Whistleblowers: they protect us, no one protects them

The majority of those who have attempted to expose dishonest or illegal conduct by their employers have faced some form of retaliation, says the newest study on whistleblower protection in the V4 countries. State authorities remain passive, lacking adequate legal instruments and failing to protect whistleblowers.

Foto: Christian Ditsch/version-foto.de

The term “whistleblowing” comes from the phrase “to blow the whistle”, used to evoke the image of a warning whistle sounded whenever a game is not being played fairly. It has been a synonym for exposing misconduct or illegal practices in the workplace since the 1970s. Whistleblowing is considered a key instrument in fighting corruption and other illegal practices in the public as well as the private sector.

Employees are often the first ones to learn about dishonest practices and blow the whistle. However, the employee faces many dilemmas in such a situation.

Should he or she turn a blind eye to what he or she has just seen in order to honour his or her loyalty and confidence towards his or her colleague, boss or employer? Or should he or she follow his or her morals and put the public interest first?

Blowing the whistle is often followed by retaliation, and in the end, the whistleblower finds himself on the defence. State authorities often remain passive. Although they publicly appreciate the activity of whistleblowers, after serious cases have been exposed, they are more or less unable to help in cases where the employer decides to take revenge.

Missing legislation

The benefits of whistleblowing in both the exposure and prevention of corruption are undeniable. In the Czech Republic alone, whistleblowers have exposed numerous instances of illegal conduct which have so far been confirmed by the judicial system. Despite this, only 4 EU countries (Luxembourg, Romania, Slovenia and the United Kingdom) have in place whistleblower protection laws that can be considered advanced. Of the remaining 23 member states, 16 have adopted at least a certain level of whistleblower protection, while 7 have a very limited or practically nonexistent legal framework.

Whistleblower protection in the V4 countries has long been deficient. A complex legislative system is missing, offering very few possibilities for effective protection of whistleblowers. These failures have been thoroughly analysed in the past; see for example the Transparency International study published at the end of 2013.

The Czech Republic lacks any sort of legal instrument to properly address the problem of whistleblowing. The situations in Poland and Slovakia are similar. The legal instruments are scattered across a number of unrelated laws and do not constitute satisfactory protection of whistleblowers. It is often the case that a particular, potentially effective measure remains unapplied due to the overall confusion of the legal framework.

Hungary is the only country with special legislation dedicated to whistleblowing. The law forbids retaliatory measures against whistleblowers who expose unfair conduct with respect to public finances or property, both in the public and private sectors. Judging solely from this, Hungary could be considered the best practice champion. The law came into force in 2010; however, it has never been fully effective, because the implementation agency which was meant to receive and investigate reports of suspicious behaviour has not been established yet.

Despite this, there are certain efforts to foster a legislative framework for whistleblower protection, not only in the V4 countries. It is, however, rather risky to create legislative proposals without deeper knowledge of who should be addressed by those laws. The legislative changes attempted so far rely on rather fragmentary evidence. It must be said the UN Convention against Corruption adopted by all V4 states as well as by all EU states with the exception of Germany includes principles for whistleblowers protection. Its implementation, however, is obviously lagging. Some recommendations are also contained in two OECD documents: the Anti-Bribery Convention and the Recommendation on Improving Ethical Conduct in the Public Service.

The Magnificent Lonely Forty

The Czech civic organisation Oživení, in cooperation with non-profit organisations in Estonia, Hungary, Poland and Slovakia, analysed interviews with 40 whistleblowers from state and local administration, politicians and political parties, semi-public entities, private companies, security forces and the judiciary. Twelve whistleblowers were from the Czech Republic, ten from Poland, nine from Slovakia, five from Estonia, and four from Hungary.

The interviewees were asked about the options they had available to expose unfair conduct within the organisation where they witnessed misconduct (internal mechanisms), as well as about external institutions (external mechanisms) such as media or nonprofit organisations. Then they were asked whether they had a chance to make use of these options. The results of the analysis confirmed our fears – whistleblowers stand alone, with no major deviations among participating V4 countries.

