The popular notion persists that whistleblowers are crazy and vengeful malcontents.

This goes against overwhelming statistics that show they are well- educated, well-liked and committed employees, generally in middle- to-senior-level posts. Yet, with all too few exceptions, whistleblowers continue to be ostracized and humiliated by the companies they hope to improve. Worse, in more than half of whistleblowing instances, the charges are ignored.

When an employee steps forward and legitimately accuses an organization of wrongdoing, it can bring out the worst in everyone. The hierarchy- -right up the line to the CEO and the board, if the allegations are serious enough--may enact one of several scenarios: The company may instigate a cover-up. It could make the whistleblower (instead of the allegations) the issue by trying to discredit the individual. It could retaliate against the whistleblower. Or, in perhaps the most insidious of the lot, the company could pretend to listen, appoint the whistleblower to solve the problem, deny access to needed information- -and make the whistleblower the scapegoat when the wrongdoing persists.

Fear of bad publicity, expensive litigation and loss of business can make a company hostile and defensive, usually at the expense of the whistleblower's personal or professional reputation. The individual' s coworkers get suspicious and angry because their expertise or ethics may be suspect. The whistleblower's family becomes anxious and insecure: "If we lose that paycheck, what happens to us?"

Then, of course, there is the whistleblower, who has stepped forward to tell the truth, despite a jumble of contradictory emotions and fears. Feelings of disloyalty are at war with those of obligation and, possibly, outrage at something very wrong in the company and frustration that no one seems to want to listen.

If that employee has blown the whistle not only on his or her boss but also on the company by taking the case outside to other authorities or to the media, the harsh truth is that this represents a failure on everybody's part. It means the business had not allowed the normal use of communications from the bottom up and that reporting procedures had not worked--or that the whistleblower had not found them to be receptive.

The sad fact is that in today's supposedly enlightened business world, corporate America continues to treat its whistleblowers poorly. The notion persists that it is disloyal and irresponsible to criticize one's employer, notwithstanding the fact that the company has done wrong. Making matters worse is the thicket of often contradictory state and federal laws and procedures. These can help or hinder the whistleblower in the recovery of damages, in reinstating his or her job--even in addressing the company's wrongdoing itself.

Consider a few whistleblowing cases, some ending more happily than others:

Chester Walsh, a former employee at GE Aircraft Engine, a division of General Electric Company, gathered information for four years to expose a defense contract fraud at the company. Senior company executives and an Israeli general were accused of a scheme to divert U.S. funds in connection with a contract involving Israel's purchase of GE jet engines. Last year, a federal judge awarded Walsh $11.5 million under provisions of the False Claims Act, a federal statute permitting employees to sue their employers on behalf of the government and to collect as much as a quarter of the assessments and fines. During the tortuous legal process, Walsh was vilified as an employee just out for the money.

Allan McDonald and Roger Boisjoly, engineers at Morton Thiokol Inc. , testified before the Rogers Commission investigating the 1986 Challenger shuttle disaster that there had been ongoing problems with the rocket' s O-rings and that they had urged their supervisors and NASA officials to postpone the fatal launch. Following their testimony, the engineers were demoted to menial jobs. Only the intervention of the Commission members got them reinstated.

Billie Garde, a Census Bureau employee in Oklahoma in 1980 and a single mother of two, was ordered by her supervisor to misrepresent civil- service test scores so he could hire incompetents. Garde, a former schoolteacher, also was directed to recruit female ex-students as sex partners for visiting political officials. When she refused and blew the whistle, her manager fired her and helped her ex-husband win custody of the children. Garde eventually regained custody with the help of whistleblower advocates. She attended law school and now, as a Houston attorney, represents whistleblowers.

Last year, an administrative law judge for the U.S. Labor Department found that managers at the Oak Ridge National Laboratory had retaliated against a technician who had expressed concern about radiation exposure there. The worker, Charles D. Varnadore, had undergone colon cancer surgery in 1989 and had subsequently appeared on television to voice distress about the prevalence of cancer among his colleagues and the lax protection against radiation. His supervisors transferred Varnadore to a room full of toxic and radioactive substances and gave him useless work. Martin Marietta Energy Systems, which runs the lab for the U. S. Department of Energy, was ordered to pay Varnadore damages, the amount to be set by Labor Secretary Robert B. Reich.

A. Ernest Fitzgerald, an Air Force financial analyst, battled the military because of its wasteful practices during several administrations. President Nixon fired Fitzgerald in 1969 after he exposed a $2 billion overrun in an Air Force contract. (Fitzgerald was reinstated by court order, but it took him until 1982 to be restored to his old job.) He was the kind of civil servant the Pentagon loved to hate: He testified before Congress about $7 claw hammers costing $436 and 25-cent washers purchased for $693 each.

