Sucheta Dalal :Whistleblowers hold the key (30 December 2002)
Sucheta Dalal

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Whistleblowers hold the key (30 December 2002)  

It seems appropriate to close the year on a note of cheer and what better way to do it than to follow Time magazine’s example and recognise whistleblowers.

The magazine chose three women as its person for the year 2002: Sherron Watkins of Enron, Cynthia Cooper of WorldCom and Coleen Rowley of the FBI. The first two exposed the accounting scandals at their respective companies, while Rowley’s memo about lapses that led to the September 11 attack on the World Trade Centre caused a major shakeout in the powerful FBI.

Atul Tirodkar’s whistle blowing at the BSE doesn’t really bear comparison with what the three women unearthed in the USA, but he probably faced worse persecution. His act of protecting a taped conversation of the BSE’s broker-president, Anand Rathi seeking confidential information from a surveillance official, got Tirodkar sacked from his job as director surveillance.

The BSE then piled on a series of allegations against him which was, however, derailed by media support for Tirodkar and the aggressive intervention by L. K. Singhvi, senior executive director of the SEBI on the BSE board.

The exchange then referred its intention to sack Tirodkar to a one-man inquiry commission headed by Justice B. V. Chavan, a retired judge of the Mumbai High Court. Justice Chavan too exonerated him of all major charges and said there were no grounds for a termination simpliciter.

By then the Joint Parliamentary Committee (JPC) was well into its investigations and the interrogations had exposed the BSE’s executive director’s lapse in informing the governing board about Anand Rathi’s practice of frequently seeking sensitive information from the surveillance department.

Frequent leaks about the JPC proceedings also made it clear that there was a lot of sympathy for Tirodkar and it would be reflected in the final report.

Yet, select BSE directors continued to lobby with politicians to drop the Tirodkar matter. At the same time, they tried to hustle Tirodkar into accepting a severance package. Fortunately, politicians cutting across party lines supported his case and a few days before the JPC report was tabled the BSE changed its stance and agreed to take him back.

Having let off corporate houses that had colluded with brokers to manipulate their stock prices and having carefully omitted to name any individuals for gross supervisory failure, the JPC probably developed a conscience about Tirodkar and recognised his role in “bringing to light the sordid affairs concerning the then president of BSE”.

Here is what the report says: “It should be ensured that Shri Tirodkar is not victimised by the BSE. Whistleblowers should be given protection so that wrong doings in any institution can have an attitude without fear”. On December 26, Tirodkar went back to the BSE, although not to the same function (director in charge of surveillance).

And it is here that his story differs from that of the Time magazine cover girls. They have world recognition for their expose, but none of them have their job back. Tirodkar has. It is this small difference that we need to celebrate. As the noted economist Paul Krugman points out in his New York Times column, “the whistle-blowers haven’t been rewarded; Time makes it clear that Ms Cooper and Ms Rowley are personae non gratae in their organisations. And those on whom the whistle was blown have mostly gone unpunished.”

In fact, “one FBI official singled out by Ms Rowley for blocking an investigation that might have averted September 11 received a special presidential award”. Some extensive Net surfing reveals that although many countries, including the US have laws to protect whistleblowers, they are seldom effective.

Most often they are fired and become ostracised from friends and co-workers. They are accused of being having a grievance with their employer. Most of them don’t ever get the recognition of the Time magazine’s Persons of 2002.

The Website bluntly says: “Whistleblowers’ actions may save lives or billions of dollars. But rather than receive praise for their integrity, they are often targeted for retaliatory investigations, harassment, intimidation, demotion, or dismissal and blacklisting.

Pentagon whistleblower Ernie Fitzgerald describes whistleblowing as ‘committing the truth’, because “employers often react as if speaking the truth about wrongdoing were committing a crime”. The same site says that “academic studies confirm that over 90 per cent of whistleblowers report subsequent retaliation” because employers often do not want to be told what is wrong with their operations and frequently greet bad news by trying to silence the messenger.

Invariably, whistleblowers are up against powerful corporate or government entities that are more than willing to play dirty. In fact, what happened to Tirodkar – the false allegations and the sacking— is the norm, rather than the exception.

In many US, the Sarbanes-Oxley Act has dramatically improved protection for whistleblowers of publicly listed companies. It makes it unlawful to harass, demote or discriminate against whistleblowers and has established criminal penalties going up to 10 years in jail for executives who retaliate against whistleblowers.

It also requires board audit committees to establish procedures to hear whistleblowers. Many countries have provisions such as the False Claims Act that provide relief such as reinstatement, double the amount of any lost back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorney’s fees.

Also, there are many support groups and Websites on the Internet that guide and help whistleblowers. Many of them have tips that would be extremely useful in the Indian context too. It is by no means an easy fight. There is little support from colleagues within the organisation and although the laws provide strong legal protections against retaliation by employers, the enforcement record has been abysmal until now.

An exceptional event leads to a Time magazine cover recognition and occasionally the story an Erin Brockovich or a Karen Silkwood get made into an award winning movie. But most whistleblowers suffer silently, go unrecognised or like Silkwood and pay with their lives.

So lets begin the New Year with the thought that although JPC 2001 was a complete washout, and although it failed to recommend any legislative protection that would encourage people to report wrong doing, at least our whistleblower has got his job back which sets a good precedent. Hopefully, Tirodkar’s victorious battle will encourage several others to blow the whistle on sleaze, corruption and illegal dealings in their organisations.

-- Sucheta Dalal