The One Thing Every Company Can Do to Prove It has Integrity - Not One Does

Example after example shows that good people can be blind to corruption - even evil - right in front of them. For example, the founding fathers agreed that "all men are created equal," yet some owned slaves. Jefferey Epstein's example is timely. No one will admit to being ok with sexual predation of children. Yet until recently, New York’s elite were willing to look past Epstein’s 2009 registration as a sex offender and his 2008 conviction for “solicitation of a minor for prostitution” – a sex crime involving a child. The man was a well-known pedophile yet senior officials at Epstein’s bank, JPMorgan, kept him as a client after his conviction. Epstein hosted charity events for hundreds of people - and their children. The actions of almost everyone involved: Florida’s prosecutors (who let Epstein avoid serious charges), the bank (who kept Epstein as a client) and New York society (who accepted him as a respectable member) amounted to complicity. The prosecutors allowed a slap on the wrist to stand as punishment for large scale, organized child sexual predation. If people had thought about it for more than a second, they must realize this action would inevitably lead to more child sexual predation. Twelve years later, New York authorities raided Epstein’s home, found nude pictures of children, charged him, and sent him to an actual jail where he took his own life. Now people are competing to see who can be more outraged. Where were all these outraged people for the last 15 years? The Florida prosecutors, bank employees, and New York society are not bad people, but their acceptance and normalization of Epstein’s corruption shows how blind people can be. Sexual predation of children is abhorrent; it's much worse than tax fraud. If people can somehow become comfortable with (or blind to) a convicted pedophile, they can become comfortable with tax fraud and other corporate crime. This has happened. The trick is to get people to open their eyes and see it. 

Large companies and their employees have accepted corruption, especially tax cheating. This is made clear by many things, but one is particularly telling to me: the universal blackballing of whistleblowers. Companies espouse high values, but people who report crimes are punished while those who hide them are rewarded. (Please see my discussion with examples in “Corporate America is Corrupt Because Employees Incentives are all Wrong.”)  Blackballing whistleblowers enables corporate crime. It's that simple. Like Epstein’s tacit accomplices, some corporate leaders are blind to their ongoing complicity while others are all-too-aware of their actions. Either way, the right response to seeing people accept corruption is to challenge them. So, if your company isn't hiring whistleblowers (and no one in corporate America is), you are part of the problem. 

There is no doubt US companies are acting corruptly. The sheer number of corporate scandals each year makes this clear. So we know there are bad apples. Are there good apples too? Corrupt companies naturally claim to value honesty. just like good companies, but both are spouting empty blather unless the honest companies do something different from the dishonest companies. I believe one litmus test should be whether a company voluntarily hires and retains whistleblowers. That is currently never done. I have seen large companies hire people they know lied on SOx forms for senior financial reporting jobs. I have seen companies hire people reprimanded by Congress for selling tax shelters to run their tax departments. I have seen two companies hire someone (actually a great guy) to run a corporate communication team despite having lied on his resume. But I have never seen a company voluntarily hire a whistleblower. Never. And I have never seen a whistleblower return to his or her industry job. Whistleblowing is the one inexcusable sin. If the Epstein case is anything to go on, whistleblowing is apparently worse than pedophilia. It doesn’t matter how vindicated a whistleblower becomes. Not even Time Magazine Person of the Year, Sherron Watkins, or Olympus CEO Michael Woodford, or any of the hundreds of other vindicated whistleblowers have been offered attractive jobs with big companies. America has the lowest unemployment rate in decades, yet no publicly known whistleblower is currently employed by a large company or consulting firm. Not one that I can find. “Blackballing” is real. Many of the people doing the blackballing are doing so without realizing their action is corrupt. Like the people who brought their children to Epstein’s charity dinners, they are blind to their complicity.  

I am waiting for a courageous CEO to change this by hiring or retaining a couple of well-known whistleblowers. I don't mean hiring them to talk at a meaningless corporate retreat or speech. I mean hiring them as an employee with actual responsibility. Doing so would send the message: “we don’t tolerate fraud” much louder than blather in a mission statement.   In my opinion, change won’t come from HR, compliance, legal or a board of directors. These groups pretend to ethical leadership, but in reality, they look to their bosses. In my experience, boards are particularly toothless; I have never seen one that provides actual ethical oversight. Board members exchange their prestige and rubber stamp for money and more prestige. It will take a CEO-level change of behavior to bring integrity to corporate America.     

The whistleblower literature is full of dishonest employees prospering while honest whistleblowers are crushed. I give Walmart examples of this in another LinkedIn article, but examples are easy to find in public filings. Look at any corporate scandal, and see what happens to the senior people at the offending company. They don't go to jail; they aren't disgraced; they keep their jobs or move on to other top positions. This does not happen by accident. As long as corruption is rewarded and whistleblowing is punished, corruption will grow. Once whistleblowing is embraced, corruption will decrease – to everyone’s benefit.  

As I was finishing this article, I came across an interesting post. I don't want this article to be about me, but here is it: apparently, there is a negative unemployment rate for US tax professionals. Every job filled creates an opening and more new positions arise each year than there are graduates. I'm a tax professional who has been unemployed in tax for 3.5 years. My resume is full of high level tax positions at the world's biggest companies: GE, Caterpillar, Walmart, etc. I have been on many promising interviews. Like most industries, tax is a small world. Any serious employer can make a few calls (to my prior employers, Big 4 partners...) and learn I'm a whistleblower. As a result, offers never come. This is the case with all whistleblowers. We are all unemployable by America's "honest companies." I think that speaks volumes.