Whistleblowing, fraud & the European Union
An analysis of the laws and practices in Europe which affect attitudes toward
First published in 1996 by Public Concern at Work
ISBN 1 898809 20 8
All rights are reserved by Public Concern at Work. The reproduction of the work in whole or in part without prior permission may attract legal action.
About this Report
This Report was called for by the European Parliament Budgetary Committee and was commissioned by DG XX (Financial Control) of the European Commission. The Report summarises and analyses papers submitted by national experts from twelve member states. The analysis was undertaken by Elaine Seth Smith and this report was drafted by Guy Dehn. It was prepared for publication by Nick Rose.
The Report also contains recommendations from Public Concern at Work on the practical and simple steps the European institutions can now take in this area to deter and detect financial malpractice on EU funds. At time of publication of this Report (February 1996), a draft had been tabled before the European Parliament Budgetary Committee.
Public Concern at Work
Mission
We believe that the public interest can be safeguarded if actual and potential threats1 to the interests of third parties2 are investigated and, if necessary, removed. To achieve this, we believe that people who have a concern3 about such a threat in their workplace need to be reassured that there is a safe and accepted alternative to silence. We believe that such concerns are best raised at work4 when they first arise, so they can properly be addressed before any damage is done to an innocent third party, the organisation and/or the individual.
This is what we mean by whistleblowing. It is distinct both from complaints by a worker who is personally offended or aggrieved and from confessions by a person implicated in the wrongdoing.
Whistleblowing is an essential element of accountability, by which we mean the giving of an explanation (rather than the establishing of legal culpability).
Introduction
Public Concern at Work is an independent institute.
We have four objectives, which are to
- Protect the public from harm and danger
- Promote the whistleblower as a witness, not as a complainant
- Help organisations establish effective early warning systems, and
- Strengthen individual responsibility and accountability.
We pursue these objectives by
- Promoting responsible and effective whistleblowing
- Providing expert help for people who are concerned about serious wrongdoing in the workplace but are unsure whether or how to raise the concern
- Guiding and training organisations on risk management and accountability, and
- Informing and influencing debates on accountability, regulatory cultures, governance and the public interest.
1 Fraud, abuse in care, public dangers, environmental damage and other illegality.
2 Competitors, customers, patients, passengers, shareholders, other stakeholders and taxpayers.
3 A genuine and reasonable suspicion about the risk.
4 If the person does not have the confidence that the concern will properly be dealt with at work, we consider it better they raise the matter in an appropriate way outside, than stay silent.
CONTENTS
Part A
Summary and recommendations Page
1.0 Introduction
2.0 The potential role of the whistleblower
3.0 Distinguishing right from wrong
4.0 Informing: an historical issue for Europe?
5.0 The abuse of the duty of confidentiality
6.0 Recommendations
Part B
Analysis of national reports
7.0 Information on financial malpractice:
The roles of the citizen, the employee and the State
8.0 Duties to report financial malpractice
8.1 Duties on public officials
8.2 Duties on the general public
8.3 Duties on employees
8.4 Duties on professionals
8.5 The Money Laundering Directive
9.0 Rewards for reporting financial malpractice
9.1 Financial rewards
9.2 Reduced sentences & immunity from prosecution
10.0 Disincentives to reporting financial malpractice
10.1 Public officials
10.2 Employees
10.3 Professional groups
11.0 Collecting information on financial malpractice
12.0 Questions of anonymity and evidential issues
Annex Detail of the study and questionnaire
WHISTLEBLOWING, FRAUD AND THE EUROPEAN UNION BUDGET
Preface
This report summarises research conducted by national experts from the member states of the European Community. The research was commissioned by DGXX (Financial Control) of the European Commission to identify the ways in which information about financial malpractice is obtained, collected and used in member states and the role that exists for whistleblowers in deterring fraud. Its purpose was to enable the appropriate European institutions to consider and recommend ways in which the EU budget might be protected.