Report to the possible perpetrator

In most cases, the employee in question reported the behaviour that he or she believed to be illegal. Typically, this consisted of wasteful management of public funds in the form of manipulation of the public procurement process or embezzlement. In half of the cases, this illegal behaviour was accompanied by breaching of internal rules. It is probable that this breaching of internal rules led to the illegal activities. In a smaller number of cases, whistleblowers reported a breach of internal rules and, in few cases, immoral or unethical activities with corrupting potential.

In 90% of the cases, whistleblowers made an attempt to resolve the matter within the workplace. They often tried several successive methods of making a report. One-third of whistleblowers used two different forms of contact, and 11% more than that. In many cases, there was an internal regulation defining who the report should be made to. The first choice was usually the whistleblower’s direct supervisor, who was often the subject of the report and thus, paradoxically, the main obstacle to the investigation. The first report was typically not effective and whistleblowers then looked for other possible ways to report. Only after the internal mechanisms had failed did they approach public institutions.

With a single exception, all whistleblowers responded negatively to the question of whether it was possible to ask someone at the workplace for protection in relation to their report. They were not aware of any form of protection for themselves. To sum up, whistleblowers were often determined to resolve the case within their organisation, thereby showing loyalty to their employer. If they ultimately decided to report it outside their organisation, it was more or less due to the passivity or hostility of their superiors.

Fraud at the Ministry of Interior

Mr. Jan Kratochvíl worked as the head of the external relations department at a state-funded organisation providing services to the Ministry of Interior. In 2010, the deputy minister started a process of streamlining the organisation’s activities, involving major organisational and system changes that could be used to siphon public property out of the ministry, abuse various mechanisms to create future obligations towards private entities, and commit other types of fraudulent activities in leasing contracts. Mr. Kratochvíl informed his supervisor, but with no success. Consequently, his department was artificially disbanded. Mr. Kratochvíl and his colleagues had the choice of being fired for redundancy or taking a worse job. He was forbidden from coming to work and later fired. Mr. Kratochvíl contacted several public institutions to no avail. A colleague made the case public, leading to investigations and a trial. Former director Milan Kocík received four months of suspended sentence for unfavourable contracts with a total damage exceeding 6 million CZK, and had to pay more than 200,000 CZK in compensation. Former deputy director Milan Pešek received two months of suspended sentence for two overpriced contracts, but was later pardoned. The deputy minister who initiated the organisational changes was “honourably discharged”. After several years, Mr. Kratochvíl won a lawsuit and his termination of employment was reversed, but he sadly concluded that the content of his report was not investigated at all. Official authorities either did not do anything or very effectively prevented any solution.

After the report – automatic retaliation

The most alarming result of the survey is that with one exception, all surveyed whistleblowers faced some form of retaliatory practices, ranging from personal pressure, bullying and threats to existential consequences such as loss of employment or salary reduction. This was critically due to the absence of measures that would protect whistleblowers at their workplace. Half of the whistleblowers lost their jobs. This form of retaliation was more common in the Czech Republic and Hungary, where three quarters of the interviewed whistleblowers were fired; in Slovakia it was half, in Poland less than a third, and in Estonia one in five. In more than one-third of the cases, employers justified their retaliation in the form of termination of employment or lawsuits through various legal provisions to make the action seem legitimate. Typically, this involved accusations of violating criminal or labour regulations.

In 2013, Mr. Lukáš, an employee of Deloitte Czech Republic, suspected that a public procurement contract was being manipulated. He reported his suspicion to the designated person at the company headquarters. Then he met with a company representative, but there was no response. Following the report, the employer took several actions: Mr. Lukáš had to work from home for some time and his e-mail address was cancelled. Eventually, his employment was terminated. For this reason, he decided to file a complaint against an unknown person at the Supreme Prosecuting Attorney’s Office in Prague. The criminal proceedings are in progress and have not reached any specific conclusions so far.

