DEAD-END FOR WHISTLEBLOWERS:

THE ETHICS COMMISSION

By Dr. Maria Rivero and Dr. Derek Kerr

A grim reality of “City Family” life is that 100% of whistleblower retaliation claims are dismissed by our Ethics Commission (Ethics; EC). The City’s Whistleblower Protection Ordinance (Article IV of the Campaign & Governmental Conduct Code) proclaims it “protects all City officers and employees from retaliation.” Since laws don’t enforce themselves, Ethics was given the job. Retaliation investigations started in June 1995. Since then, none have been sustained. The exact total is locked away. Nevertheless, a substantiation rate of zero for 18 years is statistically suspect. Whistleblower studies show that retaliation is common, with rates ranging from 22% to 90%. But in San Francisco, whistleblowers are desaparecidos and the retaliation rate is always zero. The failure to enforce the Whistleblower Ordinance makes it meaningless. It also makes it deceptive — a trap for trusting tipsters. Worse, non-enforcement forces whistleblowers to sue the City.

The roots of deception reach back to 1993 when the EC was sold to voters as a means to clean up our City government, but its architects inserted controls to protect the interests of politicians, lobbyists and City officials. For example, the original “Regulations for Investigations and Enforcement” restrained the Executive Director from overzealous prosecutions. Instead of receiving designated funding, Ethics must plead with City Hall for its annual budget. Its five Commissioners are appointed by the Mayor, Board of Supervisors, District and City Attorneys, and since 2001, the Assessor. Fawning candidates prevail. In April 2011, the Board had to fill the EC seat that “broadly represents the general public.” Dorothy Liu, an employment attorney with a large firm that represents City management, clinched the appointment by promising; “I would respect the integrity of the Board, for certain. I would be open and willing to talk to all of you about issues that need to be addressed.” Predictably, complaints that touch officials who appoint its Commissioners and approve its budget go nowhere.

In a world of complainants and respondents, Ethics empathizes with the latter. Goal #3 in its Regulations is, “Protecting the privacy rights of those accused of ethics violations…” There’s no goal to protect complainants, just lip-service. At an April 2005 meeting, Executive Director John St. Croix emphasized; “confidentiality is an important issue because investigations and enforcement matters impact the lives and livelihoods of respondents.” St. Croix publicly lauds the City Attorney, whose duty is to defend City officials, as the “higher authority” in guiding Ethics decisions. Citizens who criticize his habitual dismissal of ethics complaints are labeled “believers in ‘gotcha government.” When Ethics adjudicated a Sunshine complaint against St. Croix in October 2012, citizens warned the Commissioners about conflicts of interests. Unaware that bias is ubiquitous and often sub-conscious, Commissioner Jamienne Studley, the City Attorney’s appointee, claimed immunity because; “we act with regard to City officials all the time where the situation is sensitive.” Studley explained that she examines both sides of any issue, and suffers no conflict - if the City Attorney says so - and “as long as…we feel that we have an open mind.” This respondent bias makes it easier to deny whistleblower claims. That’s one reason retaliation persists.

Building upon respondent bias, Ethics has rendered whistleblowers, and retaliation, invisible. This process started around 2004 when the Whistleblower Hotline was transferred to the Controller’s Office, and St. Croix was installed. Before then, whistleblower complaints and retaliation were openly addressed. For example, in 2001 Ethics proposed an Article IV amendment to also protect, “employees who are subject to retaliation…when they report improper or unethical conduct to their departments.” Whistleblower retaliation complaints were tallied. The percentage of whistleblower complaints was reported until 2002, and amounted to 36% - about 10 tips yearly. In late 2003, the whistleblower designation vanished from Annual Reports, and all tips were simply called complaints. Though solely responsible for adjudicating claims of whistleblower retaliation, and required to annually report types of misconduct, Ethics purged this category from its Annual Reports. Whistleblowers regained a glint of visibility in January 2006 when St. Croix introduced six categories of complaints in his monthly Director’s Report. “Whistleblower” was one of them. But the next month, it was gone, never to return.

The opacity spread even farther, in defiance of Article IV that requires Ethics to annually report: (a) “the number of complaints received”, (b)” the type of conduct complained about”, and (c) “the number of referrals…” Starting in 2004, the number of referrals to other agencies disappeared, though they had amounted to almost half of all tips. Retaliation as a “type of conduct” had been quashed. By 2005, Annual Reports deleted the count of complaints received. These still appeared in the Director’s Monthly Reports until August 2011, when the number of new complaints was replaced by the sum of pending investigations.

Once invisible, whistleblower retaliation complaints are easily buried. Rarely has Ethics provided numbers, and they don’t add up. Meeting minutes for December 2001 show that 7 whistleblower retaliation complaints had been reviewed since June 1995. That’s about one a year. Ten years later, in September 2011, St. Croix testified before CGOBOC (the oversight body for the Controller’s Whistleblower Program) that Ethics had received; “less than 20 in the 16 years we’ve been in business.” Again, one a year. He added, “When investigated, some were found not to have merit. Others could not be proven.” In other words, all were rejected. It’s intriguing, however, that among the 160 investigations listed in Ethics “Enforcement Summaries” between October 2004 and April 2013, only 2 mention retaliation. That’s just 2 in 8.5 years – a lot less than one-a-year as St. Croix implied. What happened to the others?

Clues rolled in after we protested the City’s failure to monitor whistleblower retaliation. In October 2011, Ethics agreed to report outcomes of retaliation cases to the Controller’s Whistleblower Program. Suddenly, the numbers zoomed upward. The Whistleblower Program’s 2011-12 Annual Report shows that Ethics reviewed 17 retaliation cases over 9 months. None were sustained. Amazingly, however, Ethics was now reporting 2 retaliation claims per month, instead of one per year. No explanation for this startling 20-fold increase – despite our inquiries. Only one case was investigated and noted in Ethics Enforcement Summaries for 2011-12. The other 16 were “dismissed after preliminary review.”

At the November 2012 CGOBOC meeting, Rebecca Rhine strained to downplay this surge in retaliation complaints as being;”…retaliation for any number of other activities, but not claims of retaliation for being a whistleblower.” Since the EC’s jurisdiction covers whistleblower retaliation complaints, and since the 17 retaliation cases were reported to the Whistleblower Program, why would they be anything other than whistleblower claims? Besides, “retaliation” is defined as adverse employment actions for engaging in legally protected activities – most of which involve whistle-blowing about misconduct. The spike in retaliation claims, and their relentless dismissals, must be explained.

Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed wrongdoing by the Department of Public Health. Contact: DerekOnVanNess@aol.com

Oversight Disregarded

Dr. Maria Rivero and Dr. Derek Kerr

When 71% of voters passed Proposition C in November 2003, the Controller became City Services Auditor (CSA) and took over the Whistleblower Program (SFWP). Oversight of these functions was assigned to the Citizens’ General Obligation Bond Oversight Committee (CGOBOC). Last month, we examined some constraints placed upon CGOBOC’s mission. Here, we review the Committee’s own laxity in overseeing the Whistleblower Program.

Since 2004, CGOBOC has struggled to keep up with a slew of reports about City services, plus those from Bond Projects. Still, they stuck to quarterly meetings, squeezing in an extra one yearly to plough through the work. Only after an August 2011 scolding by civic activist Nancy Wuerfel did they vote for 6 meetings annually.

Lapses in oversight of the Whistleblower Program came to light during May 2010 media coverage of whistleblower tips, and retaliation, related to Laguna Honda’s Patient Gift Fund scandal. So in July 2010, CGOBOC devised a 3-member “Standing Committee on Audit Review” to better oversee the Whistleblower Program and CSA projects. But the 2010-11 Civil Grand Jury report; Whistling in the Dark – the San Francisco Whistleblower Program, faulted its dawdling 7 years before getting it organized. The Grand Jury characterized their oversight model as “weak” because it was dependent upon the agency it monitored, then concluded; “Clearly, CGOBOC is not an effective oversight body.” Further, it can be a stepping-stone to political office. Political ambitions can skew oversight. Both previous Chairs campaigned for Supervisor while serving the Committee.