The issues addressed in the national reports cover administrative, civil and criminal laws and jurisprudence; rules of evidence and procedure; substantive provisions on free speech, the confidentiality of professionals and the secrecy laws on public officials; the use of rewards and incentives to encourage the reporting of crime; the use of entrapment, informers and anonymised evidence; and contractual and employment rights both in law and in practice. Many of these issues would warrant a monograph to provide an authoritative picture of the position in just one member state, let alone the thirteen legal systems that were considered during this study.
Accordingly this summary cannot and does not claim to provide a thorough or comprehensive picture of the position in each member state. However, drawing on the national research this report identifies common trends in Europe and suggests ways in which the fight against fraud on the EU budget can be taken forward in the short term, consistent with the doctrine of subsidiarity.
This report was published in February 1996. The research was conducted during 1994 and 1995. The report was finalised in the autumn of 1995 after comments from the European Commission and the national experts were submitted on a draft.
Public Concern at Work thanks the European Parliament Budgetary Committee and DGXX for their support and co-operation during this study and the national reporters (listed on page 38) for their work, patience and assistance.
Part A
1.0 Introduction
The risk of financial malpractice is a problem for any organisation, but it is particularly serious for an institution of the size, nature and geographical diversity of the European Union. Whether it be the fraudulent use of farm subsidies or improper claims for training grants from the European Social Fund, the EU by its nature is vulnerable to numerous forms of financial malpractice. The latest EU accounts (for 1994) showed the amount of fraud detected in the EU had exceeded 1 billion ECU - more than 1% of the EU’s total budget of 80 billion ECU. Inevitably this figure of detected frauds can only fuel speculation about the true cost of financial malpractice on the EU. Whatever the real figure, it is beyond doubt that fraud and financial malpractice undermines the integrity of European institutions and damages its reputation across member states.
The European Commission’s overriding object in this area is “to promote sound financial management and to deter fraud” and a number of legislative and practical steps have recently been taken by the Commission and member states to tackle fraud across the Community. These steps were responsible for the 60% increase in the number of reported cases from 2538 in 1993 to 4168 in the 1994 accounts. That there is no cause for complacency is clear from the refusal of the EU Court of Auditors in November 1995 to pass the EU’s 1994 accounts because of “serious, substantial errors” relating to 4% of EU payments.
However it should be understood that the primary responsibility for tackling frauds on the EU budget lies with member states, which are required to prevent and take action against financial malpractice in their countries. The Commission’s aim is to ensure that member states afford the EU’s financial interests at least the same level of protection as their own national financial interests. This study considers the legal position and practical considerations which encourage and deter citizens, employees and public officials from playing their part in the fight against fraud.
Often the first people to suspect something is going seriously wrong - be it an attempt to bribe an EU official or to obtain fraudulently an agricultural subsidy - will be people who work in one of the organisations involved. If these people are encouraged to be vigilant and are enabled to sound the alarm or blow the whistle on serious malpractice, then the chances that criminals or fraudsters will be caught at an early stage are much increased. More importantly if such a culture exists in organisations, opportunists will be deterred from - rather than tempted to - engage in financial and other malpractice in the first place.
Until recently few organisations in Europe - be they in the public or private sector - recognised the full benefits of such an internal culture. Rigid hierarchical line management effectively created monopolies in information and undermined the passage of critical information to those in charge of organisations. However serious the malpractice and however grave the potential consequences, the clear message to employees across much of Europe was to mind their own business and to keep quiet. If they spoke out about financial malpractice, they might lose their job and, if they did, the courts and other national authorities offered them little protection. The effect has been that the very people who are often best placed to deter serious malpractice, to protect the public interest and to help the EU’s fight against fraud are in fact the ones who have most to lose by doing so.
Rather than take steps to counter this situation by enabling and encouraging employees to be vigilant, many organisations in both the public and private sectors introduced legal controls and administrative procedures to make it even less likely that their employees would sound the alarm on serious malpractice. That situation is now beginning to change as it is recognised that an open culture can promote both accountability in organisations and responsibility among employees. Recent legal and legislative developments on a European and national level have helped to check the abuse of confidential relationships for the purposes of fraud and serious crime.
