Whistleblowing has a long and respected tradition in the United States. In more recent times, whistleblowing and its protections have been part of several legislative schemes, including, for example, the creation in the Dodd-Frank Act of the SEC Whistleblower Program. The recent whistleblower complaint about President Trump’s July 2019 phone call with Volodymyr Zelensky, the President of Ukraine, underscores the continued important role of whistleblowing in the our political and business culture. As the events surrounding the recent whistleblowing complaint also show, whistleblowing is often regarded as a provocative act, and that, at a minimum, whistleblowing can be highly divisive.
A recently published book, “Crisis of Conscience: Whistleblowing in the Age of Fraud,” written by journalist Tom Mueller, takes a detailed look at the role of whistleblowing in our culture, and the ways in which, despite all of the surrounding controversy, whistleblowing remains an indispensable part of maintaining order and enforcing our values and expectations.
Mueller begins his book with several examples of whistleblowing from earlier times, including a whistleblowing incident in which abuses were alleged against a U.S. military official in our country’s earliest days. After an interesting account of a whistleblower who raised allegations of payoffs and corruption involving a major pharmaceutical company, Mueller then reviews some higher profile examples of whistleblowing from the recent past, including the story of Ernest Fitzgerald, who in the late 60s and early 70s famously blew the whistle on egregious cost overruns in the Lockheed C-5 cargo plane program, and Daniel Ellsberg, who passed the Pentagon Papers — detailing the deeply-flawed U.S. involvement in Vietnam — to the New York Times and the Washington Post.
The book also recounts a number of other whistleblower incidents with which I was less familiar, including in particular the truly disturbing account of the numerous whistleblowers that have come forward over the years to denounce dangerous waste and mismanagement at the Hanford Nuclear Reservation in the state of Washington. The accounts relating to the problems are particularly alarming because of the clear suggestion that health and safety issues were routinely compromised.
Another incident with which I was not familiar was the sordid story of the Harvard Project, a U.S.-government supported effort led by the Harvard Institute for International Development that was intended to lead post-Soviet Russia to a democratic government and a market-based economy but instead became known for conflicts of interest and misuse of U.S. government funds.
While many of the whistleblower incidents Mueller describes involve governmental misconduct, finance, he suggests, is whistleblowing’s “new frontier.” He recounts numerous incidents of (frequently disregarded at the time) whistleblowing in the lead-up to the global financial crisis. By the same token, whistleblower revelations “have been central” to many of the regulatory enforcement actions brought against the financial services industry in the last decade, in the U.S. and elsewhere. Various financial frauds arose only because of whistleblower reports, including foreign exchange and commodities fraud, money laundering, and violation of banking integrity and tax laws. Among the disturbing feature of this account is the disturbing frequency with which certain names recur: Citigroup, JP Morgan, Barclays, UBS, and the Royal Bank of Scotland, among others. As Mueller reports, “wrongdoing at the big banks is massive and repeated.”
With these and many other more recent examples, Mueller shows a recurrent pattern, where highly-principled individuals, motivated by outrage at or even horror of misconduct they have witnessed, are motivated to become a whistleblower, in order to try to draw attention to and to end perceived misconduct. In the recurrent pattern, this first step is followed by several almost inevitable steps, including a massive campaign by the accused individuals and organizations to try to identify, silence, undercut and retaliate against the whistleblower (rather than addressing the underlying misconduct alleged), and, then, next, an almost always years-long period where the whistleblower is subject to ostracism, social isolation, loss of employment, and financial ruin. In some cases, the whistleblower ultimately achieves some form of vindication, although one disturbing feature of many of these incidents is the frequency with which the wrongdoers not only retain their positions but even prosper despite the extent of the misconduct revealed.
Mueller’s book is at its strongest when he recounts the recurring efforts of those subject to a whistleblower report to try to contain, neutralize, and discredit whistleblowers. There is a very good reason why statutory whistleblower programs usually incorporate strict anti-retaliation provisions.
