By David E. Haynes
Millions of Americans rely upon the federal Medicare and Medicaid programs for their health care services. In order to fund these critical services, the federal government spends billions each year. In 2013, the federal government spent $772 billion on health insurance programs, nearly two-thirds of which went to Medicare. The funds for Medicare and Medicaid are financed by companies and individuals, who contribute by paying taxes. (more…)
Edward Siedle begins by alerting us to an alarming statistic: “Since the dawn of mutual fund regulation in the United States (1940) only one Compliance Director of a mutual fund company has ever blown the whistle on his employer.” Revealing that he was that “one,” he goes on to explain why whistleblowers are rare and what they may expect.
He notes that whistleblowers typically begin the process in the belief that their employee will appreciate their disclosure of wrongdoing, and sometimes that is the case if the malfeasance is limited in scope. But, “the greater the involvement by senior management and, of course, the more corporate revenue involved, the less likely the whistleblower will benefit from reporting the wrongdoing.”
Bear in mind that the whistleblower may have little idea, at the time of reporting, of the extent of the wrongdoing. Senior management may appear to be surprised or shocked by activity that further investigation reveals they were involved in or even initiated. For this reason, the positive response a whistleblower may initially experience upon reporting a matter may quickly turn ugly as the shadow of blame widens. As a result, whistleblowers should be suspicious when they report wrongdoing; management may already be aware of the activity or even involved. The more longstanding the practice, the more likely someone else within the organization has sounded the alarm in the past. Whistleblowers are well-advised to search the corporate records for prior reports.
Whistleblowers also should read Sidele’s May 12 article about the SEC system for receiving whistleblower complaints. While the SEC reportedly is making improvements, Sidele’s experience is typical of the response whistleblowers have received government-wide from offices designated to receive disclosures of wrongdoing. That response, typically, has been to ignore the disclosure.
Siedle notes that the new SEC whistleblower rules “do not require whistleblowers to first report problems internally” and “there is no good reason for such a requirement.” There are plenty of examples, however, where reporting problems internally gave the organization critical time to to fire the whistleblower before an external disclosure could be made so that the employee can be described as a disgruntled ex-employee. In so doing, the employer “attempts to shift attention from the allegations of wrongdoing onto the integrity of the individual.”
I’m not saying whistleblowers are never disgruntled employees. Some clearly are. However, what do we care? As long as the allegations are true, then the motives of the employee are irrelevant.
Indeed, questioning the motives of a whistleblower who reports a threat to the public’s welfare is like debating the motives of a fellow camper who shines a flashlight on a bear launching an attack. It’s the kind of behavior that keeps bears well-fed.
Photo by Adam_T4 at Flickr Creative Commons
(“For my new and precious friends at Whistleblower Support Center… Those for whom cause is justification enough to act…And, the rest of us who “stand around” watching you exercise our morality… for us!! May we soon join greater forces with one other!”) – Phil Towle, May 2011