Knowledge of Inappropriateness: When you know something is going on that should not happen. Bad claims: When you know that incorrect details have been given about the project. For example, if you know that your project is not on schedule and your co-worker is advertising that it is ahead of schedule with no problems, that would be a bad claim. Or another example, if the marketing team for a product says the product has been safety-tested for 2700 hours with no problems and then you discover that the tests excluded important parts of the product. Knowledge of Impending Doom: When you know the project is doomed for failure and can prove it, yet no one else realizes it yet.
What to think about before you blow the whistle…these are some of the issues that you will be up against should you ever have to blow the whistle.
http://legacy.ncsu.edu/CSC379/lectures/wk16/lecture.html A survey of whistleblowers was taken by Donald R. Soeken , a whistleblower himself. Out of 233 individuals polled, about 40% responded. Their average age was 47. They had been employed at their jobs for an average of 6.5 years before blowing the whistle. Almost all of those in private industry lost their jobs. Fifty-one percent of government employees lost their jobs. Eighty-two percent said they'd been harassed by superiors, and 69% said they were watched closely. Sixty-three percent reported losing some job responsibilities, and 60% said they were fired after launching their complaints. Almost 10% had attempted suicide. Only 20% felt that their actions resulted in positive changes in their workplace. But more than half of them said they would do it again.
NOTE: The effects listed are purely from this one study. The statistic that more than 50% would do it again is refuted in an article that says the majority would NOT do it again: “Whistle-blowers don't have an easy time. Almost all say they would not do it again. If they aren't fired, they're cornered: isolated and made irrelevant. Eventually many suffer from alcoholism or depression.” (http://foi.missouri.edu/whistleblowing/whistle2002/persons.html)
Full Text: http://www.aerospaceweb.org/question/investigations/q0122.shtml
Thiokol’s Dilemma: * Customer Relations: Do I please the government/customer and gloss over a hypothetical emergency, or do I pay attention to the engineers and spend more time and money to fix what could be a huge problem? * Media Relations: What will Thiokol look like in the news as a company? Will we be given a bad rap if we put off an important launch in order to fix things? What happens if a disaster ensues? * Company Relations: What will happen to the relationship between management and engineers? What happens if management is wrong and engineers are right? * How do I balance these three issues? Ultimately where are my priorities?
http://www.aerospaceweb.org/question/investigations/q0122.shtml Note: The red circles and arrows are detailing the O-rings as the shuttle lifted off. As time passed, you can see them explode and produce some black exhaust.
Answers may differ, but here’s some to get discussion started. See slide 17. McDonald went public, was demoted, and then reinstated and became spokesperson. Boisjoly never worked on shuttles again and eventually filed for disability. NASA was pressured by time, publicity, and the media. The launch was in the media a lot because of the teacher on board, and NASA is always needing positive press. Delaying a launch impacts the public opinion of NASA and can affect the budget. Peer pressure. Approval of others. Wanting to have a successful launch on time. Could have gone through channels, could have gone public immediately before talking to NASA and Thiokol management, etc. Who knows if the shuttle would have launched if McDonald took his concerns public before the launch date. After the fact usually only produces lawsuits and possibly a change in actions/policies for the future.
http://foi.missouri.edu/whistleblowing/whistle2002/persons.html This is where three women of ordinary demeanor but exceptional guts and sense come into the picture. TIME magazine named Sherron, along with two others, Coleen Rowley of the FBI and Cynthia Cooper of WorldCom, as their 2002 Persons of the Year, for being "people who did right just by doing their jobs rightly." These women were for the 12 months just ending what New York City fire fighters were in 2001: heroes at the scene, anointed by circumstance. They were people who did right just by doing their jobs rightly—which means ferociously, with eyes open and with the bravery the rest of us always hope we have and may never know if we do. Their lives may not have been at stake, but Watkins, Rowley and Cooper put pretty much everything else on the line. Their jobs, their health, their privacy, their sanity—they risked all of them to bring us badly needed word of trouble inside crucial institutions. Democratic capitalism requires that people trust in the integrity of public and private institutions alike. As whistle-blowers, these three became fail-safe systems that did not fail. For believing—really believing—that the truth is one thing that must not be moved off the books, and for stepping in to make sure that it wasn't, they have been chosen by TIME as its Persons of the Year for 2002. Sherron Watkins is the Enron vice president who wrote a letter to chairman Kenneth Lay in the summer of 2001 warning him that the company's methods of accounting were improper. In January, when a congressional subcommittee investigating Enron's collapse released that letter, Watkins became a reluctant public figure, and the Year of the Whistle-Blower began. Coleen Rowley is the FBI staff attorney who caused a sensation in May with a memo to FBI Director Robert Mueller about how the bureau brushed off pleas from her Minneapolis, Minn., field office that Zacarias Moussaoui, who is now indicted as a Sept. 11 co-conspirator, was a man who must be investigated. One month later Cynthia Cooper exploded the bubble that was WorldCom when she informed its board that the company had covered up $3.8 billion in losses through the prestidigitations of phony bookkeeping.
