Whistleblowers: Cynical Idealists or Idealistic Cynics?
"The only way to stop corporate corruption is to change the statute to make CEO's go to jail for fraud. Right now they are immune."
Explaining the basic mentality of corporate malfeasance, "If companies can commit fraud for $100 and know they will only be fined $40, they still make a $60 profit... The corporate integrity funds set aside to pay fines are part of their business plan." His point is documented by the public record of Pfizer, whose total revenue from 2004-2008 was $245 billion. During the same period Pfizer paid $2.75 billion in fines.There are two kinds of whistleblowers: Those "inside" are government employees. Those "outside" are non-government employees with knowledge of fraud or misbehavior of interest to the government (U.S. tax evasion, Medicare fraud, SEC violations, etc.) There are laws in 37 states to protect whistleblowers in the public and/or private sector, but most attorneys acknowledge these laws are full of loopholes, poorly enforced and ineffective.
A few hours after the luncheon the San Francisco Giants won the World Series, and the team received a call from the president inviting them to visit the White House. Sadly, the whistleblowers left Washington, virtually ignored.
Whistleblowers: Cynical Idealists or Idealistic Cynics?
A group of elite whistleblowers met in Washington, D.C., recently without making a sound. There was no media coverage of these men and women whose exploits have commandeered front-page headlines, been heralded on 60 Minutes and Dateline, and, not incidentally, helped enrich the U.S. Treasury by more than $16 billion since 1986.
This particular group known as SWAT (Successful Whistleblowers Advocating Against Tax Payer Fraud) met to share and celebrate their stories of exposing fraudulent health-care companies, dishonest manufacturers and nefarious pharmaceuticals. And yes, by blowing the whistle, they have made themselves and their attorneys very rich. "We know how to win and how lonely a job it is," said James F. Alderson, a certified public accountant from Whitefish, Montana, whose lawsuit against Hospital Corporation of America, Inc. yielded the biggest single cash recovery ever for the U.S. government -- more than $1.7 billion.
After 12 years of litigation Alderson received an award in excess of 20 million; the average whistleblower award is $100,000. Only one percent receives life-changing awards like the SWAT team I met. Yet these whistleblowers are not happy-go-lucky moguls, reveling in the wealth they earned by taking principled stands against fraud, abuse and corruption. "Most of us gave up years of our lives in litigation, and lost all we had to tell the truth," said Bruce Boise, a former Ohio sales representative for Cephalon, Inc. who made $250,000 a year before he was fired. He lost his job when he refused to follow the company's orders to convince doctors to prescribe the company's drugs for unapproved or "off-label" uses. He reported the company to the FDA and launched a massive government investigation. Cephalon paid $425 million to settle the suit and Boise received a handsome percentage. But despite the multimillion-dollar award he still feels ostracized from society.
"All of us do. We're looked on with disfavor and disgust by people who think we're crazy or, even worse, greedy. There's a stigma for telling the truth in a go-along-to-get along world," he said.
"They call us 'ratas' [Spanish for rats]," said John W. Schilling, who with Alderson, filed suit under the False Claims Act against HCA, Inc., the nation's largest for-profit healthcare provider, and developed the case that yielded the largest single cash recovery ever for the U.S. government. Despite their multimillion-dollar awards, neither Schilling nor Alderson feels totally victorious.
"How can you when there's still so much fraud out there?" asked Alderson. "The only way to stop corporate corruption is to change the statute to make CEO's go to jail for fraud. Right now they are immune."
Explaining the basic mentality of corporate malfeasance, he said: "If companies can commit fraud for $100 and know they will only be fined $40, they still make a $60 profit... The corporate integrity funds set aside to pay fines are part of their business plan." His point is documented by the public record of Pfizer, whose total revenue from 2004-2008 was $245 billion. During the same period Pfizer paid $2.75 billion in fines.
The SWAT conference in Washington was organized by Alderson, and I accepted his invitation to address the whistleblowers over lunch. I felt honored to be among these individuals, who are either the most idealistic cynics I've ever met or the most cynical idealists. (The cynicism kicked in when someone mentioned one attendee who had canceled at the last minute. "He got rear-ended," said Alderson, "three weeks after his settlement." All eyes looked up to the ceiling as everyone let out a long collective groan. "Yeah, well... let's just hope it was an accident.")
