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EXPOSÉ: America's Investigative Reports
The Whistleblower's Tightrope
By James Sandler
CIR Staff Reporter

In the summer of 2002, Robert Rester got a call from a colleague at the pipe foundry where they worked, the McWane Corporation in Birmingham, Alabama. The caller said that supervisors suspected Rester was leaking company information to the press. Rester, for the first time in his 24-year career, was out on medical leave - he had a heart condition -- and news of the company's suspicion of him only complicated matters, especially since what the supervisors believed was true. Rester had blown the whistle. And as a result, he would eventually lose everything.

The work at McWane--casting molten iron into massive sewer and water pipes--was inherently dirty and dangerous. But McWane's record of worker injuries outpaced all of its major competitors combined. Between 1995 and 2002--when Rester decided to speak out--4,600 employees had been hurt on the job at McWane plants across the United States. Rester had risen to the rank of plant manager, and as such, he had intimate knowledge of McWane operations. There were burns and cuts, disfiguring fractures, crushed limbs, amputations and a gruesome history of dead workers. The environment, too, suffered. McWane employees, he said, regularly dumped floods of toxic metals into local creeks and lakes, all the while duping environmental regulators by submitting samples of city tap water for their inspection.

It was an approach to business referred to as "the McWane Way," where production was maximized at nearly any cost. Rester was part of this Way for many years, and was paid well for it, making as much as $125,000 a year. Like other managers, his annual bonus was tied to his ability to cut expenses--like proper waste disposal and correctly handling worker injury claims--and exploit productivity. Supervisors, Rester said, blamed accident victims for their injuries and those who disputed a boss's account were regularly disciplined or fired. Employees quickly learned not to report their injuries.

Rester admitted not only complicity, but taking an active role in abuses. "You got polluted water, wait for a good rain and put it in the creek. Someone gets hurt, put someone else on the line. Keep the pipe movin', that's all that counts," He said at the time.

But then Robert Rester had a change of heart. His wife had been killed in a car accident in 2001, and Rester was left to care for his four young daughters. He began to consider the fragility of life, and he said at the time he tried--unsuccessfully--to get McWane to spend more money on safety and the environment. His efforts, he said, ran counter to the McWane Way. He was demoted and eventually fired. When I first met Robert Rester, I was investigating McWane as part of a reporting team at The New York Times. Rester eventually went on the record and became a key source for our story. His revelations, echoed by scores of McWane employees across the country, internal company documents and government records, figured prominently into a three-part series in The Times and a corresponding PBS Frontline documentary. The Federal Bureau of Investigation and environmental regulators, too, took notice and offered Rester immunity from prosecution if he testified against the company and his former cohorts. When it was all over, McWane was fined millions of dollars for safety and environmental violations and several employees were convicted of felonies. Rester's McWane career, however, had come to an abrupt end.

I called him recently at his new job. He now drives a garbage truck. He had to pull over to talk.

"I planned to be miserable from now on," he said, before reminding me of all he's lost: His home and eight acres, the horses out back, his Harley Davidson Road King and his cherished gun collection--all liquidated after he lost his job and went broke. "Now, I don't regret [blowing the whistle], I just wish I'd thought about it more before I done it."

Rester's plunge from comfort and prosperity to financial and emotional ruin is a path not uncommon among whistleblowers. The risks of accusing one's employer of health or safety violations, fraud or other wrongdoing are virtually limitless. The Government Accountability Project, a non-partisan public interest group in Washington, D.C. is one of the nation's premier resources for whistleblowers. GAP has helped protect dozens of public and private employees from retaliation after speaking out. But the group has also witnessed the many perils that can occur if blowing the whistle is not accomplished with careful preparation and strategy regarding how, when, where and with what evidence to come forward. The group wrote a handbook for whistleblowing called Courage Without Martyrdom: The Whistleblower's Survival Guide. The guide is intended to help potential whistleblowers strategize effective ways to speak out, but it also offers a candid preview of what employees should consider before they do:
  • "Are my family and I financially and mentally ready for a protracted fight with my employers to prove my allegations and try to retain my job?"
  • "Am I mentally ready to have my fellow workers and perhaps my friends turn against me because of my disclosures?"
  • "Am I ready for personal attacks against my character and to have any past indiscretions made public?"
  • "Do I have enough evidence to prove my charges without having to go back to my workplace?"
  • "Am I sure that my motivations are to expose the wrongdoing on behalf of the public interest, and not just sour grapes, revenge, or a quest for financial gain or public attention?"
Rester did not strategically plan out blowing the whistle, and his case was complicated in that he had taken part in many of the abuses and crimes he sought to expose. Indeed, after he spoke out to The New York Times and PBS, he became a useful source for the Department of Justice who used his knowledge as a McWane insider to help prosecute McWane officials around the country.

