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Moral Dilemna......Whistleblowing.............
Old 01-10-2007, 03:34 PM   #1
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Moral Dilemna......Whistleblowing.............

Interesting thing happened today. I have a client that works for a local development company. She is not a partner, but definitely "in the know". She told me she has undeniable proof that the partners are doing illegal money laundering and other things.

She has been there a long time, has a nice pension coming when she retires in 3 years, and is NOT the kind of person who makes waves. She would like to retire, but still has two kids in college, and is not eligible for the pension yet. She is afraid if she squeals, they'll know it's her, she'll be fired, and lose her benefits.

Ideas??
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Re: Moral Dilemna......Whistleblowing.............
Old 01-10-2007, 03:48 PM   #2
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Re: Moral Dilemna......Whistleblowing.............

Quote:
Originally Posted by FinanceDude
Interesting thing happened today. I have a client that works for a local development company. She is not a partner, but definitely "in the know". She told me she has undeniable proof that the partners are doing illegal money laundering and other things.

She has been there a long time, has a nice pension coming when she retires in 3 years, and is NOT the kind of person who makes waves. She would like to retire, but still has two kids in college, and is not eligible for the pension yet. She is afraid if she squeals, they'll know it's her, she'll be fired, and lose her benefits.

Ideas??
Yeah- be a big boy and keep your nose out of this. Quick way to ruin your business, or worse.

Ha
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Re: Moral Dilemna......Whistleblowing.............
Old 01-10-2007, 03:52 PM   #3
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Re: Moral Dilemna......Whistleblowing.............

Since YOU do not have any first hand knowledge... you should do nothing...

As for her, she can continue to ignore it and hope nobody finds out... there are a few people in jail from Enron who did not want to squeel...

She should get out of there as fast as she can, damn the pension (and BTW.. how can she not qualify for it Don't you vest in 5 years??)
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Re: Moral Dilemna......Whistleblowing.............
Old 01-10-2007, 04:30 PM   #4
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Re: Moral Dilemna......Whistleblowing.............

I think your responsibility is to explore options to protect her income stream should the business implode whatever the reason.

The partners may or may not be doing something illegal, that is for others to deal with. Assume for a moment that her opinion is correct, you don't want her to have any of her $ in a situation where it could be confiscated. She need not be a whistleblower, but she could be a witness in a criminal trial.

Water-wings aren't good enough, this client needs a survival suit.
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Re: Moral Dilemna......Whistleblowing.............
Old 01-10-2007, 05:37 PM   #5
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Re: Moral Dilemna......Whistleblowing.............

You never heard it.
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Re: Moral Dilemna......Whistleblowing.............
Old 01-10-2007, 05:44 PM   #6
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Re: Moral Dilemna......Whistleblowing.............

Quote:
Originally Posted by FinanceDude
Interesting thing happened today. I have a client that works for a local development company. She is not a partner, but definitely "in the know". She told me she has undeniable proof that the partners are doing illegal money laundering and other things.

She has been there a long time, has a nice pension coming when she retires in 3 years, and is NOT the kind of person who makes waves. She would like to retire, but still has two kids in college, and is not eligible for the pension yet. She is afraid if she squeals, they'll know it's her, she'll be fired, and lose her benefits.

Ideas??
She's correct. And gosh, now you know too!
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Re: Moral Dilemna......Whistleblowing.............
Old 01-10-2007, 05:50 PM   #7
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Re: Moral Dilemna......Whistleblowing.............

If it is a small company than she may be out of a job and pension(?) either because the partners get caught or because of the reasons behind why they are doing the money laundering.
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Re: Moral Dilemna......Whistleblowing.............
Old 01-10-2007, 05:58 PM   #8
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Re: Moral Dilemna......Whistleblowing.............

She should go talk to a lawyer.
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Re: Moral Dilemna......Whistleblowing.............
Old 01-10-2007, 06:02 PM   #9
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Re: Moral Dilemna......Whistleblowing.............

Let's all remember that the client may not have an accurate assessment of what she thinks she sees (she may well be like my sister, participating in the jumping-to-conclusions gossip competition).