Disinterest in whistle-blowing also impaired the Committee’s oversight. This is apparent from its 9-page Annual Reports. In the five Reports between 2003 and 2007, their role with the SFWP is covered in one sentence! For most of 2007, they forgot to assign a liaison to work with the program. The Annual Reports from 2008 through 2011 cover its work with the SFWP in one short paragraph, amounting to 2% of the text. Meeting minutes also reflect disengagement. In the 8 years between July 2004 and June 2012, it met 36 times. Ten of those meetings included briefings from the SFWP Director. But in only 3 did Committee members make comments worthy of entering the minutes. Two of these 3 discussions came after we criticized the Whistleblower Program.

Like Yin and Yang, CGOBOC’s disregard of the Whistleblower Program dove-tailed with the Program’s withholding of information from it. A tolerance for data-hoarding is most obvious in a 3-year period from 2008 through 2010 when the Committee accepted just two formal presentations by SFWP Directors. Without explanation – or opposition - the SFWP cut public reports from two to one a year in 2009, thereby reducing oversight opportunities by 50%. However, in a rare show of engagement in January 2009, Committee member Robert Muscat challenged the “mild” cases in the SFWP Annual Report, compared to “…all the kinds of activities in the City worthy of reporting and investigating.” The Committee then ordered a “more comprehensive and substantive list of complaints – and the actions taken.”

In response, a special Whistleblower report was presented in April 2009, with information never before disclosed. Of 414 complaints received in 2008, 24% had come through the 311 Customer Service Center, and 55% through the Whistleblower website. Only 13% of all complaints were substantiated. Only 42% were investigated. City departments bearing substantiated complaints were named: Public Health (16%), Recreation & Parks (11%), Public Works (11%), Parking & Traffic (9%). This degree of transparency wasn’t pursued by Committee. So, the SFWP stopped providing it. Although the Grand Jury’s activity pushed for more frequent and detailed reports, CGOBOC’s inertia allowed spotty and airy content. Vigilance had waned after Muscat’s 2009 protest. In a November 2012 replay, Jonathan Alloy panned the Whistleblower Program’s penchant for presenting pablum while excluding exhibits with information “more relevant to this Committee”.

In his July 2011 response to the Grand Jury, Controller Ben Rosenfield wrote: “an official liaison from the Citizens’ Audit Review Board…regularly receives updates and provides feedback on overall program metrics, reviews the program’s policies and procedures, and provides feedback to program staff on individual cases.” Really? Why isn’t any of this recorded in Committee minutes or Annual Reports? Notably, Rosenfield’s claim clashes with the April 2011 announcement by then-Chair, Abraham Simmons: “As you know, the Liaison has never been asked to do a review of the Program itself. This is the first time we undertook to do that.”

In her October 2011 reply to the Grand Jury, past-Chair Thea Selby defended the Committee’s oversight; “We have discussed the Whistleblower Program at over half the meetings I have attended in the last year and a half…” However, Selby had been a member since July 2009 - for 2 years and 3 months – not one and a half years. Committee agendas during her first year show just one item about the Whistleblower Program – in July 2010. That item was; “Creation of a subcommittee to facilitate review of whistleblower complaints.” That decision came after KGO-TV’s coverage of Laguna Honda’s Gift Fund abuse. Subsequently, every discussion about the SFWP was triggered by public complaints, media coverage, or Grand Jury criticisms.

CGOBOC members have generally been open to public comments, but hesitant to act, even in overseeing bonds. Since 2002, the Committee has amassed $1,080,865 to audit bond expenditures. This pile of money sat unused for ten years, according to its 2011-12 Annual Report. No independent auditors were hired. Similarly, no outside consultants were asked to assess the Whistleblower Program, although there are ways to get pro bono help. For example, its Bylaws allow for a “Special Subcommittee” composed of: “members of the Committee and/or the public.” After 8 years, no public experts have been recruited.

The Charter empowers the Committee to “recommend departments in need of comprehensive audit.” But it hasn’t even recommended a whistleblower satisfaction survey. In the past 6 months, taxpayers forfeited over $1.76 million to settle 3 whistleblower retaliation lawsuits. Why pay, when we have a Whistleblower Program, a Whistleblower Protection Ordinance, and an Ethics Commission that dismisses every retaliation complaint? CGOBOC must reclaim its mission and recommend an audit.

Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed wrongdoing by the Department of Public Health. Contact: DerekOnVanNess@aol.com

May 2013

Oversight in Bondage

Given human nature, oversight is needed to keep decision-makers accountable, and to protect public interests. Article IV, Sec.4.102 of the City Charter constrains oversight bodies to work “solely through the department head” to prevent political interference. Still, oversight succeeds when it is knowledgeable, independent, and committed to public service. Surprisingly, oversight of the SF Controller’s Whistleblower Program (SFWP) was thrust upon the Citizens’ General Obligation Bond Oversight Committee (CGOBOC). This happened when Proposition C of November 2003 authorized the Controller to act as City Services Auditor —and to run the Whistleblower Program.

CGOBOC itself had arisen from Proposition F in March 2002 in reaction to Laguna Honda Hospital’s over-budget, under-scope and over-time replacement bond project. The City wanted independent citizen oversight of City bond expenses. and to make sure money was spent as voters intended. But these bond-related duties were far removed from City services and whistleblowers. Nevertheless, the Charter amendment had CGOBOC: (a) function as an independent Citizens’ Audit Review Board to advise the Controller/City Services Auditor; (b) recommend departments in need of comprehensive audit; and (c) review citizen and employee complaints received through the whistleblower /complaint hotline…and the Controller’s disposition of those complaints.

Judging from CGOBOC meeting minutes, these new oversight tasks were bewildering and unwelcome. And, they came with no training, no budget and no enforcement powers. Although CGOBOC has amassed a $1.1 million budget garnered from 0.1% of bond proceeds, this money must be used to audit bonds, not the SF Whistleblower Program. While Prop F dictated that the Board of Supervisors would provide “administrative assistance” to CGOBOC, somehow all of its aid came from the Controller. For example, its Committee Assistant is the Controller’s own executive secretary. Though CGOBOC can recruit outside experts, the vetting and funding comes from the Controller. Oversight of the SFWP is limited to asking questions and hearing public comments.

At the September 2003 CGOBOC meeting, then-Controller Ed Harrington explained how Prop C would affect Committee members; “one major difference in work-load between the current bond-related responsibilities and the advisory role to the Controller would be that all reports would be coming from one source - the Controller.” Harrington added; “The purpose of an advisory committee is to have civilian oversight without taking away the independence of the Controller.” This jumbling of “oversight” and “advisory” functions allows the Whistleblower Program to pretend it has oversight, while CGOBOC ducks oversight by pointing to its advisory status.

Claiming he was not consulted when CGOBOC was picked to oversee the Whistleblower Program, Harrington explained; “the Board did not want to create another advisory committee, and this Committee has the representation that the Board wanted.” Apparently, the Board wanted “representation” rather than expertise. Of CGOBOC’s nine members, three are appointed by the Board, three by the Mayor, two by the Controller, and one by the Civil Grand Jury. But only the Controller’s appointees must have expertise – one in construction management, the other in “auditing government financial statements” – both irrelevant to whistleblower programs.

