whistleblowing
related
Guides:
censorship
& secrecy
Intellectual
Property
Publishing
related
Profiles:
Human Rights
Aust
Constitution
& Cyberspace
Defamation
|
This
page supplements the discussion
of whistle-blowing by highlighting particular cases.
They are of interest because they suggest some of the
social benefits, personal costs and institutional resistance
to whistleblowing.
 The
Stanley Adams case (Adams v Hoffmann-La Roche)
Executive Stanley Adams alerted the European Commission
to anti-competitive practices by Swiss-based pharmaceutical
giant Hoffmann-La Roche. The Commission fined Hoffmann
for abuse of its dominant position in the bulk vitamin
market but during antitrust procedings disclosed information
that enabled Hoffmann to identify Adams, who was consequently
arrested and convicted for unauthorised disclosure under
Swiss law. Adams successfully sought damages from the
Commission, which was held by the European Court to have
failed its obligation "not to disclose information
of the kind covered by the obligation of professional
secrecy, in particular information about undertakings,
their business relations or their cost components".
The case is discussed in Roche versus Adams (London:
Cape 1984) by Adams. In 1999 Roche was fined US$500 million
in the US for a repeat of its offence.
The
Pentagon Papers Case
US intelligence analyst Daniel Ellsberg
provided the New York Times and other newspapers with
access to a comprehensive study documenting the 'secret
history' of US military and political activity in South
East Asia. The case is discussed in David Rudenstine's
The Day the Presses Stopped: A History of The Pentagon
Papers Case (Berkeley: Uni of California Press 1996)
and Ellsberg's Secrets: A Memoir of Vietnam &
the Pentagon Papers (New York: Viking 2000).
The
Insider
Dr Jeffrey Wigand
disclosed questionable practice by US cigarette group
Brown & Williamson. The case is explored in Smokescreen:
The Truth behind the Tobacco Industry Cover-Up (Upper
Saddle River: Addison-Wesley 1996) by Philip Hilts and
The Cigarette Papers (Berkeley: Uni of California
Press 1996) by Stanton Glantz, online here.
It formed the basis of the Russel Crowe film The Insider.
Self-censorship by the US media in reporting Wigand's
whistleblowing is considered here.
Silkwood
and Kerr-McGee
Karen Silkwood gained attention for claims of malpractice
by nuclear fuels group Kerr-McGee before coming to what's
been portrayed in the Hollywood feature Silkwood as an
untimely end. There's an account of the case in Richard
Raschke's The Killing of Karen Silkwood: The Story
Behind The Kerr-McGee Plutonium Case (Boston: Houghton
Mifflin 1981)
Ted
Harris and Qintex
Australian property, retail and broadcasting conglomerate
Qintex
- fuelled by bank loans and its founder's ego - collapsed
in 1989 after Director Ted Harris alerted the national
companies regulator to concerns
that unauthorised payments of several million dollars
had been made to the chief executive's personal company.
Qintex features in Trevor Sykes' The Bold Riders:
Behind Australia's Corporate Collapses (North Sydney:
Allen & Unwin 1994).
The
Westpac Letters
Whistleblowing through disclosure of confidential internal
memoranda and correspondence from legal advisers revealed
that Partnership Pacific, a subsidiary of Australia's
second largest retail bank, had arguably misled some customers
and behaved improperly
to others.
The consequences of that impropriety included personal
bankruptcies and loss of family farms. Former Westpac
executive John McLennan faced substantial legal costs
(an Australian court ruled in favour of the bank regarding
copyright and confidentiality breaches); the damage to
the bank's reputation was intangible. It has been suggested
that perceived mishandling of public relations contributed
to the resignation of the Westpac CEO. The bank incurred
no government penalties but exposure of the documentation
in Parliament after suppression orders initially prevented
publication in the media appears to have led to better
treatment of some affected customers.
The Affair features in Edna Carew's Westpac: The Bank
that Broke the Bank (Sydney: Doubleday 1997), Dempsters's
Whistleblowers and Graham Hand's Naked Among
Cannibals: What Really Happens Inside Australian Banks
(St Leonards: Allen & Unwin 2001). Anne Lampe's 1997
ACIJ 'Westpac Letters' Symposium paper
offers a journalist's perspective.
Meili
and Holocaust Claims
In 1997 Union Bank of Switzerland night watchman Cristoph
Meili rescued Holocaust-related documents that were being
illegally shredded by the bank (in direct violation of
Swiss law for protection of such material). UBS, Switzerland's
largest bank, acknowledged that it had "made a deplorable
mistake" but fired Meili and had him arrested for
breaching bank secrecy legislation.
