When it comes to whistle-blowers, we may be living in a kind of strange, explosive golden age. Right now, it’s all about Edward Snowden, the Booz Allen Hamilton IT guy who’s electrified the issue of privacy vs. security. In American history, there’s been no “more important leak than Edward Snowden’s release of NSA material — and that definitely includes the Pentagon Papers,” writes Daniel Ellsberg, the crown prince of whistle-blowers. Meanwhile, the Bradley Manning trial pushes on, as the public debates whether this soldier rightly or traitorously gave classified documents to WikiLeaks. Not so long ago, Snowden and Manning might have been more uniformly judged snitches or rats. In 1971 Ralph Nader coined the term “whistle-blower” — with its positive image of a fair-minded referee calling foul — reflecting how our world had changed.
Check out this tipping point: There’s now a self-help book on the topic. Seriously, I give you “The Whistleblower’s Handbook: A Step-by-Step Guide to Doing What’s Right and Protecting Yourself” (Lyons, 2011). It’s vastly shrewd and practical, but it also offers an astute long view of American whistle-blowing. Author Stephen Martin Kohn knows ABOUT precedents: He’s one of the lawyers who helped procure the biggest whistle-blower reward ever. It went to Bradley Birkenfeld (who grew up in Brookline) for unveiling the fraud of Switzerland’s UBS Bank, which illegally met with rich Yanks trying to hide their money overseas. Birkenfeld got $104 million as compensation from the IRS’s whistle-blower program.
That’s my first wow: I didn’t know whistle-blowers sometimes got paid for their troubles. Indeed, between 1986 and 2012, they got nearly $3.9 billion in payouts for helping return $24 billion to the US Treasury. True, monetary whistle-blowers get more love than political ones. I still feel sad retrospectively for Frank Serpico, Karen Silkwood and, yes, Ellsberg himself.
“The Whistleblower’s Handbook” kicks off with Abraham Lincoln signing the False Claims Act in 1863. During the Civil War, military contractors cheated the government like crazy, overcharging, defrauding, and (to cite one case) promising gunpowder and sending sawdust instead. The FCA dredged up the “qui tam” principle from medieval times. “Qui tam pro domino rege quam pro se ipso in hac parte sequitur” means he “who pursues this action on our Lord the King’s behalf as well as his own.” More plainly: If you expose those who scam Uncle Sam, Uncle Sam rewards you.
Lincoln’s law forced the cheats to pony up twice the cheated amount: The Feds got half the money, the whistle-blower the other half. The FCA was gutted in World War II, as more military contractors pressed for a freer hand, but then was strengthened after the Challenger disaster in 1986, as NASA consultants blew the whistle on the space shuttle’s faulty O-rings. In 2002, in the wake of Enron, the Sarbanes-Oxley Act raised the stakes, mandating that all publicly traded companies open whistle-blowing hotlines.
These days, every federal agency must also have a whistle-blowing hotline. In 2006, WikiLeaks hit the scene. And over the past decade, Congress enacted three whistle-blower incentive laws covering taxes (2006), securities fraud (2010), and commodities futures fraud (2010). The Dodd-Frank bill to reform Wall Street has been a great boon for whistle-blowers: In 2011, the Securities and Exchange Commission opened the bill’s required Office of the Whistleblower.
Quite the march of progress. Even so, most employees, managers, and even lawyers “don’t realize that a whistleblower revolution has in fact already occurred in the United States,” writes Kohn. To learn more, I picked up “Whistleblowing: When It Works — and Why” (Lynne Reinner, 2002). Author Roberta Ann Johnson offers telling vignettes of various whistle-blowers like Lowell native Roger Boisjoly, the engineer who advised AGAINST LAUNCHING the Challenger that tragic day, and Nancy Kusen, an administrator who pointed out fat CONTRACT fraud in the Department of Defense.
Johnson seconds that whistle-blowing is on the rise because of enhanced laws and protections. But she also hazards it’s because more professionals are in business and government now: Doctors, engineers, and scientists are trained to relentlessly pursue facts, so when facts are twisted it offends to the core. (Think of “The Insider’s” Jeffrey Wigand, who exposed tobacco companies, and had a doctorate in biochemistry).
Are there any books by whistle-blowers themselves? Yes, a smattering. Take “No One Would Listen: A True Financial Thriller” (Wiley, 2011) by Harry Markopolos. He’s the guy who first realized that Bernie Madoff was running a Ponzi scheme and, through his position at Boston’s Rampart Investment Management, organized a team of investigators (dubbed “the Fox Hounds”) to snag the evidence. But the SEC and the press ignored him and them. Then there’s Cynthia Cooper, a vice president of internal audit for WorldCom, who in 2002 harnessed a team of accountants THAT WORKED CLANDESTINELY to uncover the company’s $3.8 billion in fraud (the biggest in US history up to that time). Her “Extraordinary Circumstances: The Journey of a Corporate Whistleblower” (Wiley, 2008) jumps (not always successfully) between her WorldCom experience and the moral upbringing that created a whistle-blower “decision by decision, and brick by brick.”
Such bedrock integrity also informs the “The Whistleblower: Sex Trafficking, Military Contractors, and One Woman’s Fight for Justice” (Palgrave Macmillan, 2011). Kathryn Bolkovac (her co-author is Cari Lynn) was a Nebraska cop who took a human rights investigator job with the private military contractor DynCorp in Sarajevo in the 1990s. The company was supposed to support the UN peacekeeping mission, but she learned that her bosses were involved in international sex trafficking. No real surprise: She’s got fired and felt her life was endangered. Bolkovac finally won her unfair dismissal case, and her story became a movie in 2010 (“The Whistleblower,” with Rachel Weisz and Vanessa Redgrave).
If you go on DynCorp’s website now, it lists these core values: “we serve, we care, we empower, we perform, we do the right thing.” Maybe Bolkovac’s suit affected the culture there or maybe not. At a minimum, corporations have soberly taken note of the impact of whistle-blowers on reputations and shareholder values. And, yes, they’ve got their own self-help book, too: “Whistleblowers: Incentives, Disincentives, and Protection Strategies” (Wiley, 2012). It hand-wrings a lot on the implications of Dodd-Frank, discusses compliance offices and notes that some two-thirds of whistle-blower hotline reports turn out to be true.
What industry has been slammed hardest by whistle-blowers? Big pharma: About 90 percent of its fraud cases are a result of qui tam actions. There’s a shocking three-page table on a decade of misconduct BY INDUSTRY GIANTS SUCH AS Bayer, Bristol-Myers, and GlaxoSmithKline, in “Whistleblowers” (Greenhaven, 2012). This is part of the excellent Opposing Viewpoints series, which brings together multiple essays and studies on one topic to create a hard-thinking immersion experience.
And what might those opposing viewpoints be, exactly?
“Whistleblowers” is pretty stark about the wrenching downside to coming forward, even with legal reform and stepped-up protections. In one study, for instance, only two of 22 big pharma whistle-blowers have continued in the field. And even if you win a qui tam reward, there’s such a case backlog (1,000-plus big pharma cases, for instance), you may not get the money for years, and it rarely makes up for your imploded career and lost wages.
“The prevailing sentiment was that the payoff had not been worth the personal cost,” intones one academic.
Then again, the book says, whistle-blowers rarely do it for the money. They take the risk because they can’t live with themselves otherwise. And we’ll be living with their choices, more and more, as the years whistle by.