In fighting against corruption and in all fraud control and prevention actions, the notion of the anonymous denouncer is essential given that detection and investigation actions generally result from a denunciation.
In the Corporate Investigations and Compliance jargon, the denouncer is best known as the “whistleblower”.
But, what does “whistleblower” mean? This is an English word used to designate the person who blows a whistle – generally in sporting events – when faced with a situation that is irregular or against the rules.
A whistleblower is the anonymous denouncer of irregularities or non-compliance situations which may take place either in the public or in the private field, in connection with frauds, conflicts of interest, accounting data misrepresentation, corruption, etc.
It is clear that the disclosure of such an action may bring about some form of retaliation on the part of the denounced party against the denouncer. If confidentiality and anonymity are not ensured, the denouncer will not have sufficient guarantees to disclose the events of which he/she is aware.
Evidently, for a whistleblower to disclose any perceived action, all denunciation confidentiality guarantees should be ensured, that is, his/her anonymity as well as his/her safety and integrity should be safeguarded.
When referring to the Effective Collaboration Agreements, the National Law on the Criminal Liability of Legal Entities (Law No. 27401 dated March 2018) for the first time in our country legislates on Integrity Programs and on their compulsory and optional contents for the existence of a Collaboration Agreement.
Among the optional elements, the law mentions the irregularity denunciation channels which should be open to third parties that are not part of the organization and adequately informed.
Another optional content under the law is the Whistleblower Retaliation Protection Policy.
As we already mentioned, according to the Argentine legislation, those elements are not compulsory for an Integrity Program. Still, their presence is desirable in said programs.
When it comes to corporate investigations, whistleblowers should be protected in connection with the following:
1- Denunciation confidentiality:
Not protecting the confidentiality of a denunciation may have different undesirable consequences not only in connection with the results of the investigation but also – and equally important – as regards the safety and integrity of the denouncer.
If a denunciation becomes public, the individuals involved may try (or eventually manage) to destroy the evidence needed to corroborate the existence or relevance of the denounced events.
2- Identity confidentiality (anonymity):
If a denunciation becomes known and, because of its characteristics, the identity of the whistleblower is unveiled, his/her safety, integrity and rights might be at risk.
Therefore, when conducting the investigation, all possible measures should be taken to protect the identity of the denouncer/s, both in connection with way and frequency of contact and the manner in which the interviews about the denunciation will be carried out.
Below are some of the best practices that should be taken into account when conducting an investigation involving whistleblowers:
- Hold personal meetings at locations unrelated to the denunciation received.
- Avoid contacting the denouncer over the phone without letting him/her know in advance. That will help him/her decide on the best time to be contacted as well as on the way in which the contact should be established.
- During the interviews or meetings, avoid taking notes which may allow for whistleblower identification or which may lead to him/her (e.g., initials or addresses).
- Avoid contacting the whistleblower at a corporate email address, if he/she is an employee of the company.
- Avoid gathering evidence which could only be obtained by the whistleblower or which could leave any trace or indication of his/her identity. This recommendation is useful in the case of electronic documents stored in a corporate /organizational server, and as for documents which could only be accessed with a username and password.
Major fraud and corruption cases were discovered thanks to the denunciation of whistleblowers. Among them was the famous “Watergate” scandal in the US at the beginning of 1970s. It resulted in the resignation of the then President Richard Nixon after documents were stolen from the Watergate office complex in Washington D. C., headquarters of the US Democratic National Committee, and Nixon administration people tried to cover up their involvement. It was by 2005 that the identity of the whistleblower was known (Mark Felt). Mr. Felt was an FBI agent who retired in 1973 while serving as an Associate Director at the agency.
In addition, in the private sector there were also famous cases, such as that of Sherron Watkins, who acted as a Vice-president of ENRON. Watkins sent an anonymous letter to the company’s founder and CEO, denouncing serious accounting irregularities. A few months later, Enron went bankrupt.
We mention these examples as a proof of the importance that an anonymous denunciation may have.
These have been paradigmatic cases of fraud investigations and corruption cases. Without the intervention of the whistleblowers, these cases could not have been uncovered. Therefore, all precautions as regards the denouncer identity should be taken.