Resentful coworkers christened Fitzgerald and his staff "attic fanatics" because of their cramped upper-floor Pentagon offices.

A Problem, You Say? You're Fired.

Discussions with experts, advocates, human resource professionals and public interest groups about how organizations treat employee whistleblowers illuminate a dismal picture. Other than outright dismissal, retaliation can and does include demotion, false complaints about job performance, reassignment and relocation, assignment of unsympathetic coworkers or supervisors and otherwise making the job difficult, withholding of pension, orders to undergo psychological examination, investigation of finances and personal life, and harassment of family and friends.

"The menu of reprisals is limited only to the imagination," says Thomas Devine, legal director of the Government Accountability Project (GAP), a Washington-based public-interest watchdog group that assists and represents both government and corporate whistleblowers.

Donald R. Soeken, who has been counseling whistleblowers since 1978, puts it directly: "If you blow the whistle on somebody below you, you'll get a pat on the back. Above you? You'll be fired."

Soeken was a therapist at a public service health clinic when he realized that federal agencies were using fitness-for-duty psychiatric examinations to weed out whistleblowers. The strategy, he found, was to find the individuals eligible for disability discharges, ending their whistleblowing claims. The object was to discredit their testimony and to make them appear crazy. Soeken's subsequent testimony before Congress helped abolish these examinations from some of the federal system, although the practice persists.

While retaliation is still business-as-usual, a surprisingly large number of whistleblowing charges die from benign neglect. "As a proportion, retaliation isn't done in even half the instances," says Marcia P. Miceli, associate dean for academic programs and professor of human resources at Ohio State University. She and a colleague, Indiana University Professor Janet P. Near, have written extensively on whistleblowing, including Blowing the Whistle (Lexington Books, 1992).

"The typical response is to ignore the charges," Miceli continues. "Corporations will say there is no merit in them, but corporations need to communicate and explain their actions-even when they do find no merit."

In the midst of such unremitting negatives, surely there must be some ray of hope, some enlightened companies that not only foster communication among employees who are compelled to report problems, but also encourage them to come forward. After all, the past few years have seen a meteoric rise in ethics programs and all the trappings of compliance systems that go into them, including confidential hotlines and employee surveys, ombudspersons and neutral-party inspector generals. Then, why is whistleblowing still treated as it was in the Dark Ages?

To answer this, we need to ponder some of the larger ideas that motivate ethical behavior in America.

The United States has been weaned on the notion that there are no moral absolutes, that whatever works is true or right, say the philosophers. We have been conditioned to think that what may be right for one person may not necessarily be right for another. Human beings, say the behaviorists, are products of genetics and environment, with little or no self-determination. The only thing meaningful is what you can measure.

"Put this all together and you have a picture that leaves out the immeasurables of ethics, religion and aesthetics," says W. Michael Hoffman, director of the Center for Business Ethics at Bentley College and a professor of philosophy. "Ethics are a matter of personal, rather than community, choice. A lot of society works on the myth that 'telling on someone is bad.'"

Professor Hoffman goes on to say that shared accountability and responsibility as part of an organization are not valued today. The American corporation has operated on the basis of goals set from the top, with little input from below. Employees have been encouraged to put their shoulders to the wheel and not to complain. There are signs that this mentality is slowly changing: increased corporate interest in participatory management, flattened hierarchies, work teams and shared goals. But it will be decades before these elements shape and define the typical organization.

Meanwhile, a whistleblower persists as someone who tattles and who presumes to judge the whole organization, causing resentment of supervisors and coworkers alike. In fact, a whistleblower's colleagues often can be the biggest problem--stonewalling any investigation of the charges, for example, or shunning the whistleblower and spreading rumors about the individual's professional or personal life. It is not without irony that in some companies, employees have taken to calling the ethics hotline "1-800-RAT-FINK."

Hero or Tattletale?

"We need to begin to turn tattletales into moral heroes," Professor Hoffman declares.

The epithets of "rat rink," "tattletale" and "snitch" notwithstanding, it would certainly. seem that the concept of shared responsibility moves enough people to come forward and blow the whistle when they see something wrong in their workplace. Statistics aren't reliable, but there are arguably at least several hundred thousand whistleblowing incidents annually, in all walks of organizational life--ranging from the "I think my coworker is stealing office supplies" calls to the ethics hotline, to full-blown charges of widespread fraud with documentation quietly accumulated over several years.

