- Are you a whistleblower or do you have a tip? Contact us securely and anonymously by clicking here. Or email the author at nmckenzie@fairfaxmedia.com.au
A few weeks ago, Brian Hood, the whistleblower who exposed an alleged national bribery scandal linked to the Reserve Bank, put his Melbourne house on the market.
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Why Australian whistleblowers deserve better
Whistleblowers who call out corporate corruption in America receive government payouts, but those in Australia face unemployment and an uncertain future.
Hood is an intense, quietly spoken ex-VFL umpire and former executive. Now – thanks to his speaking out – he is unemployed.
He is still waiting to testify in the Australian-first case he helped launch – a prosecution of two companies and their former executives for bribing foreign officials.
![Brian Hood is still waiting to testify in the Australian-first case he helped launch.](/web/20161230085634im_/http://www.theage.com.au/content/dam/images/g/t/j/c/n/8/image.related.articleLeadwide.620x349.gtgz7e.png/1483047706675.jpg)
While he has been waiting, he has been doing the maths. Hence his decision to sell his home. Hood has had more than 30 interviews with prospective employers, but has failed to resurrect his career. His professional life nosedived after he was pushed out of his role as the chief financial officer at the RBA-owned Note Printing Australia as a result of speaking out internally about the alleged corruption.
Hood is the embodiment of ASIC chief Greg Medcraft's warning that career oblivion often follows corporate whistleblowing.
Hood views with scepticism last week's announcement by Financial Services Minister Kelly O'Dwyer that the government is seeking public submissions about improving Australia's corporate and tax-cheat whistleblower regime, including the possibility of paying rewards and the toughening of penalties for companies that persecute whistleblowers.
"Change is desperately needed, but that has been obvious for years," he says. "I just hope [Malcolm] Turnbull acts on it."
![ASIC chief Greg Medcraft has warned that career oblivion often follows corporate whistleblowing.](/web/20161230085634im_/http://www.theage.com.au/content/dam/images/g/s/2/9/g/x/image.related.articleLeadwide.620x349.gtgz7e.png/1483047706675.jpg)
For anyone who doubts the potential repercussions of speaking out in an organisation, consider the story of another well-known Australian whistleblower, former Football Federation Australia corporate affairs manager Bonita Mersiades .
She blew the whistle on the FFA's use of dubious and overpaid overseas consultants as it sought in 2010 to win the backing of shonky, powerful FIFA officials for the right to host the World Cup.
Like Hood, Mersiades lost her job. She was interviewed about Australia's consultants and FIFA's modus operandi by law enforcement officials in Australia and overseas, and contributed to significant change. But beyond fulfilling a civic duty, the personal rewards for having the courage to speak out have been few, while the detrimental emotional and career impacts have been immense.
"What followed in the days and weeks after I was sacked was an institutional and systemic discrediting of me," Mersiades wrote of her experience.
"There is not a lot you can do about being trashed, unless you have enough wealth and emotional energy to take on everyone legally. You just have to let it wash over you. You spend a bit of time licking your wounds. You go over conversations in your head. What if I had said this? What if I had done that?"
Hood's and Mersiades' whistleblowing stories – and the dozens like them that have been the lifeblood our our work as reporters over 15 years – contrast dramatically with the case of a BHP Billiton insider whose story Fairfax Media revealed earlier this year.
The US government paid this person $5 million for sharing with it information that allowed authorities to extract a $25 million settlement (but no admission of liability) from the mining giant, following a probe into a gifts and hospitality program targeting foreign officials in countries where BHP Billiton was doing business. If you think this was easy money for the whistleblower, think again.
The now former executive not only lost their job but was subjected to serious threats that may have been linked to figures in the country in which BHP Billiton was doing business. (There is no suggestion BHP Billiton was involved or knew of these threats.) Sources aware of the case say the insider had to go on the run. The whistleblower's career was ruined.
Following Britain's lead
It is unlikely Australia will follow the US path in handsomely rewarding corporate and tax whistleblowers. Given the comparable legal system and culture, it is far more likely Australia will follow the British lead. The UK system involves no payments to whistleblowers, but has far greater requirements for companies to encourage and protect them.
The Commonwealth legal take on rewarding whistleblowers is summed up neatly by the head of Britain's Serious Fraud Office, David Green, QC.
"In this country and most of the Commonwealth, it is citizens' duty [to blow the whistle]," he says. "To incentivise it seems slightly distasteful."
In contrast, Mary Jo White, the outgoing chairwoman of the powerful US Securities Exchange Commission (which paid the BHP insider), has described the advent of the US whistleblower reward and protection program in 2011 as a "game changer".
While the number of US whistleblowers who have shared $111 million in rewards is still small – just 34 – a top US justice department official says the regime "scares the shit out of companies" that may otherwise want to keep their soiled whites in-house.
It's a sentiment O'Dwyer should keep in mind, especially given there appears no end in sight in Australia to corporate offshore payment scandals (including the recent expose of Rio Tinto's multimillion-dollar payment to a mate of Guinea's President to help secure mining rights), financial services misconduct and pressure to crack down on tax cheats.
Even if very few bounties are ever paid, the fact they are available should drive Australian companies to do more to encourage and protect whistleblowing staff.
The submissions called for by the government will feed into a whistleblower reform parliamentary committee recently engineered by senator Nick Xenophon, which will report to Parliament in the middle of next year. When the government assesses the committee's inevitable calls for major changes, it should not forget the other critical elements of the US and UK regimes to combat corporate crime and tax fraud.
Both countries' regulators have far greater resources and, in the case of the US, much more legislative muscle. Too often in Australia, whistleblowers face not only an employer backlash, but regulators or policing agencies without the resourcing, will or expertise to thoroughly and energetically follow up the misdeeds they have risked their careers to expose.
Are you a whistleblower or do you have a tip? Contact us securely and anonymously by clicking here. Or email the author at nmckenzie@fairfaxmedia.com.au