Half of the whistleblowers decided to defend themselves against the retaliatory practices; however, half of that number did not know whom to ask for protection. One quarter saw a lawsuit as the only solution. To sue the employer with the help of a hired lawyer is time consuming and creates serious financial as well as psychological strains. Nevertheless, the respondents in Estonia and Hungary found no alternatives.

Mr. Jakub Klouzal was appointed director of central systems and technologies at the Ministry of Foreign Affairs of the Czech Republic in 2008. While fulfilling his work duties, he started having many doubts about the system of awarding public contracts, particularly with respect to their documentation and various suspicious circumstances. He decided to share this information with senior employees of the ministry whom he trusted; according to an internal regulation, he was supposed to contact the ministry’s audit or inspection department, but he did not trust their independence or competence. Instead of attempting to investigate the situation, his contacts called him paranoid and discouraged him from submitting the information to anyone else. He tried informing others within the ministry about his suspicions, but without success. As a result, various retaliatory actions were taken against Mr. Klouzal. These included psychological bullying at the workplace, such as slander, lying, blaming, deliberate postponement of various deadlines, etc. He was also threatened with physical liquidation; his e-mail correspondence and his movements were monitored, and he was offered money and a better job in exchange for his silence. As pressure mounted, he understood he would soon have to leave and started collecting materials that he later decided to process together with Nadační fond proti korupci (NFPK). Not long afterwards, he was forced to resign. He was offered a position inadequate to his skills, which he refused, so he was fired. He is still compiling his materials with NFPK in preparation for criminal proceedings. Mr. Klouzal is also seeking remedy against the unjustified termination of his employment through a civil law complaint.

Reporting outside the workplace: anyone who will listen

Three in four whistleblowers contacted a public institution to report on unethical or illegal activity. Whistleblowers typically use most of the methods and tools at their disposal, either all at once or in sequence. Those who chose an internal mechanism also contacted external institutions (74%) and involved the media (74%) and/or non-governmental organisations (49%).

Whistleblowers usually contacted between one and five institutions; on average, each of them made a report to two public institutions. The high number of contacted institutions may be a consequence of the difficulties in understanding the applicable legal framework and a lack of confidence that their report will be effectively investigated. Often there was no institution capable of handling the investigation, and therefore the whistleblower turned to another institution, and then another, in a vain effort to find the right one. Others made their reports to all institutions known to them at once, wishing to utilise all available options. The report was often halfway investigated by various institutions simultaneously, which could be detrimental to the case when the coordination of the investigating institutions was not secured.

In most cases, the media was involved. One-third of the whistleblowers believe that the media played a crucial role, without which their report would not have been investigated at all. More than half of the whistleblowers contacted NGOs and other organisations. It seems that the media and NGOs partially substitute for non-functional mechanisms, either at the workplace or outside of it. However, their capacity to support the investigation of the case or the whistleblowers themselves is very limited.

The Czech Republic: helpless lawmakers

Whistleblower protection in the Czech Republic is partially addressed by specific sections of the Labour Code and a section of the witness protection law, but these are strictly limited to the areas of employment regulation and criminal law. They do not provide protection to those employees who expose improper or illegal deeds of their employers. Under these statutes, the employee is protected from being transferred to another job and forced to do his or her job in a different place. The most important clause for employee protection defines a limited number of reasons for which an employee could be fired. Nevertheless, based on our experience with whistleblowers, these limitations are completely insufficient from the perspective of whistleblower protection. Whistleblowers do not have confidence in such scattered protection. In May 2013, the government of Petr Nečas presented a draft to change the anti-discriminatory law. However, the government fell and with it possible solutions to the whistleblower protection problem. The current government in power pledged to adopt a legislative solution for whistleblower protection in the chapter “The Reconstruction of the state and anticorruption measures” of the coalition treaty, but so far there have been no further results.

What next?

Whistleblowing is not perceived as a contextually independent problem, and current support for whistleblowers is very superficial. Legal regulations dealing with whistleblowers should first define the terms “whistleblowing” and “notifier”. Informing on third persons to official institutions is perceived more or less negatively in postcommunist states, due to historical experiences with communist regimes which forced people to denounce their neighbours and collaborate with the ruling elite. This is confirmed by the previously mentioned TI study in the chapter Perception of whistleblowers.

