Should We Reward the Right Thing

 

I was at an all-day seminar oragnised by the International Fraud Group (IFG), yesterday. There were various discussions related to the issue of combating fraud and the one discussion that caught my attention was a discussion on whether countries should change their legislation to reward whistleblowers.

 

 As with most things, the biggest and most interesting cases of rewarding whistleblowers comes from the USA, where the Securities and Exchange Commission (“SEC”) paid a whistleblower a sum of US$279 million in May 2023.

https://www.sec.gov/news/press-release/2023-89

The main thrust of the SEC’s argument was that it made the payout because it wants to encourage whistleblowing. Whilst this was an amazing story, an American lawyer on the panel rightly pointed out that the system was not perfect.

Let’s face it, the topic of paying people for doing anything other than a nine-to-six job is something that many people struggle with. Call it the mentality of “I work so many hours a day for x number of dollars and so and so just makes one report and gets so much more.”

Whistleblowing is a particularly tricky topic in that it is more often than not an act that requires you to go against an organization or individual who has power over you. In school boy terms, you’re literally being a “grass” or a “snake,” to the hand that feeds and more often than not, to the “team” that you’ve grown up with. There is, in a lot of human societies thrive on concepts of “loyalty” to authority. That, as an Estonian member of the audience, pointed out, can be tricky, when you come from a society where people are terrified of “telling-on” people or oragnisations to the government. Post-Soviet societies are particularly terrified of this because they are trying to get out of a culture where people were terrified into “telling-on” their neighbours. A German speaking member of the panel made the point that the term “whistleblowing” in German is “informant” which has negative connotations.

Let’s face it, whistleblowing is not something that comes naturally and there are justified concerns that people may become “whistleblowers’ to get “revenge” on employers and that evidence provided by “whistleblowers” may be tainted if there’s a “reward” motive.

I get these points. Well intentioned systems can be abused. The welfare system in many Western countries is an example. The intention to ensure people don’t starve when they’re out of a job is a noble intention. However, the system has in plenty of cases “disincentivized” work. Rewarding whistleblowing can lead to abuse. So, the question is, why should you encourage people to be “disloyal.”

However, the case of not wanting to “reward” people for being “disloyal” has one fatal flaw, which is, it works on the assumption that people in authority are by default the good guys. One of the panelists in yesterday’s discussion is Ms. Ruth Dearnley, who is the CEO of STOP THE TRAFFIK Group, a charity dedicated to combating human trafficking. Her argument was simple – without whistleblowing she wouldn’t be able to do what she does. In Ms. Dearnly’s is in the business of helping victims of crime and relieving a menace.

To put it simply, those of us who happen to be working professionals living in a place where there is a “rule of law,” sometimes fall into the trap of thinking that everyone is like us. We go to work, which we may not necessarily like, does provide us with a reasonable livelihood. If you’re in a profession like law, accountancy or medicine, there is no need to “tell-on” your boss unless its an extreme “life-threatening” case. Members of any given profession have to comply with rules governing the profession as well as the laws of the land. So, whistleblowing only comes into our daily lives in extreme circumstances. – “Why rock the boat unless its life threatening?”

However, the sad truth is that the majority of the world’s population is not working professional and living in a country where there is rule of law. The fact remains, that in the majority of world, being an “honest” and “law abiding” person is the fastest way to die and easy to be tempted and tricked by anyone offering you better prospects. Go into any given red-light district, and you’ll find a young girl who thought she was going to work in a factory but was forced to get “f***ed” to keep other people rich. Ms. Dearnly had examples of boys who could use a computer and dreamed of working for a big IT company only to find themselves crammed into a cell, forced to run “love-scams.”

Let’s face it, these are stories that most of us know exists but they are usually things that don’t even enter our conscience. Yet, these cases exist. The world actually has people who are forced into situations where they are effectively prisoners of the “bad” people who profit from harming other people.

I believe that right thinking people will want the “bad guys” brought down and every right-thinking person will want “victims” to be rescued so that they can get on with life. However, you are not going to get that scenario unless people who are victims come forward.

Now, if it is challenging to get someone like me to come forward to do the “right-thing,” let us imagine what it is like to get someone who gets beaten up or tortured at the whims of their proverbial bosses. Sure, I may have my disagreements with my boss but I am NEVER in danger of losing my life or having harm done to my family as a result of those disagreements. At the most, I quit or get fired and work in a different industry but I don’t have a reason to move from where I am.

That’s not the case for people who are victims of trafficking, whether they are in sex work or forced labour. How do you get these people to help you out.

Yes, the SEC case is sensational. However, when you discuss the issue of whistleblowing, you are not asking people to try out for the lottery. You are asking them to stop the bad guys. Unfortunately, bad guys have a way of doing bad things to people whom they perceive may be a problem.

You need to tell people that you will stop bad things from happening to them if they do the right thing. They need to be able to “feel secure” if they do the right thing, whether that is to ensure basic protection both financially and physically.

No system is perfect. Abuses can happen. However, if you were to weigh up the cost and reward of incentivizing whistleblowing, its clear that society would be far better off if people felt secure enough to do the right thing.