Most of the whistleblowers I met hailed from small towns with strong values. "I'm a devout Catholic," said Schilling. "I was brought up by the nuns."
"I'm a preacher's kid," said Walter W. Gauger, a former pharmacist who joined with George B. Hunt to sue Medco for prescription fraud. After seven-and-a-half years of litigation, Medco settled for $155 million, the largest pharmaceutical fraud in the country.
There are two kinds of whistleblowers: Those "inside" are government employees. Those "outside" are non-government employees with knowledge of fraud or misbehavior of interest to the government (U.S. tax evasion, Medicare fraud, SEC violations, etc.) There are laws in 37 states to protect whistleblowers in the public and/or private sector, but most attorneys acknowledge these laws are full of loopholes, poorly enforced and ineffective. There is no one comprehensive law that protects whistleblowers from suffering intense repercussions for telling the truth, even though their claims may be valid and their disclosures spare the public a great deal of pain and expense. The retaliation against whistleblowers, especially in the private sector, is severe. They are usually fired, losing all benefits while being blackballed in their industry. Company workers, once considered close friends, avoid them as do neighbors, even relatives. Their children are bullied at school and shunned by classmates. The isolation causes severe distress within the family, often leading to divorce, depression, distrust, and decline in physical health.
"I gained 70 pounds, developed diabetes and my husband left me," said Janet Chandler, who sued Cook County Hospital in Chicago for forging data and failing to comply with federal human research regulations in a federally funded drug abuse study. As a young attorney Barack Obama worked on her case, which went to the U.S. Supreme Court. "I won a 9-0 victory but got less than $1,000,000," she said. "I spent the last three years co-founding a mentoring program for whistleblowers and getting my health back, and I continue to work in public service as an advocate for women and children ."
Members of Congress on both sides of the aisle want to give federal whistleblowers better safeguards against retaliation when they report waste, fraud and corruption. Bills languishing in the House and the Senate would give them the right to a jury trial on retaliation claims -- something they don't get now. In addition, the legislation would lift the gag rules imposed by some national-security agencies and strengthen rules against penalizing those who report wrongdoing to Congress.
Earlier this month the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) proposed implementing the whistleblower section of the Dodd-Frank Wall Street Reform Bill and not a minute too soon. We need to encourage these men and women, who perform a valuable public service by shining their lights in dark places.
As I left the SWAT luncheon, held a few blocks from the White House, I thought of the movie, It's a Wonderful Life and the bells that ring every time angels gets their wings. I fantasized about hearing whistles blowing every time someone stands up against fraud and corruption. A few hours after the luncheon the San Francisco Giants won the World Series, and the team received a call from the president inviting them to visit the White House. Sadly, the whistleblowers left Washington, virtually ignored.
This particular group known as SWAT (Successful Whistleblowers Advocating Against Tax Payer Fraud) met to share and celebrate their stories of exposing fraudulent health-care companies, dishonest manufacturers and nefarious pharmaceuticals. And yes, by blowing the whistle, they have made themselves and their attorneys very rich. "We know how to win and how lonely a job it is," said James F. Alderson, a certified public accountant from Whitefish, Montana, whose lawsuit against Hospital Corporation of America, Inc. yielded the biggest single cash recovery ever for the U.S. government -- more than $1.7 billion.
After 12 years of litigation Alderson received an award in excess of 20 million; the average whistleblower award is $100,000. Only one percent receives life-changing awards like the SWAT team I met. Yet these whistleblowers are not happy-go-lucky moguls, reveling in the wealth they earned by taking principled stands against fraud, abuse and corruption. "Most of us gave up years of our lives in litigation, and lost all we had to tell the truth," said Bruce Boise, a former Ohio sales representative for Cephalon, Inc. who made $250,000 a year before he was fired. He lost his job when he refused to follow the company's orders to convince doctors to prescribe the company's drugs for unapproved or "off-label" uses. He reported the company to the FDA and launched a massive government investigation. Cephalon paid $425 million to settle the suit and Boise received a handsome percentage. But despite the multimillion-dollar award he still feels ostracized from society.
"All of us do. We're looked on with disfavor and disgust by people who think we're crazy or, even worse, greedy. There's a stigma for telling the truth in a go-along-to-get along world," he said.
