Court filings remind companies of the perils of ignoring internal reports of misconduct and retaliating against those reporting
Yet another former corporate governance officer has collected a hefty whistleblower award from the US government. On March 1, a federal court in New Jersey unsealed filings related to John Slowik’s whistleblower lawsuit against his former employer, Olympus Corp of the Americas, which yielded him $51 million for information he provided about global kickback schemes to the US Department of Justice. The award represents Slowick’s share of a total of $646 million in settlements for criminal and civil violations of the Foreign Corrupt Practices Act ($22.8 million), the federal Anti-Kickback Statute ($312.4 million), and civil state and federal charges under the False Claims Act ($310.8 million).
After being appointed Olympus’ first chief compliance officer in 2009, Slowick uncovered kickbacks responsible for the company’s success and was fired in 2010, after his efforts to report the misconduct internally were rejected. The court filings testify to medical supplier’s ‘corporate culture of fraud and herd mentality,’ as reported by Richard Cassin in a post on the FCPA Blog on March 2.Â
A column that Corporate Secretary published in December 2015 focused on the increased risk of liability for board members who have a hand in such retaliation against internal whistleblowers and cited concerns about violation of client-attorney privilege when a company’s general counsel turns whistleblower. In that column, Susan Divers, a member of the advisory services practice at LRN, a provider of ethics and compliance advisory services and education, conceded that was a legitimate concern. But she added that if someone is fired for legitimately reporting issues about the company’s ethical behavior and no investigation is made, then ‘anyone who participated in that [decision] can potentially have liability, including board members.’
To read Cassin’s full FCPA Blog post, click here.
