This article originally appeared on TomDispatch. 

***

What’s worse: to be persecuted and indicted for trying to expose an act of wrongdoing—or to be ignored for doing so?

Whistleblowers have been under intense scrutiny in Washington lately, at least when it comes to the national security state. In recent years, the Obama administration has set a record by accusing no fewer than six government employees, who allegedly leaked classified information to reporters, of violating the Espionage Act, a draconian law dating back to 1917. Yet when it comes to workers who have risked their careers to expose misconduct in the corporate and financial arena, a different pattern has long prevailed.  Here, the problem hasn’t been an excess of attention from government officials eager to chill dissent, but a dearth of attention that has often left whistleblowers feeling no less isolated and discouraged.

Consider the case of Leyla Wydler, a broker who, back in 2003, sent a letter to the Securities and Exchange Commission (SEC) about her former employer, the Stanford Financial Group.  A year earlier, it had fired her for refusing to sell certificates of deposit that she rightly suspected were being misleadingly advertised to investors. The company, Wydler warned in her letter, “is the subject of a lingering corporate fraud scandal perpetrated as a ‘massive Ponzi scheme’ that will destroy the life savings of many, damage the reputation of all associated parties, ridicule securities and banking authorities, and shame the United States of America.”

It was a letter that should have woken the dead and, as it happened, couldn’t have been more on target. Wydler didn’t stop with the SEC either. She also sent copies to the National Association of Securities Dealers (NASD), the trade group responsible for enforcing regulations throughout the industry, as well as various newspapers, including the Wall Street Journal and the Washington Post. No one responded.  No one at all.

In the fall of 2004, Wydler called the examination branch of the SEC’s Fort Worth District Office to relay her concerns. A staff person did hear her out, but once again nothing happened. More than four years later, as the aftershocks of the global financial meltdown continued to play out, the news finally broke that Stanford had orchestrated a $7 billion Ponzi scheme which cost thousands of defrauded investors their savings. 

Making Law for Wall Street 

Wydler might have preferred the attention of the Espionage Act to the dead silence that greeted her efforts, and she was hardly alone. As with her, so with Eileen Foster, a former senior executive at Countrywide Financial who, in 2007, uncovered evidence of massive fraud—forged bank statements, bogus property appraisals—perpetrated by a company that played a major role in the subprime crisis that eventually caused the U.S. and global economies to implode. No one listened to her then and no one—in the government at least—seems to care now, either. 

Interviewed recently on 60 Minutes, Foster said she would still be willing to provide the names of people at Countrywide who belong in jail, if she were summoned to testify before a grand jury. She may never get the opportunity. As 60 Minutes reported, a Justice Department that has gone to such extraordinary lengths to prosecute national security whistleblowers has made no effort to contact her.

The experiences of corporate whistleblowers like Foster and Wydler underscore a truth highlighted by legal scholar Cass Sunstein in his book Why Societies Need Dissent. The voices of dissidents who have the courage to bring uncomfortable news to light—information that can prevent disastrous economic or other blunders from happening—matter only to the extent that anyone pays attention to them.

“A legal system that is committed to free speech forbids government from silencing dissenters,” observed Sunstein. “That is an extraordinary accomplishment.” But as he went on to note, the formal existence of this right hardly ensures that individuals who exercise it in situations that cry out for opposition have an impact. “Even in democracies, disparities in power play a large role in silencing dissent—sometimes by ensuring that dissenters keep quiet, but more insidiously by ensuring that dissenters are not really heard.”

And it seems that, if the present House of Representatives has anything to say about it, the law will soon ensure that corporate whistleblowers are silenced anew. Although the financial meltdown of 2008 didn’t exactly inspire the Justice Department to hold high-ranking Wall Street executives accountable (to date, not one CEO has been prosecuted for fraud), the abusive practices and billion-dollar scams that regulatory agencies somehow overlooked did prompt some reform. As part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress put in place new rules that, at least theoretically, enhanced the protections and incentives available to whistleblowers.

One provision of Dodd-Frank, for example, allows employees to bypass corporate internal compliance programs and report violations directly to the SEC.  Another provides rewards for Wall Street whistleblowers who step forward and offer the government tips that lead to successful prosecutions of fraud. 

