When the whistle blows

By Joanna Gualtieri

The introduction of the long-awaited whistle-blower protection act in Canada is just the first step in restoring integrity and trust

For government and corporate bosses, March 2004 erupted with warnings. As the government sponsorship scandal unfolded, it appeared the cat and mouse game between cabinet ministers and their deputies to dodge accountability was finally "game over." The scene was not much better on the corporate front. As stories of one derelict company after another inundated daily papers and nightly newscasts, the world witnessed the handcuffing of Bernie Ebbers, the former CEO of WorldCom, who surely lamented his failure to exercise greater due diligence and stewardship in the oversight of his company. But Ebbers was not alone, as bosses, implicated in scandal after scandal, were left reflecting on the heavy, sometimes fatal, price paid for stonewalling whistle-blowers — those conscientious employees who had attempted to sound an early alarm on institutional wrongdoing.

Public revelations of corporate and government malfeasance have spawned an industry of consultants and speakers preaching to the boardrooms on the need for organizational integrity. Although a valid and necessary first step in fostering an ethos of good governance, trust and accountability, the pervasiveness of institutional crimes and meltdowns have compelled us to move beyond discussion and lock in action plans for reform. The decline in citizen participation in civic matters and an alarming distrust in government and industry has only reinforced the need for change.

A recent Leger poll indicated that approximately 70% of Canadians believe their federal and provincial political systems are highly or somewhat corrupt, while 45% reported having a more negative view of the business community in 2002, with 66% believing that the accounting and stock-related scandals have resulted from a widespread problem whereby many business executives are exploiting a failing system. The trickle-down effect of this growing cynicism and disaffection is all around us: unstable stock markets, litigation and criminal prosecutions of corporate executives, record low voter turnout, disinterest and non-participation in public discourse and debate, and a cadre of leaders who are complacent and self-preoccupied as a result of the absence of public interest and scrutiny. This is not a solid foundation for a healthy democracy or robust economy.

WHISTLE-BLOWER BILL OF RIGHTS* The right to communicate within the profession, on the job and with colleagues. This basic principle, if respected, would prevent the need for whistle-blowing. The right to be part of an institution whose leadership makes integrity the cornerstone of professional expectations. Unless matched by deeds, rhetorical commitments in speeches and memoranda can foster cynicism and be counterproductive. The right to due process. Those who witness wrongdoing and allege reprisal must have a fair hearing to defend themselves against harassment. The right to information. Sufficient information should be available on the record for whistle-blower quality control to permit responsible dissent while also holding accountable those who make false reports. The right to make a difference by submitting misconduct concerns for review to an independent forum that is free from conflict of interest. The right to an expedited, timely decision when exercising legal rights. The right to interim relief while legal proceedings run their course. The right to sanctions against those who retaliate. The right to be "made whole" through relief for the tangible and intangible wounds of retaliation. The right to vindication. This permits public recognition for those who make significant contributions to integrity. * This bill of rights was drafted by Tom Devine, legal director with the Government Accountability Project, the world's preeminent whistle-blower protection organization based in Washington, DC

The tragic events of September 11 and the Enron debacle forced the US to confront fears and doubts about its security and the integrity of its corporate economy. In the aftermath of these events, 2002 was an extraordinary year for whistle-blowers in the US culminating in three female whistle-blowers gracing the cover of Time magazine as Persons of the Year. Sadly, in Canada, recognition of the role and value of whistle-blowers has been slower, but the mood is increasingly less tolerant.

Indeed, the past decade has produced a slow but steady evolution in our understanding of what whistle-blowers are and the role they play in cleansing institutions of rot and corruption. We have learned that whistle-blowers are often the best qualified, the brightest, as well as those employees most committed to the longevity of the organization. It is this loyalty that in fact causes them to risk everything in speaking out. And speak out they have.

A review of major historical precedents demonstrates the power that one individual can have in exposing corruption and wrongdoing that endangers the public. Daniel Ellsberg whose disclosures to The Washington Post and The New York Times of the lies and deceptions perpetrated by the US government in order to justify its role in the Vietnam War led to the beginning of the end of the brutal conflict. Jeffrey Wigand embodied courage and conviction when he disclosed on 60 Minutes the practice of nicotine spiking of cigarettes. His revelations lead to punitive damages in the amount of US$350 billion against the major tobacco companies for their deceptions.

