount will likely come from the insurance policies it held three years ago. 

Whistleblowers, too, stick to their current approach.  Despite warnings from Alford, Devine and others, more whistleblowers step forward each year, perhaps in response to more bad activities, ever-increasing rewards[3], or occasional news about whistleblower protections.

If we can move away from crazy situations – like whistleblower cases that stretch routinely for 4-plus years (and up to 18 years) or that can result in a $14 million whistleblower settlement – it will be the result of honestly discussing our errors and the things we don’t really know[4], not by devoting our energies to destroying the other side.

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[1] One of the wives quickly resigned when news got out, and one of the attorneys fell under investigation for a number of possible violations.

[2] Marder still denies the allegations (the DoJ concluded that all of Marder’s medical physicist service billings since 2011 were false) and plans to sue Schiff for defamation and libel.

[3] For example, payments per Dodd-Frank, IRS, and False Claims Act

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

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.