Monday, November 21, 2016
Whistleblowers: Secret heroes of transparency
THERE was a time in the recent past when it was open season on whistleblowers. This was known only too well by the woman who relentlessly attempted to highlight the ‘Grace’ foster abuse scandal in the South East.
Speaking under the privilege of the Dáil on November 2, Fine Gael’s John Deasy said he had information that there were attempts to sack the whistleblower in that case in 2011. Deasy said that evidence against her was “fabricated” and the attempt died in the end.
The claims have not been tested, but are likely to feature in the inquiry that will now be conducted into the scandal.
Others who have blown the whistle on malpractice or criminality have lived with the fear of similar consequences. In 2013, this newspaper revealed the attempts to discipline garda whistleblower Maurice McCabe for the loss of a computer seized from a priest who was convicted of child abuse.
The O’Higgins Report detailed how Sergeant McCabe was entirely innocent and that it was understandable that he felt he was being targeted because of his revelations about garda malpractice.
“Whistleblower reprisal” as it is known is a common occurrence whenever somebody breaks ranks to highlight abuse or malpractice of one sort or another. It was with that in mind that this country finally brought in a law to protect whistleblowers. The Protected Disclosure Act 2014 is the first time that any such law was enacted in this country.
The law brought Ireland into line with many other western jurisdictions which have long recognised the requirement to protect those who blow the whistle.
As with much else in public life, this country was slow in getting off the mark. By the late 1990s, the political and business world had been hit by a series of scandals over the previous decade. From banking to the semi state sector, and in the late ’90s, revelations of corruption in the political system, it became obvious that the legislative framework to tackle these areas was woefully inadequate.
The importance of the whistleblower who feels compelled to point out wrongdoing was recognised. In the Dáil, Pat Rabbitte, then an opposition Labour party TD, tabled a private members’ bill entitled the Whistleblower’s Protection Bill.
He told the Dáil that legislation, if enacted, “would radically challenge the culture of secrecy that surrounds Irish business and public life” and that employees, who make disclosures in good faith, “will be protected by the law from civil liability and discrimination in their employment, up to and including dismissal”.
The government, through its junior minister Tom Kitt, indicated that it would not oppose the bill. Kitt did warn that caution would have to be applied to ensure any such law did not become a “crank’s charter”.
So everybody was agreed on the urgent need to protect whistleblowers highlighting wrongdoing. And then nothing happened. Despite its stated willingness to co-operate, the Fianna Fáil-led government kept finding reasons not to proceed with the legislation.
This went on for seven years until 2006 when the same government — re-elected four years previously — finally admitted it was not going ahead with it.
Then Enterprise Minster Micheál Martin said that, instead, the government would favour a “sectoral” approach to legislation for highlighting wrongdoing. He said there were “exceptional legal difficulties” with the bill. These difficulties were never revealed. The major difficulty was the political will was not present in the government to go ahead with it. When the time eventually came, the legal hurdles were cleared with ease.
Rabbitte, still toiling on the opposition benches, described the withdrawal of the bill as “shameful though not unexpected”. He suggested that the real reason the government “reversed engines and decided not to proceed with important legislation” was that it had come under pressure from multi- nationals, who had had a taste of having to comply with similar, or even stronger, legislation in the USA.
“If they can persuade the government to impose much poorer standards of corporate governance than they are used to elsewhere, they would be foolish not to throw their weight around,” Rabbitte said.
Whether or not the Labour TD’s allegation was accurate, the following year an example was provided of how Irish companies regarded the imposition of whistleblowing legislation.
The Company Law Reform Group was, at the time, charged with reforming company law to bring it up to date. Submissions from the trade union movement and the office of the director of Corporate Enforcement to the group pointed out the importance of, including in its review, proposals to include protection for whistleblowers. One reason forwarded for the requirement for legislation was that it would enhance corporate governance, particularly in the eyes of investors. The group, which was dominated by corporate interests, simply couldn’t see why any such legislation might be required.
“One cannot say that there is any evidence of endemic failure in relation to corporate governance, or its enforcement in Ireland, that negatively affects the investment climate and which requires enhanced “whistleblowing provisions”.
Within a year, the whole world could see that such a statement was a candidate for bad joke of the decade. Corporate governance, particularly in banking, was shown to be nothing short of appalling. One might well speculate that had proper whistleblowing legislation been in place during the years of bubble and bust, more individuals may have been emboldened to come forward and reveal what exactly had been going on.
