August 22, 2011
Whistle blowing has been in the news lately.
The Securities and Exchange Commission (SEC), who just launched a new whistle blower program, finds itself accused by Darcy Flynn, one of its own lawyers, of destroying thousands of documents related to investigations regarding suspicious activities of major banks and hedge funds. Darcy Flynn wrote a letter to Sen. Chuck Grassley of Iowa saying that the SEC had destroyed more than 9,000 files related to “matter under investigation.” Senator Grassley said: “It does not make sense that an agency responsible for investigations would want to get rid of potential evidence.”
This week the movie Whistleblower was released in New York City. The movie is based on a true story of a UN peacekeeper who uncovered sex trafficking in Bosnia with members of the United Nations involved. Peter Rainier, a film critic for CSMonitor says that the movie serves a social good. The movie exposes the injustice of sexual slavery. Kathryn Bolkovac “blew the whistle” but lost her job in the process, although she did subsequently win a wrongful dismissal suit.
Judy Nadler and Miriam Schulman in an article published by the Markula Center for Applied Ethics entitled Whistle Blowing in the Public Sector believe that whistle blowing is an ethical issue because “it represents a person’s understanding, at a deep level, that an action his or her organization is taking is harmful - that it interferes with people’s right or is unfair or detracts from the common good.”
We are all (or should be) whistleblowers. We have a moral duty to report when harm is perpetrated.
The question is not if but when and very importantly to whom.
The Dodd-Frank Act encourages employees to report to the government rather than internally. The law signed by the President on July 21, 2010 increases the protection of whistleblowers against retaliation and termination as well as increased the potential monetary awards for whistleblowers up to 30% of collected monetary penalties.
Should the wrongdoing first be reported internally or should it be reported externally to the district attorney, the Grand Jury or the press? Obviously it all depends on the circumstances, the nature of the wrongdoing and the impact necessary to bring a stop to the practice.
Most corporations and ethics officers believe that it is preferable that a whistleblower first reports wrongdoing internally. This allows the management of a company to address the issue and hopefully “fix the problem.” However, if the whistleblower is not satisfied that the proper actions were taken following his or her reporting, then I believe, the reporting should be done to the proper authorities or the press.
Before we engage in whistle blowing we should first examine our motives to be sure that they are not self-serving or motivated by anger. We should also be very clear on what we are trying to accomplish.
We should always remember what Edmund Burke once said:
“All that is required for evil to prevail is for good men to do nothing.”