But the single biggest catalyst for change was the 1986 explosion of the Challenger, witnessed by millions. When it was subsequently revealed that three engineers had cautioned against the launch because of faulty seals, only to be overruled by NASA, the collective American conscience was awakened. As a result, in 1989 Congress passed unanimously the Whistleblower Protection Act, providing legal protection for federal whistle-blowers.

The '90s witnessed increased employee activism as workers risked much to reveal tainted food, major government contracting fraud and potential environmental disasters. The nuclear industry came under intense scrutiny as nuclear plants that were 87% and 92% completed were ordered halted because of shoddy workmanship. Increasingly, the common law duty of loyalty to the employer that had traditionally secured employee silence or simply forced an employee to quit was successfully challenged. The notion of ultimate duty to the public good replaced unquestioning loyalty and sycophancy to one's boss. Fear and intimidation, which for decades had secured acquiescence among compliant workforces, was being challenged in fa- vour of greater transparency and workers' right to speak out.

The ultimate days of reckoning occurred in the aftermath of the multi-billion dollar collapses in 2001 of corporate giants Enron and WorldCom. With surprising alacrity, US Congress in July 2002 passed the Sarbanes-Oxley Act, a comprehensive law implementing harsh criminal sanctions for corporate wrongdoers of publicly traded companies. But more important, as a result of the efforts of the Government Accountability Project, the world's leading advocacy group supporting whistle-blowers and good governance, Sarbanes-Oxley provides strong statutory protection for employees who blow the whistle on company misconduct that threatens shareholders' investments or violates federal fraud laws and includes the right to a trial by jury.

Canada doesn't have a Sarbanes-Oxley. But recent events have provoked an outcry of indignation from the public and forced our politicians to take action. On March 22, Paul Martin's government introduced Bill C-25 — the Public Servants Disclosure Protection Act — purporting to deliver on his promise to protect whistleblowers. But criticism of the bill has been widespread and in its presentation to the Parliamentary Committee reviewing the legislation, the Federal Accountability Initiative for Reform declared it to be a Trojan Horse creating an illusion of being something other than it really is.

Far from empowering workers, C-25 imposes a restrictive regime on occupational dissent and reinforces a tolerance for arbitrary managerial manoeuvres. Rather than promoting transparency, it values workplace secrecy, the very secrecy that enables sinecures of power to effect betrayals on the public trust. The good news is that C-25 died with the election call. Hopefully the new government will deliver a real whistle-blower protection act, not simply a cynical, politically expedient stopgap.

Nonetheless, the introduction of a law is just a first step. Leading theorists and policy-makers must continue to ask hard questions about the state of our parliamentary democracy and Canada's ability to compete in a global market. Likewise, in a climate of greater corporate and government scrutiny, risk managers are having to examine and redefine traditional concepts of risk and risk-tolerance. And while strengthened government and corporate accountability standards and rules are a sine qua non of the current reform, there is a growing acknowledgement that whistle-blowers, as eyewitnesses to the birthplace of scandals, are essential to bridge the secrecy gap in which corruption and wrongdoing flourish.

Whistle-blowers are employees who exercise freedom of expression rights to challenge institutional abuses of power or illegality that harm or threaten the public interest. They represent the highest ideals of public service and epitomize the golden standard of loyalty to the long-term interests and sustainability of an organization. Studies have demonstrated that whistle-blowers are not the malcontents their detractors allege, but are, in fact, the employees an organization would want — bright, qualified and loyal. As US Defense whistle-blower Ernie Fitzgerald put it, their only crime is that of "committing the truth."

So why then are there so few whistle-blowers or truth-tellers? Because speaking "truth to power" often carries devastating consequences. Every year thousands of employees witness workplace wrongdoing but only a fraction speak out. Most are simply unable to face the consequences and risks associated with becoming an ethical resister while others believe their disclosures will change nothing. So daunting an endeavour is whistle-blowing that as one US whistle-blower put it: "If you have God, the law, the press and the facts on your side, you have a 50% chance of defeating the bureaucracy."