How could CGOBOC meet its mandate as an independent Review Board if it relied on the Controller for all its information and resources? At the May 2004 meeting, Harrington told Committee members that: “it would be up to them to decide how much they wanted to be involved.” That was the extent of CGOBOC’s independence. Its role was described as; “assisting the City Services Auditor by looking at the data and determining if the information is useful, providing public hearing for audit reports, and accompanying the auditors on inspections if the members so choose.” Compared to CGOBOC’s Charter mandate, this guidance cropped its oversight. The secrecy imposed on the Whistleblower Program further limited CGOBOC’s oversight, and advice.

Meeting minutes from 2004 through 2012 show CGOBOC members passively receiving information from SFWP Directors. Focused on City bonds, and meeting quarterly for two-year terms, members hardly noticed when data about the SFWP was withheld. In January 2005, over a year after the passage of Prop C, CGOBOC finally chose two members to serve as “Liaisons” to the Whistleblower Program. But minutes of the April 2006 meeting show how this oversight mechanism was hobbled; “…the City Attorney’s Office noted that two members of the Committee have volunteered to meet with staff of the Whistleblower Program, monitor its progress and report back to the Committee …the City Attorney’s Office suggests that only one member interface with staff rather than two members…”. Working solo, the Liaison couldn’t confer with anyone, other than the SFWP Director, for the next 5 years. During that time, the Liaison presented only one substantive report about the SFWP, in April 2005. CGOBOC’s constraints and the City Attorney’s meddling lasted until late 2010. That’s when the Laguna Honda Gift Fund scandal and the Civil Grand Jury investigation spurred a show of diligence and responsiveness. After we protested the solitary Liaison arrangement, CGOBOC restored a second Liaison, Regina Callan, in August 2011.

By then it was too late. John Madden had already been sworn in as Controller Rosenfield’s appointee to CGOBOC in January 2011. He was immediately hustled to volunteer as the sole Liaison to the SFWP, and to conduct an unprecedented review of the Whistleblower Program. No one objected to Madden assessing the work of his patron, Rosenfield. It would have been gauche because CGOBOC’s then-Chair Abraham Simmons, who was running for Supervisor, had publicly endorsed Rosenfield to fill Mayor Newsom’s unfinished term. Cozier still, John Madden was the City’s Assistant Controller in the late 1990s.

So at the April 2011 meeting, Madden reviewed just three investigations, each hand-picked by SFWP Director Tonia Lediju. Oblivious to selection bias, Madden praised Lediju for her help. He skipped the investigative lapses in our Laguna Honda Patient Gift Fund case; “I did look at the Audit Report in that particular case. I haven’t gone all the way back on it. I did some review.” Madden likened whistleblowers to folks who “fink on their co-workers,” then equated retaliation to “putting sand in your sandwich” or being “moved to a smaller cubicle.” The Controller’s appointee found no problems with the Controller’s Whistleblower Program.

Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital Contact: DerekOnVanNess@aol.com

April 2013

Exhuming Whistleblower Complaints

Buried whistleblower complaints haunt the SF Controller’s Whistleblower Program (SFWP). In 2011-12, 344 complaints were “closed”, most within 3 months. Still, 18 complaint investigations lingered over 6 months, with 3 dragged out beyond one year. Each year, about a dozen cases float in Limbo past 6 months, their stranding attributed to “complexity”. Now, SFWP auditors are rushing to exhume — then close the lid — on buried tips.

SFWP Manager Steve Flaherty jolted the 11/29/12 meeting of the Citizens’ General Obligation Bond Oversight Committee (CGOBOC), the oversight body for the SFWP; all 18 long-stalled investigations had been “closed” in a 12 week scramble. For the first time, no complaints were over 6 months old! No reason was given for this abrupt turn-around, just a slew of excuses for past delays. Stone-walling, a common delaying tactic, wasn’t mentioned. Instead, one message-point was emphasized, and echoed by Controller Rosenfield and CGOBOC member Madden: “Delays were not within the control of the Controller’s staff.” Reality got twisted in this denial of responsibility. The Controller can subpoena records, prod department heads, hire outside investigators, audit departments, and report non-compliant managers to the Board of Supervisors. Plus, the Controller must have orchestrated the speedy thaw of those 18 frozen cases.

Buried complaints are predictable because the SFWP outsources most investigations to the City departments named in the complaint. That was a key finding in the 2010-11 Civil Grand Jury report: “Whistling in the Dark – the San Francisco Whistleblower Program”. Though the City Charter requires the SFWP to “track” referred complaints, here’s what really happens: “(A complaint) goes to another department to investigate. The other department needs to get Human Resources involved, etc., etc., etc. Sometimes, the departments don’t assign the same priority that we would like…but that’s the world as it is.” Thus spoke John Madden, the Controller’s appointee to CGOBOC, and its liaison to the Controller’s Whistleblower Program.

The SFWP is also required to refer about a dozen tips annually to City agencies that have primary jurisdiction. Here again, the SFWP avidly ships cases out, seemingly indifferent to the outcomes. Some whistleblower complaints get lost for years. For example, our tips about tainted Health Department contracts that eventually recovered $430,000 for taxpayers were punted to the Ethics Commission, the City and District Attorneys, then back to Ethics, for 26 months, even though the Controller is charged with overseeing City contracts. Further, the Charter authorizes the SFWP to concurrently investigate such referred complaints. In practice, the SFWP bars concurrent investigations, supposedly to cut costs, despite abundant voter-approved funding.

Given this tendency to dispatch tips, the energetic unearthing of 18 cold-cases was amazing. The SFWP, staffed by two part-time auditors, is part of the Controller’s City Services Auditor (CSA) division. Both SFWP auditors faced more CSA duties because staffing had dropped below the usual 50 full-time jobs. CGOBOC’s Jonathan Alloy asked why the CSA had just 44 staff when 63 positions were covered by its $12.5 million budget. Rosenfield replied; “The goal is to fill the number of staff required to provide a meaningful body of work, rather than spend all the money we have because it’s available,” then promised to ramp up hiring. But overall staffing had fallen, while SFWP case closures rose from 200 last year - to 344. How did the SFWP close 70% more cases – plus 18 mummified complaints - without cutting corners?

Timely investigations are commendable, but racing to close cases doesn’t ensure quality work. That’s why military Whistleblower Programs require timeliness plus quality metrics. The SFWP hasn’t presented any quality assessments of its investigations, or of those it refers out. Its auditors have great leeway in determining the “validity” of complaints, and the adequacy of departmental investigations. When CGOBOC’s John Madden conducted the first and only review of SFWP investigations in April 2011, he opined that the 3 pre-selected cases he examined generally complied with SFWP policies and “…seemed reasonable and thorough.” While the SFWP Policies & Procedures provide good guidelines for investigations, they fail to describe, or even mention, any quality control process. That’s odd because the Charter requires the CSA to: “assess measures of effectiveness including the quality of service provided, citizen perceptions of quality, and the extent a service meets the needs for which it was created.” CSA does all this for many City services – except its own Whistleblower Program.

The 2010-11 Grand Jury delivered information that never appeared in SFWP reports, namely, whistleblower perceptions of quality. Yet, Controller Rosenfield chided the Jury’s “interviewing a small group of complainants,” without trying to “randomly sample feedback.” Ironically, the SFWP has never sampled any whistleblower feedback. CGOBOC Chair Thea Selby pointedly asked if the SFWP had surveyed any whistleblowers “to see if they…have been satisfied with the process, if not the outcome.” Rosenfield answered; “We have not. Figuring how to do it is part of the challenge – and what to do with the data that is reported back.” Well, the Controller’s CSA routinely uses survey data to improve performance and customer service. Why won’t the SFWP? By shunning whistleblower input, the Whistleblower Program has become a Procrustean agency, arbitrarily forcing informants to adjust to ill-fitting, disrespectful services.