Understandably, most lesser whistleblowing charges do not reach the media because they are not grievous and, in the best cases, are handled by companies' ethical compliance programs. But serious whistleblowing can go unreported because, under pressure, whistleblowers recant their allegations, for instance, or because they become too discouraged or intimidated.

Clearly, whistleblowing presents knotty problems for the manager. If, however, an organization really wants to encourage its employees to come forward with critical disclosures, there are ways to make the process easier, say the experts. Companies must begin to set up a climate conducive to responsible whistleblowing. One big step, suggested by Miceli, is to select an arbiter who is highly trusted by all and who is visible.

Additionally, what steps to take when reporting wrongdoing and what evidence is needed should be laid out for every employee to know-- preferably in writing, with input from all levels. If issues arise, they should be resolved in a timely way. Companies should communicate to all workers the actions they took and why. When appropriate, whistleblowers should be praised and rewarded for their actions. In turn, employees need to be apprised of their rights and ethical responsibilities as members of an organization.

"I'm an optimistic person," says Professor Miceli. "If an organization really wants to encourage whistleblowing, there are ways. But, I'm pessimistic, too. I wish I could really see companies doing so."

Legal Aid

Mistreated employees have legal avenues for redress, although many of these laws are enforced by the same systems in which the charges originated. Nevertheless, there are signs that whistleblowers will be afforded some protection from employer reprisals. One of the biggest stumbling blocks has been that whistleblower protection laws have evolved inconsistently. There is no coherent body of law that protects all whistleblowers--state, municipal, federal and corporate (both public and private companies), says GAP's Devine. And, some laws protect better than others. As Devine says, "With or without legal changes, it is a fact of life that when you bite the hand that feeds you, it tends to slap you, at the least."

This may be alleviated by a bill expected to be introduced by Representative Patsy T. Mink (D-Hawaii) this spring. The proposal attempts to be a comprehensive whistleblowing code for corporate, municipal, federal and state employees who are alleging violations of federal law. Some 200 companies and public policy groups have petitioned Congress to extend whistleblowing protection.

Mink's proposal stipulates a due process hearing by a U.S. Department of Labor administrator. Also, the case must be adjudicated by legal standards of the Whistleblower Protection Act of 1989. In part, it says that if an employee alleges he or she was discriminated against because of whistleblowing as a contributing factor, the employer has to prove legitimate independent grounds for its actions. Additionally, when a whistleblower files a reprisal complaint, the allegations of wrongdoing will simultaneously be forwarded to law enforcement and federal agencies for investigation.

Congress is slowly showing some muscle. Last year it refused to re- authorize the U.S. Office of Special Counsel. It was created in 1978, ostensibly to assist federal employee whistleblowers, but the OSC had been widely criticized for hampering and intimidating them over the years.

Yet, the False Claims Act has been criticized as counterproductive because it provides monetary incentives to employees to bypass internal reporting systems, while the Federal Sentencing Guidelines (see "An Unblinking Look at White-Collar Crime," page 10) require corporations to set up these systems. In addition, recent amendments to the act have stipulated that if wrongdoing isn't reported immediately, the whistleblower has less of a right to share in eventual damages.

Here's What You Get

What happens to whistleblowers after the fact? It is like getting a divorce, says Mary Louise Cohen, a partner at Washington-based Phillips, Cohen & Goldstein, and an advocate for whistleblowers in false claims cases. "They may have had 25 years at the company. They give up their identities and fulfilling relationships."

Counsellor Soeken and other experts advise whistleblowers to leave their careers and to start fresh in other lines of work--because their actions have effectively blacklisted them. Most whistleblowers, while avowing they would sound the alarm again under the same circumstances, would rather never have gone through the turmoil, even if they were vindicated and if they received millions of dollars in settlement. They wish the occasion to blow the whistle--the wrongdoing--had never occurred.

But at least one whistleblower says he wouldn't do it again. In 1975, William C. Bush, then a 50-year-old aerospace engineer in the National Aeronautics and Space Administration (NASA), challenged agency policies that kept workers inactive. Threatened with dismissal, Bush saw his grade level reduced and his salary cut by $10,000. He was eventually given a clerical job. It took more than three years for him to be reinstated.

Bush also blew the whistle on a private NASA directive (later rescinded) disallowing executive leadership training programs for employees after age 40. Eventually, the Supreme Court ruled 9-0 against Bush, saying that federal employees did not have the constitutional right to blow the whistle.

