Tom Mueller on Crisis of Conscience Whistleblowing In an Age of Fraud

Tom Mueller has written a book on whistleblowing called – Crisis of Conscience: Whistleblowing In An Age of Fraud (Riverhead Books, 2019).

It’s about right versus wrong.

Law and order versus corporate crime.

Can you identify something in your background that drew you to this subject?

“I have been accused at times of being Old Testament in my rights and wrongs,” Mueller told Corporate Crime Reporter in an interview last week. “This is wrong and should never happen. And of course, that can be overdone. But I did recognize in a number of whistleblowers that I interviewed a sort of black and white approach to ethics. That is a wrong thing and should never be done. It is the opposite of the utilitarian approach. They weren’t interested in whether it was good overall for the company or for their university or for their hospital. They knew this thing they were doing was wrong and they needed to speak up about it.” 

“I resonate with that. Where that comes from, I have no idea.”

You live in Italy. How did you end up there?

“My wife was at Goldman Sachs when we were working there in the 1990s. We met at Goldman and we quit together and started a trip around South America. We raise our children here in Italy.  I divide my time between Italy and Spokane, Washington, where my mom and brother are. But I’ve spent a lot of time in Italy.“

You wrote a book in 2012 about the olive oil industry. It is called – Extra-Virginity: The Sublime and Scandalous World of Olive Oil (Norton, 2012).

How did your new book arise from that book on olive oil?

“It was serendipitous. I encountered John Phillips who is prominently mentioned in the book. His family comes from northern Italy.”

“Phillips is a very successful False Claims Act attorney who basically, along with Senator Charles Grassley and Congressman Howard Berman, revamped the law and gave it back its teeth. Those teeth had been knocked out by defense contractors during the Second World War.”

“A mutual friend introduced us. He has a place in Italy. I went and met with him there. And he just talked about the False Claims Act and how important it was. I had never heard of this law – the Lincoln law.”

Before you met John Phillips, you had never heard of the False Claims Act?

“Correct. I had heard of whistleblower laws. But I had never actually heard of the False Claims Act. I didn’t know how it worked. I didn’t know of this wonderful qui tam provision, which allows the individual to become a private attorney general. All of this was new to me and very exciting. I thought –  I need to dig into this and learn more about qui tam whistleblowing, where it came from, it’s origins in Roman law and medieval English law.”

“Gradually, I started talking with whistleblowers. And they told a very similar story. And it runs like this – I was just doing my job. And by the way, they hate the term whistleblower. They say – I was just doing my job. And I noticed that there was something wrong. So naturally, thinking I wanted to save my organization some pain, I took it to my boss. And they weren’t interested. And I took it to my boss’s boss, and they weren’t interested.”

“And then I realized – that wasn’t a bug. That was a feature, the fraud was hard wired into the organization.”

“The scenario as always this –  when someone blows the whistle repeatedly and this comes out, they are moved from their desk to a temporary desk, preferably near a toilet, preferably down in the basement, always near a copier or two copier machines that make a lot of noise. Their phone is taken away. They are ritually humiliated in every way possible. And then somewhere along the way, there is the pink slip.”

“For the first time, they find out about the False Claims Act. And then they realize – false claims. That is something I was doing as part of the organization. Under the False Claims Act, I can at least attempt to salvage some kind of financial well being for myself and my family. I am not only fired, but I’m blackballed in my industry. This is a scenario that I heard again and again and again when I spoke with qui tam whistleblowers.”

“Then I started talking with government agency whistleblowers – people who blew the whistle on the Food and Drug Administration or various parts of the military industrial complex. I heard the scenario again and again and again. There was personal retaliation and vindictiveness against them. This was clearly something that triggered deep human drives – loyalty, obedience, justice and truth.”

“As I spoke with these people, I gradually began to understand what that kind of ritual humiliation means for a company person, someone whose identity is bound up with their organization. This was horribly painful. It was sort of like solitary confinement. It causes real damage.”