Thwarted by City channels, some employees will seek legal redress. Data from the City Attorney and whistleblowers shows the City approved nearly $11 million in payouts for workplace harassment, discrimination and retaliation between January 2007 and January 2013. That’s about $1.8 million in taxpayer money yearly. True costs are higher due to City Attorney fees, mediation, sick leave, worker’s compensation, unemployment benefits, vocational rehabilitation, pension payments, training new hires, negative publicity, depressed workplace productivity and distracted customer service. The Whistleblower Program could abate some of these costs and damages with satisfaction surveys of whistleblowers, and quality reviews of investigations.

Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed wrongdoing by the Dept. of Public Health. Contact: DerekOnVanNess@aol.com

Rewards for Whistleblowers?

“… San Francisco has a paramount interest in protecting the integrity of its government institutions. To further this interest, individuals should be encouraged to report…possible violations of laws, regulations and rules governing the conduct of City officers and employees.”

So states the City’s Campaign and Governmental Conduct Code. Yet, the SF Controller’s Whistleblower Program (SFWP) discourages whistleblowers.

Whistleblowers are the last line of defense against fraud, waste and corruption. But they face strong disincentives, including harassment, ostracism, termination, and blacklisting. That’s why the government has long used bounties to encourage informants. Realizing that government alone was over-matched by fraudsters, in 1986 Congress rejuvenated the Civil War-era False Claims Act (FCA) expressly to improve rewards for whistleblowers who sue on behalf of taxpayers. Typically, rewards range from 15% to 30% of recovered funds. FCAs prize information quality over informant motives. Seeing the success of these incentives, California became the first of 29 States to enact a FCA in 1987. Since 2005, local governments have followed suit, including New York, Chicago, Philadelphia, and Washington DC - but not San Francisco.

The fraud-driven collapse of the U.S. financial system in 2008 pushed lawmakers to reward whistleblowers, rather than just protect them. Accordingly, the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act features mandatory rewards for securities fraud whistleblowers. The Department of Justice, Internal Revenue Service, and the Securities & Exchange Commission (SEC) provide bounties to eligible informants. On 8/21/12 the SEC announced: “We are seeing high-quality tips that are saving our investigators substantial time and resources.” On 6/28/12 the Office of Special Counsel, the agency charged with protecting federal whistleblowers, gave “Public Servant of the Year” awards to three Air Force whistleblowers, proclaiming: “Whistleblowers are patriots. They possess unusual courage. They come forward because they are driven by conscience.”

Statistics published by the US Department of Justice show that rewarding informants pays. Between 1987 and 2010, the DOJ Civil Fraud Division recovered $9.03 billion without informants. But recoveries doubled to $18.17 billion with help from whistleblowers. A 2010 econometric study of corporate fraud by the University of Chicago showed that monetary rewards were the key “positive incentive” for employee whistleblowers. Rewards increased whistleblowing by 23% - without increasing frivolous claims.

While the SFWP rejects whistleblower incentives, other City agencies reward tipsters. The SF Assessor-Recorder’s “Real Estate Watchdog Program” offers bounties up to 10% of unpaid property taxes. In 2008, $59,803 was awarded to a “watchdog” whose tip brought in $1.07 million. The Department of Public Works has a “Littering, Nuisance and Graffiti Reward Fund” and publicly gives $250 to “Good Samaritans” who report taggers. Illegal dumping informants may get $500. Likewise, the Police Department offers $100,000 for solid leads in homicide cases. Reporting an illegal gun can bring $1,000. Turning in someone who sounds a false fire alarm nets $500. The Department of Public Health offers $250 rewards for tips about dog-fight trainers. The Civil Service Commission rewards police officers with one month’s salary for “heroic or meritorious conduct.” Why not whistleblowers?

Well, the 2010-2011 Civil Grand Jury did recommend “a reward system for validated high-risk whistleblower complaints with a $500 minimum or 10% of funds recovered…” This notion, that public benefit trumps whatever moral drawbacks come with rewards, roused a chorus of City Hall naysayers.

Controller Ben Rosenfield rightly asserted that City employees should report wrong-doing “as part of their jobs.” But most will not, to keep their jobs. Rosenfield warned about a “moral hazard,” that employees might delay reporting fraud in order to collect a larger reward. There’s no evidence of such scamming by City whistleblowers. Instead, the moral hazard comes from encouraging employees to not blow the whistle by denying incentives to do so - and by tolerating retaliation.

The formal responses to the Grand Jury were gems of bureaucratic resistance: “The Controller’s Office does not believe that rewards will enhance the effectiveness of the program…rewards are not a standard or recommended practice for local government whistleblower programs.” Mayor Lee responded, “the Civil Grand Jury does not provide any evidence where other jurisdictions have a reward system and where that reward system has improved the whistleblower program.” Nevertheless, since 1992 the Los Angeles County Auditor-Controller’s “Fraud Reward Program” has tendered up to $1,000 for tips toward convictions. The LA City Office of Finance “Whistleblower Program” pays up to 10% of any recovered unpaid business taxes.

At the 10/27/11 SF Government Audit & Oversight Committee hearing, Controller Rosenfield pleaded to Supervisors David Campos, David Chiu and Mark Farrell, “the unintended consequences of financial rewards are somewhat scary to us.” Along with the canard about City employees who “delay reporting a fraud until it reached a dollar-value threshold”, Rosenfield fathered another Boogeyman; city officials “who are part of the control system, whose job is to report fraud, waste and abuse,” might report violations solely to the SFWP - just to get rewards! Supervisor Farrell surpassed Rosenfield’s paranoia, calling rewards “perverse incentives.” In reality, employees whose jobs are to detect fraud, and those who are complicit in fraud, are always disqualified by government reward programs.

What went unsaid is that whistleblowers present a threat to unethical officials – and an implicit rebuke of the City’s control systems. That’s why the City rewards tips about citizen misconduct - never about government wrongdoing. Rewarding whistleblowers is taboo in circles where retaliation is more often orchestrated than experienced. As long as obedient employees are preferred over honest ones, City whistleblowers won’t be rewarded.

Fortunately, most whistleblowers aren’t driven by monetary rewards. But they do need acknowledgement and respect. The SFWP offers neither, much less incentives. One option is to offer “Public Service Awards” to whistleblowers who deliver high-value tips - and who desire such recognition. Such awards would reduce the “fink” stigma, curb retaliation, and show that the Whistleblower Program values those who justify its existence.

Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital. They repeatedly exposed DPH wrongdoing. Contact: DerekOnVanNess@aol.com

February 2013

High-Jacking the Whistleblower Program

Dr. Maria Rivero and Dr. Derek Kerr

The SF Controller’s Whistleblower Program (SFWP) emerged after voters passed Proposition C in November 2003. Prop C authorized the Controller to function as the City Services Auditor (CSA). In turn, the CSA would manage the SFWP. Instead, the Whistleblower Program has been high-jacked and crippled.

The CSA grabs two-tenths of one percent of the City’s annual budget – about $12.5 million in 2012-13. CSA’s funding amounts to 32% of the Controller’s Office budget, and is misleadingly called the “Controller’s Audit Fund”. Records show that since 2005, CSA spent $567,210 on 21 contracts for staff training and technology services – not audits. Only $19,360 (3.4%) went to the Whistleblower Program. While the CSA grew from 4 to 7 Divisions, funding for its SFWP Division dwindled from $312,816 in 2004, to a measly $139,192 in 2012.

The 2003 voter pamphlet presented Prop C as a good government measure to curb City corruption. Some 15% of the Proponents’ Argument promoted the SFWP to; “…ensure that City government will be run in a clean manner, above reproach” by having “…the Controller to investigate complaints of misuse of City government funds, and improper activities by City government officers and employees.” Fully 10% of the legal text of Proposition C featured the SFWP. But if voters expected 10% or 15% of Prop C funds to go to the SFWP, they were wrong.