One way in which a more open and self-disciplined culture can be encouraged and fostered is if governments provide safe and accepted routes through which people can, as an option of last resort, report their concerns about serious malpractice outside their own organisation. There could be no greater incentive for organisations to ensure they keep their own house in order than the fact that employees and others can lawfully, safely and readily report serious contraventions to the appropriate national or European authorities.
That said, the pre-eminent aim of any initiative on whistleblowing should be to encourage people to raise their concerns internally, so that those in charge of the organisation or responsible for the expenditure of EU money are able to account in practice for the propriety of the relevant transactions. In this way our recommendations differ from the American approach (which applies to a small extent in the field of customs and excise in various EU states) where whistleblowers are offered rewards to divulge confidential information to the authorities. Thus while our recommendations do not question the presumption that there is a public interest in maintaining duties of confidentiality, we consider that steps need to be taken to ensure that these duties are not abused by those who set out to defraud the EU and damage its integrity.
By considering the risks and opportunities that face the employee and the individual citizen concerned about fraud on the EC budget it is possible to make proposals to help safeguard public money which are not unduly bureaucratic and which are consistent with the doctrine of subsidiarity. This is not to say that whistleblowing has the potential to be a universal panacea - only that other mechanisms to protect the public purse will work more efficiently if the potential value of employees and citizens is understood and their assistance is enlisted in the fight against fraud. As this report shows, any specific proposals which are introduced in this area should be coupled with broader educational initiatives which help explain the relationship between the citizen and the European Union and the responsibility of one to - and for - the other.
2.0 The potential role of the whistleblower
There are no statutory definitions of a whistleblower either at an EC level or in any member state. Accordingly the national researchers drew on their own experience of the ways in which information about frauds and financial malpractice is and may be obtained in their member state.
These national reports show the extent to which the potential of the true whistleblower or conscientious citizen is yet to be harnessed in the fight against fraud and they all recognised that more consideration needs to be given to the role of the whistleblower. The national reports from both Greece and the UK urged that the value of this source of information should be harnessed and developed without undue delay. In Spain and Portugal recent legislation has made it easier for employees there to sound the alarm on malpractice. In Ireland current legislative proposals will substantially alter the climate in which fraud is reported. In Germany, Belgium and the Netherlands recent court decisions have departed from previous jurisprudence and recognised the public interest in protecting the whistleblower. In the Netherlands and Denmark initiatives in this area are being pursued. As the Dutch report concluded “Until recently there had not been much sympathy for the whistleblower but in a reaction to the rapid growth of fraud and other illegal practices, the climate is changing in both the public and private sector.”
As Part B of this report shows, information about potential frauds comes in many circumstances - some meritorious and some not; some from individuals and some from official bodies; some publicly and some anonymously; some performed in the course of a duty and some volunteered; and some paid and some provided for no reward.
Diverse and disparate sources of information were identified in the national reports, including individuals who gave a tip off, the employee, the competitor, the conscientious citizen, the ex-spouse, the paid informer, the traitor, the criminal seeking immunity from prosecution or a reduced sentence, the witness, the accuser or denouncer, the private prosecutor, the professional auditor, the banker, the civil servant, the official investigator, the courts and the regulatory authorities. As the national report from Luxembourg noted, quoting Belgium’s senior public prosecutor, M. Brahy:
“Criminal law is based essentially on denunciation. This term is a burning issue. It is ambivalent. It is never used neutrally. But practical judicial action is based on testimony. In a way, this is always perceived as informing. Denunciation is sometimes considered a perversion of testimony.
The totality of the social response to crime is based on statements made by certain persons about the conduct of certain other persons. The basic fact, which the law postulates, is that man is by nature a witness of other persons, that is a spontaneous denouncer.
