Whistle in the dark

Can the Irish aversion to whistleblowing be overcome by some simple online software? The experience in Germany suggests it can

IRISH BUSINESSES cherish the shoot-the-messenger approach to dealing with scandal. While Britain and other European countries enact whistleblower legislation to let insiders alert authorities to wrongdoing within their organisation, Ireland takes the dog whistle approach. No one in the companies hear anything untoward, even if the dogs in the street do. And, aware of the consequences of opening their mouths, many employees keep their knowledge of wrongdoing to themselves.

Yet would Anglo Irish Bank have gone into meltdown, taking the entire country with it, if better provisions had existed to let employees inform on the company’s practices? Would the property bubble have inflated as it did if examples of sharp practice in the real estate industry got out? With the benefit of hindsight, what is the cost of investigating corruption and preventing future wrongdoing compared to the final cost of dealing with its consequences?

Clearly a new approach is needed to tackling white-collar crime. In this new era, whistleblowers could play an important role. They have already proven vital in the success of individual services such as Crimestoppers and the insurance fraud hotline.

German company Business Keeper AG offers a whistleblower system as innovative as it is simple: a souped-up digital version of the dead-letter-drop so beloved of Cold War spy thrillers.

In the past decade, they have worked with leading companies in Germany to provide a one-stop whistleblowing solution that gives the company a chance to deal with wrongdoing in its ranks. The company launches in Ireland later this month. Would-be whistleblowers can visit the website of the company in question and are directed via a link to a page on the server of Business Keeper AG. Through an encrypted connection, the whistleblower can detail their allegations, which is then sent to a specially appointed administrator within the company.

The system allows two-way communication to ask follow-up questions and separate the cranks from the serious complaints. It’s a message exchange that resembles e-mail but, by comparison, is completely untraceable thanks to the encryption on the servers of Business Keeper. The system is set up in such a way that not even the German company has access to the messages it is storing – a feature not even the company’s US competitors offer.

“People here joke that that there was no corruption in Germany before Siemens,” says Kai Liesering, Business Keeper board member, referring to the exposure of a network of bribes and other fraudulent payments at the engineering giant. What you find is that companies who have had to deal with scandal – the financial loss not to mention the loss of reputation – want their employees in future to report what’s going on.”

At Siemens, charges were filed, management heads rolled and the case only settled after multi-million fines were paid and new controlling system was put in place. Similar scandals followed at truck manufacturer Man and industrial services company Ferrostaal have seen the new management at both companies approach Business Keeper AG for preventative measures.

They are in good company: Business Keeper’s existing clients include telecoms giant Deutsche Telekom, Germany’s second largest lender Commerzbank, and the vast Bertelsmann media group, including broadcaster RTL and the Random House publishing group.

The company has public sector clients as well, including Germany’s largest healthcare provider, AOK. The city of Berlin will introduce the system across all ministries next year, while a number of law-enforcement authorities are interested. In the state of Lower Saxony, the system adopted by the police force there has been so succesful that already half of the statements lodged on their service concern allegations of illegal activity elsewhere in Germany.

Besides being effective, the system is simple: the web-based interface means there are no hardware costs for clients; website programming and staff training can be done in weeks.

The system – available in 30 languages including, soon, Irish – saves the expense of going outside the company for a call-centre service – and keeps complaints and allegations of misbehaviour inside the company.

Denis Madden, who is launching the service in Ireland later this month, says the annual running costs are “less than the cost of maintaining a permanent staff member”.

Whistleblowing has a weak tradition in Ireland, he suggests, as a holdover from the attitudes towards British informers. That in turn has lead to a legislative situation that compares poorly to the UK public interest disclosure act.

Worse, some of Ireland’s existing whistleblowing legislation even penalises those making claims. In the health service, for instance, nurses or caregivers who report what they believe to be wrongdoing can themselves face stiff penalties if they “should have known” the claims were inaccurate.

Transparency International has noted “significant gaps” in Ireland’s whistleblower legislation, particularly the lack of protection for whistleblowers from reprisals.

In light of these legislative gaps, and without any law-changes necessary, the German software company is confident its solution offers whistleblowers anonymous, effective support.

“The Business Keepers system allows wrongdoing to be reported,” says Madden, “but also for older crimes to come to light.”

In an era of financial crisis and lean budgets, might innovative informer software be the budget-priced alternative to Ireland’s tribunalitis?