"They call us 'ratas' [Spanish for rats]," said John W. Schilling, who with Alderson, filed suit under the False Claims Act against HCA, Inc., the nation's largest for-profit healthcare provider, and developed the case that yielded the largest single cash recovery ever for the U.S. government. Despite their multimillion-dollar awards, neither Schilling nor Alderson feels totally victorious.
"How can you when there's still so much fraud out there?" asked Alderson. "The only way to stop corporate corruption is to change the statute to make CEO's go to jail for fraud. Right now they are immune."
Explaining the basic mentality of corporate malfeasance, he said: "If companies can commit fraud for $100 and know they will only be fined $40, they still make a $60 profit... The corporate integrity funds set aside to pay fines are part of their business plan." His point is documented by the public record of Pfizer, whose total revenue from 2004-2008 was $245 billion. During the same period Pfizer paid $2.75 billion in fines.
The SWAT conference in Washington was organized by Alderson, and I accepted his invitation to address the whistleblowers over lunch. I felt honored to be among these individuals, who are either the most idealistic cynics I've ever met or the most cynical idealists. (The cynicism kicked in when someone mentioned one attendee who had canceled at the last minute. "He got rear-ended," said Alderson, "three weeks after his settlement." All eyes looked up to the ceiling as everyone let out a long collective groan. "Yeah, well... let's just hope it was an accident.")
Most of the whistleblowers I met hailed from small towns with strong values. "I'm a devout Catholic," said Schilling. "I was brought up by the nuns."
"I'm a preacher's kid," said Walter W. Gauger, a former pharmacist who joined with George B. Hunt to sue Medco for prescription fraud. After seven-and-a-half years of litigation, Medco settled for $155 million, the largest pharmaceutical fraud in the country.
There are two kinds of whistleblowers: Those "inside" are government employees. Those "outside" are non-government employees with knowledge of fraud or misbehavior of interest to the government (U.S. tax evasion, Medicare fraud, SEC violations, etc.) There are laws in 37 states to protect whistleblowers in the public and/or private sector, but most attorneys acknowledge these laws are full of loopholes, poorly enforced and ineffective. There is no one comprehensive law that protects whistleblowers from suffering intense repercussions for telling the truth, even though their claims may be valid and their disclosures spare the public a great deal of pain and expense. The retaliation against whistleblowers, especially in the private sector, is severe. They are usually fired, losing all benefits while being blackballed in their industry. Company workers, once considered close friends, avoid them as do neighbors, even relatives. Their children are bullied at school and shunned by classmates. The isolation causes severe distress within the family, often leading to divorce, depression, distrust, and decline in physical health.
"I gained 70 pounds, developed diabetes and my husband left me," said Janet Chandler, who sued Cook County Hospital in Chicago for forging data and failing to comply with federal human research regulations in a federally funded drug abuse study. As a young attorney Barack Obama worked on her case, which went to the U.S. Supreme Court. "I won a 9-0 victory but got less than $1,000,000," she said. "I spent the last three years co-founding a mentoring program for whistleblowers and getting my health back, and I continue to work in public service as an advocate for women and children ."
Members of Congress on both sides of the aisle want to give federal whistleblowers better safeguards against retaliation when they report waste, fraud and corruption. Bills languishing in the House and the Senate would give them the right to a jury trial on retaliation claims -- something they don't get now. In addition, the legislation would lift the gag rules imposed by some national-security agencies and strengthen rules against penalizing those who report wrongdoing to Congress.
Earlier this month the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) proposed implementing the whistleblower section of the Dodd-Frank Wall Street Reform Bill and not a minute too soon. We need to encourage these men and women, who perform a valuable public service by shining their lights in dark places.
As I left the SWAT luncheon, held a few blocks from the White House, I thought of the movie, It's a Wonderful Life and the bells that ring every time angels gets their wings. I fantasized about hearing whistles blowing every time someone stands up against fraud and corruption. A few hours after the luncheon the San Francisco Giants won the World Series, and the team received a call from the president inviting them to visit the White House. Sadly, the whistleblowers left Washington, virtually ignored.