The story of what happened after the Pentagon Papers’ release is particularly interesting in that regard. Once then-President Nixon learned about the documents’ release, he authorized and launched a massive and no-holds barred effort, first, to identify who released the documents, and then to retaliate, by attempting to discredit Ellsberg. I had forgotten that among other things Nixon did was that he authorized a break-in of Ellsberg’s psychiatrist’s office, in order to try to obtain dirt or compromising information in order to discredit Ellsberg. The break-in was one of the things that ultimately resulted in the dismissal of the criminal charges against Ellsberg. I thought about these things in recent days as I heard news reports that our current President has organized a team to identify the Ukraine phone call whistleblower – and even before the whistleblower has been identified to try to discredit him or her, by suggesting that whistleblowers are spies that should be executed.
The rise of whistleblowers over the last five decades is, Mueller suggests, the result of several inter-related factors: the rise and normalization of fraud; the growing interpenetration of corporations and the government; and the spread of secrecy. For example, Mueller returns again and again to the problems created by the revolving door between government regulators and industry. Insiders who can earn significant credibility by serving in a high-profile government role can hope to cash in by then working in the industry they were previously regulating. These individuals have a significant financial incentive not to make waves, but instead to keep relationships smooth.
The only way the casual corruption of these cozy relationships can be exposed and addressed is the action of a whistleblower that is willing to risk the security of their own position by calling out the excesses. There is a reason why the reaction to whistleblower is usually so strong and defensive; the whistleblower threatens the tacit assumptions underlying and mutual benefits that are available to those that support the status quo. There is a reason why whistleblowers often are outsiders; “Outsiders alone retain the freedom of spirit to recognize, and sometimes to renounce, corruption concealed beneath the mantle of authority, status, wealth. “
I recommend Mueller’s book. It is very detailed, ambitious, and interesting. His accounts of the crises of conscience that caused the whistleblowers to act, and of the consequences they then face, are both fascinating and inspiring.
However, the book is not without its flaws. Mueller is at his best when he is describing specific whistleblower incidents, detailing the misconduct the whistleblowers witnessed and the agonizing process the whistleblowers go through before deciding to blow the whistle. These parts of the book are very compelling. Unfortunately, periodically, the book gets sidetracked by excursions into psychology, sociology, and behavioral economics; these sections are less compelling.
Also, one of the Mueller’s missions in the book is to show that the rise of whistleblowing has become necessary because of what he perceives as the rise of fraud. (The subtitle of his book is “Whistleblowing in the Age of Fraud.”) One of the bogeymen that Mueller frequently invokes in trying to make this case is the Chicago School of Economics and the pervasiveness of market-based models in economics and politics. Whatever else one might make of Mueller’s attack on a school of economic thought, it represents a diversion from his stated mission of detailing the importance of whistleblowing. His recurring critique on the Chicago school represents one of several ways in which the book occasionally sets aside its journalistic approach and takes a polemic tone.
The book is also really long. It is long because in many places it is unnecessarily over-written. For example, the book’s chapter about the problems at the Hanford nuclear facility, overall a particularly interesting chapter in the book, begins with a long description of the area surrounding the facility that starts like this: “Mergansers and pelicans feed in the shallows on stonefly larva and freshwater clams. A great blue heron stalks the waterline, pauses, spears a glistening fish with its javelin beak. A mule deer, grazing among the mulberry trees and cottonwoods by the riverbank, raises it head to watch us slip by.” On and on and on like that, for several paragraphs. There are unfortunately too many wordy detours in the book like this. The book could have been at least a third shorter, without any loss. Indeed, it would be a better book if it were a third shorter.
All of that said, the book is very interesting, and in the end, Mueller does present a persuasive case for the importance of whistleblowers in our society. His accounts of the courageous individuals who have dared to step forward and call out misconduct make for interesting reading. He also establishes the importance for all of us of encouraging whistleblowers to come forward and protecting them when they do. These seem like particularly important points to remember just now.
Whistleblowers, Mueller writes,” take the responsibility for seeing with their own eyes and following their individual conscience, cutting through cant and rationalization to comprehend things as they really are.” They also “prove the power of the righteous voice.” They may even “lend us the courage we will need to reclaim entire realms of civic life.”
Special thanks to a loyal reader for suggesting that I read and review this book.