While overarching legislation was sadly missing, the decision to leave such matters to sectoral interests provided some interesting results. There was provision and protection for whistleblowers in areas like social services and even the wider public service. The gardaí were covered through the Garda Síochána Act 2005, which was supported by regulations two years later.
This was as a direct result of the Morris Tribunal reports into garda malpractice in Donegal. Former judge Frederick Morris found that had some members of the force been confident enough to speak up about wrongdoing early on, much of the problems could have been avoided.
The result was a system of whistleblowing within the force in which a member could go to an outside agent, the “confidential recipient” who would then bring the concerns anonymously to the commisssioner’s office to be addressed.
In theory, the system looked good, but it didn’t work properly in practice. Coincidentally, the Protected Disclosure Act (PDA) was going through the Dáil when the controversy surrounding Maurice McCabe’s revelations were rocking the gardaí and the whole political system in 2014.
Garda Sergeant Maurice McCabe, who found himself ostracised once he tried to reveal some of the practices in the force.
So how good is Irish legislation in protecting whistleblowers? One of the advantages of coming late to the table with legislation was that the Irish lawmakers could pick and choose the best aspects in law in other countries.
Thus the PDA here is regarded as being one of the strongest in western Europe. It has drawn from the better features of laws in the UK, New Zealand and South Africa, providing protection for workers across the public, private and voluntary sectors. (Interestingly, the term ‘whistleblower’ is not used in the legislation, with the emphasis being on the information rather than the individual divulging it).
The main point of the PDA is to provide protection against formal or informal sanctions against the whistleblower.
For instance, if there is an attempt to sack a whistlebower, he or she can fast-track reinstatement without having to wait for up to two years for a hearing in the Employment Appeals Tribunal or the High Court.
The whistleblower also has recourse to the Work Relations Commission if he or she believes that they have been sanctioned as a result of divulging wrongdoing.
A worker who makes a disclosure does not have to be an employee. For instance, most employees don’t enjoy protection from dismissal until they have worked for 12 months with a company. The worker who makes a disclosure is covered in that regard from day one of their employment.
Additional protection is provided under section 13 of the act for persons who suffer as a result of a protected disclosure, even though they themselves were not responsible for the disclosure. This could occur, for example, if the spouse, partner or close friend of a whistleblower working for the same or a related organisation is targeted because of the disclosure.
The act states that that the kind of “detriment” alleged in this regard includes “coercion, intimidation or harassment; discrimination, disadvantage or adverse treatment in relation to employment (or prospective employment); injury, damage or loss and threat of reprisal”.
According to John Devitt, chief executive of Transparency International Ireland, the act has many strengths that do not feature in corresponding legislation in other countries.
“It does provide some assurance or safety net for the first time for workers across the public and private who disclose wrongdoing,” he says.
This is not the case in many countries where whistleblowing legislation is confined to various sectors.
As of yet, it is probably too easy to say how successful the PDA is as it has not been tested in the courts because so few cases have been brought.
The nature of whistleblowing is such that instances that actually go as far as the courts are rare, and it could be many years before definitive conclusions can be drawn.
However, there are still weaknesses in the Irish legislation, according to Devitt.
“One of the issues we’ve highlighted in the past was the need to protect people who report wrongdoing that doesn’t necessarily amount to criminal offence or other catagories laid out in the legislation,” he says.
“A lot of employees are subjected to a code of conduct, they don’t have recourse to the law if they report a breach of professional code because professional or corporate codes of conduct don’t have the same standing in legislation.
“We have encountered cases where people sought to bring attention to a code of conduct or a conflict of interest, but might not be protected.”
One other feature of the legislation is that it does not cover volunteers in the same manner as it does people with employment contracts.
John Deasy of Fine Gael, who has been at the forefront of highlighting the efforts of a whistleblower in the “Grace” foster abuse case.
How other countries respond to disclosures of wrongdoing
The law in the UK dates from 1998 with the enactment of the Public Interest Disclosures Act.
Similar to this country, the legislation was brought in following a series of scandals. These incidents were in the financial services sector, primarily, but also included a number of cases in construction, where health and safety breaches were uncovered.
A theme running through all these instances at the time was that the worst could have been avoided if somebody junior had blown the whistle early on.
The Public Disclosure Act is primarily concerned with protection for the individual who highlights the wrongdoing.
Prior to 1998, anybody doing so could be fired without any recourse apart from an application to the UK employment appeal tribunal. The new act ensured that the whistleblower would be protected from that fate, or from suffering any career impact such as a reduction of wages or salaries, or a block on promotion.
