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Death threats and smear campaigns, the lot of a whistleblower

Adele Ferguson

The culture of "don't dob in a mate" strikes at the heart of our poor treatment of whistleblowers. From an early age we are told to keep quiet and avoid the stigma of being a snitch or a troublemaker.

But the fundamental question that needs to be asked in the joint parliamentary inquiry into whistleblowers is: why should whistleblowers be protected?

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Victims have nowhere left to turn

CBA whistleblower Jeff Morris has been assisting former clients of a suburban accountant who have suffered devastating investment losses.

There are numerous examples of the contribution whistleblowers have made to society in exposing wrongdoing. But for all the good they have done, few come away unscathed.

The Commonwealth Bank financial planning whistleblower Jeff Morris has lodged a submission to the inquiry which is nothing short of alarming.

What he went through reads like a Stephen King thriller. In it he talks about a decision by a certain person at CBA "to finally get rid of me". He wasn't referring to his job.

By chance, he heard from a psychiatrist that threats had been made about shooting whistleblowers at the bank - a group which included Morris.

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 The person who allegedly made the threats has been redacted from the submission.

The stress became too much.

"Talk of shooting made me wonder if I had put my family at risk of being collateral damage," he said. "I spoke to my contact at ASIC. His comment, that it was probably bullshit but if I was worried to go to the police, left me numb."

He said the stress led to several long stays in hospital for his wife. Then the unthinkable happened.

"I came home to an empty house one night. My wife had left with my children, aged five and seven."

This was the nadir. "Like a boxer face down on the canvas staring at a whiteout. I was diagnosed with PTSD. It was almost a relief to know."

Talk of shooting made me wonder if I had put my family at risk of being collateral damage... I came home to an empty house one night. My wife had left with my children aged five and seven.

Jeff Morris, CBA whistleblower

Whatever the case, it serves as a chilling illustration of the risks whistleblowers take when they speak up.

High stakes

The inquiry will complete a report on June 30, including a list of recommendations.

The stakes are high. But, at the end of the day, it is then up to the government to fix the piecemeal system and create a better framework, or fiddle around the edges.

In corporate Australia, boardrooms are grappling with what it means for them.

Companies know the damage that can be wielded when whistleblowers aren't contained, particularly if they take their concerns to the media. Look no further than the Commonwealth Bank (both in financial planning and its CommInsure division), National Australia Bank, IOOF, 7-Eleven, CIMIC Group (formerly Leighton Holdings), Reserve Bank subsidiary Securency, Unaoil and energy giant Origin.

It is why the treatment of whistleblowers that go to the media needs to be properly addressed. A number of institutions will fight tooth and nail at the idea of putting it into law. Others will try to water it down to the point where it no longer poses a threat.

But going to the media is in the public interest.

The 7-Eleven whistleblower went to the media with allegations of systemic wage fraud across the franchise network which resulted in policy changes and a compensation scheme that so far has paid out $83 million to exploited workers.

The president of Whistleblowers Australia, Cynthia Kardell, argues that legislation should be amended to allow a whistleblower to go to the media, a politician or other third party at the outset, but at a policy level encourage – even reward – internal disclosure as a first step.

"It would be a powerful practical deterrent to management bad behaviour – but if it did occur, management would not be able to cry foul and the wrongdoing, not the whistleblower, would be the focus – which is as it should be," Kardell says.

She is right. Misconduct shouldn't be buried and companies should not be allowed to cover it up.

Kardell argues that the only way things can change is to overhaul the system to the point where the preferred option for a company is an investigation, not a cover-up.

"This is what will keep management on the straight and narrow and whistleblowers safe from reprisals and in their jobs," she says.

The way to stop cover-ups is to introduce laws that publicly reward good choices and punish bad choices.

"The entire process must be open to public scrutiny, with all decisions reported in real time on the organisation's website – so that, over time, cover-ups will no longer be seen as the 'smart' option."

For this to happen, the decision of whether or not to investigate a whistleblowing disclosure must be taken out of the hands of management. The person delegated with the authority to investigate a whistleblower claim must be legally independent of management.

In addition, a criminal and civil cause of action and financial penalty should apply if management fails to support a whistleblower.

And, to ensure there are no conflicts, external watchdogs should be banned from referring disclosures back to the organisation's management as is now the case, Kardell argues.

"For far too long, external watchdogs have naively trusted in self-regulation, in secret," she says.

She recommends the establishment of a public interest disclosure agency (PIDA) to register, promote, protect and support whistleblowers. It would have the powers to seek injunctive relief for whistleblowers, prosecute claims of reprisal and seek penalties for the failure of management to support whistleblowers and whistleblowing.

Kardell also suggests the creation of a 'false claims' division within the PIDA that has the power to register and monitor false claims actions and receive, assess and resolve claims for compensation under a false claims scheme. Depending on the number of crimes and money involved, this could make the PIDA self-funding.

The 7-Eleven whistleblower, in his submission, says there need to be financial safeguards for whistleblowers so they don't have to make a choice between justice and financial security. "This is the reality of life as a whistleblower in modern corporate Australia." Indeed.

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