GAP returned to Auburn University and its School of Accountancy for the fourth stop on its 2012-2013 American Whistleblower Tour last Thursday (Jan. 31), bringing with us whistleblowers Frank Casey, who sought to expose Bernie Madoff’s $50 billion dollar Ponzi scheme with his Rampart Investments partner Harry Markopolis, and Jon Oberg, who saved taxpayers billions of dollars after exposing illegal payments of federal tax to student loan providers. Auburn’s War Eagle spirit supporting whistleblowers and ethics education was off the charts!
The evening panel presentation (centerpiece of most Tour stops) attracted a crowd of nearly 300 students, faculty, staff, and members of the public. In riveting detail, Casey described the nine-year hunt to expose Madoff, and the utter failure of the SEC to act on information he and Harry Markopolis presented to the agency multiple times before the Ponzi scheme collapsed. Oberg’s incredible account of his efforts to research and stop illegal payments to lenders of federally-guaranteed student loans resonated with the accounting students. Oberg’s case closely tracked the classic stages of a whistleblower’s experience:
- Discovering the fraud,
- Disclosing it to his supervisor to try to end the payments,
- Facing some retaliation in the form of being told to no longer pursue or work on that issue,
- Isolation in the form of being denied information to doing further research,
- Finding some solidarity after getting support from Congress and the General Accounting Office (now the Government Accountability Office) to affirm his finding and agree with his assertion to end the payments, and
- Vindication when the payments were ended in new legislation and when the loan companies returned millions to the public coffers in settlements with the Department of Justice as a result of False Claims Act law suits Oberg filed as a private citizen after retirement.
Before the main event, Casey and Oberg spoke in faculty roundtables and in two Masters-level capstone accounting classes, each of which focused on ethics in the profession and taught by faculty host Professor Sarah Stanwick, who also serves on GAP’s faculty committee focused on developing whistleblowing teaching materials.
Last year, the School of Accountancy eagerly hosted a Tour stop featuring whistleblower Sherron Watkins, famous for blowing the whistle on accounting fraud that brought down the Enron Corporation in 2001, and Kenneth Kendrick, who in 2008 exposed unsanitary conditions and corrupt testing practices at the Plainview, Texas plant of Peanut Corporation of America that contributed to the deaths of at least eight people and sickened hundreds more across the country. The response by students to Sherron and Kenneth was overwhelmingly enthusiastic, and Auburn quickly invited GAP to return to campus this year. This is the first repeat stop of GAP’s young Tour program (started in late 2011).
In contrast to last year’s event, which offered a cautionary message about the risks involved with blowing the whistle, Frank’s and Jon’s stories told a more encouraging tale to the accounting student crowd: you canblow the whistle and successfully combat fraud, and even find the experience intellectually stimulating. Notably, neither Frank nor Jon experienced significant retaliation: Frank largely because he neither worked directly for Madoff nor, as the “covert investigator,” presented information directly to the SEC (Harry Markopolis, on the other hand, experienced significant stress and paranoia after presenting their findings to the SEC); and Jon, largely because he was nearing retirement and had developed unassailable professional credibility and strong relationships with important allies inside and outside of the Department of Education.
Each whistleblower’s story put a fine point not only on the important role truth-tellers can play in combating and preventing fraud (and indeed the responsibility that accountants and auditors have to identify fraud if they see it), but also on some of the important factors in raising a concern in the most effective and safest way possible: Document your findings, have a solid professional reputation, pursue the issues responsibly, and find allies.
As for me, I am deeply appreciative of the opportunity to work with a school that understands the educational and professional value of having its students hear the real experiences of people guided by ethics who stood up when they witnessed serious wrongdoing. Many faculty members told me how much they and their students referenced last year’s stop throughout the year in their courses and conversations. I hope this year’s events offered equal value in the classroom and beyond to this amazing, thoughtful audience.
Sincere thanks must go to Dr. Stanwick, who organized another visit full of Southern hospitality and intellectual stimulation, supported in full by
DeWayne Searcy, Dean Hardgrave and all the faculty who greeted our return so enthusiastically. Thanks too to all of the students who volunteered to help at the event and asked such great questions. Finally, I want to extend special thanks to Frank and Jon, who after blowing the whistle to protect the public interest, have chosen to give so generously of their time and tremendous spirits in the service of educating tomorrow’s youth by partnering with GAP on its American Whistleblower Tour. You are my heroes.
The next Tour stop is this week at Florida International University, another “return visit” because of the school’s enthusiastic response last year’s stop. GAP President Louis Clark will host the event, and will be joined by two financial whistleblowers who disclosed serious fraud: Michael Winston, who was retaliated against after refusing to write a fraudulent report about mortgage loan giant Countrywide’s corporate governance plans and policies, and Eric Ben-Artzi, who experienced reprisal and ultimately termination after disclosing internally, and to the SEC, evidence of Deutsche Bank hiding as much as id=”mce_marker”2 billion in losses from investors.
We have several more Tour stops scheduled through Fall 2013, with Auburn also inviting us to return this time next year. If you are a faculty member or student interested in learning how you can bring the Tour to your college or university, please contact our terrific Tour Coordinator, Alison Glick, at firstname.lastname@example.org.
Dana Gold is the American Whistleblower Tour Director for the Government Accountability Project, the nation’s leading whistleblower protection and advocacy organization.