The disclosure being made must be one in which the individual “reasonably believes” that a criminal offence, a failure to comply with legal obligations, a miscarriage of justice, danger to the health and safety of an employee, or damage to the environment has occurred.
If that bar is crossed, then the individual can make the disclosure to their employer or a “prescribed person”. The latter includes the Health And Safety Executive, the Data Protection Registrar, the Certification offices and the Environmental Agency.
Disclosures can also be made directly to the Secretary of State for Trade and Industry.
So far, the law has appeared to have worked reasonably well. One thing it did prompt employers to do was to set up their own internal mechanisms to deal with whistleblower complaints in a proper manner.
However, surveys suggest that less than 40% of companies have such a system in place.
Critics say that provision for setting up internal systems should be included in the legislation.
One other criticism of the Public Disclosures Act is that it does not protect against ‘blacklisting’. If an individual has made a disclosure he can still be blacklisted if applying for another job. Attacking this problem would create some difficulties as to the capacity to prove that blacklisting is occurring.
While whistleblowers are often subjected to some form of reprisal, the USA has long recognised that in order to balance the risks of doing so, a reward system should be in place.
The first time this was tried was under the False Claims Act in 1986. This law was designed to detect and prevent false claims against the federal government, particularly in relation to defence contracts and healthcare programmes.
The act made allowance for “non discretionary awards to qualified whistleblowers”. The provision appears to have been a success, as the law is credicted with ensuring that more than $50 billion in civil settlements and criminal fines has been recouped in cases involving fraud against the federal government.
This was foremost in the minds of lawmakers when it came to introducing strict consumer protection following the financial meltdown in 2008.
The Dodd Frank Act was proposed by congressman Barney Frank and former senator Chris Dodd, who had been chair of the Senate Banking Committee in response to the financial crisis.
President Obama credited the act with effecting a “sweeping overhaul of the United States regulatory system, a transformation on a scale not seen since the reform that followed the Great Depression”.
In terms of whistleblowing Dodd-Frank made provision that anybody blowing the whistle on financial malpractice was entitled to between 10% and 30% of any monies recovered in excess of $1 million.
The criteria applied to examine whether any individual would qualify for a pay-out includes: “the significance of the information; the degree of assistance provided by the whistleblower; and the extent to which the government wants to deter the violations in question”.
Even at the lowest end of the scale, this system ensures that a whistleblower whose information results in a recovery of $1 million for the federal government will receive a reward of not less than $100,000.
That money, however, is small potatoes compared to some of the awards that have been made. In September 2014, the Security and Exchange Commission awarded a whistleblower $30 million in one case.
At the time, the chief of the SEC’s Office of the Whistleblower, Sean McKessy, said that the award showed that his employer meant business.
“This award of more than $30 million shows the international breadth of our whistleblower programme as we effectively utilise valuable tips from anyone, anywhere to bring wrongdoers to justice,” he said.
“Whistleblowers from all over the world should feel similarly incentivised to come forward with credible information about potential violations of the US securities law.”
The mammoth award was not an isolated case. In 2015, the same programme awarded $14 million to a whistleblower in October 2013 and $17 million in another case last August.
Another aspect to legislation in the USA is the obligation of corporations to establish procedures to permit anonymous reporting by employees. The Sarvanes-Oxley Act provides for this measure specifying that the audit committee of companies should ensure that such procedures are in place.
There are federal laws such as the Public Interest Disclosure Act 2013, but that only covers “public officials, Commonwealth contractors and their employees reporting a broad range of conduct”.
Most of the laws cover the disclosure of matters of public interest, but the same protection is not present for those in the private sector making disclosures. The other outstanding feature is the patchwork of laws that apply to the different states in the country.
For instance, New South Wales whistleblower protection is governed by the “Protected Disclosures Act 1994 and covers only “public officers disclosing public sector wrongdoing”. The same category of potential whistleblowers is included in the law governing the Northern Territory, even though the specific legislation in that state is the “Public Interest Disclosures Act 2008.”
The other states are governed by a whole series of other laws dating between 1993 and 2013. All of these concern disclosures of public interest matters.
The private sector is governed by legislation dating from 2001, the Corporations Act. This makes provision for whistleblowers to be drawn from “company officers, employees or contractors disclosing company contravention of the Corporations legislation”.
In a report compiled by Transparency International in 2014, it was pointed out that there are many inconsistencies between the various protected disclosures laws.