There is a whole range of forms of accusation of other people, extending from the act of civic courage to the anonymous letter, from the complaint about a civil or criminal offence to the police informer. The latter, stinking as much as certain forms of manure, is sometimes just as helpful in criminal investigations.”
In most member states the national studies indicated there was some recognition of the particular position of the whistleblower as an employee or conscientious citizen. These states included Belgium, Denmark, France, Ireland, Italy, Germany, Greece, Luxembourg, the Netherlands, Portugal and the UK. Building on this common ground, we suggest that the following definition should be used as a starting point in future studies and initiatives on whistleblowing which the EU undertakes:
Alerting the authorities to information which reasonably suggests there is serious malpractice, where that information is not otherwise known or readily apparent and where the person who discloses the information owes a duty (such as an employee’s) to keep the information secret, provided that wherever practicable he or she has raised the matter within the organisation first.
3.0 Distinguishing right from wrong
As policies are developed in the field of whistleblowing, we suggest that the authorities should encourage serious concerns to be raised by individuals who identify themselves in confidence. One way to do this is to offer some protection to the meritorious whistleblower. If this approach is taken then it will go a considerable way to addressing the legal and social problems that stem from anonymous informants. First, anonymity is the preferred cloak of a malicious individual, a point a number of the national reports make. Secondly, anonymous information is rarely admissible as evidence in the courts of any member state. Thirdly, anonymity suggests that the informant is in some way doing something morally or socially wrong when he or she sounds the alarm on frauds on the EU budget. If policies on whistleblowing actually encourage anonymity then they will fail to give a clear and loud message that frauds on the EU budget are wrong.
Provided the authorities are able to receive the information in confidence - and are able to offer some protection to the source - then there is no reason why the source should not identify him or herself to them. If the identity of the source is known then it is not directly relevant whether he or she acts with bona fides or good faith. Situations may well arise where a source also has an ulterior motive in passing on the information. Where the source is known to the authorities then this issue can be explored and it is easier to establish whether there is any substance in the information. Additionally investigations are clearly more efficient if the authorities know who their sources are and can contact them and this is not possible with anonymous informants. Encouraging and protecting people who identify themselves in confidence is central to the investigation as it is the accuracy of their information - rather than the purity of their motives - which is the most important issue to the authorities and the wider public interest in preventing crime.
By offering some protection against victimisation to employee whistleblowers, the authorities can only encourage people to identify themselves and thereby facilitate the effective investigation of the alleged irregularities. If the source does not identify him or herself to the authorities then he or she cannot claim any protection that may be available. This is particularly important for employee whistleblowers as the protection of their identity cannot be guaranteed even if they remain anonymous: information provided by employees is often only known to a limited number of colleagues and through the process of elimination, the source can be identified by those suspected of malpractice. If the identity of the source is not known then neither the authorities nor the law can offer them protection.
Although there are few, if any, examples of laws in any member state which could be described as whistleblower legislation (though draft legislation is presently before the UK Parliament), it is clear from the national reports that there is an awakening recognition of the role of employees and citizens in helping to combat fraud. While this is seen as part of a development toward the responsibility of the individual and away from the idea that the State and its institutions can on their own protect the public interest, the debate about whistleblowing is not without controversy as the next sections show.
4.0 Informing: an historical issue for Europe?
Reservations about policies to encourage or protect whistleblowers stem from recent experience or memories about the use of informers in totalitarian or autocratic States. As the Portuguese national report says, whatever the merits of whistleblowing, some Portuguese citizens would see little practical distinction between reporting serious malpractice to the authorities and informing the State on the political activities or social views of neighbours or colleagues. This question of public perception and attitudes is also raised in the reports from Greece, France and Luxembourg.