The law should address whistleblowers from both the public and private sector. Effective internal and external mechanisms for reporting should be established. The method of reporting must be clearly functionally defined and followed by objective and independent investigation. Included in the internal mechanisms should be an option to report outside the existing hierarchical structure of the workplace. The whistleblower should also have the opportunity to report beyond the hierarchy of his direct superiors due to their conflict of interest or direct involvement in the reported case. A position of internal ombudsman, standing outside the traditional hierarchical chain of command but entrusted with enough powers and capacities to investigate the report objectively and independently, may be an option. It is also necessary to support the establishment of an institution responsible for the investigation of these cases, at least at the level of coordinating various institutions and cooperating with the whistleblowers during the investigation process. It does not necessarily have to be a completely new institution; the current powers and capacities of the public defender of rights could be broadened.

Whistleblower protection should be robust and cover various retaliatory measures and compensation systems as well. Because of the frequent retaliatory measures such as termination of contract or job transfer, there may be a clause banning any personal changes in the workplace until the case is properly investigated, or else requiring justification of every step taken by the employer with respect to the whistleblower. At the same time, there must be an information campaign to support the perception of whistleblowing as a way of protecting the public interest and public funds and participating in public affairs.

Personal stories of whistleblowers in five European countries

Whistleblowers in the private sector
1) Manipulation of a public contract (Czech Republic)
2) Price cartel (Hungary)
3) Overpriced tickets for a city-owned company (Czech Republic)
4) Mobbing (Poland)
6) Food chain breaching of employment contracts (Poland)
Whistleblowers in state administration
1) Amending the law in exchange for a bribe (Slovakia)
2) Accreditation of education programmes for sale (Czech Republic)
3) Covering tax evasion by retail chains (Hungary)
4) Lending state-owned agricultural land only to select people (Hungary)
5) Licence to sell tobacco only given to friends of politicians (Hungary)
6) Daylight robbery in state-owned companies (Poland)
7) Manipulated medical equipment contract (Poland)
8) Dubious contracts at the ministry (Czech Republic)
Whistleblowers – politicians
1) Conspiracy in the funding of a political party (Estonia)
2) Unlawfully provided grant (Czech Republic)
3) Unauthorised management of city property (Czech Republic)
Whistleblowers – local civil servants
1) Mayor taking money from town funds (Slovakia)
2) Overpriced city contract and selling city property to select people (Czech Republic)
3) Wasting project money from European funds (Czech Republic)
4) Twenty percent for corruption (Czech Republic)
5) Mismanagement of city property I (Estonia)
6) Mismanagement of city property II (Estonia)
7) Dis/advantageous leases of city property (Czech Republic)
Whistleblowers in semi-public entities
1) Paying for fictitious medical procedures (Estonia)
2) Falsifying accounting documents and suspicious public contracts (Slovakia)
3) Overpriced legal services for schools (Slovakia)
4) New ambulance vehicles at exorbitant prices (Slovakia)
5) Less equipment for more money (Czech Republic)
6) From whistleblower to Member of Parliament (Slovakia)
7) Fraud at the ministry (Czech Republic)
8) Financial irregularities at the Municipal Cultural Centre (Poland)
9) Concealing violent crime in the emergency medical service (Poland)
10) Professorial plagiarism (Poland)
11) Unnecessary surgeries for insurance money (Poland)
Whistleblowers in security forces and the judiciary
1) Wrongdoings in the Navy (Estonia)
2) Reported fuel consumption (Slovakia)
3) Judges ordering disciplinary proceedings for criticism (Slovakia)
4) Expensive conspiracy flats purchased by private entities (Slovakia)
5) Regional police director bullying his subordinates (Poland)
Lenka Franková

Lenka Franková

is an associate of the civic association Oživení and a co-author of the study “About us with us: Protection of whistleblowers in the Czech context and in comparison with other countries”.