Rester, however, found it difficult to find work. He was known in the pipe-making industry as a whistleblower and a rabble-rouser. He sought help from one of the most commonly used whistleblower protections, a federal law called the False Claims Act.

This law is intended to allow private individuals to sue companies they allege have defrauded the government, and protect them from retaliation once the suit is made public. Healthcare corporations accused of fraudulent billing for Medicare and Medicaid are some of the most common targets of these suits, followed by defense contractors who overcharge or substitute cheap parts while billing for more expensive ones. The False Claims Act provides for a type of lawsuit known as qui tam, which roughly translates to "on behalf of the king." Whistleblowers file qui tam suits on behalf of the government and, as a reward, they get between 15 and 30 percent of any money recovered--the U.S. Treasury gets the rest. The law was passed during the Civil War when President Lincoln discovered that defense contractors were selling the same horse to the Union cavalry many times over, and padding gunpowder with sawdust. Because of the financial motivation, qui tam suits have become a popular partnership between government and citizens. In 2006 alone, 382 qui tam actions were filed in the federal courts, according to statistics published by the Justice Department's Civil Division. That year, the U.S. government recovered more than $1.4 billion and whistleblowers, collectively, received a cut of more than $197 million.

But as Robert Rester discovered, qui tam suits do not always go as planned. Rester filed a qui tam suit against McWane, claiming the company defrauded the government by selling it defective pipe and by covering up violations of safety and environmental laws, thus failing to pay the penalties and fines they should have incurred. He also sought severance pay, his retirement benefits and health insurance under the law's wrongful termination clause. The government declined to join Rester's case and McWane eventually won. The judge ruled that while Rester's testimony may have been helpful to the Department of Justice, his allegations were not specific enough, nor did they come with enough hard evidence, to win a qui tam suit.

Indeed, in the guide Courage Without Martyrdom, GAP warns that the chances of winning a qui tam suit are like those of winning the lottery. "The odds of a painful and protracted reprisal, on the other hand, are a good bet," says the guide. Not only that, the government, more often than not, declines to join whistleblowers in their cases, leaving individuals to go it alone. Still, the government takes most of the money recovered.

Nevertheless, whistleblowing can be worth the risk. Whistleblowers from the government and the private sector alike have likely saved tens of thousands of lives, and helped keep companies and public officials honest. Consider these cases:
  • Douglas Keeth filed a qui tam suit in 1989 against his employer, the United Technologies Corporation, alleging inflated billing in the company's Sikorsky Aircraft division. UTC had to pay the U.S. Government $150 million and Keeth took home $22.5 million as a reward.
  • Dr. Peter Rost was a vice president at the drug maker Pfizer when he blew the whistle on the company's illegal marketing practices, among other things. He lost his job, but a Pfizer subsidiary pleaded guilty in 2007 to a kickback scheme and promoting "off-label" uses of the drug Genotropin.
  • Cynthia Cooper was a WorldCom insider who helped blow the whistle on the communication provider's cover up of $3.8 billion in losses. Cooper kept her job and a WorldCom executive was indicted on charges of securities fraud.
  • Shawn Carpenter was an employee of Sandia National Laboratory who blew the whistle on his employer's cover up of a hacker getting into top-secret computer systems. He was fired and in 2007 was awarded $4.7 million in damages.
Blowing the whistle will invariably become a defining career move with its own risks and rewards. As GAP explains, "the only thing that you can count on is personal satisfaction that you did the right thing, and that you lived your values instead of stopping at lip service," they say. "If you approach whistleblowing with the idea that this is all you will receive, any other benefits will be a bonus."

© 2007 Educational Broadcasting Corporation. All rights reserved.