Given the immense social, economic and personal damage caused by scandals within Irish institutions, the reluctance to provide legal protection to whistle-blowers is extraordinary, writes FINTAN O'TOOLE
JUST THREE years ago, in early 2007, the then minister for finance Brian Cowen asked the Company Law Review Group to consider whether Irish law should protect those who blow the whistle on wrongdoing in banks and other corporations. The idea was strongly supported in submissions by the director of corporate enforcement, Paul Appleby, and by the Irish Congress of Trade Unions. Most countries with similar legal traditions to Ireland’s (including the UK, the US and Australia) already have laws to protect whistle-blowers.
Even in 2007, it was obvious that malpractice was relatively common in areas of Irish business, and particularly in banking, with the industry-wide Dirt scandal, the Ansbacher Cayman scam and large-scale misbehaviour at Allied Irish Bank and National Irish Bank. Yet, the Company Law Review Group completely dismissed the idea of giving legal protection to those who draw attention to wrongdoing within their companies. “One cannot say,” it pronounced, “that there is any evidence of endemic failure in relation to corporate governance or its enforcement in Ireland that negatively affects the investment climate and which requires enhanced ‘whistle-blowing’ provisions.” Protecting those who expose wrongdoing would pose a “risk of negative connotations attaching internationally to the heretofore positively perceived Irish business sector” and “Ireland’s reputation as a lightly regulated economy could suffer”.
Behind that lofty conclusion was the idea that it is whistle-blowers, and not the conduct they expose, that damages Ireland’s reputation. This is a perfect reflection of the response of so many Irish institutions to those who draw attention to corrupt, depraved or reckless behaviour. It is not just the Irish Catholic hierarchy that preferred to maintain its authority, assets and reputation rather than confront gross wrongdoing within its own structures. From banks such as AIB to State institutions such as the Army and sports organisations such as the Irish Swimming Association, the instinctive response has often been to blame and isolate the person who tries to shout “stop”. Whistle-blower is regarded as a synonym for troublemaker.
In 2001, for example, Eugene McErlean was head of group internal audit at AIB. Looking at the fees levied by branches across the State, he discovered that there was a major problem of overcharging. His rough calculation was that the bank may have wrongly taken up to €75 million of customers’ money.
He was ultimately proven to be right – AIB eventually admitted to overcharging of €64 million.
Eugene McErlean says he had no intention of becoming a whistle-blower and that he is “embarrassed” to be considered in the same company as the victims of sexual abuse who broke the silence within the Catholic Church or the swimming association. “I was just doing my job as an auditor. There was no big deal. I was obliged to report my findings both to the bank and to the Financial Regulator.”
INSTEAD OF BEINGcongratulated for doing his job properly, however, McErlean was fired by AIB. His departure was announced at the same time as the bank revealed the huge fraud carried out by John Rusnak in its subsidiary in Maryland, giving the false impression that the two events were somehow connected. Equally, when the overcharging scandal eventually became public in 2004, the bank blamed its internal control procedures, hinting that McErlean, the very person who had discovered and tried to deal with the problem, was responsible for it.
McErlean got no help from the Financial Regulator. When he initially reported his findings, the regulator seemed to be taking them very seriously. When he returned for a second meeting, however, he was, he says, curtly told that he should withdraw his allegations. (Officials from the Financial Regulator denied last year that this had happened.) Having signed a confidentiality agreement with the bank, McErlean was effectively silenced, and the regulator did nothing until the scandal was uncovered as a result of information from a different source in 2004.
The whole saga, McErlean says, “took a very heavy toll on my family and myself, particularly in the simple fact of not having a job. I had some very down days, but I grew up in Belfast in the 1970s so I suppose I have some resilience.”
