Monday, August 25, 2014

The Whistleblowers: An Indictment of the Mixed Economy and Bureaucracy

Socrates was an early whistleblower. He exposed many leaders of ancient Athens as hot-air know-it-alls and was executed for his efforts.

Today, whistleblowers usually avoid execution, though the enemies of Edward Snowden would like to bring the death penalty back for him. Most whistleblowers are harassed, labeled as troublemakers and, perhaps, as unstable; they are demoted, fired, prevented from collecting unemployment insurance, blacklisted from obtaining new employment in the same field, and sometimes sent to prison.

This is the reward they get for exposing the sleazy, dishonest practices of their superiors in the political-power-laden bureaucratic management of government.

The Whistleblowers by Myron Peretz Glazer and Penina Migdal Glazer, published in 1989, reviews some sixty-four cases of informing on and exposing less than savory behavior of superiors. Contrary to the Glazers’ intent, the book is an indictment of the mixed economy and government bureaucracy.

The Glazers’ premises are standard Marxist social liberalism, so they assume that the profit motive in capitalism is anathema to customer satisfaction, health, and well-being. They also assume that government waste and dangerous policies are the result of profit-seeking lobbying from private businesses.

If unethical behavior goes on entirely within the government, that is, with no private lobbyists or businesses as participants, they assume that a few bad apples in a normally white-hatted environment are the ones the whistleblowers are going after. Over two-thirds of the Glazers’ cases took place exclusively within the government bureaucracy.

The cases focus mostly on the exposure of wrongdoing and its aftermath, usually retaliation from superiors who had demanded silence and team-playing loyalty. Facts of each case are minimal, or assumed to be unquestioned, and are often difficult to judge.

History, however, has proven a few whistleblower cases wrong involving private businesses. Ralph Nader’s Corvair was not a dangerous automobile, as was thought at the time, nor was Ford’s Pinto. Nor, for that matter, is nuclear power dangerous when compared to other forms of energy (1, 2).

Several cases in the book deal with nuclear power plant licensing and illustrate the disease called government intervention in the marketplace. Absent the free market yardstick of earning profit through customer satisfaction, bureaucrats regulate the licensing of nuclear power plants based on their own “expert” judgments.

Compliance to the regulations requires mountains of paper, diverting attention from operation of the business, namely the production of a service that meets the consumer’s needs and wants. In the process of completing the mountains of paper, some employees may neglect the compliance regulations, inaccurately fill out the forms, or even falsify them.

This last produces the hailstorm of corruption complaints against private businesses and the subsequent whistleblowing. Remove the government from business affairs, leaving the issue of “satisfaction, health, and well-being” to the customers, and the corruption would most likely not occur.*

Similarly, the Frank Serpico case, in which the New York City policeman blew the whistle on fellow cops for accepting bribes from drug dealers and gamblers, would become moot in a free market. Legalize gambling and drugs—what is left to blow the whistle on?

Make a legitimate product illegal and the incentive is to cheat! That’s how black markets arise.

Probably the worst of the Glazers’ cases was the Census Bureau bureaucrat who had political ambitions. He told his employee she had to provide sex to politicians and provide other candidates for the same thing. After she blew the whistle, the woman’s boss told her, among other retaliations, that he was making sure her ex-husband would get her children and that she would never see them again.

Another example, in the Department of Education, entailed theft and illegal withholding and destruction of documents in a case alleging misuse of federal money by the state of Illinois and city of Chicago.

The whistleblower was told a “very good” letter of recommendation, signed by the Secretary of Education, would be given to him if he would just get a new job and keep his mouth shut. When he didn’t keep his mouth shut, he was fired—but that wasn’t the end of it. He was eventually framed on a criminal charge, spent time in jail, then was finally exonerated after he had served his time.

Loyalty to superiors and not going over their heads is a big thing in bureaucracies. The purpose of retaliation against whistleblowers who do not remain silent and are not loyal is to destroy their credibility as witnesses against wrongdoing. This, whether coming from a frail ego that cannot tolerate criticism or from a criminal personality, explains why dictators kill their critics.

Socrates would not remain silent, so he had to go.

Naive as I may be, I am frankly astounded that such unsavory behavior goes on within government bureaucracies. When I was a young man, working in a small (50-60 employee) private business in mid-town Manhattan, it never occurred to me not to question my boss or go over his head. And no one was offended if I was “disloyal” and went to the general manager or president of the company to ask how to resolve a problem. Everyone in the company understood that the reason for being in business was to satisfy customers.**

Whistleblowing and retaliation against whistleblowers continues today unabated within the bureaucracies. Shortly after 9/11, Jesselyn Radack (1, 2, 3), who is now Edward Snowden’s American lawyer, found herself on the receiving end of an extremely negative job evaluation and was strongly encouraged to resign from the Department of Justice. Later, she was put on indefinite leave from her private sector job, was stopped for extra screenings at airports, put on a no-fly list, and threatened with arrest.

Her crime? She gave the press copies of emails she had sent to the FBI advising them of correct ethics and legality in relation to John Walker Lindh, the American Taliban. The emails had somehow disappeared from the FBI file and her recommendations against illegal interrogation of Lindh were flatly ignored. Radack was then alleged to have violated attorney-client privilege and obstructed justice. The Bars of Virginia, Maryland, and the District of Columbia were asked to sanction her. No charges were ever filed, but the harassment continued for several years.

Such is the way bureaucrats seem to operate when they have no rational, objective yardstick by which to measure their actions.

*This is not to say that there are not “bad apples” in private businesses. My point, contrary to the Glazers and most social liberals today, is that capitalistic incentives to satisfy customers in order to generate a profit require integrity and courage.

**No one in that profit-making business, or in any others that I have worked in, were sleazy or dishonest.

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