A Guide to Whistle-blowers: Resources and Risks

November 2015

IN THIS ISSUE

— Someone on the Inside: The Potential Roles of Whistle-blowers in Investigations
— Cooperation and Scrutiny: Handling Whistle-Blowers

GREETINGS!

Welcome to the November edition of our newsletter! In this issue, we’ll examine how whistle-blowers can aid in corporate investigations, and the risks to both your company and the whistle-blowers themselves.

SOMEONE ON THE INSIDE: THE POTENTIAL ROLES OF WHISTLE-BLOWERS IN INVESTIGATIONS

While the traditional image of a whistle-blower is that of a “Deep Throat”-style source arranging clandestine meetings in a parking garage, in reality whistle-blowers have become a much more integral part of corporate investigations. The majority of internal investigations begin with a message to a tip line, often made anonymously. Sometimes the whistle-blower, who has some level of knowledge of a perceived fraud or wrongdoing, is never identified. In certain instances, as with claims of overbilling federal government programs, the whistle-blowers make themselves known as part of a legal proceeding brought on behalf the government agency at issue.

While each employee’s knowledge of abuses can vary, the information gleaned — if obtained legally and properly preserved by both the source and the investigator — can protect your company from the financial and public relations damage an insider fraud case can bring. Without proper safeguards for both the source and their evidence, however, an inquiry can do more harm than good.

COOPERATION AND SCRUTINY: HANDLING WHISTLE-BLOWERS

Like journalists chasing a “hot scoop”, there are risks for investigators who believe a source’s information is a “smoking gun” of impropriety. While this occurs in a few cases, most of the time the information obtained is best used to uncover a layer of information that was previously hidden, and from which people can be identified for interviews, other records can be sought, and other traditional investigative avenues pursued.

While a source is obviously putting their job — and possibly their reputation — at risk by coming forward with information, vetting of sources is also an important step. An understanding of the source’s history at their current (and past) employer is a key aspect to consider before going ahead with an investigation predicated on the information. Does the source have another agenda beyond exposing fraud, such as retribution after a poor performance review? Have they made similar complaints at other jobs? Do they have financial difficulties which they are hoping to remedy by receiving a percentage of a civil penalty or fine? By understanding the context in which allegations are made, including the background of the source making them, you can protect your company from uncovered fraud while ensuring that the integrity of the inquiry remains intact.