Bush retired from NASA in 1986 and now suffers from several stress- related illnesses he says were brought on by continual harassment. One of the country's best-known former whistleblowers, he has maintained a support network for others and has pleaded their causes to members of Congress, the press and concerned organizations. Although less active now, Bush says he still receives a couple calls a week from whistleblowers.

"Hell, no, I wouldn't do it again," Bush asserts. "I ruined my life, my wife's life. And, I wouldn't do it anonymously, either. There is no protection whatsoever."

BRIEFCASE

The good news is, there are methods in place at a growing number of corporations for employees to report wrongdoing. The bad news is, businesses usually establish these procedures after someone has blown the whistle--and they continue to mismanage whistleblowing.

~~~~~~~~

By BARBARA ETTORRE

Inset Article

"WOULD I DO IT AGAIN? YOU BET"

When Robert A. Bugai realized that he would have to blow the whistle in the early '80s, he made a "premeditated and deliberate" decision to learn about what he was getting into. "I took the time to find out," says Bugai, 37. "I researched whistleblowing at the library. I sat down and considered the cost--mentally, financially, physically, emotionally and spiritually."

When Bugai decided to go ahead, he blew the whistle on college marketers, which he figures is currently a $140 million market. These are firms hired by advertising agencies to get their clients' products and services (credit cards, car rentals, periodicals, grooming aids, dorm room supplies, apparel) to college students.

Beginning as a student in 1974, Bugai worked on a commission basis for various college marketing firms, supplying placards, posters, product samples, magazines, stand-up card displays and other ad tools to be placed on college campuses. Trouble was, Bugai had found the products and ad messages weren't reaching the intended audience.

Bugai found that campus representatives were filling out job completion forms--while posters and other sales materials and samples languished undistributed in campus storage closets and basements and empty vandalized merchandise racks went unrepaired and un-filled. Posters were ripped off bulletin boards and were not replaced. College newspaper organizations, which had payment contracts with marketers for inserting their clients' ads in newspapers, were not being paid.

Bugai went back to the library, taught himself investigative techniques and went to the clients, documenting his charges with photographs and legitimately retrieved samples, many of them bearing original wrappings and shipping documents. Twice he was taken to court by the marketers, but both cases were settled before trial. When threatened with a court action, Bugai would write a polite thank-you letter saying how honored he was to have such a formidable opponent. "I wasn't going to be nasty," he says. "I wanted to give positive reinforcement to other whistleblowers."

In 1985, Bugai made his expertise formal by founding College Marketing Intelligence, based in North Arlington, N.J., offering advice, competitive intelligence and marketing programs on his own. "I would encourage people who are thinking of being whistleblowers to think about the real cost involved," he says. "Would I do it again? You bet.".

Inset Article

IF YOU ARE BLOWING THE WHISTLE

There is a wealth of advice avail- able from ex-whistleblowers, counsellors and advocates. The following strategies are from the Government Accountability Project:

Talk everything over first with your family or loved ones.

In a non-accusatory manner, first try to work within the system, involving several layers of management, before going outside the organization. Be aware that sounding the alarm may trigger a cover-up.

Develop a specific record-- keep a factual log, documenting both wrongdoing and any harassment you receive.

Make a detailed memorandum for the record, when you need a permanent record of an important event or conversation. Sign it, date it, and, if possible, have someone witness it. If you believe your word will be challenged, you can apply the "poor person's copyright": mail a copy to yourself, and keep it, unopened, until it is needed.

Pinpoint and copy key records before drawing attentionur allegations. You may be denied access later.

eate a larger support circle, a constituency of those outside the organization who would benefit from the exposure of your allegations.

Seek the help of specialists, organizations that assist whistleblowers.

Inset Article

WORKBOOK

Few managers are ever comfortable hearing from their subordinates that a problem exists in the company. As a manager, how can you develop an atmosphere in which it would be likely your people will come to you if they know of wrongdoing? Here are a few timeless suggestions:

Don't play favorites, above or below you.

Keep an open-door policy so that your staff knows you are available and accessible. Ivory/towers have fallen; you should already be listening to your people every day.

Maintain confidentiality on unimportant matters; when important matters come along, your employees will know they con trust you.

Appreciate that, for most employees, it takes courage to come to a supervisor with a problem.

Investigate all allegations, and if appropriate, act on them. Document what you do and communicate your actions to the

employee. Show by example that you believe ethics are paramount.

Copyright 1994 by American Management Association. Text may not be copied without the express written permission of American Management Association.

Ettorre, Barbara, Whistleblowers: Who's the real bad guy?., Vol. 83, Management Review, 05-01-1994, pp 18.