In its first four years, from 2004-2008, the SFWP budget averaged $256,000 yearly. That amounted to 2.5% of the $41.2 million in Prop C funds then garnered. But in the last four years, from 2008 to 2012, the SFWP budget averaged a paltry $134,000 annually - just 1.1% of the $48.4 million pumped into the Controller’s Audit Fund. Therefore, between 2008 and 2012, the CSA collected 17.5% more tax money - yet chopped its SFWP budget by 48%, compared to the prior four years.

The turning point was 2008. That year, the SFWP budget was slashed from $218,010 to $128,410 – a 41% cut. Was there a cash shortage in the Controller’s Audit Fund? Nope. Records show that $12.9 million flowed into CSA’s coffers in 2008-09, compared to $12 million the year before. And of that $12.9 million, only $9.8 million was spent. The excess $3.1 million was returned to City departments and the General Fund. So, the SFWP budget was cut by 41%, despite a $900,000 boost to the Controller’s Audit Fund - with millions to spare. Also in 2008-09, the number of complaints handled by the Program soared from 347 to 465 – a 34% jump. Why did the SFWP lose 41% of its funding in 2008, despite an increased workload?

In March 2008, Mayor Gavin Newsom replaced 17-year veteran Controller Ed Harrington with his own – and Mayor Willie Brown’s Budget Director – Ben Rosenfield. Within three months, the SFWP budget was cut by 41%. During Rosenfield’s four years, the SFWP budget collapsed to 48% below the norm in Harrington’s tenure. However, Rosenfield’s spending on CSA contracts rocketed to $542,835 versus just $24,375 spent by Harrington. Under Harrington, the SFWP handled an average of 278 complaints annually compared to 391 yearly under Rosenfield. In sum, during Rosenfield’s four years, the SFWP lost 48% of its funding and gained 41% more work. All the while, CSA’s tax revenues had increased, along with spending on outside contracts. How could this happen?

One reason is that Prop C gave the Controller carte blanche to neuter the SFWP under the cover of “confidentiality” and lax oversight. Oversight of the SFWP was assigned to the Citizens’ General Obligation Bond Oversight Committee (CGOBOC). But CGOBOC was given no budget and no enforcement powers over the SFWP. Organizationally, CGOBOC is dependent upon the Controller’s Office for information, funds and staff. As the 2010-2011 Civil Grand Jury reported; “CGOBOC depends exclusively on selected information prepared by the Controller and the City Services Auditor (CSA) – the very department that it is charged with overseeing.”

When CGOBOC met in April 2009, newly-appointed SFWP Director Tonia Lediju announced a “revamping” – without mentioning the 41% budget cut then imposed. Deceptively, the CSA’s 2009-10 Work Plan budgeted $300,000 for the SFWP. But records show that only $133,707 – less than half - was actually spent. “Revamping” had leeched 55% of the SFWP’s allocation.

In December 2010, the SFWP quietly revised its original 2005 Policy & Procedure Manual. The difference is telling. In 2005, a dozen pages were devoted to engaging and responding to whistleblowers. By 2010, the Customer Service approach had expired. Instead, the focus shifted to managing complaints, staff development, and bureaucratic processes. Both Manuals use “Complaint Flow Charts” to show how tips are processed. But they are dramatically different. The 2005 version placed the whistleblower at the center of the chart. By 2010, the whistleblower was not only removed from the center, but off the chart entirely!

The 2010 Manual adopted a corporate tone. A self-promoting Mission/Vision/Values statement includes; Service – We focus on our customers’ needs. There is even a set of “strategic planks” like Marketing – Communicating our Mission and Engaging the Public. Apart from the fact that the SFWP does not engage its whistleblower clients, the corporate model is preposterous for a two-person “Program” with a $139,000 budget. Ironically, while the Controller is charged with recommending Customer Service Plans for all City departments (Charter F1.108), the SFWP treats its customers like threats. This practice was codified by adding a one-sided “Risk-Assessment” policy: “Each complaint is…evaluated to determine the risk profile of the complaint.”

This change re-framed the Program’s purpose from rooting out wrongdoing to dodging risk and liability. Within this paradigm, whistleblowers bring risk, City officials are customers, and confidentiality can limit risk by hiding misgovernment and sham investigations.

Since 2008, the SFWP has been sapped and rendered into a clearinghouse for “risks.” Belying the Prop C sales-pitch, the SFWP side steps looting, self-dealing and retaliation.

Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed DPH wrongdoing. Contact: DerekOnVanNess@aol.com

Veiled in Secrecy – The Whistleblower Program

By Dr. Maria Rivero and Dr. Derek Kerr

Between 2004 and 2009, the SF Controller’s Whistleblower Program (SFWP) issued public reports every six months. Though brief, they gave examples of investigated complaints, substantiated or not. Readers could tell why some complaints were not substantiated. Starting in 2006, investigated City departments were identified. High-profile cases involving Commissioners, CEOs and even Supervisors were noted. Whistleblowers were promised confidentiality — and encouraged to identify themselves. SFWP staff would “ask follow-up questions and/or relay results of investigations.” By 2008, 57% of tipsters were providing contact information. There was a sense of public engagement.

Something changed in 2009. Public reports were cut from two to one a year, and loaded with verbiage about “confidentiality.” Names of implicated City departments were replaced by generic terms like “an employee” or “a department manager.” Such generalizations can hide mismanagement in a City with some 60 departments and 30,000 employees. “Unsubstantiated” case reports were deleted, though they outnumbered substantiated ones by 2-to-1 and may have harbored scandals. For the first time, the SFWP disclosed that it had “facilitated the investigation” of 50% of all complaints. But the number of investigations independently conducted by the SFWP remains a secret.

Right after Ben Rosenfield became Controller, the 2008-09 budget for SFWP salaries, benefits and overhead was surreptitiously cut by 41%. At an April 2009 meeting, the newly-appointed SFWP Director, Tonia Lediju, reported; “The Whistleblower Program is being revamped.” Nothing more was disclosed. Likewise, annual budgets for the SFWP were never made public. In response to our public records request, the Controller’s Office compiled data showing that in fiscal years 2004 to 2008, the average annual SFWP budget was $256,300. The next four years, between 2008 and 2012, the average annual budget plunged to $134,079 – a 48% drop. During the same time frame, the flow of complaints surged from an average of 278 to 391 yearly – a 41% increase. Nobody reported how the SFWP performed with 41% more work and 48% less money. And, the SFWP refuses to conduct a whistleblower Satisfaction Survey.

In its early years the SFWP consisted of a Manager and two investigators. Now, the SFWP reportedly gets by with two half-time investigators, one of whom is also the Manager. For fiscal year 2011-12, the SFWP budget was $139,192 – a puny 1.2% of the $11.6 million allotted to the City Services Auditor. Compare this $139,192 to the $93,849 base salary for SFWP Manager Steve Flaherty in 2010-2011. That budget barely covered one full-time investigator plus 30% benefits. Fiscal starving could explain the cloddish customer service, why investigations were punted to implicated City departments, and why most complaints were “unsubstantiated.”

The secrecy of the SFWP, and the alienation of its informants, were unveiled in a May 2011 ABC-7 “I-Team” broadcast, “San Francisco Whistleblower Program Comes Under Fire”; and the July 2011 Civil Grand Jury report, “Whistling in the Dark – The San Francisco Whistleblower Program.”

In September 2011, Sunshine activist Mel Shapiro won a Superior Court ruling that San Diego’s Whistleblower Program “must disclose any report of an investigation that has been substantiated.” These events prodded the SFWP to revise its 2010-2011 Annual Report on 11/22/11. Finally, all substantiated complaints were reported. However, the names of implicated City departments were not. Quarterly reports were issued and a FAQ section was added. In a reversal of previous practice, anonymous rather than identified tips were encouraged. Anonymity can isolate informants, limit follow-up contact, and lower the odds of full investigations. The number of anonymous complaints was withheld. Nothing about the 43% of complaints deemed “unsubstantiated” was disclosed.

