Protecting the Sentinels Blowing the Whistle

   Starting Out 

Whistle-blowers (or sentinels as the ACFE calls them) raise signals that something is amiss. In this issue, Karol Romanowicz, a second-year graduate student in the Master of Public Administration-Inspector General Program at John Jay College of Criminal Justice in New York City, provides a simple historical primer on the whistle-blower phenomenon and implications for fraud examiners. This column is adapted from a paper Romanowicz wrote for a college course.  

Identifying internal fraudulent, wasteful, or corrupt behavior, as we know, can be extremely difficult. Elaborate illicit practices such as those committed by executives of Enron, WorldCom, Tyco, or other mega corporations can take years to identify and investigate. A fraud examiner’s best source of information is someone on the inside – a whistle-blower.

“Whistle-blower” refers to British bobbies, the first professional police force, who blew their whistles when they witnessed crimes. One of the most famous whistle-blowers is Jeffrey Wigand, former vice president for research and development for Brown and Williamson Tobacco Corporation. In 1995, on the CBS television program “60 Minutes,” Wigand disclosed that the tobacco industry knew of the health hazards that its products were causing. According to Wigand’s Web site, his insider knowledge assisted the Federal Drug Administration with its investigation into the role and effects of nicotine in tobacco products.

A LENGTHY TRADITION
The first U.S. law addressing whistle-blowing, the Lloyd-La Folletta Act of 1912, was a response to executive orders by the Theodore Roosevelt and William Taft administrations, which prohibited federal employees from communicating directly with Congress unless cleared with their superiors. (See whistle-blower history content on the Government Accountability Project Web site.)

However, potential whistle-blowers within the private sector didn’t have any protection until 1972 with the passing of Water Pollution Act. This was followed by a plethora of others such as the Safe Drinking Water Act, Toxic Substances Act, and Energy Reorganization Act, all of which incorporate protection for individuals that were retaliated against or fired for addressing issues of public safety or company wrongdoings.

Unfortunately, with such differing legislation, whistle-blowers have from 10 to 300 days to file claims depending on the states in which they live.