Few things can be more agonizing than discovering wrongdoing at work. Keeping quiet can harm others and spawn guilty feelings. Reporting it can mean professional ruin. In a shift, more Americans are choosing the latter course.
Whistle-blowing is on the rise, thanks to high-profile insiders who have gone public with sordid details of corporate corruption, and a new law that offers increased protection for those who report suspected abuses on the job.
Some experts say the new protections fall short, and that whistle-blowers will continue paying far too high a price for their honesty. Meanwhile, increased focus on the issue has brought to light some intriguing similarities among whistle-blowers, who otherwise span racial, religious and economic divisions.
James Krutchen of Robbinsdale joined the swelling ranks of whistle-blowers recently when he alleged that his former employer, Onvoy Inc. of St. Louis Park, colluded with MCI to cheat AT&T of access fees on long-distance calls.
Onvoy has denied Krutchen’s allegations. Krutchen, speaking through his attorney, declined to comment publicly.
Krutchen’s case, like most, is complicated and it is not known whether his allegations have merit. But the controversy and mud-slinging that have enveloped him in the aftermath of his claims is typical.
Yet despite what Krutchen and others go through, people seem compelled to speak up.
Whistle-blowing is up sharply, according to the Government Accountability Project, a 26-year-old nonprofit group that helps whistle-blowers in corporations and government. In 1999, the organization handled 80 cases; in the first seven months of 2003, it dealt with 230.
Whistle-blowing entered popular culture and politics along with the rising mistrust of government during the Vietnam War and Watergate eras. The Whistle-blowers Protection Act of 1978 granted protection to federal government workers reporting suspect practices, and established whistle-blower hot lines at federal agencies.
A number of late 20th-century films were derived from true stories of whistle-blowers. The movie “Silkwood” told the story of a whistle-blower at a nuclear power plant; “Marie” was about a woman reporting prison corruption; “Serpico” was about a police officer who uncovers vast corruption on the force; and in “The Insider,” a tobacco company executive revealed efforts to manipulate nicotine levels to hook people on cigarettes.
Then came the aftermath of Sept. 11, 2001. Minneapolis FBI agent Coleen Rowley publicly pointed up the agency’s failure to detect warning signs of the terrorist attacks. More recently, Sherron Watkins of Enron and Cynthia Cooper of WorldCom played key roles in revealing financial abuses at their companies.
Efforts to increase corporate accountability resulted in government making it easier on whistle-blowers with the Public Company Accounting and Investor Protection Act of 2002, otherwise known as Sarbanes-Oxley. Whistle-blower provisions in the law protect employees of publicly traded companies who seek to report suspected irregularities. The act requires companies to establish ways for workers to report suspected wrongdoing anonymously, and makes a potential criminal offense of firing, demoting or harassing them. In addition, the law requires attorneys for public companies to report suspected misdeeds.
Some experts in the field are optimistic that Sarbanes-Oxley will bring the most favorable climate for whistle-blowers in history.
“There’s a cultural shift going on today that encourages and ennobles the whistle-blower,” said Roberta Ann Johnson, professor of politics at the University of San Francisco and author of a new book, “Whistle-blowing: When It Works and Why.”
Louis Clark, executive director of the Government Accountability Project, said Sarbanes-Oxley amounts to nothing less than a “revolution in corporate free speech.”
Nonetheless, Clark has some reservations about the effective implementation of the law. Claims must be filed with the Department of Labor within 90 days of an alleged retaliation against a whistle-blower. Clark says that time frame is unrealistically short. In addition, he said, unfair regulations are being proposed that would limit Sarbanes-Oxley protections to people deemed a “security risk.”
A lot of people are taking issue with provisions of Sarbanes-Oxley, said Robert Hennessey, an attorney with Minneapolis firm Lindquist & Vennum who has handled whistle-blower cases. “They say it’s gone way too far, that it’s ill-conceived. There is a huge controversy going on over its requirement that attorneys blow the whistle.” As far as the law’s ability to clean up corporations, he said, “The jury’s still out.”
“There have always been outbreaks of corporate malfeasance,” said David McGowan, associate professor of law at the University of Minnesota. He pointed to the Drexel Burnham Lambert scandal of in the late ’80s, the savings and loans crisis of the ’90s, and most recently wrongdoing by telecommunications firms.
McGowan says he does not believe Sarbanes-Oxley will prevent further scandals. “If you could stop people from committing fraud by passing a law, there wouldn’t be any fraud,” he said.
With or without Sarbanes-Oxley and whistle-blower heroes in the news, people who have been through it insist that in the end, no good deed goes unpunished.
“Human nature’s not going to change much,” said Gregg Corwin, a St. Louis Park attorney who’s handled numerous whistle-blowing cases.
“The papers never talk about what happens to the whistle-blower afterward,” he said. “It’s very good at the beginning. These stories are sexy for the newspapers, who print it up and you’re a media star for a day or so. But if you win, you will only get back-pay damages and attorneys’ fees.
“Then you go out and look for work, but you’ve had all this publicity. Who wants to hire a whistle-blower?”
If, as Corwin says, whistle-blowers get fired, blackballed, traumatized and worse, what makes people do it?
Profiles in principles
The Government Accountability Project’s Louis Clark says whistle-blowers come from all religious, ethnic and racial backgrounds, and with all different levels of education and career experience. What unites them, he said, are moral and professional standards.
“They have an inability to separate morality according to their circumstances,” he said. “They have the same moral concerns within the family, the workplace, the church, the community group. They don’t differentiate. They have personal, moral, ethical stands across the board. They don’t plug it in and plug it out.
“A second pattern is that they tend to be the hardest-working people. They are precise, sometimes perfectionist. They have a difficult time accepting other people doing sloppy work around them.”
Of course, some whistle-blowers give the breed a bad name. One well-known example is Mark Whitacre, the whistle-blowing executive at Archer Daniels Midland Co. who was later found to have embezzled $9 million from the company.
“Any time you have a remedial measure, there’s going to be some people who take advantage of it,” Clark said. “But that is no reason to deny the benefits of those rights to the 99 percent of people who are acting in good faith.”
Anyone who doubts the importance of whistle-blowing protections in America should consider how bleak things are elsewhere, said the University of San Francisco’s Johnson.
“We are actually exporting it to other countries,” she said. The U.S. State and Commerce departments are involved in projects to teach other countries, especially in the former Soviet bloc, about how protecting whistle-blowers can help them address systemic problems.
Indeed, representatives of 80 different countries have consulted with the Government Accountability Project over the past two years to seek help rooting out abuses, Clark said.
“The only way to stop corruption,” Johnson said, “is to make sure the person reporting it doesn’t get fired or killed.”