“There remains significant dufferences between jurisdictions. For example, while the definitions of reportable wrongdoing and who may be covered, are very comprehensive under the federal Public Interest Disclosure Act 2013, whistleblower reports about wrongdoing by members of parliament, ministerial staff or the judiciary are not protected.
“By contrast, under Australian state whistleblowering legislation, reporting of wrongdoing committed by all public officials (including politicians and judicial members) is typically protected.”
Major struggle to change the culture of whistleblowing
Al Pacino as New York police whistleblower Frank Serpico.
ON April 24, 1970, Frank Serpico gave evidence to the Knapp Commission, an inquiry set up to investigate widespread police corruption in New York. Serpico had been dogged and persistent in exposing the corruption that saw numerous officers taking bribes and pay-offs in the course of their work.
Speaking at the commission, Serpico said that “the atmosphere does not yet exist in which honest police officers can act without fear of ridicule or reprisal from fellow officers”.
Some saw Serpico’s role in exposing the corruption — later immortalised in the eponymous movie starring Al Pacino — as heralding a breakthrough in the treatment of whistleblowers. Unfortunately, that was to prove not to be the case.
Down through the decades since then, whistleblowers have been subject to reprisal of one sort or another once they decided to stick their heads above the parapet.
There have been numerous examples. Tom Clonan, the former army officer who spoke out about sexism and bullying in the forces, has written extensively about the reprisal he faced. In the world of business, a number of people in financial services who spoke out were subjected to isolation culminating in departure from the sector. A similar scenario exists in areas of the public service, recently illustrated by the allegations surrounding the public servant who highlighted the “Grace” case.
Down through the years individual sectors attempted, to a greater or lesser degree, to set up systems to allow for whistleblowing. Much of it was window dressing.
An Garda Siochana, for example, purported to set up a charter for whistleblowers in the wake of the findings of the Morris Tribunal which examined malpractice in the Donegal area.
Out of that came the charter that was published internally in 2009. It stated: “The aim of this charter is to create an environment in which sworn members and civilian employees are encouraged to report incidents of corruption or malpractice.”
The aim, while laudable, is all very well, but subsequent events in the force have shown that it can be a cold house for anybody who highlights malpractice. The best known example of a garda who stuck his head about the parapet in recent times was Sgt Maurice McCabe. He was subjected to being ridiculed as a “rat”, having intimidating slogans painted on garda property and believes he was targeted with a disciplinary inquiry, which ultimately found him innocent, but dragged on through two stress-filled years.
The Protected Disclosure Act was designed to ensure that any such whistleblower will be protected from that kind of reprisal. However, there is only so far the law can go. Changing the law is a cakewalk compared to attempting to change a culture.
To that end, Transparency International recently published the results of a survey into how the law has been operating since it was brought in two years ago. The survey found most employees were in favour of the law, but that most employers have no procedures in place to channel reports of wrongdoing from staff or protect those who speak out. More than nine out of 10 employers said it was in the interests of their organisation or industry sector for people to speak out. However, only 79% said they would consider hiring somebody who had blown the whistle in a previous job.
A certain section of employers believe that speaking out is good when it occurs elsewhere. And only 64% said they would encourage an employee to report wrongdoing when the disclosure might harm the company or organisation. Again, it would seem, a minority of employers believe wrongdoing is something that happens elsewhere and if it rears its head on their patch it’s a minor matter.
In terms of awareness of the PDA, only 68% of employers are aware of it, and the vast majority of them are not aware of specific provisions. Fifty five per cent of respondents did not know that the law allows a worker to seek financial compensation if they have been penalised for speaking out. Only half were aware that an employee who speaks out can now seek a court order to prevent their dismissal if they believe it is being done on foot of speaking out.
At the publication of the survey in September, the minister for public expenditure, Pascal Donohoe said it was encouraging that employers had a generally positive outlook on whistleblowing. “Nevertheless, these results suggest that much more needs to be done to raise awareness of the Protected Disclosures Act and to ensure that organisations have measures in place to act on reports from their staff and make sure that whistleblowers don’t suffer as a result of their disclosures.”
Of course he is correct. The government can only do so much by bringing in legislation, which, while displaying some flaws, can stand beside most similar laws in the western world.
However the government can also set the tone of ensuring that anybody who does speak out will be protected and encouraged. There is little sign yet that such an attitude is widespread in the upper echelons of government or the wider employment sectors.