CBA Record April-May 2018

In March 2018, Christopher Wylie, a 20-something data and internet specialist, blew thewhistle on a transatlantic political scandal. According toWylie, the once-obscure researchfirmfor which he worked, Cambridge Analytica, illicitly acquired data on 87million Facebook users, which it utilized to influence the U.K.’s Brexit election and the U.S. 2016 presidential election.

T HIS IS NOT THE FIRST TIME A WHISTLEBLOWER has blown the lid on a transatlantic political scandal. In 1772, America’s first whistleblower, Benjamin Franklin, was serving a dual role as Massachusetts’ agent in London and the English-appointed Postmaster General of the American colonies. England sought Franklin’s assistance in quelling colonial unrest in Massachusetts. In this capacity as an ambassador of sorts, Franklin received confidential letters that had been written by Massachu- setts’ governor, Thomas Hutchinson, for Parliament’s eyes only. Designed to exacerbate Parliament’s distrust of the colonies and perhaps further entrench himself, Hutchinson’s letters secretly advocated further abridgment of the colonists’ fundamental rights. Appalled that the governor was so blatantly subverting his constitu- ents’ interests and stoking English antipathy toward the colonies, Franklin quietly turned the letters over to the governor’s political rivals in the Massachusetts legislature, including Thomas Cush- ing and Samuel Adams. Shortly thereafter, the Hutchinson letters became front-page news. Franklin was lambasted by Britain for his role in the leak, accused of thievery and dishonor, and stripped of his post as colonial Postmaster General. The letters precipitated a series of events that culminated in the Revolutionary War. Between Franklin and Wylie, thousands of whistleblowers have stepped forward to reveal a wide range of misconduct. In the business world, examples include MarkWhitacre, who in 1992, as president of ADM’s bio-products division, tipped off the FBI to a global price-fixing conspiracy in the lysine industry. Whitacre’s cooperation led to jail terms for high-level executives and hundreds of millions of dollars in fines and settlements. Similarly, in 1996, Jeffrey Wigand, a scientist and vice presi- dent of research and development, blew the whistle on Brown & Williamson’s use of ammonia and other additives to augment the effects of nicotine. The ensuing publicity ushered in a new era of tobacco regulation, precipitated recovery of hundreds of billions of dollars for government healthcare costs, and led to wide-ranging private litigation. Reliance on whistleblowers has only increased in the wake of the last decade’s financial crisis and ensuing 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Dodd-Frank tasked two financial regulators, the Securities and Exchange Commission (SEC) and the Commodity FuturesTrading Commission (CFTC) with implementing whistleblower programs

designed to financially motivate individuals to step forward with information concerning violations of the financial laws. Largely viewed as successes, these whistleblower programs have led to hun- dreds of investigations and billions of dollars in fines and penalties. They have also made the whistleblower more ubiquitous, if not more accepted, in United States corporate culture. As the frequency of whistleblowing increases, so too will attorneys’ interaction with them. It is important for attorneys representing whistleblowers or potential whistleblowers, as well as those representing businesses who are targets of whistleblowing, to have an analytical framework for addressing their clients’ concerns. Some of these issues are explored below. Whistleblower Motivations Motivations for whistleblowing vary. A traditional misconception is that whistleblowers are either driven by greed, have some axe to grind, or both. Research, however, demonstrates the opposite. Indeed, this is at the center of studies conducted by the Ethics Research Center (ERC), which conducts periodic surveys on corporate ethics issues. See , e.g. , Ethics Research Center, Inside the Mind of aWhistleblower: A Supplemental Report of the 2011 National Business Ethics Survey (2012), http://www.corporatecompliance- insights.com/wp-content/uploads/2012/05/inside-the-mind-of- a-whistleblower-NBES.pdf (“ Inside the Mind of aWhistleblower ”). Contrary to the stereotypes, the vast majority of employees who report misconduct do so for laudable reasons, unrelated to money. According to the ERC study, employees who reported misconduct identified one or more of the following reasons: believed it was the right thing to do (99.5%); believed their reporting would correct a wrong (79%); wanted to support management (75%); wanted to support co-workers (72%); or felt that nobody else would report (49%). Inside the Mind of a Whistleblower , p. 5. Ironically, those who choose not to report seemed more likely to be financially motivated or dissatisfied with how their employer would handle it. According to the ERC study, employees who chose not to report misconduct cited one or more of the following reasons: believed no corrective action would be taken (59%); feared retaliation (46%); feared no anonymity (39%); believed someone else would (24%); or did not know who to contact (18%). . Equally untenable is the notion that whistleblowers are dis- gruntled loners with axes to grind. Rather, it is employees who

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