Caslon Analytics elephant logo title for Whistleblowing Cases note
home | about | site use | resources | publications | timeline   spacer graphic   blaw


qui tam


Australia 1

Australia 2



related pages icon





related pages icon


& Cyberspace


section heading icon     US cases

This page highlights some US whistleblowing cases.

It supplements the discussion of whistle-blowing and secrecy.

The following cases are of interest because they suggest some of the social benefits, personal costs and institutional resistance to whistleblowing.

subsection heading icon    The Pentagon Papers Case

US intelligence analyst Daniel Ellsberg provided the New York Times and other newspapers with access to a comprehensive study documenting the 'secret history' of US military and political activity in South East Asia.

The case is discussed in David Rudenstine's The Day the Presses Stopped: A History of The Pentagon Papers Case (Berkeley: Uni of California Press 1996), Inside the Pentagon Papers (Lawrence: Uni Press of Kansas 2004) edited by John Prados and Margaret Porter, Speaking Freely: Trials of the First Amendment (New York: Viking 2005) by Floyd Abrams and Ellsberg's Secrets: A Memoir of Vietnam & the Pentagon Papers (New York: Viking 2000).

subsection heading icon    Deep Throat

Mark Felt, former second-in-command at the US Federal Bureau of Investigation, admitted in 2005 that he had been the 'Deep Throat' who supplied crucial information to reporters Woodward and Bernstein about the misdeeds of President Richard Nixon.

The Economist commented that

His information kept the break-in alive as a news story. He pushed the reporters, then lowly hacks from the Metro section, to look higher into the administration by imploring them to "follow the money" - which would become an enduring aphorism for the American press. He revealed the White House cover-up, which forced Nixon to leave office before he was impeached. Without Mr Felt's actions and the courage of the Washington Post's publisher, Katharine Graham, Nixon would have served out his term.

Felt was convicted, post-Nixon, for authorising illegal FBI break-ins against anti-Vietnam War protesters.

For views of Felt's whistleblowing see All the President's Men (New York: Simon & Schuster 1974) by Bob Woodward & Carl Bernstein, Woodward's The Secret Man: The Story of Watergate's Deep Throat (New York: Simon & Schuster 2005), David Halberstam's classic The Powers That Be (New York: Knopf 1979), editor Ben Bradlee's A Good Life: Newspapering & Other Adventures (New York: Touchstone 1996) and David Greenberg's superb Nixon's Shadow: The History of an Image (New York: Norton 2003).

subsection heading icon    The Insider and Tobacco

Dr Jeffrey Wigand disclosed questionable practice by US cigarette group Brown & Williamson and its peers.

After Wigand, a former B&W head of research and development, told the US media in 1996 that cigarettes were the "delivery device for nicotine" he faced lawsuits and death threats but was persuaded by journalist Lowell Bergman to reveal in a television interview that tobacco companies knew nicotine was addictive, that carcinogenic material was knowingly added to cigarettes, that research exploring the dangers of cigarettes was suppressed and that attempts to develop a "safer" cigarette were axed.

Wigand noted that executives "eliminated all reference to anything that could be discovered during any kind of liability action in reference to a safer cigarette". His subsequent testimony was instrumental in a US$206 billion settlement in 1998 between the tobacco industry and 46 US states for the costs of treating sick smokers.

The case is explored in Smokescreen: The Truth behind the Tobacco Industry Cover-Up (Upper Saddle River: Addison-Wesley 1996) by Philip Hilts and The Cigarette Papers (Berkeley: Uni of California Press 1996) by Stanton Glantz, online here. It formed the basis of the Russel Crowe film The Insider. A perspective is offered in The Cigarette Century (New York: Basic 2007) by Allan Brandt.

Self-censorship by the US media in reporting Wigand's whistleblowing is considered here.

subsection heading icon    Silkwood and Kerr-McGee

Karen Silkwood gained attention for claims of malpractice by nuclear fuels group Kerr-McGee before coming to what was portrayed in the 1983 Hollywood feature Silkwood as an untimely end.