Whatever the facts, she is worried. Were I her FA I would consider the worst case scenario and ask her if she wants me to explore her options from a financial standpoint. For example, if her 401k includes company stock, could she sell it or withdraw it and sell it, or maybe you just assume it has no value.

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Re: Moral Dilemna......Whistleblowing.............
Old 01-10-2007, 06:14 PM   #10
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Re: Moral Dilemna......Whistleblowing.............

As a guy who spent a lot of years excelling in all the otherwise useless skills of catching bad guys I know that sooner or later somebody talks. At the very least, the authorities already have information, or will one day run across something, that might lead to an investigation. They may never get busted because sometimes you just can't make the case, but eventually somebody will start looking into what's going on.

When it comes to criminal activity we tend to see everyone in broad categories: victims, witnesses or bad guys. People can occupy more than one category. For example, a victim could be a crook who got done wrong by other crooks, or a witness can be a person who committed an illegal act who can also testify about their personal knowledge of the acts of the really bad guys.

People like your client often fall into that very last group - witnesses who have some degree of culpability. Now, the extent of her criminal culpability may merely be the posession of "...undeniable proof that the partners are doing illegal money laundering ..." but that is a crime under Federal Law. In fact, it's one of those really cool laws that we seldom used against big crooks, but we whipped out on much less culpable crooks who could testify. It's like the federal equivalent of a parking ticket - a parking ticket that's worth 5 years in Club Fed. It's a Misprison of Felony, and not a lot of people go to prison for it but many witness/crooks are faced with this choice: "Do you want to be a witness for the Government, or a defendant facing five years in Federal Prison for committing a Misprison of a Felony?" Few people go to prison for such things because they find the witness stand much more comfortable than the defendant's chair.

The fact that what is going on is at least money laundering means that it will be likely investigated by federal agents or by the local police who will seek federal prosecution. Having spent several years leading a federal task force doing nothing but major international conspiracies I can assure you that the federal government has provided it's agents with some major cool laws, is not afraid of using them, and they are brutally effective. We local cops that worked in the Federal system, and looked upon most of our federal bretheren as not-quite bumblers, used to have a joke about it:

Quote:
Hey, do you know why Federal conspiracy cases are so easy to make? So Federal Agents can make them.*
The point of telling that joke is to point out that experienced state and local cops, who thought they understood how to use laws as a tool, when introduced to the use of Federal law are amazed by the power that lives inside the Federal Codes. I'll be honest in saying that there were times I was more than a litttle scared at how much is illegal and how easily it gets prosecuted. A friend, a former cop who later became an assistant D.A. before going into private practice, called to buy me lunch one day. His boss was laundering money for clients who, unknown to any of them, were targets being investigated by one of my squads. He had no direct involvement and his "knowledge" was little more than a cop's suspicions, but he knew that eventually somebody would start looking into it and he wanted to come forward and offer all of his assistance rather than have us come to him and make him "the offer".

"Look, I know how you'all work, these dudes will wind up on somebody's radar screen eventually and I don't want any part of being on the wrong side of it. I want to be the good citizen who came forward of his own volition rather than the questionable quy you threaten with some cheesy fed crime."

That's the deal your client might be facing. Who knows, she may stick there and walk away with her retirement and nothing ever happens. Or there might be a grand jury meeting right now to issue sealed indictments for the big "round up" next week. If I was in her position, I would seriously consider some option other than hoping that nothing happened. **

* My apologies to any retired feds here - but I heard enough "local yokel" comments that I used to lash out in retaliation. I'm over it now and love all of you guys.

** See my PM
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Re: Moral Dilemna......Whistleblowing.............
Old 01-10-2007, 08:02 PM   #11
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Re: Moral Dilemna......Whistleblowing.............

As Leonidas now knows, I was one. All-be-it on the civil side. I have seen a lot as I have had occasion to peer over the shoulder of my criminal counterparts well before 9/11.

