Americans pay millions to whistleblower at BHP; we hound them out of their jobs
The US government paid a huge bounty – nearly $5 million – to a former employee of Australian mining giant BHP Billiton in a case that exposes the weakness of Australia’s whistleblower regime.
In Australia, those who flag corruption inside companies receive limited or no protection and are often sacked or mistreated, while in the United States, which paid for evidence that exposed alleged bribery by BHP Billiton, whistleblowers are encouraged to come forward.
News of the bounty comes as the new, more powerful crossbench in Federal Parliament shapes up to pressure the big parties to change Australia’s whistleblower protection laws.
The calls for reform are being made as Fairfax Media can reveal new details of another whistleblower case that suggests serious ethical failings by a top Australian businesswoman and ABC board member, Kirstin Ferguson.
A Fair Work Commission complaint filed by the whistleblower alleges he was “victimised as a result of the disclosures” he made to Dr Ferguson about alleged corruption at mining services giant Thiess. Dr Ferguson is a director at Thiess’ parent company, Leighton Holdings (now named CIMIC), and is responsible for company ethics as ethics committee chairwoman.
Dr Ferguson declined to comment on detailed questions sent to her by Fairfax Media.
Key MPs Nick Xenophon, Jacqui Lambie and Andrew Wilkie, as well as the Greens and shadow attorney-general Mark Dreyfus have all said they will push in Parliament for stronger whistleblower laws to encourage reporting of corporate corruption.
Australian Securities and Investments Commission senior executive Warren Day also said he backed calls for major whistleblower reforms, saying new legislation and the prospect of compensation should be considered.
Minister for Financial Services Kelly O’Dwyer said the government was looking at strengthening Australia’s corporate whistleblower regime.
In May, the US corporate watchdog, the Securities and Exchange Commission, revealed it would pay a bounty “to a company employee whose tip bolstered an ongoing investigation with additional evidence of wrongdoing”.
Legal sources have confirmed that the whistleblower was a BHP Billiton insider, paid US$3.75 million (about $4.96 million). The former employee provided detailed information to US investigators about the mining firm’s activities overseas several years ago.
The allegations remain the subject of an active Australian Federal Police bribery investigation. To protect their identity, Fairfax Media is not revealing evidence of the conduct the whistleblower exposed.
It is the first time an employee of an Australian company has received a US whistleblower bounty. Under the US Sarbanes-Oxley Act, the SEC can reward whistleblowers by giving them a cut of a fine extracted from a company, with payouts often reaching many millions of dollars.
In May 2015, BHP Billiton agreed to pay $US25 million to the SEC to settle an inquiry into trips to the Beijing Olympics that the company gave to government officials. The officials represented countries where the miner was operating, and where it was sometimes seeking government permits.
BHP Billiton said in a statement that, during that inquiry, the SEC had made no findings of bribery or corrupt intent against the company, and that the US Department of Justice had investigated but took no action.
“The SEC recognised BHP Billiton’s ‘significant cooperation’ throughout the investigation and its ‘significant remedial efforts’,” the company said in a statement.
The company said it was not aware of the involvement of any whistleblower as part of either investigation.
“We respect and fully support protections for all whistleblowers, and the importance of providing confidential avenues for reporting,” the statement said.
Australian whistleblower persecuted
Leaked company and court documents reveal a whistleblower from mining services giant Thiess asked Dr Ferguson to protect him in 2014 in her capacity as director and chair of the ethics committee at Leighton Holdings, Thiess’ parent company.
On July 25 that year, the whistleblower allegedly told Dr Ferguson of Thiess’ involvement in an alleged bribery conspiracy in India. He had told her the company had failed to disclose the allegations to the stock market as required under law.
Records of conversations and text messages between Dr Ferguson and the whistleblower reveal she was told by the whistleblower that he had uncovered “the biggest ethical issue this company [Thiess] has and would be the biggest in Australia”.
“My role is under serious threat,” the whistleblower told Dr Ferguson on July 25, 2014.
Twelve days later, the man was sacked, and forced to go on “garden leave” by Leighton, legal documents say.
Forty-eight hours after that, Dr Ferguson texted the whistleblower and said she was “following up” on his allegations. “I … will be sure to call you when I am done,” her text states.
In response, the whistleblower texted Dr Ferguson that he was being sacked and needed urgent help: “This matter requires urgent escalation … Kirstin, when can I expect to hear from you?”
She did not contact him back.
A formal complaint filed with Leighton Holdings and lodged in the Fair Work Commission states that as a result of whistleblowing to Dr Ferguson, “he was victimised”.
The whistleblower had earlier tried to get the company to fully investigate and respond to allegations of Thiess’ involvement in bribery in India in connection to a multibillion-dollar coal deal. The whistleblower’s complaint details a subsequent “cover-up” of information from the market by Leighton Holdings, which has been renamed CIMIC. The company has never passed the matters raised by the whistleblower to corporate watchdog ASIC or the federal police.
CIMIC and the whistleblower confidentially settled the Fair Work Commission case.
ASIC executive Warren Day believes new whistleblowing laws could provide far greater clarity and protection for employees who wanted to report a range of misconduct, spanning financial crime and environmental or health and safety breaches.
Mr Day says there was merit in compensating whistleblowers, although he cautioned against aspects of the US scheme.
Senator Nick Xenophon has told Fairfax Media that “whistleblowers in the US get rewarded and protected, but here they get punished and ruined”.
Andrew Wilkie, who was recently elected as an independent MP in Tasmania, said Australia had a cultural problem in which whistleblowers were scorned as untrustworthy dobbers, or unhinged: “In the US whistleblowers are celebrated, but in Australia they’re often vilified,” he said.
“Greater whistleblower protection is one of the building blocks of a healthy democracy and … of a healthy corporate culture.”
Senator Lambie, who has taken up the cause of a Defence Department whistleblower, said she wanted “world’s best practice” whistleblower laws which would “strengthen our democracy, prevent and uncover official corruption, decrease government waste, save lives, money and prevent damage to our environment”.
Shadow attorney-general Mark Dreyfus said private sector employees should enjoy the same whistleblower protection as people in the public sector because their information is “just as valuable to our community, and they should not be treated differently under the law”.
“Recently a string of brave private sector whistleblowers have come forward with valuable information, including those who have exposed wrongdoing in our banking sector. They deserve our protection,” Mr Dreyfus said.
Minister Kelly O’Dwyer said that, as it looked to strengthen legislation, the government would “follow usual process, and will consult publicly”.
She said in a speech in July that the government would consider ways to “encourage, protect and reward whistle-blowers whose information reveals artificial tax structures and misconduct”.
“Big business will have to get their house in order, or suffer the consequences,” she said at the time.