Liars and Outliers (24 page)

Whistle-blowers are an extreme example of someone defecting from an organization to cooperate with society as a whole. When WorldCom's Vice President of Internal Audit, Cynthia Cooper, first expressed her concerns about bookkeeping anomalies she had discovered, she was met with hostility from her supervisor and apathy from the company's auditors. Despite this, she unilaterally conducted a full-scale financial audit of the company. What she discovered was that
top WorldCom executives
had routinely misidentified operating costs as capital expenditures, ultimately preventing $11 billion from being subtracted from the company's bottom line, and thereby misrepresenting the company's value to its board and investors. Cooper's discovery led to an SEC investigation, bankruptcy and reorganization of the company, and criminal convictions of WorldCom's top executives and accountants. It also brought into renewed focus the need for public companies to implement internal societal pressures to protect themselves and the public from defectors in their ranks.

Along similar—but not nearly as extreme—lines as Sean O'Callaghan, Cooper put herself at considerable personal risk by becoming a police informant.

This is a complicated risk trade-off, one that includes both the group interests of WorldCom and society as a whole, as well as Cooper's various self-interests.

I don't know the exact dimensions of the trade-off—likely the full range of competing interests includes everything related to cooperating with the police—but you get the general idea. And it's not just employees;
corporate board members
face a similar pair of societal dilemmas. Cooper had a variety of competing interests, and the full force of WorldCom's societal pressures fighting her.

Organizations can muster considerable societal pressures to prevent and punish whistle-blowing defections. Some extreme examples:

• National Security Agency
  analyst Thomas Drake
  , alarmed by the agency's initiation of warrantless domestic electronic surveillance after the September 11 attacks, first expressed his concerns to his superiors, then supplied classified information on the program to the House Permanent Select Committee on Intelligence and oversight committees investigating 9/11-related intelligence failures, and finally shared what he believed was unclassified information about the NSA with a reporter. A year and a half later, federal agents raided Drake's home, confiscated his computers, books, and papers, and accused him of participating in a conspiracy to violate the Espionage Act—a law originally aimed at those who aid the enemy and harm national security, rather than those whose disclosures serve the public interest.
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• The
  1962 Vatican Instruction
  “Crimen Sollicitationis”
  prescribed excommunication of those who violated the oath of secrecy imposed on parties to investigations of sexual misconduct by priests, including pedophilia investigations.
  
• As a research physician, Nancy Fern Olivieri was part of a group conducting a clinical trial of a drug for the pharmaceutical company Apotex. When she came to believe that the
  drug was ineffective
  and possibly toxic, Apotex threatened all sorts of legal action against her if she took her concerns public.
  
• Detective Jeff Baird exposed misconduct in the New York City Police Department's Internal Affairs division. As a result, he was shunned and harassed by his fellow officers, gratuitously transferred to different units, and received anonymous death threats.
  

It's no wonder so few people become whistle-blowers, the consequences can be so devastating. Imagine you're in the middle of a Madoff-like pyramid scheme. Do you expose the scheme and risk prosecution or retaliation, feign naïveté and try to get out, or actively participate for greater rewards and greater risk?

An even more extreme example is military desertion in wartime. Militaries need strict hierarchies to function effectively. It's important that soldiers obey the orders of their superiors, and be able to give orders to their subordinates. But since these orders might be otherwise pretty abhorrent to individuals, the military implements a lot of societal pressure to make it all work. This is why military training uses substantial social pressures around strict obedience and group cohesion. In addition, militaries have strict rules about obeying orders, with serious sanctions for breaching them. Throughout much of history, desertion was punishable by death with less than due process, because it was just too important to the group preservation interest to allow for individual self-preservation.

This can change when the military is ordered to take action against the very people it believes it is protecting. In 2011, two high-ranking Libyan
military pilots defected
rather than carry out orders to bomb protesters in the Libyan city of Benghazi. The pilots realized that they were in a pair of societal dilemmas, and chose to cooperate with their fellow countrymen against the government rather than cooperate with their fellow soldiers against the protesters.

