THE COLD, HARD REALITY
The media’s attention to Jeffrey Wigand, Sherron Watkins, Coleen Rowley, and Cynthia Cooper could lead you to believe that doing the right thing and speaking out against the perceived wrongdoings of your employer will guarantee you public support as an honourable and ethical person, putting the needs of your fellow human beings before your own. In reality, the majority of whistle-blowers face the opposite situation. They are branded as traitors, shunned by their former colleagues, and often singled out to the extent that they never find work in their respective industries again. Consider the cases of the following two individuals who made the same tough ethical choices as their more famous counterparts with markedly different outcomes.
Khaled Assadi, an American employee of GE Energy, was temporarily assigned to the company’s Amman, Jordan, operations, where he was responsible for coordinating with Iraq’s governing bodies to secure and manage energy service contracts. In 2011 Assadi reported to both his supervisors and the GE ombudsperson that the company could be in violation of the Foreign Corrupt Practices Act (FCPA) for actions taken in relation to a joint venture agreement with the Iraqi minister of electricity. Assadi alleged that, during the negotiations, the company agreed to hire Iman Mahmood, a woman “closely associated” with the senior deputy minister for electricity, at the specific request of that minister. Assadi was later fired from the company.
In a subsequent lawsuit alleging that his represented illegal retaliation for his disclosures of alleged bribery. Assadi stated that he received a negative performance review immediately after reporting his concerns about hiring of Iman Mahmood, and that GE began “constant and aggressive severance negotiations” to force him to leave the company until it finally “abruptly ended all discussions and terminated” him.
Assadi sought protection under the Dodd-Frank whistle-blower provisions, but in June 2012, the U.S. Court for the Southern District of Texas dismissed the lawsuit on the grounds that the anti-retaliation provision did not apply in cases of “extraterritoriality” (where the petitioner was assigned overseas at the time of the alleged event).
Kyle Lagow, a former home appraiser, will receive $14.5 million as part of a whistle blower lawsuit that accused subprime lender Countrywide Financial (a bank of America subsidiary) of inflating appraisal values on government insured loans. Lagow lost his job after raising concerns about appraisal practices at his company, and his inability to find similar employment after the termination placed his family in severe financial hardship.
His complaint was brought under the qui tam provision and his lawsuit was one of five whistle-blower complaints that were folded into a larger $25 billion national mortgage settlement that five banks-Ally Bank (formerly GMAC), Bank of America, Citicorp, JPMorgan Chase, and Wells Fargo-reached with state and federal officials in February 2012.
Required:
(a) Identify who took the greater risk: Khaled Assadi or Kyle Lagow of the above case.
(b) Discuss your reason by refer to (a).