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The Wall Street-Washington ‘Code of Silence’

Posted by Larry Doyle on April 13, 2012 7:58 AM |

Do you ever wonder why we have not heard more people on Wall Street coming forth to expose practices and policies which were prevalent in bringing our economy and nation to its knees? What is holding people and firms back from coming clean? Why does the same scenario seem to be playing out in Washington as well?

Allowing bad behaviors to remain swept under the rug is little more than a catalyst for further bad behaviors down the road. Actually, punishing those who might look to expose bad practices promotes a code of silence which I strongly believe undermines confidence in our markets and our nation. I am very concerned that we are experiencing this very dynamic at play. Let’s navigate.

While the Dodd-Frank Financial Regulatory Reform incorporates whistleblower protection, will we see an increase in whistleblower actions? I personally do not believe we will. Why? As CNN/Money’s Gary Stern wrote the other day, What Will It Take for Finance Workers to Report Wrongdoing?:

Turning a blind eye to the wrongdoing of colleagues has become the norm at many financial services firms.

The improper conduct goes unreported because people “fear retaliatory action, including losing their job, failing to get promoted, failing to get a bonus,” explains Thomas Monahan, chairman and CEO of Corporate Executive Board. Many employees expect that the misconduct will be buried under the table and no action will be taken. Indeed, companies have failed to create a healthy, ethical culture where people feel “they will not be retaliated against and the company will go and do something” about the wrongdoing, Monahan suggests.

While management on Wall Street might ‘talk the talk’ about creating a healthy ethical culture, they do not have the pedigree in ‘walking the walk’. Regrettably, they seem to have taken their cue from their incestuous friends in Washington. In fact, much like organized crime’s practice of omerta, the code of silence in our nation’s capital only seems to be getting worse.

Why has ABC News Jake Tapper seem to have been the only member of the media to call the Obama administration on the carpet in terms of its treatment of whistleblowers? Thanks to POGO and the Government Accountability Project for banging the drum on behalf of those within our government who have the courage to expose bad practices. Again, I find it regrettable that this topic does not receive the requisite coverage by our major media, so let’s cross the pond and see what The Guardian has to say about The Obama Administration’s Disturbing Treatment of Whistleblowers:

. . .this is a White House that once vowed to protect whistleblowers when it drew up its transition agenda. “Such acts of courage and patriotism, which can sometimes save lives and often save taxpayer dollars, should be encouraged rather than stifled,” the document said as Obama prepared to take power.

But that was then. This is now.

Over the past three and a half years the Obama White House has instead shown a ferocious hostility to many whistleblowers and earned itself the ire of progressive columnists like Salon’s Glenn Greenwald and whistleblower defence groups like the Project on Government Oversight and the Government Accountability Project.

Danielle Brian, of the POGO, has said the US department of justice in the Obama administration “sent a clear of message of fear and intimidation” to whistleblowers in the national security field. This is how the GAP’s Jesselyn Raddack – herself a former whistleblower at the DoJ – put it: “While the Bush administration treated whistleblowers unmercifully, the Obama administration has been far worse. It is actually prosecuting them,” she wrote recently.

I am all for protecting national security but the code of silence in Washington would seem to go far beyond that. How else are we to explain:

For example, the Food and Drug Administration is being sued by current and former employees who say it started monitoring their private emails after they complained that approved medical devices might be risky. Or consider Obama’s signing of a new defence law – called the NDAA – which critics have said defines illegal support of terrorists so broadly that journalists could be swept up in it by interviewing sources at radical groups. A group of writers and activists, including a Pulitzer prize-winning former New York Times reporter, have already gone to court in New York arguing the NDAA is chilling free speech around the globe.

Politicians and financial titans can talk the talk when it comes to promoting truth and transparency, but who amongst them have shown the courage and character to walk the walk?

Whatever happened to . . .

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

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