But even these modest steps may soon be reversed. Last year, Congressman Michael Grimm (R-NY) unveiled the antidote to Dodd-Frank’s gestures toward the urge to leak.  His “Whistleblower Improvement Act”—a name that Orwell might have appreciated—would do away with the Dodd-Frank protections, such as they are, which the U.S. Chamber of Commerce and other industry groups lobbied against and continue to vigorously oppose. 

Grimm’s proposal would indeed mark an “improvement”—for companies hoping to deprive whistleblowers of their voices. If passed, it would strip the financial rewards from Dodd-Frank and require most whistleblowers to first report problems to their employer before even thinking about going to the government. “This would be like requiring police officers to tip off suspects before they begin an investigation,” the Project on Government Oversight has wryly observed.

Harry Markopolos, a financial analyst who repeatedly tried to warn the SEC about Bernard Madoff’s Ponzi scheme—and who, like Leyla Wydler, was persistently ignored—has said the law “reads as if it were a wish list from those who once designed the Enron, Madoff, Global Crossing, Stanford, and WorldCom frauds.” Evidently, that only proved an incentive for the House Subcommittee on Capital Markets to approve Grimm’s measure in December 2011, on a party-line vote, which means it could now be tacked onto some must-pass piece of legislation and enacted.

The Silent Treatment 

Should the Grimm Act eventually become law, it would not mark the first time corporate whistleblowers had been encouraged to step forward in the wake of rampant abuse and misconduct, only to discover that public officials had no intention of emboldening them to speak out. Back in 2002, after the accounting scandals broke at Enron and WorldCom, President George W. Bush signed the Sarbanes-Oxley Act, which made it a crime for companies to retaliate against employees who reported suspected fraud and illegal activities.

“The era of low standards and false profits is over,” Bush declared at the time. “No boardroom in America is above or beyond the law.” It didn’t quite turn out this way. In fact, his administration promptly set about staffing the federal agency in charge of whistleblower complaints with judges determined to deprive employees who reported suspected fraud of the protections they thought they’d just been guaranteed.

According to the Wall Street Journal, of 1,273 complaints filed by employees who claimed they had been subjected to company retaliation for speaking out between 2002 and 2008, the government ruled in favor of whistleblowers 17 times. Another 841 complaints were dismissed unheard, sometimes thanks to minor technicalities. Other times they were tossed out because the potential whistleblowers worked at the private subsidiaries of publicly traded companies, which the Department of Labor bizarrely decided were not covered by the statute.

Some might assume that, if the government ignores corporate whistleblowers again, a citizenry incensed by the greed and recklessness of Wall Street is not likely to allow history to repeat itself. But this might be wishful thinking. Despite the lore of the whistleblower that pervades popular culture, Americans turn out to be less sympathetic to such dissenters than Europeans. Drawing on data from the World Value Surveys and other sources over multiple years, the sociologist Claude Fischer has found that U.S. citizens are “much more likely than Europeans to say that employees should follow a boss’s orders even if the boss is wrong.” They are also more likely “to defer to church leaders and to insist on abiding by the law,” and more prone “to believe that individuals should go along and get along.”

Whistleblowers may often be praised in the abstract and from a distance, but Americans have a tendency to ignore or even vilify them when they dare to stir up trouble in their own workplaces or communities. In the case of Leyla Wydler, it wasn’t just the SEC that disregarded her warnings about Stanford. It was also her fellow brokers, none of whom came forward to defend her, and her clients, who for the most part brushed aside the concerns she voiced about Stanford’s certificates of deposit (and so their own investments).

Later, after the facts had come to light, Wydler testified at a Congressional hearing in Baton Rouge, Louisiana, before an audience full of defrauded investors. She received a standing ovation. The belated recognition felt nice, she told me, but it would have felt a lot better if more people had listened to her beforehand, and maybe even stood by her side. 

If we really want to honor people like Wydler, we ought to make sure that financial industry whistleblowers who emulate her example in the future don’t have to languish in isolation or wait so long for the applause, and that, unlike Eileen Foster, Harry Markopolos, and Leyla Wydler, they will be spared the silent treatment.

Eyal Press is the author of the new book Beautiful Souls: Saying No, Breaking Ranks and Heeding the Voice of Conscience in Dark Times (Farrar, Straus & Giroux).  To listen to Timothy MacBain’s latest Tomcast audio interview in which Press discusses the treatment of American whistleblowers, click here, or download it to your iPod here.  Follow Eyal Press on Twitter @EyalPress. 

Follow TomDispatch on Twitter @TomDispatch and join us on Facebook. 

