VideoMoreover, the remedies OSHA can offer are weak. None of its initial findings are binding, so it must broker a voluntary settlement between employee and employer. Even then, at best an employee can hope to be reemployed at the same seniority level—potentially in another division—with back wages plus interest for lost time, along with litigation costs, expert-witness fees, and attorneys' fees. OSHA has no power to order accounting procedures reformed, numbers restated, or other employees fired. "We focus on making the complainant whole, not on changing the work environment," says Spear.
A whistle-blower's allegations of fraud, in general, fall to more-powerful agencies, like the DoJ and the SEC. But those agencies also offer little in the way of subsequent reward, protection, or even information about the case. "The SEC is kind of a one-way street," says Stone, who had provided documents to the SEC's regional Atlanta office. So far he has not been deposed by the SEC, which is reportedly investigating Duke.
Others complain that investigations go nowhere. Roy Olofson, a former vice president of finance at Global Crossing who made allegations of accounting fraud, was interviewed only once—by the U.S. Attorney's office in winter 2002, according to his attorney, Paul Murphy. "After that, we saw no follow-up," says Murphy. The investigation has since been dropped, despite a $1 billion earnings restatement related to Olofson's concerns in late 2002.
Some whistle-blowers say they can't get heard at all. "I'm starting to feel like the wallflower at the dance," says Lynn Brewer, who worked in various divisions of Enron from 1998 to 2000. She has been trying to share her Enron documents and experiences with the DoJ and various members of Congress since the day the company filed for bankruptcy in December 2001 and nullified her confidentiality agreement with Enron. "At that point, I was getting desperate to get my story out there, because I was getting concerned about my own culpability," she says.
Yet getting government officials even to return her phone calls has been a challenge. For instance, she says she E-mailed and phoned Sen. Byron Dorgan (D—N.Dak.), but never heard back, nor has she heard from anyone from the SEC or the DoJ. Now on the lecture circuit for organizations such as The Conference Board and the Association of Certified Fraud Examiners, Brewer says she gets 15 to 20 E-mails or phone calls per month from people who feel trapped by illegal activity at their companies. "My official answer is to send them to OSHA," she says, "but I also give them the name of a good lawyer." In the long run, of course, there's hope that Sarbanes-Oxley may have the desired effects on whistle-blowing. "A case could be made that there will be fewer claims in the future," says OSHA's Spear, "because the act puts more mechanisms in place for companies to hear from whistle-blowers early. Plus, there's a criminal penalty attached to [retaliation], which tends to get people's attention."
But reporting ethics violations is still perilous. While Coke, for example, now has a link on its Website for employees who want to report issues regarding accounting, controls, auditing, or other matters, all comments are forwarded to senior management rather than to the board or a third party. And while the site's FAQs section assures employees that they can "report suspected violations of the [conduct] code without fear of reprisal or retaliation," few are likely to do so after Whitley's experience.
Meanwhile, whistle-blowers still have to find their next job. Olofson is now consulting as he looks for permanent employment. "While this cloud is hanging over him, it's very difficult for him to find work that would make sense for him otherwise," says Murphy, his attorney. "His career path has been dramatically impacted by coming forward with his concerns."
And after sending out about 150 résumés, networking with about 50 people, and working with six recruiters, Whitley has had one interview in three months. For anyone else, that could be chalked up to the state of the economy. But Whitley has no doubt what has blown an ill wind on his job prospects: blowing the whistle at Coke.
Alix Nyberg is a staff writer at CFO.
How to Respond to Whistle-Blowers
Many companies are scrambling to establish toll-free hotlines and Web-based mechanisms that allow audit-committee members to hear directly from employees, suppliers, and customers who want to voice concerns about accounting or internal controls. According to the Sarbanes-Oxley Act of 2002 and Securities and Exchange Commission rules, such systems must allow for anonymity and be in place by a company's first annual meeting after January 15, 2004, or by October 31, 2004, whichever comes first.
But CFOs may do well to become better listeners. Most whistle-blowers say they never would have gone public with their concerns about the financial statements if senior management had been more attentive to them. And opening up the lines of communication doesn't necessarily mean opening Pandora's box.
Only about 5 percent of anonymous employee complaints received at United Technologies Corp. (UTC) each year relate to possible financial wrongdoing, says Patrick Gnazzo, the vice president in charge of investigating such claims. (UTC employees can report abuse anonymously through the company's Dialog program, which uses printed and online forms, or its ombudsman office, which fields phone calls.) Neither that percentage, nor the absolute volume, has changed much in the 17 years the office has been in existence, he says, not even after Sarbanes-Oxley. "If you're all trying to do the right thing in the first place, what's the fear of hearing from people?" asks Gnazzo.
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