This level of secrecy exceeds the confidentiality granted to Whistleblower Hot-Lines by California Code 53087.6(e). While the identities of whistleblowers, witnesses and subjects are protected, State law allows Programs “to issue any report of an investigation that has been substantiated, or to release any findings resulting from a completed investigation that are deemed necessary to serve the interests of the public.” Since 2009, the SFWP has denied any public interest in knowing why so many complaints are unsubstantiated. In comparison, Santa Clara County’s “24/7 Whistleblower Program” does a better job. There, the Board of Supervisors gets twice-yearly summaries of every complaint received – including unsubstantiated ones – along with investigative findings and actions taken.

State Senator Leland Yee asserts that whistleblower complaints are often settled and “swept under the rug.” Yee proposed Senate Bill 1336 in February 2012 to identify subjects of substantiated complaints, the action taken, and the outcomes of unsubstantiated allegations. Since then, SB 1336 has been eroded in committee and opposed by City auditors and Unions, among others. The clause requiring disclosure of unsubstantiated complaints was the first casualty. Disclosure of unsubstantiated complaint findings remains discretionary State-wide, and unobtainable in San Francisco.

By October 2007, the SFWP had partnered with the City’s Customer Service Center and switched its Hotline number to 311. The sixty call-takers at the 311 Service Center receive over 7,000 calls daily. Though call-takers are trained to forward whistleblower tips to the SFWP website, they also forward minor complaints about botched City services. After the transition to 311, the average number of SFWP complaints zoomed from 263 to 391 annually — a 49% increase. Was this dramatic rise due to service complaints or whistleblower tips?

Since 2009, the SFWP has masked complaints coming from the 311 Service Center by combining them with tips that whistleblowers log directly onto the SFWP website. Importantly, the number of citizen service complaints, versus employee whistleblower tips, is no longer reported. To preserve its focus and to inform the public, the SFWP should track true whistleblower tips separately from service complaints, as before.

The SFWP has expanded “confidentiality” beyond the realm of public interest, best practices, and even its own past practices.

Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed DPW wrongdoing. Contact: DerekOnVanNess@aol.com

Retaliation

In 2012, the Association of Certified Fraud Examiners issued a “Report to the Nations on Occupational Fraud and Abuse.” They found that 5% of a typical organization’s revenue is lost to fraud. Government is especially vulnerable, rating second among 23 industries surveyed. Whistleblowers catch three times as many frauds as any other form of detection. Most whistleblowers are employees.

Meanwhile, the Government Accountability Project, an advocacy group providing legal aid to 5,000 whistleblowers over 35 years warns:

“You will surely suffer some level of harassment or retribution for blowing the whistle because bureaucracies instinctively tend to eliminate anything perceived as a threat. Academic studies confirm that more than 90% of whistleblowers report subsequent retaliation.”

Other surveys in various settings show retaliation rates between 22% and 38%, but experts agree that reprisals have increased despite laws prohibiting them. Studies show that retaliation is more likely when the reported wrong-doing involves losses over $100,000 and when the misconduct is routine. Although San Francisco’s Campaign & Governmental Conduct Code includes “Protection of Whistleblowers,” City whistleblowers are praised on paper but punished in practice.

On 7/24/2012 the City agreed to pay over $1 million to settle two whistleblower retaliation lawsuits. As reported in the May 2012 Westside Observer, 911 Call-Center supervisor Maura Moylan, and dispatcher Anne Raskin, reported supervisory misconduct within the Department of Emergency Services in 2009. Reprisals ensued and escalated. Unaware of the City’s Whistleblower Program (SFWP), they consulted a lawyer. They sued in Federal Court in October 2010 (Case # C10-04700-TEH). The City Attorney fought them every step of the way. Almost two years later, a Jury awarded them $262,000 for retaliation and harassment. The post-verdict settlement, including legal fees, was $762,000. Not included is the cost of City Attorney hours in this 2-year legal battle.

Similarly, Recreation & Parks Ranger Michael Horan received $250,000 for the retaliation he experienced. According to Matt Smith’s 7/19/12 article in The Bay Citizen, Horan had exposed favoritism and overtime abuse in the Park Patrol Division since 2008. The City’s Human Resources Department failed to fix the problems, so he went to the federal Equal Employment Opportunity Commission. The EEOC substantiated his complaints, but the City Attorney dismissed them. Horan sued in Superior Court in September 2009 (Case # CGC-09-492910), then Federal Court (Case # CV-10-01383). As in the Moylan & Raskin case, the City Attorney vigorously defended management wrongdoers against employee whistleblowers.

Perhaps retaliation was better handled when the Whistleblower Program was in the Mayor’s Office from 1989 through 1993, and initially managed by Edwin Lee. In November 1993, voters passed Prop K that authorized the Ethics Commission to investigate retaliation claims. On 2/24/1997, Lee advised the Ethics Commission that “Cases involving retaliation were treated as a high priority” – even though he had been the sole investigator. As of 12/17/2001, Ethics had reviewed 7 retaliation complaints over 6.5 years. As of July 2012, Ethics has dismissed all of approximately 17 whistleblower retaliation claims it received.

Retaliation, a primitive form of damage control, is directed at whistleblowers by their bosses. Yet, the SFWP sends most complaints right back to the department named in the complaint. Until May 2012, the SFWP didn’t even bother to track retaliation complaints. Instead, the SFWP washed its hands of retaliation by making dead-end referrals to the Ethics Commission. While monitoring retaliation would help, “reported cases of retaliation are a small fraction of actual reprisals” says Mat Stephenson, partner in the Employment Law firm of Kochan & Stephenson. The trauma of retaliation pushes most informants to give up and move on without protesting. Therefore, unethical organizations consider retaliation “cost-effective” according to Stephenson. The few who seek redress are often dismissed as “disgruntled.” Until they sue. Although potential costs for the City are significant, the Controller’s Office refuses to conduct a whistleblower retaliation survey.

Exposing wrongdoing and retaliation by a City department often points to systemic failures of governance. Wrongdoing may be entrenched in the work-place culture, or serve a hidden political agenda. Whistleblower Programs that tackle such problems threaten powerful entities and become vulnerable to retaliation themselves. They face smears, bullying, funding cuts, staffing changes, or having their mandate clipped. In other words, they are treated just like whistleblowers. The Board of Supervisors’ purge of the City’s Sunshine Task Force in May 2012 shows how risky addressing misgovernment can be. However, Programs have ways to dodge political reprisals.

Setting up a sham Whistleblower Program avoids the risks of exposing corruption. Fake Programs can lure and lull informants so they don’t air complaints publicly. The 2011 Civil Grand Jury alluded to such charades in its investigation of the SFWP: “A poor or mediocre Whistleblower Program — one that seems to be something it is not — is perhaps worse than none at all.” It’s noteworthy that in the four fiscal years between 2004 and 2008, the average annual budget for the SFWP was $256,300. In the 4 years from 2008 to 2012, under Controller Ben Rosenfield, the average annual budget plunged to $134,079, a 48% drop. That’s enough to prop up a façade, not to maintain a top-notch Program.

Colluding with other City agencies to dismiss whistleblower claims also reduces the risk of exposing misgovernment. Both the Controller’s Whistleblower Program and the Ethics Commission refer serious complaints to the City Attorney. The City Attorney has dual loyalties — and a conflict of interests. Along with reviewing allegations of governmental wrongdoing, the City Attorney has a duty to defend City officials accused of misconduct. Despite claims of erecting “ethical walls,” the likelihood of mutual back-scratching is high. Instead of protecting whistleblowers, the City Attorney is the main adversary, the reason retaliation persists.

Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed DPW wrongdoing. Contact: Derek Kerr

September 2012

Secret Investigations

By Dr. Maria Rivero & Dr. Derek Kerr

In their 2011 report “Whistling in the Dark – the San Francisco Whistleblower Program” the Civil Grand Jury warned:

“From a policy perspective, there are several issues. Most glaringly, once a complaint is filed, the whistleblower is from that point forward, essentially shut out of the entire process and left to navigate a “black hole” where further access to the investigation is denied.”

City whistleblowers should know that most complaints to the Controller’s Whistleblower Program (SFWP) are referred back to involved departments for investigation. The SFWP has masked the number of such referrals by asserting that complaints were “investigated or referred for investigation.” However, the 2010-2011 Civil Grand Jury revealed that the “majority of the investigations were performed by the departments listed in the complaint rather than the Whistleblower Program investigators.” Belatedly on 11/22/11, the SFWP admitted to a “majority” of cases being referred – without giving the number. The Jury concluded; “The investigation of whistleblower complaints is not independent when performed by the targeted agency or department.”

Other Whistleblower Programs are more open about the work they do. For example, the Oakland Fraud, Waste and Abuse Prevention Hotline “independently conducted 34% of the investigations.” The Los Angeles Program claims it investigates 36% of complaints independently. In San Francisco, the percent may be too small to mention.

Referring investigations to departments is reasonable for minor complaints. Indeed, most complaints received by the SFWP are gripes about City services. SFWP reports from 2006 and 2007 show that barely one-third of complaints were true whistleblower reports about fraud, waste and abuse of City resources. The Civil Grand Jury also found that just 36% were true whistleblower tips in 2009 and 2010. Nevertheless, some of the more serious complaints went back to the targeted departments. In fact, even “Medium-Risk” complaints involving sums of $10,000 to $50,000 and/or mid-level managers were sent back to the named department. The SFWP asserts that referring complaints leverages investigative resources, and that they oversee results. But conflicts of interest are also leveraged when departments probe their own misconduct.

It was the Civil Grand Jury that revealed the Department of Public Health received the most whistleblowers complaints. Since 2009, the SFWP ceased naming implicated departments, perhaps hiding wrongdoing and mismanagement. Had the SFWP conducted a Best-Practices survey, it would know that the Los Angeles Fraud Hotline identifies each department in a substantiated complaint. Further, when the LA Program refers a complaint back to a targeted department the outcomes are recorded as “Substantiated” or “Not Substantiated” or “Not Investigated” for every department. The public has a right to know these department-specific findings.

Instead, the SFWP conceals outcomes of departmental investigations by lumping all the results together. There is no way to identify City departments troubled by misconduct or mounting complaints. We don’t even know how many complaints are outsourced for investigation. What’s also kept secret is whether the SFWP conducts any investigations. The number, seriousness and outcomes of SFWP investigations should be reported, as well as those performed by targeted departments.

Such disclosures are needed if the SFWP reveals whistleblower identities upon referring complaints to City departments. In their Quarterly Report of January 20, 2012 the SFWP warned, for the first time, that they may disclose tipster identities “…to take any enforcement action” and “also can release information as part of a referral when referring any matter to another City department…” This “information” may include clues about the whistleblower. In other words, there is no confidentiality within the City network.

Conversely, records requests by whistleblowers whose complaint investigations are “closed” without explanation are denied because, “Whistleblower Program practices do not permit a complainant to waive anonymity or confidentiality for the disclosure of investigation work-product.” The SFWP has also refused to return documents that informants submitted in support of their complaint. The reason given is “to protect whistleblowers.” By this reasoning, delays, inaction and lost-records may be disguised as “work-product.” Further, the SFWB has rendered itself immune from Performance Audits, since the City’s Director of Audits, Tonia Lediju, also runs the Whistleblower Program.

Leaks in the investigative pipeline are likely to spring up during the Preliminary Review.

That’s when the SFWP screens tips for jurisdiction, “risk of loss to the City,” and level of management involved. Within five days, informants supposedly receive an acknowledgement from the SFWP. But when we reported misappropriations from the Laguna Honda Hospital Patient Gift Fund in March 2010, it took three weeks to get a response – and then only because we followed-up. We were told that the SFWP was still “determining jurisdiction.” What kind of discussions – and with whom – would take three weeks? Even with “High-Risk” complaints like ours, the SFWP review process may include contacting the Director of the implicated department. When “High-Risk” or “Medium-Risk” complaints loop back to the involved department, informants should be notified and checked for retaliation. But that doesn’t happen.

The SFWP has yet to conduct a Best Practices Survey. The Government Accountability Project (www.whistleblower.org), a national whistleblower advocacy group, compiled a set of international Best Practices. One standard is a “Credible Corrective Action Process.” This principle allows whistleblowers to comment on the charges that merited an investigation, and on whether there has been a good-faith resolution. Whistleblowers are often the most knowledgeable and concerned witnesses. The failure of the SFWP to engage its informants discredits their investigations. Whistleblowers should not be silenced in the resolution of the alleged misconduct they risked their careers to challenge.

Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed wrongdoing by the Department of Public Health. Contact: DerekOnVanNess@aol.com

July-Aug 2012

Can We Trust the Controller’s Whistleblower Program?

By Derek Kerr, MD and Maria Rivero, MD

Whistleblower Programs need solid tips from insiders who confront wrong-doing. Two major barriers for tipsters are the belief that nothing will be done, and the fear of retaliation. Trust is essential. Do whistleblowers trust the SF Controller’s Whistleblower Program (SFWP)?

Not Mercedes Hernandez-Bran. In 2004 she became the first SFWP whistleblower. As Director of Human Resources for the Juvenile Probation Department, she reported misspent funds, conflicts of interest, altered time-sheets, and the shredding of public documents. Once the City Attorney heard about her concerns, she was locked out of her office and her computer was seized. The scandal was widely covered by the Press. But like other high-profile whistleblower cases, it was invisible in the SFWP annual report. Hernandez-Bran explained:

“I reported the Chief Probation Officer for collusion and corruption, and I was laid off as a result. But not before being harassed and investigated… There are so many cases of City employees who have filed whistleblower complaints and then were targeted for layoffs. No one trusts this program. The City Attorney protects officials first, then acts against the informant.”

Another half-a-dozen cases of retaliation were described in the July 2011 Civil Grand Jury report, “Whistling in the Dark – The San Francisco Whistleblower Program.” Controller Ben Rosenfield was not moved. To date, no whistleblower retaliation surveys — or even satisfaction surveys — have been conducted, though the Controller employs dozens of auditors and analysts.

Short of conducting a survey, whistleblower trust can be estimated from the number of complaints sent by insiders — City employees. The SFWP withholds this information. However, Oakland’s Fraud, Waste and Abuse Prevention Program reported that in 2011, “City employees generated 44% of the reports…the first time that the volume of tips…from the public exceeded those tips from employees.” A decline in employee tips should be reported to taxpayers. But the SFWP has a reason to overlook employee participation.

Over the past three years, complaints to the SFWP fell from 465 to 386 to 365, a 22% drop. Over the past 9 months, only 252 complaints came in. At this rate the fiscal year could end with another significant plunge. Likely, employee complaints are falling, too. This steady decline in participation has yet to be addressed.

A trustworthy program that focuses on serious wrongdoing will attract serious tips. From 2004 to 2007 the SFWP tried to do that. True whistleblower tips, about fraud, waste and abuse of City resources, were separated from gripes about shoddy City services. Consistently, however, true whistleblower complaints stayed around one-third of the total. Starting in 2007, whistleblower tips were merged a larger group of minor complaints pouring into the 3-1-1 call line. This mix created the illusion that the SFWP was doubly-busy responding to “whistleblower complaints” and checking malfeasance. Further, dispersing whistleblower tips in a sea of service complaints obscures the drop in claims from whistleblowers when they lose faith.