All the national reports refer to the use by the police and the authorities of informers. Sometimes their role is formally recognised and sometimes they are rewarded or paid from official funds. In almost all cases they remain anonymous and are a source of tip-offs or indices about crimes, rather than witnesses who then provide evidence or preuves in court. No national report suggests that employees are used in this way. Rather the use of informers by the police is reserved to violent crimes, drug trafficking and terrorism. Economic crimes - which are characterised in a number of national reports as victimless - are said not to warrant the same attention. However, as we show below customs and tax authorities in most member states do make modest provisions to reward sources of information, even though they do not appear to have a network of informers.
Where the police and investigating authorities in member states do use a network of informers, it seems these are mostly drawn from the criminal world. The German study refers to a survey which showed that 71% of informants were criminals, 8% were taxi drivers and publicans and 20% were motivated by sour grapes (divorcees and ex-employees). In return for their services they are offered rewards and immunity from prosecution, or at least much reduced sentences should they ever be prosecuted and convicted. The Belgian report puts the national budget for informers at BF 32 m.
The consideration that is shown such criminals and accomplices - and the protection they receive - is justified by their role in helping keep the police and investigatory authorities efficient and securing convictions and in protecting the public interest. However as this study shows the approach taken to such criminal or unworthy people is in marked contrast to the isolation of the conscientious citizens and law abiding employees who sound the alarm on economic crimes committed by their organisation. Indeed it can be said that across much of the EU an employee who participates in a serious fraud before going to the authorities will receive more respect, protection and help from the authorities than a law-abiding colleague who blows the whistle on a crime, rather than participate in it.
It should be noted that in almost every member state, the customs authorities have traditionally solicited information from citizens, protected their identity and rewarded them for their efforts in controlling contraband. Historically, practically and legally there is much in common between fraud on the EU budget and the smuggling of contraband into individual countries. To the extent that there may be opposition to initiatives to improve internal controls by facilitating the reporting by whistleblowers of frauds on EU funds, there is a strong case for contrasting such modest steps with the common use of paid by the police and customs forces across Europe.
5.0 The abuse of the duty of confidentiality
As indicated in the previous sections, debates in Europe about whistleblowing may get diverted and confused by the use of informers in society. It is our view that the use or abuse of citizens for political, economic and social purposes to act as informers for their personal gain is fundamentally different from the dilemma of the whistleblower. In this summary report, the whistleblower is characterised as a person who knows about serious crime or malpractice which is not readily visible to others and who is under a duty of confidence and financially beholden to the criminal or transgressor for economic and legal reasons, such as an employee or auditor. The main purpose of initiatives on whistleblowing is to counter abuses of confidential relationships which allow serious frauds on the community to go unchallenged. If the initiatives are presented as such then the debate will be focused on the real problem.
Any measures adopted to tackle abuses of confidentiality must start from the premise that there is a public interest in recognising and preserving the value of confidences. This can be achieved by ensuring that whatever scheme is promoted in Europe recognises the desirability in encouraging such concerns to be raised internally, thereby ensuring the accountability of those in charge. Duties of confidentiality are abused where serious concerns of financial malpractice are swept under the carpet or where the organisation itself is essentially corrupt. In these cases there must be some safe and accepted way for the concern to be reported to the appropriate authority.
In the context of this distinction between whistleblowing and informing there is an important and recent precedent on an European level where member states and the EU institutions have agreed that the abuse and misuse of confidential relationships must be controlled and countered. In the Money Laundering Directive (91/308/EEC) banks and credit institutions are required to report transactions to the authorities which they suspect may be being used to launder money. Where they do notify the authorities, the institution and its staff are released from any liability for breach of confidence if they act in good faith. The fact that bankers’ duties of confidentiality - which had hitherto been almost sacrosanct across much of Europe - can be subjected to a greater public good is a precedent the Commission, the Parliament and the Council of Ministers should bear in mind when they consider the role employees and others can play in deterring and detecting frauds on the EU budget.
