Corporations vs Employees - Little Justice in Internal InvestigationsBruce Green in Forbes, January 02, 2013
After attending numerous conferences during the year, I can tell you that compliance officials in corporate America were concerned that employees would jump at the opportunity to run to the federal government to rat out the company through the whistle-blower reward program. The provision entitles the whistle-blower to a cash reward based on the fine paid by the company . However, I don’t think companies have anything to worry about, but the employees just might.
Bruce Green (Fordham Law) and Ellen Podgor (Stetson Law) recently published a paper on corporate internal investigations and the substantial risks posed by them to employees. When a company believes there has been a crime or ethical breach, the internal investigators descend into the ranks of staff to find out who knows what. No Miranda Rights. No taking the 5th. No legal representation (the company has lawyers of course) …. just people trying to figure out what, if anything, has gone wrong. Whereas people believe that the corporate interests are aligned with their own personal interests, that just is NOT the case. It is a confusing time and it can leave employees in a bad situation when the criminal justice arm of the feds come knocking.
Legal papers are known for presenting unintended consequences and Green/Podgor present their share …. but I have found out that some of their concerns are being played out in our legal system today. When one considers the vast amount of evidence gathered in an investigation, it is not only used to find the “bad guys”, it’s used as a way to get the company out of more trouble with the feds. In our U.S. justice system, information that you have on other people helps reduce punishment, imposed as fines on corporations and years in prison for people. Once a company has their arsenal of data, it is used for its benefit, not the employees’. We are seeing this playing out right now in the case of the BP Oil spill.
Kurt Mix, whose case has been written about here, worked at cleaning up the oil spill in the Gulf of Mexico but he was arrested earlier in 2012. His charge? Obstruction of justice associated with him allegedly deleting some text message strings when he was under orders from BP to not delete ANYTHING. The feds said that Mix deleted the text string to hide information related to flow rate of oil into the Gulf of Mexico, a number that would be used in calculating the fine BP would pay for damages (recently settled). All that information that Mix and other BP personnel gathered during the cleanup was handed over to the government as a means to minimize the damage, but it did nothing for Mix. In fact, Mix has had a difficult time clearing name and has made claims that BP has information that could clear him …. but BP has been slow in releasing that information as it was more concerned with reducing the affects of the spill on shareholders.
In addition to Mix not having access to information that would help him fight the charges against him, some of the very information, now evidence, he helped gather during the spill was used to bring criminal charges against BP executive David Rainey who the feds have charged with lying to Congress about the amount of oil spilled into the Gulf (a calculation Mix personally worked on). BP’s information was turned over to the government as part of the subpoena to preserve information related to the spill, good for BP, but bad for Mix and Rainey. Think about it, if Mix had information that he personally could have used to throw Rainey under the bus, the feds would have gladly given him a pass (no jail). Instead, he’s looking at prison and Rainey’s chances are not looking so good either.
To all those compliance officers out there, relax. Corporations have the upper hand on obtaining and using information gathered during an internal investigations. Employees? Not so much.