My husband worked for a small company with a fantastic financial controller -- a great guy, obviously talented -- a former whistle blower. His story knocks my socks off every time I think about it. He was a young accountant for a Fortune 500 company. He uncovered illegal diversion of funds, and proceeded to report it to management. He says something remarkable at this point in the story -- he did not even think of himself as a whistle blower -- he just thought he was doing his job, and a superb job of it, too. He says it took a considerable amount of ill treatment and mysterious stalling of his formerly promising career for him to begin to understand that his actions had been not only unappreciated but punishable, and he eventually was let go for reasons that made no sense to him. Then, he found that his "trouble maker" reputation seemed to precede his every effort to become employed by a major corporation, as revealed by one unusually honest interviewer. This is how he came to serve in smaller companies that were unable to pay him what he would probably have earned in that other world. Remarkably, he did not seem bitter, but he was obviously transformed from a naive and trusting individual into a cynic.
Linda_from_Deerfield: My husband worked for a small company with a fantastic
Another way the Gov't/Military circumvent whistleblower protections is by using Gov't contractors. Unlike civil servants, contractors can be dismissed without cause and without explanation. Contractors also do not have a direct means of reporting malfeasance to the Inspector General -- the IG is focused on military and civil service personnel. Given this structure, as soon as a corrupt military leader or corrupt civil servant thinks a contractor might report them, they can dismiss them with impunity and without recourse for the contractor employee. The system is really quite astonishing and if it is not being addressed in proposed legislation -- it certainly should be.
JulieKay
"Members of Congress on both sides of the aisle want to give federal whistleblowers better safeguards against retaliation when they report waste, fraud and corruption."
Congress could care less about protecting federal employee whistleblowers. The federal agency (MSPB) has legislated from the bench to dilute the original laws enacted by Congress. MSPB decided that reports made from information obtained as part of a person's job responsibilities do not qualify for whistleblower protection. The judges call the reports of information obtained "mere disagreements with management."
Less than 2% of federal employees win cases before the MSPB.
I am sure the SEC/CFTC whistleblower process will be just like the federal and Sarbanes-Oxley process - worthless.
Whistleblowers almost always are committing career suicide.
Why Plants Are (Usually) Better Than Drugs
For four decades, I've been skeptical of a prevailing belief in Western medicine: when a plant shows bioactivity in humans, we must attribute that effect to a single, predominant compound in the plant. We label that the "active principle," isolate it, synthesize it, and make a pharmaceutical out of it. Then, typically, we forget about the plant. We don't study any of the other compounds in it or their complex interactions.
Human beings and plants have co-evolved for millions of years, so it makes perfect sense that our complex bodies would be adapted to absorb needed, beneficial compounds from complex plants and ignore the rest. This is an established fact in nutrition, but the West's sharp distinction between food and medicine somehow blinds us to these properties when it comes to botanicals. The most successful medical philosophies make no such division -- Okinawans, the world's longest-lived people, believe that the food they eat is "nuchi gusui" which roughly translates as "medicine for life."
A Mighty Wind
Michigan will lead the green industrial revolution, making wind turbines, solar panels, advanced batteries, and other technologies to power our nation's 21st-century progress. The investments from the federal Recovery Act complemented state policies we enacted three years ago to diversify our economy. The result: Since the passage of Michigan's renewable energy standard in 2008, Michigan has attracted 48 clean-energy companies that are projected to create 89,918 jobs and $9.4 billion of investment in Michigan.
U.S. Preparing Sweeping Insider-Trading Charges: Report
Two lawyers speaking to Reuters, who declined to be identified* because they represent potential clients, said agents from the FBI had approached hedge fund traders over the past two weeks and a number of traders had contacted lawyers.While the scope of the investigation is unclear it is said to focus on the use of so-called expert network firms, businesses that command big fees from hedge funds to match them up with experts in particular industries. There has been concern for years that some experts may be passing on confidential information about public companies to traders.
* ( It's a change from unidentified sources from the Hill or Pentagon at least. I'm reminded of Glenn Greenwald's caustic quips a couple of days ago...and why you protect sources )
Transcript: CNN exposes federal government’s failure to protect whistleblowers
Lack of Justice for U.N. Sexual Harassment Victims
It should be noted that employees at intergovernmental organizations (IGOs) like the United Nations are starting to challenge the immunities of these institutions in national courts. If an IGO does not offer aggrieved individuals independent, third party dispute resolution, waiver of sovereign immunity is unavoidable to overcome the inherent, structural conflict of interest that occurs when an organization is both the defendant and the judge.
Sexual-Harassment Cases Plague U.N.
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The United Nations, which aspires to protect human rights around the world, is struggling to deal with an embarrassing string of sexual-harassment complaints within its own ranks.