Investigative and prosecution priorities change. Even assuming that the client was accurate in her assessment of her employer's actions they may not become an issue short term. I agree with Martha that she needs to consult an attorney.

My immediate concern are FinanceDude's responsibilities. He needs to work with the client on the assumption that her employer's business will implode and protect her as best he can, in an ideal world in coordination with her attorney.
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Re: Moral Dilemna......Whistleblowing.............
Old 01-10-2007, 11:09 PM   #12
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Re: Moral Dilemna......Whistleblowing.............

sorry I didn't get it from reading the thread here...

Whose "moral dilemma" are you asking about, please? Hers? Or yours?
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Re: Moral Dilemna......Whistleblowing.............
Old 01-11-2007, 09:34 AM   #13
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Re: Moral Dilemna......Whistleblowing.............

Quote:
Originally Posted by Caroline
sorry I didn't get it from reading the thread here...

Whose "moral dilemma" are you asking about, please? Hers? Or yours?
Well..........she asked my opinion........she's the one with the problem...........

I'm going to stay out of it, and make sure she has her ducks in a row financially if it hits the fan.

Thanks to all the help I received...........I figured I would get good feedback, and of course was not disappointed..........
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Re: Moral Dilemna......Whistleblowing.............
Old 01-11-2007, 09:35 AM   #14
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Re: Moral Dilemna......Whistleblowing.............

Quote:
Originally Posted by Brat
I think your responsibility is to explore options to protect her income stream should the business implode whatever the reason.

The partners may or may not be doing something illegal, that is for others to deal with. Assume for a moment that her opinion is correct, you don't want her to have any of her $ in a situation where it could be confiscated. She need not be a whistleblower, but she could be a witness in a criminal trial.

Water-wings aren't good enough, this client needs a survival suit.
She would know. She worked at a Big 8 accounting firm as an audit manager, then got an MBA from Wisconsin......so I think she knows money flows...........
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Re: Moral Dilemna......Whistleblowing.............
Old 01-11-2007, 10:01 AM   #15
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Re: Moral Dilemna......Whistleblowing.............

FinanceDude, I agree you're doing the right thing.
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Re: Moral Dilemna......Whistleblowing.............
Old 01-11-2007, 11:36 AM   #16
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Re: Moral Dilemna......Whistleblowing.............

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Originally Posted by FinanceDude
I'm going to stay out of it, and make sure she has her ducks in a row financially if it hits the fan.
Give her a copy of Sherron Watkins' book and suggest that she display it prominently on her desk or leave it adrift in her workplace's conference room...
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Re: Moral Dilemna......Whistleblowing.............
Old 01-11-2007, 11:37 AM   #17
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Re: Moral Dilemna......Whistleblowing.............

Many states have laws protecting the whistleblower.
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Re: Moral Dilemna......Whistleblowing.............
Old 01-11-2007, 12:11 PM   #18
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Re: Moral Dilemna......Whistleblowing.............

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Many states have laws protecting the whistleblower.
Yes, but.

Don't make the decision to whistleblow or not whistleblow without seeing a lawyer first.
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Re: Moral Dilemna......Whistleblowing.............
Old 01-11-2007, 12:15 PM   #19
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Re: Moral Dilemna......Whistleblowing.............

Quote:
Many states have laws protecting the whistleblower.
From what little I've heard, the legal aspects of whistleblowing are the least of one's worries.

I had the plane seat next to the engineer who designed the O-rings on the Space Shuttle once. It was a cross-country flight, so he had plenty of time to tell me his story.

He said his engineers knew they were going to "kill astronauts" the night before the Challenger went up. Some of them said so to their wives before the flight. He said that they warned Morton Thiakoll not to ok the launch, but that they were overruled. He said he was told "take off your engineering hat and put on your management hat."

He said he was called to testify to all of this in Washington after the Challenger blew up, which he did.

The fallout from his testimony was devastating. He wasn't fired, but he and his wife couldn't go anywhere after that. They lived in a "company town." They'd go into a pizza parlor and the entire restaurant would go silent for as long as it took him to get his order and leave. Same in the grocery store and everywhere else. His "friends" would no longer speak to him, and the wives of his colleagues made his wife's life a living hell. He was a pariah in his own town.