There is an account of the case in Richard Raschke's The Killing of Karen Silkwood: The Story Behind The Kerr-McGee Plutonium Case (Boston: Houghton Mifflin 1981).

subsection heading icon    
National Fuel Gas and Lee

New York utility National Fuel Gas sacked corporate lawyer Curtis Lee after he alleged NFG's chief executive and president had ordered him to increase their remuneration by backdating stock options on forms submitted to the SEC. NFG then successfully sued Lee for the return of documents that might have provided proof and in 2002 persuaded a local court that he was in contempt of court, prohibiting him from repeating the allegations. The court notoriously ruled that he undergo psychiatric treatment (subsequently reversed on appeal after Lee had been 'treated'). The SEC investigation was frustrated by the death of the chair of NFG's compensation committee.

subsection heading icon    Enron, Watkins, Ceconi and others

Enron executive Sherron Watkins alerted CEO Kenneth Lay to large-scale accounting irregularities in August 2001. She resigned in November 2002 after inaction by Lay and other officers and after "she had been demoted 33 floors from her mahogany executive suite to a 'skanky office' with a rickety metal desk and a pile of make-work projects". Enron subsequently collapsed amid claims of regulatory indifference and complicity by auditors.

She disarmingly commented that

I don't think Enron is that unusual. After all, we have a chief executive class which act like dictators of small Latin American countries.

The Economist commented in 2006 that

Ms Watkins, at first sight a rare exception, is arguably not even a whistleblower. She made no systematic attempt to reveal wrongdoing to internal or external authorities, the defining action of a whistleblower. Her qualms were instead laid out in an internal memo that she wrote to her boss, Mr Lay, expressing a fear that the company might "implode in a wave of accounting scandals". The memo was uncovered by an investigative committee after the company had collapsed.

Lynn Brewer's Confessions of an Enron Executive (New York: Authorhouse 2004) claims that many of her colleagues tried to alert authorities, notably Margaret Ceconi in anonymous messages to the SEC in July 2001 and publicly to Enron directors in August 2001. In 2006 lawyer's for defendant Ken Lay characterised Ceconi as "a nutcake".

Watkins co-authored Power Failure: The Inside Story of How Enron's Culture of Greed Led to the Biggest Bankruptcy in American History (New York: Doubleday 2003) with Mimi Swartz. Studies of Enron - such as Corporate aftershock: the public policy lessons from the collapse of Enron and other major corporations (New York: Wiley 2003) edited by Christopher Culp & William Niskanen and Innovation Corrupted: The Origins and Legacy of Enron's Collapse (Cambridge: Harvard Uni Press 2008) by Malcolm Salter - are highlighted in this site's discussion of the dotcom and telco bubbles.

subsection heading icon    Cynthia Cooper and WorldCom

WorldCom VicePresident Cynthia Cooper, responsible for performance evaluations and setting budget standards, informed the Board's audit committee that WorldCom had used deceptive bookkeeping to hide US$3.8 billion in losses (subsequently assessed as over US$9 billion).

Her account is Extraordinary Circumstances: The Journey of a Corporate Whistleblower (New York: Wiley 2008). Pointers to studies of WorldCom - such as Disconnected: Deceit and Betrayal at WorldCom (New York: Wiley) by Lynne Jeter - feature in our discussion of the telco bubble.

subsection heading icon     Xerox and Duke

US executive Barron Stone alleged that Duke Energy group fudged its accounting from 1998 to 2001 to receive substantial benefits from US state governments. Stone alerted his superiors in 1999 that the practice did not meet "generally accepted accounting principles" but was told that their decisions were final. In 2001 he anonymously alerted state regulators and Duke senior executives. His identity was apparently disclosed and he was transferred to the Duke equivalent of Siberia.