Out of the 200 or so whistleblowers that you interviewed, you give deep profiles of a handful in your book – including Ernest Fitzgerald, Daniel Ellsberg, Bill Binney, Franz Gayl, Allen Jones.

The whistleblowers you profile are the successful whistleblowers. What about the unsuccessful whistleblowers, those who failed to get a modicum of justice or secured some kind of financial recovery?

What can you say about those whistleblowers?

“Certainly, failures are the majority. Even the ones that I profile were successful perhaps in a monetary way. But for many of them, if they had just kept their heads down and stayed with the program, they would have made a lot more money long term. They certainly don’t feel as if justice was done. They don’t see themselves as successes as whistleblowers. The ultimate victims of the acts they are making public were not helped.”

“There is a problem with sampling. I attempted early on in my work to contact corporations and say – I’m writing about whistleblowing. But I understand that my sampling is of whistleblowers who have gone nuclear, whistleblower situations that have blown up, there are lawsuits, there is a public record, they have come to the attention of the press.”

“I want to tell the other story, where everything goes well. Where an internal whistleblower says –  hey boss, I think we are breaking the law here. And the boss says – you are right, we should fix that. And they fix it. And it goes away. And no one ever hears about it including myself.”

“The problem is that no organization that I contacted wanted anything to do with this. They of course didn’t want to admit that they had done anything wrong and they had fixed the problem, even though it would have made them look good. Their legal departments had no time for this.”

“So, I admit to a certain problem in sampling. The stories I tell are quite often stories that reach lawyers, the public and the press and my ears. But as far as those stories being successes, most of the people in my book would not say they are successful whistleblowers. Ultimately, the real victims of the acts they are calling out were not helped. They may have made some money in the process, but ultimately, it was a pittance compared to what they would have earned had they just sat tight.”

What did you find out about the Justice Department’s view of the False Claims Act?

“My sense was that the line attorneys realize that the vast majority of good information that they will build career cases on come from whistleblowers and that the False Claims Act and whistleblower laws are essential tools for them to use in bringing justice to corporate America.”

“At the same time, as individuals, many attorneys were working in highly structured, highly hierarchical organizations like the Department of Justice don’t trust or particularly like individuals who will turn on their bosses or their chain of command and go outside the organization. Instinctively they don’t trust them.”

“One very good Assistant United States Attorney, whose name I won’t give you – and this person is extremely successful in prosecuting whistleblower cases, said to me – do you know that I sometimes have breakfast with whistleblowers and they have alcohol on their breath?”

“After having spent so much time seeing what whistleblowers go through, I would not be the last to take a stiff drink before going to meet a prosecutor and making sure my case goes through and making sure my family survives financially. But there is a sense of whistleblower as snitch, ratfink, traitor that pervades many prosecutor’s personal approach to whistleblowers even though they, unlike the current Attorney General, espouse the basic philosophy of the law and make their careers on whistleblower lawsuits.”

You also quote a Justice Department official, Joyce Branda. You report that in the Singer case, she blew up at John Phillips and his colleague Robert Montgomery who were representing the whistleblower in the case. Branda said to Phillips and Montgomery – “this is so wrong, this is outrageous, we do all of the work and you get all of the money.”

There is this sense among Justice Department lawyers that whistleblower lawyers are getting a free ride on the public dime. Is that a legitimate argument?

“I don’t think it’s legitimate at all. It’s a Chamber of Commerce argument that doesn’t have legs. In order for the whistleblower to navigate the extremely treacherous legal landscape against a phalanx of defense lawyers, they need very good representation. And that very good representation costs something. And the money is ultimately paid by the defendant – the fraudster, including legal fees in some cases.”

[For the complete q/a format Interview with Tom Mueller, see 33 Corporate Crime Reporter 34(10), Monday September 9, 2019, print edition only.] 

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