Sources: http://www.icmtalent.com/lect/images/watkinss.jpg http://www.icmtalent.com/lect/profiles/50094.html Sherron Watkins is the Enron vice president who wrote a letter to chairman Kenneth Lay in the summer of 2001 warning him that the company's methods of accounting were improper. In January, when a congressional subcommittee investigating Enron's collapse released that letter, Watkins became a reluctant public figure, and the Year of the Whistle-Blower began. Enron (22 August 2002) * In 15 years, Enron grew from nowhere to be America's seventh largest company, employing 21,000 staff in more than 40 countries. * Enron’s success turned out to have involved an elaborate scam. * Enron lied about its profits and stands accused of a range of shady dealings, including concealing debts so they didn't show up in the company's accounts. * As the depth of the deception unfolded, investors and creditors retreated, forcing the firm into Chapter 11 bankruptcy in December. * More than six months after a criminal inquiry was announced, the guilty parties had still not been brought to justice. * Source: http://news.bbc.co.uk/1/hi/business/1780075.stm
Coleen Rowley is the FBI staff attorney who caused a sensation in May with a memo to FBI Director Robert Mueller about how the bureau brushed off pleas from her Minneapolis, Minn., field office that Zacarias Moussaoui, who is now indicted as a Sept. 11 co-conspirator, was a man who must be investigated. http://archives.cnn.com/2002/ALLPOLITICS/06/06/terror.lapses/
One month later Cynthia Cooper exploded the bubble that was WorldCom when she informed its board that the company had covered up $3.8 billion in losses through the prestidigitations of phony bookkeeping. During an audit in May 2002, Cooper discovered that some of WorldCom's financial practices were suspect. The company, then based in Clinton, Miss., had been classifying operating costs as capital expenditures, thereby inflating its profits. She took her findings to the audit committee of WorldCom's board in June 2002. Within days, the board fired its CFO, Scott Sullivan, and revealed to the investing public—and government regulators—that the company had overstated its profits by what ultimately proved to be $11 billion. It was the biggest corporate fraud in U.S. history. Excerpts from Accounting Fraud at WorldCom , Harvard Business School Case Study 9-104-071 On July 21, 2002, WorldCom Group, a telecommunications company with more than $30 billion in revenues, $104 billion in assets, and 60,000 employees, filed for bankruptcy protection under Chapter 11 of the US Bankruptcy Code. Between 1999 and 2002, WorldCom had overstated its pretax income by at least $7 billion, a deliberate miscalculation that was, at the time, the largest in history. The company subsequently wrote down about $82 billion (more than 75%) of its reported assets. WorldCom’s stock, once valued at $180 billion, became nearly worthless. Seventeen thousand employees lost their jobs; many left the company with worthless retirement accounts. The company’s bankruptcy also jeopardized service to WorldCom’s 20 million retail customers and on government contracts affecting 80 million Social Security beneficiaries, air traffic control for the federal Aviation Association, network management for the Department of Defense, and long-distance services for both houses of congress and the General Accounting Office. Cooper’s internal audit team, by the beginning of June 2002, had discovered $3 billion in questionable expenses, including $500 million in undocumented computer expenses. On June 11, Cooper met with Sullivan (CFO), who asked her to delay the capital expenditure audit until after the third quarter. Cooper refused. On June 17, Cooper and Glyn Smith, a manager on her team, went to Vinson’s office and asked her to explain several questionable capital expense accounting entries that Internal Audit had found. Vinson admitted that she had made many of the entries but did not have any support for them. Cooper immediately went to Yates’s office, several feet away, and asked him for an explanation. Yates denied knowledge of the entries and referred Cooper to Myers, who acknowledged the entries and admitted that no accounting standards existed to support them. Myers allegedly said the entries should not have been made, but that once it was started, it was hard to stop. On June 20, Cooper and her internal audit team met in Washington, DC with the audit committee and disclosed their findings of inappropriate capitalized expenses. When Sullivan could not provide an adequate explanation of these transactions, the board told Sullivan and Myers to resign immediately or they would be fired. Myers resigned. Sullivan did not and was promptly fired. On June 25, 2002, WorldCom announced that its profits had been inflated by $3.8 billion over the previous five quarters. Nasdaq immediately halted trading of WorldCom’s stock. Standard and Poor’s lowered its long-term corporate credit rating on WorldCom bonds from B+ to CCC-. On June 26, the SEC initiated a civil suit of fraud against WorldCom. Attorneys in the US Justice Department launched criminal investigations into the actions of Bernie Ebbers, Scott Sullivan, David Myers, Buford Yates, Betty Vinson, and Troy Normand. Cynthia Cooper remained as WorldCom’s vice president of Internal Audit and was named by Time magazine, in December 2002, as one of its “Persons of the Year”. She was not promoted, and no senior company executive had ever personally thanked her. Several employees resented Cooper, believing that her revelation of accounting irregularities had led to WorldCom’s bankruptcy.
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