Xerox Assistant Treasurer James Bingham was less lucky, being who fired in 2000 after publicising creative accounting that had boosted the group's reported earnings.

subsection heading icon    San Diego

UBS Financial Services investment adviser Diann Shipione, a trustee of the San Diego city employee retirement system, blew the whistle on a proposed San Diego sewer bond issue in 2003 after identifying that the city had not disclosed underfunding its public pension fund (with an unfunded liability of over US$1.15 billion). The city owed around US$1 billion in health care benefits to retirees. The proposed issue implied that the fund's actuary had approved the underfunding.

Shipione commented that

I had completely lost confidence in the city's financial decision making. I just couldn't let this go forward.

Going public resulted in postponement of the bond sale and significant downgrading of the city's credit rating, raising future borrowing costs. The city admitted that it had misstated its financial condition. Several senior officials resigned. Retired employees sued the city demanding action to fix the shortfall and the Securities & Exchange Commission initiated an investigations, accompanied by an FBI inquiry.

subsection heading icon    Rost and Pfizer

Pfizer vice president for corporate marketing Peter Rost claimed in 2003 that Pharmacia, acquired by Pfizer earlier that year, illegally promoted the sale of human growth hormone for unauthorised uses such as anti-aging therapy. The claim was followed by an often public disagreement, including criticism on 60 Minutes that Pfizer had sought to block US consumers from saving money by importing prescription drugs, and culminated in Pfizer firing Rost in December 2005.

A Pfizer spokesman commented in 2005 that

Peter Rost filed his whistle-blower lawsuit after Pfizer brought the matter to the government. His actions in this regard were clearly opportunistic

and went on to suggest that Rost was essentially blowing the whistle on his own conduct. The spokesperson claimed that Rost had asked Pfizer for a severance package of US$12.5 million in 2004, and that his public criticism began only after the company rejected the severance package. Rost said he believed he had filed his suit before Pfizer disclosed any information to the government, bringing the suit because Pfizer and Pharmacia repeatedly rejected his efforts to tell the FDA about the marketing.

I had spent from October 2002 trying to get Pfizer and Pharmacia to take action and finally took my own action.

subsection heading icon    Fishbein and the NIH

In 2005 the US National Institutes of Health (NIH) reinstated medical safety expert Dr Jonathan Fishbein, who had been fired after raising allegations of scientific misconduct and sexual harassment in federal AIDS research.

Fishbein alleged he was fired for raising safety concerns; the NIH said he was fired for poor performance, although he had been recommended for a cash performance bonus just weeks before he was notified of termination. He was hired by NIH in 2003 to improve the safety of its AIDS research. He raised concerns about several studies and filed a formal complaint against a senior manager alleging sexual harassment of subordinates and a hostile workplace.

An internal review substantiated many allegations, characterising the NIH AIDS research division as ''a troubled organization'' whose managers engaged in unnecessary feuding, sexually explicit language and other inappropriate conduct. It concluded NIH's efforts to fire Fishbein gave the ''appearance of reprisal" and represented a denial of justice.

An administrative law judge initially ruled that, unlike ordinary federal workers, Fishbein and similar experts had no whistleblower protection because they were hired outside the civil service system as special employees at a higher salary. Amid criticism the government reversed course, arguing such people should have some protection. The NIH proceeded to fire Fishbein and then, after strong criticism, to rehire him in what is seen as an admission that his whistleblowing was justified.

Eric Poehlman, a tenured faculty member at the University of Vermont, admitted during federal court action to fabricating over a decade's scientific data on obesity and aging. That data had been helpful in obtaining millions of dollars in grants from the US National Institutes of Health. Poehlman's admission followed denial of charges against him, perjury and attempts to discredit critics such as whistleblower Walter DeNino.

icon for link to next page   next page (US qui tam cases)

this site
the web


version of August 2008
© Bruce Arnold | caslon analytics