News Shane Ross

Wednesday 26 October 2016

Shane Ross: Whistleblower will yet again be the only casualty here

Shane Ross

Published 13/12/2015 | 02:30

PAYING THE PRICE: Eugene McErlean, a former internal auditor at AIB, lost his job
PAYING THE PRICE: Eugene McErlean, a former internal auditor at AIB, lost his job

Barbara the banker was over the moon. A few weeks ago she landed a job in Ireland's Central Bank. She has just arrived in Dublin from Poland with her husband, Kamil, and their two children.

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She cannot believe her luck. Ireland's regulator is a wonderful employer. She has a job for life, short hours, generous annual leave, a fully funded defined benefit pension, even subsidised food. Kamil, a labourer, will find a job in the recovering building industry.

The interview in Dublin's Dame Street was a doddle. She had the language and the skills. The interviewers were impressed by her background in Narodowy Bank Polski - the Polish Central Bank .

As a clincher she had high hopes of grabbing one of those hush-hush Central Banker's bonuses revealed recently. She has signed a confidentiality agreement with her new bosses.

A few weeks ago the fortress in Dublin's Dame Street was severely embarrassed: news broke that the Central Bank was paying top employees as much as twenty grand each in 'retention' bonuses. Barbara is on the gravy train.

Some spoilsport in the Bank spilled the beans. Despite a requirement of confidentiality between any parties to a bonus, yet another dirty little secret about the financial regulator is out in the open.

Spilling the beans in the Central Bank is hardly a good career move. So naturally enough, Barbara never asked her interviewers about their whistleblower policy. Any hopeful job applicant would be insane to demand protection from her future bosses in the event of her blowing the lid on any of their unacceptable practices.

All job application forms at the Central Bank should be headed by the warning words "Whistleblowers not welcome here".

Last Thursday, Barbara watched the proceedings at the Dail's Public Accounts Committee (PAC). She was nonplussed to see Mary Lou McDonald TD bringing a case of a Central Bank whistleblower to public attention. Two months into her new career Barbara is wondering if jobs at the Central Bank are all they are cracked up to be. She is worried because the whistleblower is already toast.

On Friday she did a bit of research. She is deeply unhappy with what she found out.

An initial google told Barbara that Thursday's news was not the first worrying case of a Central Bank whistleblower. Nor is it the second. It is the third. All three whistleblowers have one thing in common: they have been found surplus to requirements after blowing the whistle.

She quickly discovered the name of Eugene McErlean, as honourable a citizen as ever existed in Ireland's nest of banking vipers. Eugene was one of the first employees to point the finger at unsavoury bankers' behaviour.

As the internal auditor at AIB back in 2002, he made a complaint to the Central Bank about systemic overcharging at AIB.

A few months later he found himself out of his job at AIB. Not long after that, a Central Bank boss tried to persuade him to withdraw the allegations.

He refused.

Six years later, Eugene McErlean arrived in my Oireachtas office, almost a broken man, almost beaten by the system. I managed to edge him towards the Oireachtas Committee on Economic and Regulatory Affairs. When he finally arrived as a witness, he told tales of the banks and the Central Bank that, seven years after the event, forced an apology from AIB and a similar admission of guilt from the Central Bank.

Barbara read McErlean's story with disbelief. Was this the same Central Bank that had beckoned her along the road from Poland to paradise ? No, no, all had changed. Since McErlean's victimisation there had been whistleblower legislation. Employees were protected. Ahem.

Barbara muttered to Kamil about apologies being cheap. He responded darkly that McErlean never got his job back.

Post-McErlean, the Central Bank vowed to reform; but vows, like apologies, are cheap. Two years ago another uncomfortable little incident arose. A second whistleblower emerged in the big fortress, again pointing the finger at the banks and the Central Bank itself.

This time it was a foreign woman, like Barbara, who blew the gaff on the methods being used in highly sensitive stress tests imposed on our banks from Europe. The regulator's credibility was at stake.

The second whistleblower was suspended. Next, she was re-instated. Then, she left again. The deputy governor of the day, Matthew Elderfield, refused to give details of the case at PAC, pleading that it was an HR matter, and highly confidential to boot. He conceded that her allegations had come through their "internal speak-up policy". He defended the Central Bank's subsequent vindication of its own conduct, pleading that her charges had been investigated by "an internal audit person"! Central Bank whistleblower number two has vanished, no longer employed in Dame Street. Mary Lou's latest Central Bank whistleblower alleges that he refused to delete critical remarks he made in an audit report about the Central Bank. He claims that he lost his job as a result. The Bank denies this, admitting that the report had been critical but declaring that the weaknesses had been addressed. It employed consultants Deloitte to sort out the dispute.

Deloitte found in favour of the employer. The employee insists that he consulted the Association of Chartered Certified Accountants, who advised that nothing of the sort should ever have been deleted or suppressed.

The conflict between the whistleblower's and the Central Bank's versions has now been sidelined, to be considered - behind closed doors - by the Comptroller and Auditor General. The employee has one striking similarity with his predecessors.

He is out of a job. Barbara is wondering about her own security.

Who says whistleblowers are protected by the law and the authorities?

Whistleblowers are far better protected going to a journalist than pursuing their grievances through official channels. When Nick Webb, former business editor of this newspaper, and I broke the FAS expenses story we were kept informed by a whistleblower. FAS was exposed. The extravagance ended, the FAS top brass resigned and the whistleblower remained in his job.

The protection of anonymity and the likelihood of action was far more secure in the hands of a journalist than through the official whistleblowing channels. Imagine if he had gone to the board of FAS. He would have lasted another week, at most.

Similarly, when we blew the lid on CIE corruption, it was courtesy of an employee. She gave us documents that were dynamite. She still works at the semi-state. She laughed at the idea of making her complaints directly to her bosses. Today her anonymity remains as secure as her job. CIE embarked on a witch hunt, but the source was never unmasked, although a couple of innocent employees came under suspicion.

Other whistleblowers known to have used official procedures include the man alleging improper procedures in the Banking Inquiry and the civil servant who produced allegations about politicians with Ansbacher account holders to PAC.

In both cases the whistleblower failed to convince the authorities to take the allegations further.

Of course, not all whistleblowers will be starry-eyed idealists. In future some will have axes to grind. Others may bear grudges, others will be bonkers but a dangerous pattern of employment exits is emerging.

Can anyone produce a high-profile case where a whistleblower has emerged unscathed, vindicated and reinstated, let alone promoted, in his or her job?

The Central Bank is not the only culprit. Ask two noble gardai, Maurice McCabe and John Wilson, who exposed the abuse of the Pulse system.

The behaviour of both men was described as "disgusting" by Commissioner Martin Callinan. Sergeant McCabe suffered unbearable stress while Garda Wilson conformed to the normal whistleblower's fate. He left his job.

Barbara the banker is now contemplating her future. She can either conform to the unchanged, rotten Irish banking culture or head back to Poland with Kamil and the kids.

Sunday Independent

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