The case is discussed in Hitler's Silent Partners:
Swiss Banks, Nazi Gold & the Pursuit of Justice
(New York: Morrow 1997) by Isabel Vincent.
Wilkie,
Ponting, Tisdall, Vanunu and War
Defence analyst Andrew Wilkie resigned in 2003 from the
Australian Office of National Assessments in conjunction
with criticism of use of intelligence reports during military
action against the Hussein regime in Iraq. Resignation
in front of the spotlights - ideally followed-up by testimony
to a parliamentary or judicial inquiry (and a lucrative
publishing contract to offset the end of a career) - has
attracted those whistleblowers who haven't chosen to remain
under cover by leaking documents to the media or another
party.
Whistleblowing about war remains deeply contentious because
of disagreements about ethics and the interaction of free
speech with official
secrets legislation and media
privilege. Examples in the UK include senior civil
servant Clive Ponting and Sarah Tisdall; the latter received
a six-month jail sentence under the UK Official Secrets
Act after the Guardian disclosed that she
was its source of documents about cruise missile policy.
Mordecai Vanunu provided the London Sunday Times
with information in 1986 about alleged nuclear weapon
development activity at Israel's Dimona research facility,
subsequently being abstracted from Sydney and imprisoned
in Israel. An account is provided by Seymour Hersh's The
Samson Option: Israel, America & the Bomb (London:
Faber 1997).
Australian
Tobacco
Former WD & HO Wills company secretary and legal counsel
Frederick Gulson alleged in 2003 that the Australian cigarette
group had sanitised files through destruction of sensitive
documents in managing health litigation.
Sanitisation is discussed here
and in a 2003 speech by the Victorian government Solicitor-General
(PDF).
Konrad
and 'Shattered Windows'
Victoria Police officer Karl Konrad was ostracised by
colleagues and was sacked after alleging 'kick-back' payments
to police in 1995 for alerting window shutter companies
to vandalised windows.
Investigations in response to his claims resulted in 550
officers being charged with disciplinary offences: 107
resigned and 224 were demoted, transferred or fined.
Sherron
Watkins and Enron
Enron executive Watkins alerted CEO Kenneth Lay to large-scale
accounting irregularities in August 2001. She resigned
in November 2002 after inaction by Lay and other officers
and after "she had been demoted 33 floors from her
mahogany executive suite to a 'skanky office' with a rickety
metal desk and a pile of make-work projects". Enron
subsequently collapsed amid claims of regulatory indifference
and complicity by auditors.
Watkins co-authored Power Failure: The Inside Story
of How Enron's Culture of Greed Led to the Biggest Bankruptcy
in American History (New York: Doubleday 2003) with
Mimi Swartz; we've highlighted studies of Enron in our
discussion of the dot-com and telco bubbles.
Cynthia
Cooper and WorldCom
WorldCom VicePresident Cynthia Cooper, responsible for
performance evaluations and setting budget standards,
informed the Board's audit committee that WorldCom had
used deceptive bookkeeping to hide US$3.8 billion in losses
(subsequently assessed as over US$9 billion). Pointers
to studies of WorldCom feature in our discussion of the
dot-com and telco bubbles
One.Tel,
Xerox and Duke
Closer to home Paul Barry's Rich Kids: How the Murdochs
& Packers lost $950 million in One.Tel (Milsons
Point: Bantam 2002) highlights unsuccessful attempts by
an insider at the One.Tel telecommunications group to
point auditors in the right direction through anonymous
email messages. It has been suggested that problems reflected
a culture in which managers were under intense pressure
to "stretch" financial targets (and to massage
numbers within or outside the law) and where bad news
was either ignored or explicitly punished.
US executive Barron Stone alleged that Duke Energy group
fudged its accounting from 1998 to 2001 to receive substantial
benefits from US state governments. Stone alerted his
superiors in 1999 that the practice did not meet "generally
accepted accounting principles" but was told that
their decisions were final. In 2001 he anonymously alerted
state regulators and Duke senior executives. His identity
was apparently disclosed and he was transferred to the
Duke equivalent of Siberia.
Xerox Assistant Treasurer James Bingham was less lucky,
being who fired in 2000 after publicising creative accounting
that had boosted the group's reported earnings.
back to whistleblowing
(issues, law and protocols)
|
|