Many U.N. workers who have made or faced accusations of sexual harassment say the current system for handling complaints is arbitrary, unfair and mired in bureaucracy. One employee's complaint that she was sexually harassed for years by her supervisor in Gaza, for example, was investigated by one of her boss's colleagues, who cleared him.
Cases can take years to adjudicate. Accusers have no access to investigative reports. Several women who complained of harassment say their employment contracts weren't renewed, and the men they accused retired or resigned, putting them out of reach of the U.N. justice system.
eBoss Watch
Senate Approves $4.6 Billion Discrimination Settlement For Black Farmers, Indians
The two class action lawsuits were filed over a decade ago.
The settlements include almost $1.2 billion for black farmers who say they suffered discrimination at the hands of the Agriculture Department. Also, $3.4 billion would go to Indian landowners who claim they were swindled out of royalties by the Interior Department. The legislation was approved in the Senate by voice vote Friday and sent to the House. City Will Pay Millions To 10,000 9/11 Responders
Image via Wikipedia
More than 10,000 workers exposed to the tons of toxic dust that blanketed ground zero after the World Trade Center fell have ended their bruising legal fight with New York City and joined a settlement worth at least $625 million.
The deal will resolve an overwhelming majority of the lawsuits over the city's failure to provide protective equipment to the army of construction workers, police officers and firefighters who spent months clearing and sifting rubble after Sept. 11.Among the thousands who sued, claiming that soot at the site got into their lungs and made them sick, more than 95 percent eligible for the settlement agreed to take the offer. Only 520 said no or failed to respond.
Why is Pentagon Whistleblower Franz Gayl Being Retaliated Against for Saving Our Troops?
Why is it that the nation’s most select intelligence leaders have praised Mr. Gayl for his disclosures, but he remains subjected to unfettered harassment by his superiors? The Pentagon’s targeted retaliation against Gayl may not have silenced him, but it has sent an unmistakable message to other would-be whistleblowers: Keep Your Mouth Shut. In an interview, Franz captured this intrinsic clashing of priorities “By the very interest of being a civilian bureaucracy, you may have objectives and incentives that are in contradiction to the Uniform Marines in the field. That’s just the psychology of bureaucracy.”
Whistleblowers Protection Blog
NWC Opposes Corporate Lobby Attempt to Weaken Whistleblower Provisions in Dodd-Frank
Is your boss using a "key logger"? Find out.
Appropriate Use of Science in Public Policy
On October 27, 2010, Professionals for the Public Interest (PftPI) will present a panel discussion on the "Appropriate Use of Science in Public Policy.
( Nice to know somebody is taking an interest. )
China's New Drones Raise Eyebrows
Western defense officials and experts were surprised to see more than 25 different Chinese models of the unmanned aircraft, known as UAVs, on display at this week's Zhuhai air show in this southern Chinese city
The apparent progress in UAVs is a stark sign of China's ambition to upgrade its massive military as its global political and economic clout grows.The U.S. and Israel are currently the world leaders in developing such pilotless drones, which have played a major role in the wars in Iraq and Afghanistan, and which analysts say could one day replace the fighter jet.
This year's models in Zhuhai included several designed to fire missiles, and one powered by a jet engine, meaning it could—in theory—fly faster than the propeller-powered Predator and Reaper drones that the U.S. has used in Iraq, Afghanistan and Pakistan.
The Buzz on China's Drones
Still behind the U.S. and Israel, China is starting to catch up:- Jet Drone: The WJ600 from China Aerospace Science & Industry Corp. has several missiles and a jet engine and is the Chinese drone of greatest potential concern to the U.S.
- Drone in Space? China Aerospace Science & Technology Corp., one of the main contractors in China's space program, displayed an attack drone, complete with air-to-ground missiles.
- Largest Drone:ASN Technology's ASN-229A Reconnaissance and Precise Attack UAV, the largest drone at the show, carries air-to ground missiles and uses a satellite link to find targets over a radius of 2,000 kilometers 1,250 miles.
- Avian Drone:The ASN-211, a model under development, is about the size of a large duck and has flapping wings. It is designed for reconnaissance behind enemy lines.
If the U.S. is ultimately leaving Iraq, why is the military expanding its bases there?
Iraq Facilities
US Military Bases in Iraq: Permanent?
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map of u s bases in iraq
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