Copyright 2012 Eyal Press

Image by ElectronicFrontierFoundation, licensed under Creative Commons. 

A frightening aspect of geoengineering—the attempts to counteract global warming by manipulating the climate—is that the actions of one country or even a single scientist could affect the entire world. “Done carelessly,” Jamais Casico writes for Momentum, “geonengineering could cause unintended environmental damage. It could also undermine the health and security of millions of people, and drive political wedges between powerful nations. Geoengineering could even push us to the brink of war.”

To avoid catastrophe, Casico proposes a few measures that must be taken before any individual or entity begins the work of manipulating the climate through science. He suggests that countries should adopt greater transparency and tough international laws and regulations. He also proposes an international “Ecoscientists Without Borders” organization to oversee the projects. The ideas can’t guarantee that geonengineering won’t destroy civilization as we know it, but they could make the end a little less likely.

Source: Momentum 

Image by indigoprime, licensed under Creative Commons.

For many in Kenya, their government is a black box. Attendance records for members of Parliament are kept secret, and the Parliament website has little to no information on its members. Frustrated by this flagrant lack of transparency, Ory Okolloh co-founded the website Mzalendo to keep an eye on her government. She was motivated by the challenge of acting, rather than just complaining, and because, “if you let them get away with stuff they will.”

Concerned citizens, developers, and bloggers around the world are using the internet to promote transparency, accountability, and civic engagement. In Jordan, where complaints “are really a tradition,” Waheed Al-Barghouthi helped start Ishki, a clearinghouse for Jordanian griping online. In Chile, Felipe Heusser and Rodrigo Mobarec started Vota Inteligente, a website that fact-checks politicians and gives Chilean citizens more information about their government officials.

Projects like these are often disjointed, addressing specific needs of their communities without realizing that there is a vast network of people around the world working on the same problems. The new Technology for Transparency Network is trying to change that by bridging the gap between bloggers and civil society and fostering collaboration among disparate civic-engagement and good-governance projects.

In the next three months, the Technology for Transparency Network will produce 32 case studies of different good-governance projects and 16 blog posts highlighting other projects. In an interview with Utne.com, David Sasaki, the research director of the Technology for Transparency Network, says that the project is trying to figure out “what works well and what doesn’t and sharing that information.” The network plans to challenge project leaders to figure out how their work could creat concrete, offline change. With help from the network, projects could potentially attract funding from organizations like the Omidyar Network, which funds the Technology for Transparency Network.

The first three projects have already been chosen, and, according to Sasaki, the Technology for Transparency Network is already fostering cooperation between different good-governance groups. Eight researchers are sifting through the web, trying to figure out which websites, Facebook groups, or government projects will be highlighted next. Sasaki said, “a difficulty here is that there are so many new media for transparency projects coming up left and right,” and it’s hard to choose which ones are best suited for the network.

Volunteer researchers are also being asked to collaborate with the site in researching and interviewing founders of different projects. Anyone who’s willing to invest a few hours is able to work with the Technology for Transparency Network and help figure out how technology is able to promote good governance and civic engagement. The project is an opportunity to do what Okolloh tried to do with Mzalendo and say, “Enough talking, some acting.”

Source: Technology for Transparency Network 

Image by Erik Hersman, licensed under Creative Commons.

“How could anyone be against transparency?” Lawrence Lessig asks in The New Republic. “Its virtues and its utilities seem so crushingly obvious.” Yet the law and technology expert proposes one provocative downside—that “the naked transparency movement . . . will simply push any faith in our political system over the cliff.” While speaking positively about the majority of transparency initiatives, Lessig sees trouble brewing with those intended to reveal influence and corruption, on account of “the problem of attention-span”:

“To understand something—an essay, an argument, a proof of innocence—requires a certain amount of attention,” he writes. “But on many issues, the average, or even rational, amount of attention given to understand many of these correlations, and their defamatory implications, is almost always less than the amount of time required. The result is a systemic misunderstanding—at least if the story is reported in a context, or in a manner, that does not neutralize such misunderstanding. The listing and correlating of data hardly qualifies as such a context.”

In other words: Bits and pieces of data make insinuations: smudges that will stick whether or not they accurately reflect the whole story, whether or not they’re refuted down the line. The alternative, of course, is not a return to obfuscation—but the issue does present an intriguing challenge for transparency advocates.

Source: The New Republic

Image by altemark, licensed under Creative Commons.