This climate of fear and intimidation leaves grave incidences of unethical and illegal workplace conduct unchallenged year after year, putting organizations and the public at real risk for future catastrophes. Instead of pursuing investigation and/or corrective action, studies and testimony from whistle-blowers have confirmed the practice of shooting the messenger and covering up the wrongdoing. Rather than being acknowledged for their contributions, too often whistle-blowers face harassment, intimidation, demotion, deployment, dismissal, blacklisting, humiliation and the complete paralysis of their career. Polls reveal a dangerously ill Canadian federal public service with one in five workers reporting being the victim of harassment while workplace stress has been cited for wreaking havoc on productivity and profit margins. The cost associated with stress-related or burnout leave amounts to billions of dollars annually. Toxic workplaces are the modern day plague and, as a result, the public is being betrayed. But to understand the true impact of failing to provide protection and safe channels for employees who report wrongdoing, one must move from the theoretical to real life.

Consider the thousands who would have been spared an agonizing and prolonged death if only someone had blown the whistle on Canada's tainted blood. The ex post facto Krever Inquiry, although helpful in allowing Canadians to follow the sequence of events that lead to the tragedy, was of little value to those consigned to an early death. If RCMP officers had been able to speak truth to power we might have learned just what role then prime minister Jean Chrétien and foreign affairs minister Lloyd Axworthy played in protecting Suharto at the APEC conference while the civil rights of peacefully protesting students were drenched in pepper spray.

Surely if employees had been able to speak out, we would know how the gun registry became a black hole of squandered public monies and we would have learned the genesis of the boondoggle at HRDC. We likely would have averted the $60-million Somalia enquiry and lives would have been saved in Walkerton, Ont. It is entirely disingenuous to think there were not hun-dreds, if not thousands, of public servants wanting to bear witness but were afraid, or complacent, unable to contemplate committing the truth and risking their livelihood and their personal well-being.

However, the time for profound attitudinal, legal and policy change is here. Although critics lament that it is not moral rectitude but political expediency that has driven the change, managing major enterprises is rarely guided by utopic aspirations of morality as first principle. In the real world, this opportunity for substantive reform must not be lost.

Whistle-blowers are not going away and therefore the duty for government and the private sector to implement a legitimate disclosure framework is essential. By doing nothing, even the best leaders run the risk of being blamed for the consequences of misdeeds of which they were not even informed. As accountability standards are tightened up and while organizational bureaucracies continue to grow in size and complexity, top executives may be many times removed from lower level critical decisions but nonetheless accountable for those decisions. Disclosure therefore becomes the cornerstone of maintaining integrity and good governance and reduces the possibility of being blindsided by risks taken without one's knowledge. Although Enron was too far gone to be saved by the revelations of whistle-blower Sherron Watkins, the consequences for ignoring the Watkinses of the world are increasingly a risk that organizations are simply not in a position to leverage.

Whistle-blower protection is not a panacea. It will never be a substitute for good leadership. But good leadership must embrace it as a legitimate partner. Justice Brandeis of the US Supreme Court once wrote: "Sunlight is the best disinfectant." With the expansion of worldwide communications through the Internet, it will be increasingly difficult for bosses to maintain the secrecy gap in which corruption flourishes. With the increasing vigilance being exercised by regulators, auditors, lawyers and boards of directors, the requirement to establish a legitimate framework that provides safe channels for good faith disclosure of information that threatens the public interest and the organization will be a minimum requirement. The ever-increasing calls for statutory protection for whistle-blowers that provides strong locked-in remedial rights for any damages suffered as a consequence of disclosing wrongdoing can no longer be left unheard. The long march toward simply acknowledging that whistle-blowing is in- dispensable in maintaining institutional in- tegrity is ending its journey. The new journey starts with our collective commitment to implement legitimate due process and procedures that truly protect whistle-blowers, who through their individual acts of conscience serve the public interest and promote public trust.

Joanna Gualtieri is a lawyer and founder of Federal Accountability Initiative for Reform, Canada's only whistle-blower rights organization: fair.Canada@sympatico.ca

Technical editor: Peter Jackson, CA, partner with Peter Jackson and Associates in Toronto