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Whistle-Blowers Coming of Age - 2004-06-15

So-called whistle-blowers are increasingly seen as a key safeguard on misdeeds in public and private companies. By speaking out on issues others try to hide, they can create seismic shifts in governments and corporations -- and sometimes even change the course of history. More countries around the world are enacting legislation to protect those who decide to disclose actions they believe are wrong or harmful. VOA's Brent Hurd spoke with a whistle-blower behind the energy giant Enron's meteoric fall and has this report.

The Dutch call them lighthouse-keepers. The Germans say bell-ringers. In English, they are called whistle-blowers -- a metaphor for a sports official calling a foul after a player makes an illegal move. In modern usage, a whistle-blower is an employee who reports illegal or wrongful activities within an organization to people who can fix the problem.

Former Enron employee Sherron Watkins is one of the best known in America. She blew the whistle on the corrupt accounting practices that created this energy trading company's mirage of financial strength. Mrs. Watkins says problems multiplied when Enron management began to stifle employees questioning controversial bookkeeping. “What I discovered later was that when Enron started down this slippery slope of fraudulent accounting in 1999 there were people like me who said we can't do this,” she said. “This is crazy. This is not a legitimate transaction. They were shoved aside, had their responsibilities diminished. Others saw what happened to those truth-tellers, and they realized to protect themselves it is better to be quiet.”

But Sherron Watkins chose to speak up, although she says it was too little too late. In August 2001 she began sending letters to former chief executive Kenneth Lay, warning him of deceptive accounting practices that could cause the company to crash in a wave of scandals. By December, Enron was bankrupt after admitting it had inflated its profits. Investors lost billions of dollars and thousands lost their jobs.

Bill Black is a public affairs professor at the University of Texas who spearheaded efforts to expose federal savings and loan scandals of the 1980s. He says that in today's inter-connected world, whistle-blowing can have a profound impact. “It allows the prevention of some of the worst abuses in the world,” he says. “And in the modern world, terrible abuse in one country can lead to disaster worldwide. An excellent example of this was the SARS outbreak in China. If not for a Chinese military doctor coming forward and revealing what had been done, SARS might well have reached levels that might have sustained a worldwide epidemic.”

Professor Black adds that whistle-blowing becomes much more difficult to carry out when it jeopardizes one's colleagues. Such was the case with Joseph Darby, the army specialist responsible for revealing the abuse of Iraqi prisoners. ”Specialist Darby became aware that there were terrible abuses occurring in this prison and the abuses were being committed by colleagues in the reserve unit, and he could not in good conscience turn away from it,” he said. “He went public in a way that was sure to cause great injury to his comrades. That's the hardest situation for a whistle-blower.”

The United States has maintained strong whistle-blowing protection for federal employees for decades and recently passed laws guarding employees -- like Sherron Watkins -- of large publicly traded companies.

More countries including South Africa, Japan and Korea have recently passed legislation to shield people who expose wrongdoing from harassment or being fired. Guy Dehn, Director of the British whistle-blowing charity Public Concern at Work, says these new laws are sending a message that whistle-blowing is good for the public.

“The importance of whistle-blowing is that it provides the means by which you can make sure that the systems are protected by a fail-safe when they break down,” he says. “That is what the world is waking up to, and I think we are going to see a lot more whistle-blowing legislation and a lot more whistle-blowing.”

Despite protective laws, life for whistle-blowers is rarely easy. Few are rewarded for their deeds. Many lose their jobs and some their health and sanity. Society seems to regard them more as snitches than heroes. Sherron Watkins was an exception. “My life changed drastically,” she said. “I was middle management at Enron. Now I appear to have a very large platform to teach leadership and ethics. I think I am the only whistle-blower that has a positive story where horrible things have not happened to me, where I am making a living on the lecture circuit.”

Mrs. Watkins says ethical problems remain in American business; for instance, the soaring salaries for heads of corporations. In 1970, business executives were paid 26 times more than the average worker. In 2000, they received 531 times more than their workers. When will someone blow the whistle on this? asks Mrs. Watkins.