By Lisa Fitterman

The single mom didn’t know what to do. As an accounts payable clerk in the clothing subsidiary of a Toronto manufacturing conglomerate, she’d noticed a cheque payable to a BMW auto dealership come through the system and she couldn’t figure out why. Certainly, she’d seen some strange cheques go through before; payments she’d passed off as none of her business because she was just a clerk and what did she know, anyway? But this one was different. She knew the company wasn’t in the business of buying cars, so she made a photocopy and pondered her next move. Who could she go to? What if she told the wrong person; someone who was involved in a scam and managed to get her fired? Only 27, she knew that a reputation as a snitch could dog her for the rest of her working life.

Finally, the clerk approached a man who worked in human resources, if only because she knew and trusted him. “Look at this,” she said, pulling the photocopy out. The man agreed it was worth looking into. Neither was prepared for what would be found: a spending spree on the company’s dime to the tune of nearly $10 million over 10 years. The company’s second-in-command, whom employees thought was independently wealthy, had been using the funds to finance his lifestyle; besides the Beamer, which he’d bought for his mistress, he’d purchased a Lexus for his wife and a Porsche for himself. He also had a wine cellar stocked with quality, expensive vintages from around the world, a power boat, an art collection that featured noted Canadian painters and a designer watch worth $183,000.

Photographs by Derek Shapton

“I can’t remember what kind of watch it was, but it was the ugliest damn thing,” says Norman Inkster, the former RCMP commissioner turned private consultant who investigated the case. He won’t reveal the name of the company, saying it was settled quietly, with more than two-thirds of the ill-gotten goods seized and resold. But he tells the story with perfect recall, as if scrolling through a reel of film, at once indignant at the crook’s chutzpah and admiring of the clerk who put her job on the line.

“You have no idea what kind of courage it takes to do what she did,” he says. “This was about three years ago, before whistle blower lines were being used in Canada. She couldn’t be anonymous, even though the guy, until he was unmasked, was an unknown quantity. He was a liar who even told his wife that he’d won the lottery, and he was undone by someone committed to the truth.”

These days, those who come across wrongdoing in the workplace have a slightly easier time voicing their concerns than did that accounting clerk. In the business sector, more companies are instituting features such as anonymous tip phone lines and websites in order to comply with Canadian regulations and United States anti-fraud laws, such as Sarbanes-Oxley, passed four years ago in the aftermath of the Enron and WorldCom scandals.

In the public sphere, Bill C-11 was passed just before the Liberal government fell and was expected at press time to be amended by the Conservatives to give it what Prime Minister Stephen Harper calls “more teeth” before it is enacted into law. Largely a response to the sponsorship scandal, the changes are supposed to herald the beginning of a limited protection system so that people in the federal service, and perhaps contractors and citizens, can report what they know or suspect without fear of the kind of recrimination Allan Cutler faced.

Cutler is the former federal public works bureaucrat who one day reported to the ministry’s audit department that there were serious irregularities regarding the sponsorship program. The very next day, he was called in to his boss, Chuck Guité’s office and told that his job was being declared “surplus.” The conversation took less than five minutes; the big, brash Guité, whose trial on fraud charges in relation to the scandal is expected to begin in May in Montreal, insisted that the move had been planned for a long time. “I was stunned,” Cutler says. “I knew there’d be negative consequences, but I hadn’t dreamt the degree to which they’d go.”

These days, Cutler, who ran unsuccessfully for the Conservatives in January’s federal election, has carved out a career as an expert on ethics, procurements and negotiations, travelling the country to speak, consult and give seminars. He is struck by the number of people who call or approach him on the street to tell him their own tales of whistle blower woe. Knowing that he is lucky to have been able to erase the stigma of being seen as a snitch, his message to the others is simple: never forget that they aren’t alone and never second-guess themselves. “That’s my belief system,” he tells me. “You can’t let the wrong things go on. You have to stop them, no matter where they are.”