One other European precedent relevant to this issue is the Health and Safety Framework Directive (89/391/EEC). This provides, inter alia, that all employees have a duty to report their concerns about health and safety issues internally and, where they are not satisfactorily addressed, the Directive authorises employees to report the matter to the appropriate authority. In this narrow respect the Directive releases employees from the obligation of confidentiality they owe their employer. As the Commission, Parliament and Council accept this caveat where there are risks to the employee involved, it is reasonable and logical to recognise this same caveat when the employee is motivated by a wider interest in tackling fraud on the EU.
In the context of employment relationships (as distinct from the role of a financial institution in the Money Laundering legislation) the Health and Safety Framework Directive accepts and builds on the importance of confidentiality between employer and employee in that it requires the employee to raise the matter internally in the first instance. However, the Directive also recognises that this important and desirable obligation of confidentiality should not be abused by an employer and exploited by him in the knowledge that the weak practical position of the employee will allow serious dangers to health and safety to go unchallenged. By making it a duty on employees to raise such concerns, a clear message is being given that society expects employees to speak up when faced with serious dangers to their safety or that of their colleagues in the workplace. We consider that a similar approach should be taken to the situation where an employee is confronted by evidence of fraud or serious malpractice with regard to EU funds in his or her own organisation.
6.0 Recommendations
If the European Commission, the Parliament and the Council of Ministers agree to treat fraud on the EU budget as seriously as they have treated money laundering and dangers to health and safety in the workplace, then there are ready precedents to build on. What is also clear from this study and the national reports is that if such measures are to be effective, they should be coupled with educational and training initiatives that address the responsibility of the citizen and employee in relation to his or her employer, community, nation and Europe. Additionally steps should be taken to challenge the attitude that fraud is a victimless crime and any educational or training should show how frauds on the EU budget affect both the citizen and the community.
6.1 Extend the provisions of the Money Laundering Directive
This Directive, originally targeted at the illegal proceeds of drug trafficking, has been extended to cover the proceeds of all crimes in eight member states. It obliges banks and other financial institutions and professional bodies to report any reasonable suspicion they have that money is being laundered. During 1995 following a Council Resolution, the European institutions have been considering extending the provisions of the Directive to the laundering of the proceeds of EU frauds.
By extending the Directive’s provisions explicitly to cover frauds on the EU budget, it would require those institutions which are directly involved in the transfer and handling of EU grants and subsidies to exercise a degree of vigilance over their proper use. Importantly it would also require these bodies to train their staff to recognise suspect financial practices in relation to EU funds. As such its potential effect on CAP fraud is considerable as in rural communities banks and other credit institutions will often be better placed to recognise irregularities and suspect practices with EU funds among their customers than any distant auditor or official investigatory body. We endorse these proposals and recommend that the EU should assist banks and credit bodies and their staff to recognise and report their concerns about serious malpractice in relation to EU funds.
6.2 Leading by example
The Commission should ensure that it has its own internal procedures, outside of line management, for its staff to raise concerns about serious financial malpractice. It should also promote its fraud hotline more widely across the Community, making it clear that citizens who come across malpractice and who wish to tackle it, know of the existence of the service. It is our view that the Commission should consider increasing the staffing on the service so that callers are dealt with personally, rather than asked to leave details anonymously on an answering machine.
6.3 Contractual provisions in direct EU subsidies
Although the proportion of EU funds which are distributed directly by the Commission is small, this is an area where the role of the whistleblower can be productively developed. Where the Commission makes direct grants of EU money to bodies in member states it should contractually require the body to have proper and sufficient controls against abuse of the grant. These should include a prominent requirement on all employees and contractors to report financial malpractice internally and a duty to report unresolved matters direct to the Commission (or an appointee) as grantor. All employees and contractors should be required to raise such concerns internally and should also be provided by the grantee with details of how they might also raise such concerns with the Commission - for instance by the fraud hotline. The contractual provisions should require the grant recipient not to victimise any employee or contractor who reports his or her suspicions either internally or to the Commission.