People like Eugene McErlean, and his predecessor at AIB, Tony Spollen, who had similar experiences when he uncovered the Dirt tax fraud, should be cherished and protected. So should those like Gary O’Toole, his parents Aidan and Kay, Bart Nolan and Carole Walsh, who withstood a great deal of personal vilification to expose the activities of paedophiles at high levels within Irish swimming. Instead, however, the legal regime tends to leave them isolated, vulnerable and prey to reprisals and the impugning of their motives.
Given the immense social, economic and personal damage caused by the covering-up of crimes by Irish institutions, the reluctance to provide systematic protection to such whistle-blowers is extraordinary. The Labour Party introduced a bill in 1999 and the Fianna Fáil/PD government promised to enact its own legislation. Nothing happened until 2006, when the government abandoned this commitment because of unspecified “legal complexities”. Instead the official approach has been to have some whistle-blower protection stitched in to some pieces of legislation. The result has been a confused and wholly inadequate regime, in which some areas, such as child abuse or breaches of competition law, afford some protection, and others, such as banking and company law, afford none. The code of standards for civil servants says nothing about whistle-blowing or about any obligation to bring serious misconduct to attention. There are also serious criminal penalties imposed in the Health Act of 2007 to anyone who makes an allegation about misconduct that they “ought to know” to be false – a formula so vague that it could act as a general deterrent against speaking out.
IN A REPORTpublished this week, the Irish branch of the anti-corruption organisation Transparency International called for legislation modelled on what it says is the simplest and best operating anywhere, the UK's Public Interest Disclosure Act. A mere nine pages long, it covers both the public and private sectors, gives anyone who reports wrongdoing in good faith the right to anonymity, and protects them against reprisals and legal action.
While the Government insists that a single, coherent piece of legislation to protect whistle-blowers would be too “complex and cumbersome”, a simple, comprehensive and easily understood regime is in place just across the Border. The only reason for not following suit is the apparent belief that the Republic is too scandal-free and ethically sound to have need of those who take their own consciences seriously.
Speaking up: Five who demanded to be heard
TOM CLONAN
Clonan, now security analyst for The Irish Times and a college lecturer, was a captain in the Army when he undertook research for a PhD on the experiences of women in the defence forces. He unexpectedly discovered very high levels of sexual harassment and bullying. The reaction of the military authorities was an entirely false allegation that he had fabricated his research, threatening his new career as an academic.
GARY O’TOOLE
O’Toole, probably the most accomplished swimmer Ireland has ever produced, essentially had to sacrifice his own swimming career to bring to light the abuse of other swimmers by the national coach, George Gibney. The Irish Amateur Swimming Association did not respond to his letters of complaint in 1992, and remained in denial about widespread sexual abuse until three senior coaches were convicted in the courts.
‘ANN’
Still anonymous, “Ann” was the midwife at Our Lady of Lourdes hospital in Drogheda, Co Louth, who broke the silence around the mutilation of dozens of women through unnecessary hysterectomies by rogue obstetrician Michael Neary. In her report, Justice Maureen Harding Clarke noted that “no one saw anything out of the ordinary, no one heard even a whisper of disquiet, and no one was given any reason to say or think that any of the hysterectomies were questionable”. After complaining, she faced hostility from much of the medical profession. It took seven years, from 1998 when she first spoke up, for Neary to be struck off by the Medical Council.
BERNADETTE SULLIVAN
Surgeon Michael Shine was able to sexually abuse patients at Our Lady of Lourdes for up to 30 years. The Minister for Health, Mary Harney, told the Dáil that it was “incredible” that no doctor had tried to stop him. Sullivan, a nurse, was the first to listen to and support the victims, though she claimed that many GPs and mental health professionals had been told about the abuse.
TONY SPOLLEN
Spollen, the internal auditor for AIB, discovered in 1991 that the bank was operating bogus non-resident accounts to help clients evade Dirt tax. He insisted the bank thus had a liability to the Revenue of £100 million. He told the Public Accounts Committee inquiry he was “painted by some as somebody who is a disgruntled guy, a chip on his shoulder . . . who was out to cause trouble.” His conclusions were entirely vindicated in the PAC report.