The United States government is addicted to private contractors. According to Allison Stanger in Foreign Policy, “contractors in Iraq and Afghanistan outnumber American men and women in uniform.” Contractors provide security, food, clothing, shelter, and training for US forces. The use of private contractors not only invites extreme waste and corruption, there is also an extreme lack of transparency from the federal government. Stanger writes, “Obama is now leading a war in Afghanistan whose funding is effectively a black hole.” Stanger tries to cut through the opacity with charts and graphs showing how the federal government has increasingly contracted out its foreign policy.

Source:  Foreign Policy  

Image by jamesdale10, licensed under Creative Commons.

For the past two years, tech-geeks around the country have applied to the Sunlight Foundation’s Apps for America contest with new ideas to make government data useful. This year, the judges have narrowed the field down to three government-transparency boosting, accountability-promoting web applications. The finalists are:

GovPulse.us – This website makes the information from the Federal Registrar comprehensible. Users can track all the rules and notices from federal agencies and executive orders and presidential documents. The application breaks the information down by agency or place mentioned.

ThisWeKnow.org – Every city in the United States is made a little more transparent by this site. Users can type in a zip code and find information including demographic numbers, environmental pollutants, and employment statistics. The website also tracks how many bills were introduced about any given location, including what the bill was about and who introduced it.

DataMasher – When people make connections between seemingly disparate sources of information, the result can be illuminating. DataMasher lets people compare gun ownership numbers to high school graduation statistics or health care coverage to age demographics, and then it maps the results by state.

Users can now vote for their favorite application, and the winners will receive up to $10,000 as a prize.

Source: The Sunlight Foundation 

Transparency advocates are questioning the sincerity of Barack Obama’s inauguration-day pledge to create “a new era of openness” in government. The administration has taken concrete steps toward creating more transparency and cooperation between the government and the American people, but it’s also disappointed many with a sometimes baffling degree of secrecy. Ellen S. Miller, executive director of the Sunlight Foundation, told Congressional Quarterly, “There is real transparency, and then there is transparency theater. I can distinguish between the two.”

Miller’s criticism is notable, in part because the Sunlight Foundation has been one of the White House’s best partners on transparency issues. At the National Civic Summit in July, the administration’s Chief Technology Officer, Aneesh Chopra, touted the organization’s Apps for America contest as a prime example of the government’s commitment to cooperation.

Participants in Apps for America try to create the best application presenting raw government data in a new and interesting light. The winner of last year’s contest was Filibusted, a website that tries to hold Senators accountable for their use of the filibuster. Applications for this year’s Apps for America 2 include SpendTrendus, a website that allows users to track government spending by keyword.

The Sunlight Foundation was also cited recently in an $18 million government contract awarded to the software company Smartronix to help the federal government bring more transparency to the “stimulus package.” The problem with that deal, according to the investigative website ProPublica, is that  the details of that contract released to the public “are so heavily blacked out they are virtually worthless.”

The software company asserted in the contract that the Sunlight Foundation “is willing to advise Team Smartronix on transparency,” a characterization that the organization disputed. Clay Johnson of the Sunlight Foundation told ProPublica that he had never been contacted directly by the company and isn’t involved in the contract. He added, “We’re willing to advise anybody on transparency.”

The issue with the Smartronix contract isn’t really transparency, since the company’s work could actually increase openness. In an interview with Utne Reader, Johnson emphasized, “people want authenticity” in government. That authenticity, according to Johnson, is what separates real transparency from “transparency theater.”

For more, read Utne Reader’s past coverage of government transparency and accountability.

  Sources: Congressional Quarterly, ProPublica, Sunlight Foundation 

Image adapted from photos by the  White House  and TheTruthAbout, licensed under Creative Commons. 

Every morning, on the way to work, many Americans pass by a current or future stimulus project. Some $27 billion of taxpayer money will be spent on fixing roads, replacing bridges, and building signs and light posts. With that much money on the table, corruption, waste, and abuses of power are nearly inevitable. 

The website ProPublica is amassing a network of citizen watchdogs to keep an eye on the individual projects and the stimulus as a whole. In the beginning, volunteers will be asked simple questions: When did construction start? What companies are showing up? The idea is to tap into local knowledge that ProPublica’s professional investigative reporters in New York City might not have.

