Whistleblowers versus systemic corruption

A review of Tom Mueller’s book Crisis of Conscience

Published in The Whistle (Newsletter of Whistleblowers Australia), No. 103, July 2020, pp. 2-4

Reviewer: Brian Martin

Tom Mueller is a US journalist. He undertook a study of whistleblowing, proceeding by interviewing whistleblowers and many others, and used these interviews as the basis for his book Crisis of Conscience: Whistleblowing in an Age of Fraud.

If you want a feeling for what it’s like to be a big-time whistleblower, up against powerful government and industry opponents, this is the book for you. Mueller is a great storyteller, and stories about individual whistleblowers drive his book’s narrative. Far more than most treatments, Mueller provides extensive information about the upbringing, personal views and experiences of his key characters. Most of them you’ve probably never heard about. He does tell about famous whistleblowers like Daniel Ellsberg but more of the book is about ones like Allen Jones and Lynn Stout.

Tom Mueller

There’s another impressive dimension to Crisis of Conscience. Mueller gives a lot of context. He tells about entire industries and how they have become prone to fraud. If ever you thought fraud in Australia is especially bad, Mueller’s examination will show that the US fraud system is far more extensive, and far more corrupt in deep-seated ways.

The book is divided into chapters about particular sectors of the economy, each of which receives detailed analysis, including the medical establishment, academia, nuclear waste, finance and national security.

The Hanford fraud complex

During the project to build the atomic bomb, a large area in Washington state was used to produce plutonium. This area, called Hanford, encompasses massive buildings that now are vacant — except that they are filled with nuclear waste. If the waste escapes its containment vessels, it will contaminate vast areas. There is a workforce of 20,000 handling containment, most of them working for contractors — large companies — funded by the US Department of Energy. Every year, these contractors receive $2 billion from the government, a flow of money that is deeply corrupting.

Despite the funding, or perhaps because of it, projects to control the waste have proceeded exceedingly slowly, never reaching their goals, while in the meantime there are ever more leakages of radioactivity. In this context, there are some honest workers who see dangers and who speak out about shortcomings of the clean-up and control efforts. These whistleblowers are unwelcome — unwelcome to their employers, the contractors, unwelcome to local politicians, and unwelcome to the Department of Energy. The corrupting effects of a massive flow of government money to the local community make for a toxic environment, toxic in relation to both the physical and the political environment. Whistleblowers have lost their jobs and sometimes attempts have been made on their lives.

Mueller’s account of the Hanford story is gripping. He tells the stories of individual whistleblowers and the stories of campaigners who are the most important allies of whistleblowers. However, despite their courageous efforts, the corruption continues. This is an important part of Mueller’s treatment. He describes what might be called the political economy of corruption: the intertwining of economic and political systems in the service of those who are most wealthy and powerful. The implication for whistleblowers is that no agency can offer relief, because every part of the government has been captured by the same network of operators.

Hanford site

Here is Mueller’s diagnosis of what’s involved in billions of dollars paid to corrupt contractor corporations.

"The same ugly pattern has recurred at Hanford for generations, and when a rare whistleblower dares to name it, the contractors lie to the press about him, lie to investigators, lie under oath to the courts and to Congress, knowing that the DOE [Department of Energy] and the DOJ [Department of Justice] have their backs, nobody will check their lies, and even if they do, ultimately nobody will punish them. They lie and they lie, until, at a silent signal that all players in the game understand, they settle the charges, cut a check, and move on, writing off the settlement charge against their taxes and billing legal costs to the government, or building it all into their next fraudulent government contract. Because one thing is certain: the fraud will go on. The DOE will continue to sign contracts with the same contractors and do their bidding, pretending to regulate while aiding and abetting, swearing zero tolerance for whistleblower retaliation while whispering their names to the contractors, laughing behind their hands while whistleblowers twist in the wind. Congress holds hearings, shows its outrage at the behavior of the contractors and their government facilitators, yet Congress continues to send them our billions, because a goodly portion of those billions are kicked back to Congress as campaign contributions, votes, nuclear pork." (pp. 311–312)

Financial corruption

Crisis of Conscience is a massive book, and the biggest chapter of all is about financial corruption. Mueller’s background in the financial industry may be a driving force here. He tells first of an enforcement agent who worked in the government in the 1980s during the time of the Savings & Loan crisis. Back then, regulators had support from investigators and prosecutors to challenge rogue operators. But then things changed, regulations were weakened and the US Department of Justice became an ally of big business and hostile to whistleblowers. By the time of the 2008 global financial crisis, criminality in finance had become so entrenched in laws, regulations and practices that honest regulators and whistleblowers had no chance. No bankers responsible for predatory lending and selling toxic investments were prosecuted. Instead, the biggest players were bailed out by the US government — by the taxpayer.