In the classic film To Have and Have Not, the line Bacall offers Bogey is one for the ages: “You know how to whistle, don’t you, Steve? You just put your lips together and … blow.” But real whistle blowing, more properly known as “disclosure of wrongdoing,” is not so easy. Certainly, names such as Imperial Tobacco, Enron, WorldCom and Ottawa’s Public Service Department have become synonymous with words like “fraud,” “cavalier” and “blinkered.” But those who do tell have often been treated miserably afterward; as Chuck Grassley, the Republican senator from Iowa, has dryly observed, whistle blowers tend to be as welcome as a skunk at a picnic. Noted constitutional lawyer Julius Grey speaks for much of the public when he says that he disapproves of the culture of whistle blowing in general, simply because it underscores the notion that people have an automatic duty to report wrongdoing whenever they encounter it. “It’s the systemic nature of it,” he explains. “It leads to a society without trust; a society of squealers where people look over each others’ shoulders. And, you know, I believe that everybody breaks the law, that every single person over 30 or 40 years old will find moments in their lives where a well-placed phone call would have put them in very serious difficulty.” Still, Grey admits that whistle blowing is a moral balancing act, one in which the needs of the majority must be weighed against the cost of telling—a cost that is often heavier than expected. Just ask chemist

Pierre Blais, a former scientific adviser with the federal Health and Welfare Ministry who in 1989 publicly denounced the Meme breast implant as “unfit for human consumption.” In short order, he lost his job, was treated as a psychotic nut, received letters warning him to shut up, and got anonymous, threatening phone calls. Strangers took photos in broad daylight of his family’s home, and cars followed his children to school.

“It’s the unwritten side of whistle blowing, or corrective action measures, as it’s called elsewhere,” says Blais, now a consultant in Ottawa. “At the beginning, you don’t anticipate it and it’s unsettling. But eventually, you accept it as being part of the risk. It’s like triage in a war zone: with time and repetition, you become hardened and desensitized to it.”

And the stories just keep on coming. They all sound similar—and similarly discouraging. Think of Sherron Watkins, the Enron whistle blower who was ostracized, or Coleen Rowley, the hard-bitten FBI agent who came forward after September 11 to tell of information that had been ignored and found herself the subject of mean-spirited gossip. Or Jeffrey Wigand, the former tobacco executive who lost his job and was treated as a big-mouthed pariah by friends and family after he revealed that Brown & Williamson, the company he worked for, was adding toxic chemicals to tobacco to make it even more addictive. Or Cynthia Cooper, the former chief audit executive at WorldCom Inc. who was central in exposing $3.8 billion in fraud back in 2002. She couldn’t sleep, and lost friends, colleagues and weight. Each night, as she lay in bed, she tried to find comfort as her father sat and read to her the Twenty-Third Psalm.

Donald Soeken, a psychotherapist in Maryland who specializes in the issues faced by whistle blowers, most recently those who called the media about U.S. torture of prisoners at Abu Ghraib prison in Iraq, describes them as rigidly ethical people who follow through on what they were taught as children. According to a study he did in the 1990s, most of them are “absoluters” —people for whom life is divided into right and wrong, black and white. “If someone came to me beforehand, I’d tell them, ‘If you can’t do it anonymously, don’t do it, because you’ll be sacrificing yourself.’ But they won’t do that, because the rest of the story is that whistle blowers don’t listen to advice about anything they feel is high priority,” he says.

Soeken, who has a whistle blower retreat in West Virginia called Whistlestop, knows the drill. Back in the late 1970s, he was working for the U.S. Public Health Service, assessing federal employees after their supervisors had deemed them mentally unstable. He noticed all his patients had something in common, namely, they’d been whistle blowers who’d called the system into question. So, he found a new calling, starting Integrity International, a non-profit foundation that works to ensure whistle blowers are able to speak freely, continue working and not be harassed or intimidated.

That said, it’s easy to understand why Colin Grant, a religious studies professor at Mount Allison University in Sackville, N.B., who has previously written about whistle blowers in the Journal of Business Ethics, describes them as saints, at least in a secular culture, complete with self-sacrifice and acting for the good of others. “I’d probably chicken out if I was faced with such a situation,” he says. “I wouldn’t have the courage to go to the extreme.”