Eventually, he left. He was of course unemployable as an engineer anywhere else in the country. Instead, he now lectures on the experience and on the ethics of whistleblowing. Seems to make a living at it.

That terrible story told, he was adamant in saying that he would not hesitate to do the same thing again. Speaking the truth to power is not for the faint of heart but then, if one is so constituted to believe in right vs wrong, it seems that one cannot do otherwise.

I'd like to think I'd do the right thing in such a situation. But I hope I never have to prove it.

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Re: Moral Dilemna......Whistleblowing.............
Old 01-11-2007, 12:48 PM   #20
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Re: Moral Dilemna......Whistleblowing.............

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Originally Posted by Caroline
That terrible story told, he was adamant in saying that he would not hesitate to do the same thing again. Speaking the truth to power is not for the faint of heart but then, if one is so constituted to believe in right vs wrong, it seems that one cannot do otherwise.
Interesting story, thanks for sharing.

Morally there's little difference between whistleblowing and reporting a crime. Legally there are a lot of issues and FD's client is definitely in the land of criminal law.

One of the moments near the end of my career that drove me closer to RE was one of those times when I stood up and told the big man that his plan was fraught with problems. I misunderstood the political realities of the situation and believed what I had been told "You're the expert on this stuff, we want you to come in and tell us what needs to be done and then run the operations."

People's lives were at risk, but not to near the degree of pending doom as in the Challenger story, but my people would be the one's risking their butts to do something that was constructed not to address a very real problem, but to address some politician's concept of what should be done. When I suggested that I had a better idea, well, the reaction was as if I had just blew a 100 decibel fart. The room got quiet and everyone looked at me and then looked back at the head of the conference table. "Thank you for your contribution. If we could move on now."

Some saw me as a pariah for a while, I was told I needed to be a "team player", and I was suspected of being the source behind some critical media coverage. But in the end they realized that their plan sucked and they started doing it my way. Without any acknowledgement that it was just a renaming of something I had come up with years earlier.

Right after that moment, when everyone looked at me in astonishment for a few seconds and then moved on and acted like I was not even there, was when I had a retirement epiphany. I tuned the rest of the meeting out and started doodling a picture of a sailboat on my notepad. Dreams of being a retired sail bum filled my thoughts as I came to grips with my future. I was high enough in the organization to see how all the stupid decisions were made but I was dumb enough to stand up and speak my mind. It was a recipe for disaster and I knew I had to make some serious plans for leaving before either they went after me, or I adapted my behavior to become a politically correct yes man.

I wasn't a whistleblower, and I wasn't the primary source for the media, but I was sorely tempted and might have said a few things too many to a reporter, but I never stood up publicly and pointed fingers. If someone had been hurt I can't say for sure what I would have done. And that's the dillema for many potential whistleblowers: You see stupid things being done and you can foresee a disaster in the making, but not all risky and stupid decisions guarantee a disaster. So, if you come forward before the big disaster you're easily disproven "Hey, nothing bad happened so he must be wrong." And if you speak up afterward, you become the target of people trying to protect themselves "He's just a disgruntled employee - If he felt so strongly that what we were doing was wrong, why didn't he say something before it happened?" All of your coworkers are worried about how this affects them and they don't want to catch whatever the hell it is that you have that has management out to ruin you.

Knowing something is illegal is easier. There's still a moral issue, what's wrong is wrong, but the element of personal risk is more clear because if you are targeted for prosecution - or even a deal in exchange for testimony - just a few minutes research with an attorney can illuminate the ugly downside to choosing the wrong option. I like to think I'm a moral person and would step forward to stop things that are wrong or illegal. But even if I fail morally, I'm fairly certain I will make the moves that are right to protect me and mine. Fear is a big motivator, and the government has a big club to put the fear into you. I've been in a lot of prisons, and everytime I left I knew that 1 hour behind the wire was 59 minutes and 59 seconds more than I wanted to be there.
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