Whistleblowing - Should it be encouraged?

An employee, Miss X, in the Accounting Department of a large company recently resigned.

During her 5 years she had built up a solid reputation in the business but Miss X was no longer willing to work in the Finance Department because of the atmosphere of fear and intimidation created by the Finance Director, a Mrs. Bennett. Matters came to a head when Miss X was asked to sign off on some doubtful invoices for work allegedly carried out by a company known to the Finance Director, Mrs. Bennett.

These invoices were for larger amounts than normal and came through on a far more frequent basis than usual. The total amount involved was £30,000. Because of her concern Miss X rang the supplier in question to query the invoices. The supplier denied any knowledge of the invoices. Furthermore, when she looked at them more closely Miss X noticed that although the name of the firm was the same as the one normally dealt with there was a different postal address.

Miss X raised her concerns about these invoices with her superior, Mrs. Bennett, who merely told her to pay them as soon as possible. Miss X refused to do this without an adequate explanation. Because of Miss X's fears of the consequences of not passing these invoices she decided that the easiest course was to resign. Miss X tendered her resignation to Mrs. Bennett. Miss X did not give any explanation for her resignation nor did Mrs. Bennett ask for one although Mrs. Bennett did offer to give Miss X a very good reference.

What happened next is that Miss X asked to see the Managing Director. The Managing Director asked Miss X to look into the matter much more closely and to check the address on the invoices. This Miss X did and traced them to Mrs. Bennett's sister-in-law. The Managing Director requested Miss X to set out the whole of the position in writing. The Managing Director asked Miss X to stay with the company and assured her the company would provide her with adequate protection. This Miss X reluctantly decided to do.

Without going into all the details, the story eventually unravels into a major case of fraud masterminded by the Finance Director that involved in excess of one million pounds. Also, the size of the fraud and the level at which it occurred made the situation potentially very embarrassing to the Managing Director if it were to become public and potentially harmful to the reputation of the company, too.

This case study was focal point of a wide ranging discussion held at the Serious Fraud Office led by Mrs Rosiland Wright, the Director. Held under Chatham House Rules and hosted by JABE, the seminar included leading personalities in the field like Guy Dehn from Public Concern at Work and Dayan Berger, a renowned expert on Jewish ethics. The Seminar covered the wide range of issues thrown up by whistleblowing and the difficult ethical dilemmas faced by whistleblowers and the companies and institutions where they work.

Some of the Dilemmas:

  • How do you encourage people to point out serious wrongs while maintaining a sense of camaraderie and trust?
  • How does a company create mechanisms that allow people to come forward?
  • When Dr David Edwards a GP from Merseyside blew the whistle on his senior partner, a campaign was launched discrediting him and his concerns. Dr Edwards left the practice with damaged morale, a huge bank loan and half a practice.
  • Can we overcome the climate of silence that is often the product of autocratic management? BCCI, the largest bank collapse in history, where there were numerous findings of fraud against much of the top management, the culture and fear of reprisals prevented employees from speaking out.
  • What about client confidentiality and other contractual relationships? Auditors have argued for years that their relationship with the firms they act for prevent them from disclosing illegal or unethical behaviour to regulators or law enforcement agencies.
  • Is all wrongdoing equally reportable? What is sufficiently serious to demand a response? Who is to decide?
    Sarah Tisdall leaked two confidential documents concerning missiles at Greenham Common to the Guardian Newspaper. She felt that untrue statements had been publicised concerning the deployment of missiles in the UK. She was charged under the Official Secrets Act and sentenced to six months imprisonment.
  • Employees often feel threatened with being ostracised by their fellow employees if they blow the whistle on wrongdoing.
    Dr Stephen Bolsin, an anaesthetist who raised legitimate concerns about paediatric surgery at the Bristol Royal Infirmary, found he was ostracised by his colleagues and had to emigrate and start again abroad.
  • How does one prevent the settling of old scores through using a whistleblower's cloak?
  • What happens to the whistleblower if the company decides to do nothing?
    Before the sinking of the Herald of Free Enterprise, killing 193, staff had warned management repeatedly of the dangers of sailing with the bow doors opened, but these warnings had been disregarded.

The legal background today

In response to these problems and other issues involved in whistleblowing, the participants were provided with some of the legal background and a publication from Public Concern at Work, a charity dedicated to promoting good practice and the responsibility of workers to raise concerns, on whistleblowing. (Available from JABE on request)

In fact, the new Public Interest Disclosure Act, which has just come into effect, has been termed as " the most far reaching whistleblower law in the world, " It provides people in the workplace with full protection from victimisation when they raise genuine concerns of malpractice. Disclosures to an employer, to regulatory and statutory bodies and even to press on rare occasions are protected.

The role of Public Concern at Work is in ensuring that potential whistle-blowers consider all the possible courses of action and their consequences and only then make an informed choice about what to do. The first question they ask of a potential whistleblower is " What do you want out of this? "

These new laws and the role of Public Concern at Work are a reflection of the changing cultural climate that has strengthened the hand of whistle-blowers and given them at least a grudging acceptance among those who maintain the standards of public life.

The Jewish View

At the seminar a number of Jewish Sources were introduced into the discussion and applied to the various case studies that had been presented.

Dayan Berger has presented five basic Jewish criteria for whistle blowing. (See the box on this page for these.) Uniquely, major emphasis is laid down in Jewish sources that the whistle-blower not be motivated simply out of spite or other ulterior motive.

The purpose must be clearly to prevent financial loss to the intended victim rather than damage the miscreant.

In principle a general prohibition of the spreading of gossip and slander exists. We are told in Vayikra " do not go around as a gossiper among your people. "

At the same time, if an individual who can prevent wrongdoing but does not do so, according to Jewish tradition he or she shares in the responsibility for that act - even if in secular law there was no duty of disclosure. Judaism in concerned not only to avoid the harmful effects of fraudulent behaviour to the victim of a crime, it is also concerned with the effects of crime on perpetrator of the fraud and the consequences to them of becoming involved with immoral activities.

Nevertheless, a person is not required to undergo financial loss to do so. Of course to save life and limb the situation may differ.

Another important point discussed was to what extent did a potential whistleblower have to put their own income at risk by his or her concern for others.

Remarkably, much of the Jewish criteria are the same as those employed by Public Concern at Work - searching to ascertain the underlying motives of the whistle-blower.

In Summary

Whistle blowing is an area fraught with concerns. Concern about the whistle-blower, concern about a potential victim or the public, concern about the suspected perpetrator of a crime. In deciding to bring light to an area of corporate or public policy or deeds that would other wise remain closed, the whistle-blower must weigh up his or her actions and never act in haste.

While the climate has improved for those who wish to help out, it remains problematic and the underlying motives must be pure. Even then, the ramifications of whistle-blowing often spin rapidly out of control of the whistle-blower. The criteria laid down by Jewish tradition will help clarify the situation and the motivations. While no one wishes to live in a society where spying and mistrust is pervasive, nevertheless, we rely on those who put the benefit of the wider society over their immediate needs, for us to survive.