“Ultimately what we’re trying to do is tell a story that would be more difficult with traditional methods,” ProPublica’s Amanda Michel told me on the phone. Michel gained experience directing Off the Bus, a groundbreaking citizen-driven campaign news project for the Huffington Post. With the new “Adopt-a-Stimulus Project” and ProPublica’s budding reporting network, Michel hopes to “build a network of people on the ground to tell us what’s really going on in their communities.”

Knowing that an army of citizen watchdogs are looking over their shoulders might keep the stimulus recipients a little more honest.

Source: ProPublica

Two and a half years after he co-founded Democracy: A Journal of Ideas, which won last year’s Utne Independent Press Award for best new publication, Kenneth Baer nabbed a job in the new administration. He’s now heading up communications and strategic planning at the Office of Management and Budget, the office President Obama has charged with boosting government transparency.

Baer is leaving Democracy with a supremely talented staff, including Andrei Cherny, the co–founding editor, and E.J. Dionne, Jr., who was named chair of the journal’s editorial committee in December. The new issue takes stock of Obama’s America, with dispatches from Orlando Patterson (on equality), Geoffrey Stone (on liberty), Jedediah Purdy (on community), and others.

After eight years of oppressive government secrecy, the new Obama administration wasted no time making strides toward what the President called “a new era of openness.” In his first full day in office, Obama signed an executive order and two presidential memoranda aimed at releasing government information from the vice grip of the previous administration.

The steps are a “spectacular start” toward greater government transparency and accountability, according to Stephen Aftergood of the Federation of American Scientists and writer of the Secrecy News blog, but they are just the start. As President Obama readily acknowledged, many more transparency issues within the federal government need to be addressed.

One of Obama’s early actions was to release a memorandum on the Freedom of Information Act (pdf), making it harder for the government to “withhold” information. Though laudable, the memorandum doesn’t address the persistent over-classification that’s hampered a free flow of information. The National Security Agency can still classify a host of documents that should be available to the public.

“People from throughout the intelligence, military, and law enforcement communities would acknowledge that the excessive overclassification is a problem,” according to Meredith Fuchs of the George Washington University’s National Security Archive, “and it actually puts us at risk, so it has to be fixed.”

There are a number of high-profile Freedom of Information Act requests still outstanding—including the documents surrounding warrantless wiretapping, detainee treatment, and the millions of missing Bush Administration White House emails—that aren’t addressed in Obama’s preliminary actions either. Fuchs believes these cases present opportunities for the new administration to prove themselves as the advocates to open government with real actions.

So far, according to Fuchs, Obama’s actions have been more of a statement of principals, albeit an important one, rather than a panacea for government accountability. The actions signal a drastic change in the way the government interacts with the American people, but more details are needed, including how the transparency principals are going to be carried out.

“There’s fierce bureaucratic culture of protectiveness” that has taken hold inside the federal government, according to Aftergood. Without definitive rules, the support of congress, and pressure from the public, the cloud of government secrecy won’t go away. What Obama did achieve, Aftergood said, is that “he made it clear that openness is not a slogan, and it is not even an end of itself, rather it is a means to an end, and that ultimate end is a vital and vigorous democracy.”

Image of the National Archives building in Washington D.C.

UPDATE: Talking Points Memo has a video on another angle to Obama’s transparency efforts:

Barack Obama has pledged to run an open and transparent administration, rejecting the extreme secrecy that characterized the Bush years. But we shouldn't just take his word for it, warns Megan Garber of the Columbia Journalism Review.

Much has been made of the Obama administration's revamped WhiteHouse.gov website and of their plans to use social networking tools to open the White House up to the people. But a better website than the one Bush oversaw does not a transparent administration make, writes Garber:

And what about the press? Garber notes that Obama’s transparency manifesto, as it’s laid out on his new website, curiously fails to make any mention of journalists. “The goal can’t simply be transparency itself,” writes Garber, “but rather transparency that is processed through a journosphere that is diligent, curious, and skeptical.” So will Obama let reporters in to do the work of informing the people?

If the first few days of his presidency (or most of his campaign, for that matter) are any indication of how things will play out in the years to come, reporters shouldn’t expect plentiful access. Politico reports that the sparring has already begun between the press and White House staff. Tightly restricted access to the President’s oath of office do-over and to his first moments in the Oval Office got the press particularly riled up. Among their complaints: No news photographers were allowed into either of those events. Major wire services responded by refusing to run the pictures “in protest of the White House’s handling of the event,” according to Politico.