BusinessCompany NewsWhistleblowing: man on the inside

Whistleblowing: man on the inside

Internal auditor T Smith was investigating a serious fraud and was zeroing in on the prime suspects but, as he explains, it is not always easy to do the right thing

I was head of internal audit and asked to follow up on an “anonymous” phone
call alleging senior management misuse of corporate assets and, basically,
fraud. As with most investigations, there was the initial fumbling around and
eventually a decision was taken to involve external fraud investigators – this
made it appear to be “very serious”. I wrote down on a piece of paper my
predictions for the result of the investigation and sealed it in an envelope in
a secure place.

The external investigators were helpful but made a fatal blunder early on;
they went ‘trash trawling’. They were going through waste bins in offices when a
cleaner spotted them and reported it to the local staff who were under

In addition, throughout the investigation a cardinal rule was being broken
whereby the prime suspects were being informed of our findings almost
immediately by my boss. I did not find out about this until half-way through the

Any investigation is akin to lifting up a stone in the garden – you are
spoilt for choice as to which insect to follow, and this was no exception.

Telephone conversation monitoring (internal only) showed that there was a
whole sub-set of questionable activities going on involving company vehicles,
and of course, there was the obligatory sex scandal waiting to break – or not,
as most people already knew about it. There was a remarkable situation where
four employees were interviewed in separate rooms simultaneously and came out
with identical stories; the investigators said that this could only have
happened through coaching.

At the reporting stage, it became clear that concerns were at quite a high
level, and one weekend the cabinet in which I kept the papers was forced open
and some papers disappeared – fortunately I had backups elsewhere.
It was at this point, with so many strands and issues that needed addressing,
and with my superiors prevaricating, it became obvious that nothing decisive was
going to happen. The permanent stress of trying to do a good job while being
undermined finally resulted in me being signed off for a number of months. This
came as a real shock, as I was brought up to believe that one should always try
to be fair and do a good job, and in this case neither of these were possible.

After being signed off there were many self-doubts and sleepless nights, but
gradually, with my wife’s unending and positive support – and meditational music
– I got back to normality, whatever that may mean. At that time, Monty Don had
just written some articles about gardening and how to adopt a simple approach to
it, and that became a really important and positive activity to hang onto.

After a while, thoughts turned to going back to work, but there was one main
drawback – the same boss was still at the company and in the same post. Whatever
trust there might have been previously had obviously all disappeared by now. But
it was worth giving it a try, if only on a professional basis. However, it was
never going to work and a redundancy package was agreed.

I decided to make my way working for myself, I had specialist experience and
a wide range of general audit experience, and I would be working for myself and
no other bosses. I also decided to work towards helping identify fraud in other
organisations, as I am still convinced that there is at least one fraud going on
in every organisation – or is that paranoia? Although discovery of frauds has
been minimal, I have felt a lot better about myself for trying to support the
“good people”.

It came as a very hard lesson to learn that not every professional person has
professional integrity, and it is also somewhat depressing. This subsequently
was confirmed through the financial crises from which we have still not even
begun to have recovered.

Lessons to be learned from this episode are that one must maintain one’s own
personal integrity, outside activities are absolutely vital in order to keep
things in perspective, and there are opportunities to try to rectify the

Oh, and what was on the sealed piece of paper? “Management will close ranks
and promote the guilty party” – this eventually came to pass, including
promotion of my undermining boss. In addition we saw the redefinition of fraud
as “abuse and excess”, resulting in gentle smacking of a few wrists. One has to
wonder why bringing in external investigators, and at a high day rate, was
authorised with such alacrity?

Whistleblowers’ rights

Despite the horror stories you hear from those that do blow the whistle on
their employers, the UK government claims to offer protection against loss of
job and victimisation for those looking to expose corporate wrongdoing.

Protection for blowing the whistle

You are protected as a whistleblower if you:

* are a ‘worker’;

* believe that malpractice in the workplace is happening, has happened in the
past or will happen in the future;

* are revealing information of the right type (a ‘qualifying disclosure’);

* reveal it to the right person, and in the right way (making it a ‘protected

Qualifying disclosures

To be protected as a whistleblower you need to make a ‘qualifying disclosure’

* criminal offences;

* failure to comply with a legal obligation;

* miscarriages of justice;

* threats to an individual’s health and safety

* damage to the environment;

* a deliberate attempt to cover up any of the above.

You won’t be protected for whistleblowing if:

* you break the law when making a disclosure (eg. if you signed the Official
Secrets Act as part of your employment contract);

* the information is protected under legal professional privilege (eg. if the
information was disclosed to you when someone wanted legal advice).

Protected disclosures

For your disclosure to be protected you should make it to the right person
and in the right way. You must make the disclosure in good faith (which means
with honest intent and without malice) and reasonably believe the information is
substantially true and that you are making the disclosure to the right
‘prescribed person’.

If you make a qualifying disclosure in good faith to your employer, or
through a process that your employer has agreed, you are protected. You should
check your employment contract to see if your employer has set out a process for

If you feel unable to make a disclosure to your employer then there are other
‘prescribed people’ you can make a disclosure to. If you are unsure, you should
always get professional advice before going ahead. Anything you say to a legal
adviser in order to get advice is automatically protected.

Dismissal or victimisation

If you are an employee protected from whistleblowing and you are dismissed
for complaining about malpractice at work, you can make a claim for unfair
dismissal, even if you don’t have one year’s service. If you have been
victimised or suffered detrimental treatment (eg. you have been demoted or
denied promotion), because of blowing the whistle you may be able to take your
case to an Employment Tribunal. Your claim would be for ‘detrimental treatment’.


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