Corporate Whistleblowers

Two weeks after a whistleblower filed an updated federal complaint accusing the network of promoting terrorism, Facebook continues to deal with pressure about questionable content. The details of the complaint to the Securities and Exchange Commission were outlined in an Associated Press story.

https://www.facebook.com/pages/%D9%87%D9%8A%D8%A6%D8%A9-%D8%AA%D8%AD%D8%B1%D9%8A%D8%B1-%D8%A7%D9%84%D8%B4%D8%A7%D9%85/237269353391307?timeline_context_item_type=intro_caAt issue in the complaint: the network’s failure to limit content designed

It’s Time for Facebook to be Sanctioned for Misleading Shareholders and the Public About Terror and Hate Speech on its Website 

The Securities and Exchange Commission (SEC) now has all the information it needs to sanction Facebook for its dishonesty about terror and hate content on its website, thanks to a petition filed by a whistleblower working with the National Whistleblower Center (NWC).  Today, the Associated Press published an explosive story describing and confirming the key findings in the petition. 
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Two whistleblower cases unsealed this week reveal how aggressive pharmaceutical marketing programs can cross the line into Medicare fraud and kickbacks. Trips to the Kentucky Derby for doctors and huge bonuses for sales reps can lead to bribes, conflicts of interest and poor-quality care.

Illustration: Tinker ReadyIn one case, a drug maker was competing with a far less expensive, easier-to-administer alternative. Sales reps reportedly told doctors they could shorten a two-to-three week treatment with the Questcor’s expensive anti-seizure drug to one week. However, the Food and Drug Administration had not vetterd the efficacy of the one-week course, according to the case.

US WorldMeds

In the settlement case, the company is charged with secretly covering co-pays for all Medicare patients –not just those in need — thus insulating them from a steep price hike. Good for the patients, whose co-pays could have reached $5,000, DOJ noted; bad for the rest of us, who have to pay the balance. That’s why the approach is considered a kickback.


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A selection of this week’s whistleblower news, including a harrowing tale of a group of war crimes whistleblowers.
NAVY

Some of details of the case against Navy SEAL Edward Gallagher, as reported in The New York Times Tuesday, may sound familiar to many whistleblowers.  Here’s what reportedly occurred when Navy SEAL commandos reported their platoon chief had committed atrocities in Iraq.

(I)nstead of launching an investigation that day, the troop commander … warned the seven platoon members that speaking out could cost them and others their careers, according to the report.

 The Times story is based on a confidential Navy criminal investigation report obtained by the paper.

According to the investigation report, the troop commander, Lt. Cmdr. Robert Breisch, said in the meeting that while the SEALs were free to report the killings, the Navy might not look kindly on rank-and-file team members making allegations against a chief. Their careers could be sidetracked, he said, and their elite status revoked; referring to the eagle-and-trident badges worn by SEALs, he said the Navy “will pull your birds.”


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Retaliation against whistleblowers takes many forms.  A little person working at the White House recently reported a supervisor moved files to a high shelf out of her reach. Others report being followed, shunned, smeared, fired and worse. Whistleblowers often find themselves in a hostile work environment.

Julie Myers Wood, a corporate compliance consultant, thinks that works against both whistleblowers and their employers. In-house reporting programs with whistleblower protections built in are the way to go, writes Wood, who has a resume filled with high level federal government positions.

Institutions must shift their mindsets to view the reporting of regulatory problems as an opportunity to shine by addressing the problem, improving the institution and preventing large settlements. 

In a column posted on the Forbes website Monday, she suggests companies work with whistleblowers to both protect the company and strengthen compliance.

Companies need to get to a place where they embrace the potential whistleblower by creating a transparent culture, instilling the shared value of compliance at all levels.

Her advice is not aimed at whistleblowers, some of whom have had bad experiences with in-house hotlines. Advocates suggest employees approach internal reporting systems carefully – they are there to protect the company and can be used against whistleblowers.

Wood encourages the development of internal reporting programs with the message – let’s try to keep this in house. For companies, that is a good thing. But whistleblowers have found that internal reporting isn’t always effective or to their advantage. They have other options. Working with law enforcement or government agencies, they can remain anonymous in many cases and often qualify for a reward.  
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Whistleblowers exposed the technology collapse at Theranos, the life science start-up at the center of a new HBO documentary.

In January, Tyler Shultz and Erika Cheung told their stories at a session hosted by Stanford University’s McCoy Family Center for Ethics in Society. They talked about how disorienting and frightening their experiences at the company were after they realized the touted blood testing system didn’t work.

Cheung said she doubted herself at first. She had a feeling “that there was something wrong going on here, but maybe there is something I’m not seeing. You’re surrounded by so many talented people… Everyone else was being very nonchalant about what was going on, just going through the motions and the grind of every day, knowing there were so many problems.”

More in this clip. A video of the entire session is available on YouTube. 

4/2 update: CNN reports that Cheung and Tyler have started an organization called Ethics in Entrepreneurship.


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Some might see whistleblowers as lucky lottery winners when their multimillion-dollar rewards come through. But, the title of the piece in the February 4 issue of The New Yorker reflects the other side of the story: “The Personal Toll of Whistleblowing”

“Whistleblowers are usually, but not always, employees or members of the group on which they’re blowing the whistle; after they do so, their lives are never the same,” writes Sheelah Kolhatkar. She joined The New Yorker in 2016 after a writing about Wall Street and financial crime for Bloomberg Businessweek.

“Institutional denial, obfuscation, and retaliation are hallmarks of many whistle-blowing cases,” she writes.

new york whistleblower artKolhatkar runs through a list of notable whistleblowers, including  New York City police officer Frank Serpico,  tobacco company whistleblower Jeffrey Wigand; Sherron Watkins of Enron; and National Security Agency contractor Edward Snowden.  That they were all portrayed in Hollywood films is no surprise. Whistleblower tales are often David versus Goliath dramas.


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Much of the $234 billion laundered through the Danske Bank started in Russia and ended in the U.S, as dollars, a whistleblower told the European Parliament in November.

Rep. McHenry

Now, a growing number of U.S. investigators want to know more. Last week, the heads of two congressional committees asked Deutsche Bank for information related to its lending practices and its role in a series of money laundering scandals, according to several news reports. Federal agencies are asking questions too.

The House is preparing to investigate Deutsche Bank’s handling of suspicious transactions from Denmark’s Danske Bank, according to a report in Politico.  Danske Bank is now is under investigation in relation to a massive, international money laundering scheme involving its Estonian branch banks.
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Corporate ComplianceOriginally published at Corporate Compliance Insights on November 19, 2018 by Guest Columnist Donna Boehme.  

Donna Boehme, the “Lion of Compliance,” comments on Novartis as a new “rock star” on the corporate compliance landscape, observing that the company has elevated its approach to compliance, culture and trust to best practice “Compliance 2.0” status – first, with its 2014 appointment of an independent and empowered CECO with true compliance SME (earned in the field) and now, with the elevation of the role to include all management risk functions and with a seat on the executive management team. She also notes as best practice the company’s establishment of a new bonus system that links bonuses to ethical leadership behavior, a feature many leading companies have yet to achieve.
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Dankse Bank Money-launderingA report released by Bloomberg today states that criminal investigators from the U.S. Department of Justice have contacted Deutsche Bank AG and Bank of America Corp. about transactions they handled for the small Danske Bank branch in Estonia that’s at the center of one of the biggest money-laundering investigations in history. The investigators are also questioning JPMorgan Chase & Co.’s work with the branch.
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