In 2005, Captain Ian Fishback exposed the
U.S.'s use of torture
in Iraq because of his religious convictions. Similarly, Bradley Manning had to deal with two competing societal dilemmas in 2010 when he allegedly became a whistle-blower and sent 250,000 secret State Department cables to the anti-secrecy group WikiLeaks, which made them public.
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Like the Libyan pilots, he chose to defect from the government and cooperate with what he perceived as the country as a whole. His subsequent treatment by the U.S. government—which incarcerated him, stripped him of due process, and tortured him—is in part a societal pressure by the government to prevent copycat defections. In previous eras, the king might have put his head on a pike for all to see.

Such anti-defection measures don't work perfectly, of course. Almost all corporate, government, and other institutional misdeeds become public eventually. All militaries have some level of insubordination and desertion. Historically, desertion was huge, mostly because there was no good way to enforce cooperation most of the time. These days, in most countries, it's generally kept at a low enough level that it doesn't harm the military organization as a whole.

It's not always the case that someone who defects from an organization hurts the organization. An individual member of the organization can defect against the desires of the organization but for the benefit of the organization.

This is easiest to explain with an example. Let's return to the Robert Fish Corporation. This time, the corporation decides it will not overfish. Alice, a fisher working for the corporation, has a societal dilemma as an employee: she can cooperate and implement the corporate policy, or she can defect and do what she wants. She also has the same dilemma as a member of society.

Like most employees, Alice generally cooperates and does what the corporation wants. The problem is that the corporation wants a lot of things, but only measures and pays attention to some of them. In our example, Alice's level of cooperation is measured by how much her actions affect the profitability of the corporation. She's rewarded for keeping revenues high and costs low, and penalized for doing the reverse.

Alice might overfish, even though the official corporate policy is not to. She defects in the societal dilemma with society as a whole, and also in the societal dilemma with the Robert Fish Corporation. But unless her management is specifically measuring her on overfishing, they're not going to realize that her increased revenues are coming from something that is against corporate policy. And unless management penalizes her for doing so, she will be motivated to continue the practice.

This sort of dynamic is not uncommon in a corporate environment.

• In 2010, BP's
  Deepwater Horizon
  drilling rig exploded, killing 11 workers and injuring 17 others, then collapsed, and spilled 205 million gallons of oil and 225,000 tons of methane from the Macondo well into the Gulf of Mexico. Reading the reports on the Deepwater Horizon oil spill, it's obvious the company cut all sorts of safety corners and took undue risks. The
  employees of BP
  didn't do what was required by law. More importantly, BP's employees didn't do what was required by BP.
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• The “Big Dig,”
  the massive highway project in downtown Boston from the 1990s, had a long list of defects resulting from shoddy business practices. Again, cutting costs and time was more important than doing the job right on a project already way over time and budget. And while in many cases the companies who did the substandard work were successfully sued, the individuals inside those companies who made the decisions were largely untouched.
  
• Before the 2008 financial crisis, there was an expression around Wall Street: “I'll be gone. You'll be gone.” It was what self-interested investment bankers would say about worthless mortgage-backed securities, weird derivatives, or anything else that was more smoke and mirrors than real value. Yes, those who sold these financial instruments were going against the long-term interests of their employer by dealing in them. But by the time anyone would find out, they expected to be rich, retired, and beyond any reprisals from their bosses. It's only a small step removed from pump-and-dump stock scams.
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This isn't always a defection from the organization. Sometimes it's a defection in detail but not in spirit. Sometimes senior managers make sure they don't know the details of what's happening. Or they're perfectly aware corners are being cut and regulations violated, but make sure the facts never appear in a memo or e-mail. This gives them plausible deniability in the face of prosecution. In extreme cases, companies hire public relations people to lie to the public without realizing that they're lying. Of course, if someone gets caught doing this, the individual will be accused of not following company policy.