BusinessCompany NewsWhistle while you work?

Whistle while you work?

It is an odd and depressing fact that employees who expose corruption, negligence and other malpractices in their workplace usually end up more reviled and outcast than those responsible for the wrongdoing.

The institutions of the European Union offer case studies in this regard.

International organisations with complex structures, multiple points of power, authority and responsibility are particularly vulnerable to accounting fraud.

But such systems encourage whistleblowing as the lines of seniority can be opaque. When there are many authorities who could deal with a corruption issue and it is not clear whose help one should seek, the temptation is to blow that whistle. Take the cases of Marta Andreasen, Paul van Buitenen and Dorte Schmidt-Brown – to name just three of the more prominent whistleblowers in the context of EU accounting.

Without them many outbreaks of fraud would have lain undiscovered for years, festering in little-browsed, complicated balance sheets in Brussels.

Yet each has paid for their disclosures with the loss of status, the esteem of former colleagues and often their privacy and self-confidence.

‘To be a whistleblower, you have to be brave,’ says Christopher Heaton-Harris, a British conservative in the European parliament who monitors fraud in the EU institutions. ‘Theoretically, if you blow the whistle you’re meant to be protected, but the reverse happens. You are picked on by the system and ignored by your bosses,’ he adds.

There is a distinction to be drawn between those whose job it is to find and expose mal-practice and those who discover it by accident. Marta Andreasen, for instance, was the chief accounting officer at the European Commission.

Voted this year’s Accountancy Age Personality of the Year and interviewed elsewhere in this edition, it was her responsibility to ensure the accounts were reliable and transparent. ‘I couldn’t hide away from my responsibility.

Having acted in any way differently would have meant I was not responding to my professional integrity,’ she says. ‘I was responsible for the accounts of the commission – this is written down in the financial regulation and it is the general understanding of the role of an accounting officer.’

Andreasen has coped well with her controversy. She was suspended on full pay from her duties and barred entry into commission buildings on the grounds, according to Neil Kinnock, vice-president of the commission, of ‘a breakdown in personal relations’.

The case of Dorte Schmidt-Brown is different because, as a Danish economist working for the EU’s Eurostat statistical agency, it was not her formal responsibility to ensure the contracts she came across were regular. In January 2001, Schmidt-Brown nevertheless disclosed concerns about suspicious contracts agreed by Eurostat that led to official investigations and uncovered a trail of scandal and fraud at the agency.

Nothing Schmidt-Brown said has been disproved, yet she has paid heavily for her disclosures. The Dane, who joined Eurostat in 1993 as a project manager and was later promoted to head of a section compiling industrial statistics, took sick leave from the time of her disclosures until last December. She is now living on a E35,000-a-year invalidity pension in a deal struck with the EC.

Schmidt-Brown told the Brussels-based EU weekly European Voice in October that she had suffered a nervous breakdown after her exposures. ‘I am 37 years old and on invalidity benefit – hardly the best career move,’ she says. ‘I have sacrificed nearly four years of my life to this and suffered both psychologically and physically as a result.’

Schmidt-Brown said she had been treated as an outcast ‘and it got to the point where I was unable to enter my own place of work without my legs physically shaking. People often ask me if it has all been worth it and, from a personal point of view, you have to say, on reflection that, no, it hasn’t. But if you ask, if I would do it all again, I wouldn’t hesitate to say that I would’.

This is an extreme case of the personal consequences of blowing the whistle.

But what of Paul Van Buitenen, a commission official whose 1999 report on the former commissioner Edith Cresson played a key part in the downfall of the entire commission that year and exposed the extent of sleaze in Brussels?

The commission suspended him on half-pay for four months after his disclosures to the European parliament in December 1998. ‘The fact that they took the heaviest measure against me was, and is, outrageous,’ he says. ‘If you compare it to the director general and director of Eurostat – now accused of very serious wrongdoing and fraud and see that they’re just put into another service and still get their huge salary, I’m of the opinion that there’s not an equal treatment here.’

Van Buitenen subsequently published a book and worked on a 5,000-page dossier delivered to the anti-fraud services in August 2001 which is still being investigated. After a year off without pay, Van Buitenen started again at the commission – in the personnel department – in September this year.

‘I don’t regret it, but whether I’d do it again depends because I have a wife who’s seriously ill with a brain tumour and cannot endure this situation again,’ he says. In the meantime, Van Buitenen has been awarded a knight decoration of the Queen by the Dutch government.

Van Buitenen says the Public Interest Disclosure Act in the UK offered some level of protection to whistleblowers. ‘It works in concentric circles, offering criteria to determine whether a whistleblower acted in good faith and is entitled to protection. The burden of proof for the whistleblower depends on how and where he made his disclosure. The PIDA has already been successful in a number of cases.’

But such laws alone could never offer sufficient protection. It was therefore important that, in addition to a proper procedure, such as PIDA ‘an independent body is available for whistleblowers, which advises and supports them and is prepared to actively defend whistleblowers’.

In short, blowing the whistle is not an easy job and risks a ruined private life. ‘It may well be worthwhile, but think carefully before engagement,’ warns Van Buitenen.

  • Alan Osborn is a freelance journalist.

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