In 2011, the SFWP resumed sorting out high-value tips about major wrong-doing. The SFWP ranks incoming complaints as High-Risk, Medium-Risk and Low-Risk – depending on “the risk of loss to the City.” But the resulting risk-profiles are kept secret. High-Risk complaints involve high-level City officials and a risk of loss of $50,000 or more. Medium Risk complaints implicate mid-level managers. Low-Risk complaints involve regular employees or a sum under $10,000. Note how the risk of loss to whistleblowers has no place in this calculus.

Obviously, the higher the risk for the City, the higher the risk of buried complaints, whitewashed investigations, and retaliation for whistleblowers. Although the Civil Grand Jury found that “only high-risk” complaints were investigated by the SFWP, they did not confirm that all of them were. Potential whistleblowers need assurance that serious complaints are actually received, investigated and substantiated, not just “referred and closed.” A Whistleblower Program that acts on high-value complaints will be trusted with more of them. That’s another reason why the SFWP should immediately contact whistleblowers who submit High-Risk and Medium-Risk complaints — and again within six months — to check if they saw results or retaliation.

A program that protects tipsters will get more who identify themselves. A major provider of whistleblower hot-line services, The Network, Inc., found that requests for anonymity dropped from 78% to 48% over 20 years, as employees became comfortable with reporting. The San Diego Fraud Hotline reported that only 46% of callers in 2011 requested anonymity. In fact, the SFWP’s own 2008-2009 mid-year report disclosed that just 43% of callers were anonymous. A rise in anonymous complaints signals mistrust. Since 2009, the SFWP has withheld the rate of anonymous tips.

More important, substantiated complaints show that something is being done. This number was never disclosed — until 11/22/11 — after the public uproar over the Civil Grand Jury investigation. That’s when the SFWP revised its 2010-2011 annual report and showed that only 16% of all complaints were substantiated. During this period, the Los Angeles program substantiated 23% of all complaints, while San Diego sustained 33%. Notably, both programs had investigated a greater share of complaints; 72% for LA and 100% for San Diego, compared to 59% for SF.

In the last half of 2011, the SFWP substantiation rate climbed to 21% of all complaints. This increase is linked to a surge of investigations into 71% of all complaints, compared to an average of 51% for the prior 3 years. Something is being done – but by whom? In our next column we will explore how most complaints sent to the SFWP are quietly referred back to the same City departments named in the complaints.

Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed wrongdoing by the Department of Public Health Contact: DerekOnVanNess@aol.com

June 2012

Whistleblower Advocates

Watchdogs Beware

By Derek Kerr, MD and Maria Rivero, MD

On 4/11/12 a Federal Court jury awarded $262,000 to whistleblowers Jane Doe and Anne Raskin for retaliation by the City’s Department of Emergency Management.

In 2010, Doe and Raskin exposed a variety of workplace irregularities at the 9-1-1 Call Center that resulted in shunning by coworkers, invasion of privacy, intentional infliction of emotional distress, and retaliation. The City was held liable for “a failure to prevent harassment and retaliation.” ¹ This is not an isolated case.

In a scathing report titled “Whistling in the Dark – The San Francisco Whistleblower Program”, the 2010-2011 Civil Grand Jury (CGJ) noted that exposure to “bad press” and “liability from costly lawsuits” occurred “when legitimate complaints are ignored or dismissed.” Although the CGJ was unable to determine the actual cost to the City because of confidentiality conditions of the settlements, it determined: “A program that properly addresses and resolves allegations of malfeasance ‘in house’ can significantly reduce the City’s exposure.” The City’s Whistleblower Program was failing. (2)

Mayor Art Agnos started the Whistleblower Program in 1989. It fell under the Ethics Commission from 1993-2003, where it withered. After a Port corruption scandal, 71% of voters approved Proposition C that added a City Services Auditor (CSA) function to the Controller’s duties, including a reinforced Whistleblower Program. Prop C also granted the CSA 0.2% of the City budget, now $12 million annually, to audit departments, monitor City services, oversee contracts and manage the Whistleblower Program. A selling point was the claim that the Controller’s Office was politically “independent.”

Despite new management, the Controller’s Whistleblower Program has been hobbled by recurrent staff turnover, few investigators, bureaucratic secrecy, fealty to power, disregard for whistleblowers, and lax oversight.

Ironically, although the Controller’s CSA conducts innumerable audits and reviews, the Whistleblower Program itself was never assessed — until the CGJ report in July 2011. Predictably, Controller Ben Rosenfield pooh-poohed its findings. Those who exposed misgovernment — professional journalists, whistleblowers and Sunshine advocates — praised the report. Of the 14 recommendations issued by the CGJ, most were rejected by City Hall. However, in a nod to transparency, the 2010-2011 Annual Whistleblower Program report was revised. It now lists all substantiated complaints, rather than a trivial “sample.” The time taken to resolve investigations was also added.

The “Controller’s Whistleblower Complaints Program” is a misnomer. Barely one-third of the cases are true whistleblower complaints involving fraud, waste and abuse. The program primarily serves City officials, rather than whistleblowers or the public. It was designed by high-level officials to address low-level misconduct. By keeping tabs on whistleblowers and City hot-spots, embarrassing events are contained. With complaints involving high-level City officials, the program falters. These are some of the reasons why no performance audit had ever been performed, and why a Best-Practices survey has yet to be done. Although an informal survey was sent out, to date no Whistleblower Satisfaction Survey has been performed. Despite the clear connection between whistleblowing and retaliation, neither the Whistleblower Program nor the Ethics Commission bothered to track retaliation. Whistleblowers have generally felt ignored, or treated like burdens and threats.

The Controller’s Office has the money to do a better job, if public service is the goal. Instead, the Controller issues hundreds of thousands of dollars each year to private contractors under the guise of “audits” or assessments of City services. Often, such contracts support under-performing departments. Prime examples are the 2010 contract to Lumetra HealthCare Solutions for $250,000 on behalf of Laguna Honda Hospital. In 2009, Davis Ja & Associates received a $1.2 million contract on behalf of Community Behavioral Health Services. That contract was revoked and the City recovered some $430,000 after whistleblowers reported a conflict of interest. Since 2005, several contracts valued over $700,000 were awarded to Health Management Associates (HMA) to help the Department of Public Health (DPH). Meanwhile, whistleblowers reported that then-Health Director Dr. Mitch Katz was paid $10,000 a year by HMA from 2008 through 2010 – while HMA was working for the DPH. Although the Whistleblower Program received 365 complaints last year, the majority were referred back to the targeted departments for investigation, as reported by the Civil Grand Jury.

Oversight of the Whistleblower Program was also faulted by the Civil Grand Jury. The Citizens General Obligation Bond Oversight Committee (CGOBOC) has no staff or resources to monitor the Whistleblowers Program. Its sole “Committee Assistant” is the Controller’s Executive Secretary who is paid by, and reports to the Controller. Public comments critical of the Whistleblower Program are censored from its Minutes. E-mails to cgobo.committee@sfgov.org are triaged by the Controller’s staff. CGOBOC members receive no training in whistleblower issues, and get all their information from one source – the Controller. In effect, CGOBOC is dependent upon the agency it oversees.

“Confidentiality” keeps a veil of secrecy over program operations, leaving little room for citizen oversight. Whistleblower Program reports provide scant information, making it difficult to judge whether the program is effective, impartial, or even trusted, by complainants.

In this column we plan to explore the performance of the City Whistleblower Program, local whistleblower issues, and public action to correct misgovernment. Input from City whistleblowers and good government advocates would be greatly appreciated.

Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed wrongdoing by the Department of Public Health Contact: DerekOnVanNess@aol.com

1. Case 3:10-cv-04700-TEH

2. www.sfsuperiorcourt.org/Modules/ShowDocument.aspx?documentid=2884

May 2012