And why Inkster, the former RCMP commissioner turned consultant, notes that in every investigation he has been involved in, there has always been someone who, within an hour of it starting, has said, “Damn it, I knew something was wrong but I didn’t do anything about it.”

But it’s also an attitude that is beginning to change here, if only given the trend to anonymous tip lines and websites, and the growing realization that bad things happen, even in nice, milquetoast Canada. “We just didn’t realize we had issues,” says Penny Collenette, a former prime minister’s office staffer who has since developed a course on whistle blowing for the University of Ottawa’s law school, her alma mater. “We thought we were OK, but then cases like Nortel Networks and the sponsorship scandal woke us up.”

In 2002, Collenette had a senior fellowship at Harvard University’s John F. Kennedy School of Government. She arrived just as Enron imploded and spent much of the next two years researching corporate governance issues. Upon her return to Canada in 2004, she developed the course, which has proved a forum for debate about whistle blowing in general, reflection on the students’ own moral compasses, and as a way to compare Canada’s response in both the private and public sectors to that of the rest of the world—namely, slow and steady.

They learn that here, statistics show that somewhere between one to three per cent of employees in both the public and private sectors, each year report suspected malfeasance. They argue about the merits of legislation such as Sarbanes-Oxley in the U.S. and the Public Interest Disclosure Act in England; the former is well-intentioned but onerous, especially for smaller firms because the cost of compliance, which includes hiring internal auditors to investigate complaints, often runs into seven figures. England’s version, enacted in 1999, was based on the notion that it should be about the message, not the messenger, complete with an independent employment tribunal that hears informant complaints. “It’s not piecemeal, and it has led to a bit of a shift in British business culture so that if someone has brought forth something from the company, they say ‘Well done’ rather than ‘What have you done?’” Collenette says.

Not that it’s all clear sailing across the water. A study commissioned last year by the British Institute of Business Ethics and Management Today magazine found that whistle blower protections only go so far and that a little bit of financial fiddling is seen as fine. After canvassing 759 full-time employees, it found one in four of them had felt pressure to compromise their organization’s ethical standards, while one in five had observed but not reported unethical or illegal conduct by colleagues.

The students also hear from whistle blowers themselves. Last semester, the speaker was Joanna Gualtieri, a lawyer and former portfolio manager in the Department of Foreign Affairs who was fired after she revealed unnecessary expenditures in her department. Whistle blowers, she told them, tend not to be disgruntled workers with axes to grind; rather, they are people who feel they have no choice but to speak out after their efforts to deal with the problem within the confines of their office go nowhere.

Still, the course is at the cutting edge of a phenomenon so new, there is only anecdotal evidence as to how much crime is being curtailed by it. Companies are reluctant to talk about things that could possibly put them in a bad light, while firms such as KPMG and Bay Street’s ClearView Strategic Partners Inc., both of which operate independent whistle blower lines and websites for clients, are reluctant to reveal information for fear of breaching confidentiality and ceding ground to the competition.

What is clear, though, is that the companies that are using whistle blower tip services cut a swathe through the private and public sectors, from Quebecor and Air Canada through to provincial governments and municipalities. Phil Enright, ClearView’s executive vice-president, even says that his company doesn’t use the term “whistle blower,” preferring the more positive, pro-active “ethics reporting system.”

“If you drop the term “whistle blower” into a system, you’re sending the wrong message, plain and simple, because you’re looking for something wrong,” he tells me. “We like to think that we’re putting this in place because we want to do the right thing.”

It’s a service the accounting clerk who discovered the cheque made to a BMW dealership could have used. Despite her fears, it worked out for her because the subsidiary, which had been bleeding money due to the thefts, quickly became profitable again. “It’s proof there can be happy endings, except, of course, for the crook,” Inkster says. “The company was very grateful for her courage in coming forward.”