Mueller gives a detailed account of the way the US financial system has become totally corrupted, so that wrongdoing is normalised. He shows how successive administrations have weakened controls, how Supreme Court rulings have made prosecutions for bribery almost impossible, how the Department of Justice serves the financial industry and how ordinary citizens are the ones who pay the price. Mueller uses case after case to condemn neoliberalism, which supposedly liberates markets from government restraints but actually enables systematic corruption.

"This gradually consolidating control of the economic elites over the financial system helps explain why bank whistleblowers have gotten scant traction, triggered no arrests or convictions of top bank fraudsters, led to no lasting regulatory changes: the hyenas, wolves and foxes, the people who consider predatory fraud not only clever business but socially desirable, have been set to guard the henhouse." (p. 411)

Mueller tells of an academic researcher, Janine Wedel, who studied corruption in Eastern Europe and the former Soviet Union, and how in the transition to capitalism — following neoliberal principles recommended by US advisers — massive corruption emerged, with the so-called oligarchs acquiring former government enterprises at bargain basement prices. Wedel called these oligarchs “flexians”: they went back and forth between government and industry roles, ensuring that regulations served their own interests. Wedel then scrutinised the US, seeing exactly the same dynamics, with US flexians being prominent figures in industry who go in and out of high positions in government, including regulatory agencies, which become tools for their own enrichment.

Janine Wedel

Mueller condemns corruption in a non-partisan manner. His critique of neoliberalism as a facilitator of corruption regularly highlights the administrations of US presidents Ronald Reagan, Bill Clinton, George W. Bush and Barrack Obama. He notes that although Obama promised to protect whistleblowers, he turned out to be a ferocious opponent of them. In an epilogue, Mueller presents Donald Trump as a manifestation of the corruption facilitated by successive US governments and courts. Trump promised to drain the swamp of special interests but instead deepened it, and is himself a perfect example of a flexian who straddles industry and government, has massive conflicts of interest and has no allegiance except to himself.

A strong aspect of Crisis of Conscience is attention to scholarly work that helps make sense of systemic corruption. For example, in a few deft strokes Mueller summarises research on the psychology of obedience. As well, part of Mueller’s narrative is from the point of view of researchers such as Wedel, so readers get to see the world from several perspectives, including those of whistleblowers, whistleblower supporters and social analysts. In part because Mueller has chosen to highlight high-profile whistleblower stories, and tells them in such engaging detail, the reprisals they suffer seem especially horrific.

Crisis of Conscience is a major contribution to writings about whistleblowing. It goes into great depth, provides engaging stories, and gives a great deal of information about systems of corruption. In addition, Mueller lists a large number of sources, so interested readers can probe further into areas of interest.

What’s missing

Even the best book is bound to have limitations, and it is worth spelling out some of them. Mueller started out his investigations into whistleblowing by looking at major cases involving the False Claims Act, and in this was aided by the Government Accountability Project, a powerful ally of US whistleblowers. While this focus offers many insights, it also leaves many issues out of the picture. Mueller’s focus is on the US, which means that the dynamics of whistleblowing in other countries are not addressed. The US has a False Claims Act, but few other countries have anything like it. More generally, in the US, courts are a crucial part of whistleblowing struggles, but in other countries there are other key players, including trade unions, political parties, activist groups and the media.

Mueller looks only at corruption at the intersection of government and industry. This means he misses whistleblowing in other domains, including schools, police, science, and churches. Mueller admits that his perspective was limited when he first started looking at national security issues: he initially thought those who spoke out were somehow different from whistleblowers in other sectors. However, changed his mind and offers a damning indictment:

"When even whistleblower-protectors like John Crane get the whistleblower treatment, as they routinely do in the national security arena, we know that the entire system for safeguarding legitimate disclosures is profoundly broken — or rather, has been optimized to draw in would-be whistleblowers with false assurances of confidentiality and intent to investigate, and then to silence them." (p. 514)

John Crane

Because he focuses on major cases, Mueller gives no inkling of the great number of whistleblower cases that never get into the courts and never attract media attention. These are far more common than the big-ticket cases, yet can cause just as much angst for those involved.

Though never stated, Mueller seems to assume that whistleblowers need to be correct in their claims. In his insightful descriptions of systems of corruption, Mueller seems to be trying to convince readers that the whistleblowers whose cases he describes are on the side of honesty and human welfare. He makes a convincing case, but the limitation is that this leaves out cases in which people speak out but their concerns were not vindicated. To properly defend whistleblowing, it is important that whistleblowers not be subject to reprisals even when they are wrong.

In summary, read Crisis of Conscience for an engaging, informative and alarming account of US whistleblowers, who are one of the few remaining challenges to systemic corruption in the intertwined system of industry, government, regulators and courts. But remain aware that there is more to the whistleblower experience than high-profile cases.

Brian Martin is editor of The Whistle.

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