Advent 2009, Week One, Day 5

 Harry Markopolos was a fraud investigator. When he saw the way Bernard Madoff had been using ‘Ponzi’ schemes to defraud investors, he reported his concerns with the Securities and Exchange Commission. This was in 1999. No action was taken until December 2008 when Madoff himself confessed to fraud amounting to $50 billion, later found to be $65 billion. Markopolos accused the Securities and Exchange Commission of ‘financial illiteracy’ for failing to heed his warnings. He was awarded a silver whistle by the Boston Security Analysts Society.

 

 

Advent 2009 A World In Waiting

Week One – A New City

Day Five – Who Dares

 

1st Thessalonians 3: 9-13

How can we thank God enough for you in return for

all the joy that we feel before our God because of you?

Night and day we pray most earnestly that we may see

you face to face and restore whatever is lacking in

your faith.

Now may our God and Father himself and our Lord

Jesus direct our way to you. And may the Lord make

you increase and abound in love for one another and

for all, just as we abound in love for you. And may he

so strengthen your hearts in holiness that you may be

blameless before our God and Father at the coming of

our Lord Jesus with all his saints.’

 

In an age of corruption in high places, it is refreshing to know that some individuals have been brave enough to blow the whistle. Sherron Watkins, an accountant working for Enron, first made her concerns known to the firm’s Chief Financial Officer and to the firm’s auditors, Arthur Andersen in 1996. She was not taken seriously. Five years later she wrote to Enron’s Chief Executive Officer and Chairman, Ken Lay, expressing the concern she and others in the company had about the company’s dealings and warning that the firm could ‘implode in a wave of accounting scandals.’ Five months later the letter – and Enron’s fraudulent activities – became public. Watkins was hailed as the ‘Enron whistle-blower’ and appeared on the cover of Time Magazine as ‘Person of the Week’.

 

Harry Markopolos was a fraud investigator. When he saw the way Bernard Madoff had been using ‘Ponzi’ schemes to defraud investors, he reported his concerns with the Securities and Exchange Commission. This was in 1999. No action was taken until December 2008 when Madoff himself confessed to fraud amounting to $50 billion, later found to be $65 billion. Markopolos accused the Securities and Exchange Commission of ‘financial illiteracy’ for failing to heed his warnings. He was awarded a silver whistle by the Boston Security Analysts Society.

 

Sadly, not all whistle-blowing stories have a happy ending. John Githongo, born in Britain, is a member of the Kenyan Kikuyu elite and was head of the Kenyan chapter of the global anti-corruption body Transparency International. When his people’s party was returned to power in 2002 he was appointed permanent secretary for ethics and governance. He knew that the attitude which went with the assumption of power in Kenya was known as ‘It’s Our Turn to Eat’ – a story told by Michela Wrong in the book by that title. But he was determined to change that. Githongo detailed the corruption and released his report in 2006. He became persona non grata in his own country.

 

Fraud, cheating and tax evasion are not found only in high places. They are pervasive and are experienced in our everyday lives. Which of us has not seen people boarding trains without paying full or any fare, or shoplifting, taking items from the workplace, or demanding to be paid in cash for their services so as to avoid taxes, etc. What do we do? Do we challenge them on the spot? What reaction would that get from them? Or do we blow the whistle? It is certainly true that we are increasingly being encouraged to blow the whistle. Private employers,

charities and government bodies all encourage whistle-blowing. The Government gives us a number to call if we suspect benefit fraud on the part of our neighbors. We are told what to do if we see dubious practices in our work-place. Some go so far as to offer positive rewards. The US Internal Revenue Service advertises a ‘Whistle-blower Informant Program’: ‘If the IRS uses information provided by the whistleblower, it can award the whistleblower up to 30 percent of the additional tax, penalty and other amounts it collects.’ That could be big money! There are also agencies which offer payment for whistleblowers to sell their story.

 

But it is not easy to be a whistleblower. First of all, we have to live with ourselves: how do we feel about scrutinizing our work-mates or neighbors or a member of our church for that matter? Are we traitors or heroes, informants or informers? Then there are real risks of incrimination. If our identity is found out – even though assurances have been given that it will not – we may find ourselves being shunned by colleagues and neighbors, besieged by the media, made the object of defamatory comments, taken to court, subjected to anonymous hate-mail and threats. Whistleblowing is a risky business.

 

Yet there may well be times when we come across behavior that is likely to cause serious damage to innocent people or to involve a risk to public health and safety. In some situations we simply cannot turn a blind eye and simply hope that the proper authorities will catch the offender in time. And if we know that calling it to the attention of the culprit will be worse than useless, we may indeed decide that it is time to blow the whistle. If we do, it’s important to know what help is available. First, whistleblowers have a degree of legal protection. A Public Interest Disclosure Act came into force in Great Britain on 2 July 1999. The information disclosed must be deemed to be in the public interest. What’s called a ‘qualifying disclosure’ covers matters such as the commission of a criminal offense, endangering of health and safety, damage to the environment. The disclosure can relate not only to damage that has already been done; it extends to damage which is culpably made likely to happen. The grounds of disclosure, therefore, are limited. So, too, are the contexts where this protection applies. The Act covers most workers in the public, private and voluntary sectors. But it does not apply to self-employed professionals, nor to volunteers (nor to charity trustees and charity volunteers), nor to police officers or the intelligence services. And the protection is also limited. The Act forbids employers subjecting the informant to victimization, unfair dismissal or any other ‘detriment’. This, of course, does not extend to the reactions and disapproval that may come from fellow workers. The current legal protection is a help in some cases but being a whistle-blower remains a risky business. So before taking the plunge, it would be wise to get advice from some of the helplines that exist..

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