6.4 Protecting whistleblowers
It does seem to be the case that national authorities in many member states show more generosity and consideration to those who provide information about frauds they have participated in than they give to those law-abiding citizens who raise concerns about financial malpractice, even if it is at some personal risk. The reason for this appears to be due to the imperative of the prosecuting authorities to secure evidence to convict fraudsters. It is not clear there has been proper consideration of the benefits that might be gained by encouraging and enabling all those who suspect serious malpractice among colleagues to report it to the authorities, thereby deterring the malpractice in the first place.
Accordingly we recommend that the Commission and member states should make provision to protect whistleblowers who report financial malpractice either on the fraud hotlines or under the procedure outlined in 6.3 above. Where he or she is victimised, the whistleblower should be entitled to compensation direct from the grantee, or alternatively from the Commission or the member state which should be empowered to off-set or recover any compensation it pays the whistleblower from the grantee, under the existing or any future grant or subsidy.
For the same reason, member states should introduce fraud hotlines along the lines developed by the EU’s fraud agency, UCLAF. However, as we point out above, we consider that they can be more effective if calls are dealt with by individuals (who can encourage the callers to identify themselves in confidence) rather than by anonymous reports which are recorded on telephone answering machines. Member states should also consider the case for developing a designated, independent service able to provide free and confidential advice and assistance to whistleblowers who are concerned about financial and other malpractice. As Public Concern at Work has shown in the UK such a service can not only help influence a culture which deters fraud but it can provide confidential help and real and practical assistance to people who do not know where to turn when they uncover serious malpractice in their workplace.
6.5 Education and training
The Commission should consider developing training and educational initiatives which are aimed directly at European citizens and students and which explain the relationship between the individual and the EU and how fraud on the budget affects them - be it in food prices, construction projects in their community or organised crime. The use of interactive technology, CD-roms and games may well provide a practical and cost-effective way in which the role and responsibility of the individual and the relationship to the nation state and the European Union can be explained. These are increasingly used by major companies for training and induction purposes and they would be a valuable tool in helping bank staff to identify EU frauds.
New technology allows demonstrations and exercises to be developed which show the risks and opportunities involved in the fight against fraud, the steps the Commission itself is taking and the ways in which citizens can play their part. Rather than exclusively relying on contract terms, detailed procedures and audits, new technology offers a way in which the Commission can ensure a greater level of vigilance and propriety among those who receive and manage EU funds and those they employ. Turning from the role of citizens to those directly involved in the fight against fraud, such as the Association of European Lawyers for the Protection of the Financial Interests of the Community (ALPFIEC) new technology can provide practical means for sharing information and developing skills in deterring and detecting financial malpractice across member states.
Part B
Analysis of national reports
7.0 Information on financial malpractice: The roles of the citizen, the employee and the State
As Part A of this report makes clear it is important that any initiative the Community takes should build heavily on the role of internal whistleblowing as a means of deterring malpractice and ensuring accountability within organisations which receive EU money. In as much as it should become a term of art, we recommend the term whistleblowing is given the following meaning:
Alerting the authorities to information which reasonably suggests there is serious malpractice, where that information is not otherwise known or readily apparent and where the person who discloses the information owes a duty (such as an employee’s) to keep the information secret, provided that wherever practicable he or she has raised the matter within the organisation first.
At present it seems in the Netherlands, the UK, Belgium, Luxembourg, and Ireland, the activity of whistleblowing is broadly understood to be the disclosure or communication of information about malpractice by individuals or organisations to an outside authority. In these countries the term appears to have equal validity to breaches of civil and criminal law and the concept of whistleblowing is associated with principles of accountability. For example the Dutch report referred to ‘those who disclose information without authority regarding an organisational deviance’ and the employee aspect was also stressed in the UK and Irish reports. However the dilemma facing an employee who is opposed to fraud on the EU was recognised in each national report. The potential of this source in the fight against fraud was clearly stated in the Greek report which noted that whenever a crime is prevented “there is always someone behind the curtains who blew the whistle to the appropriate authorities”.
In France, Italy, Greece and Germany the term is understood to be relevant only in the criminal sphere. For example in the Italian Criminal Code reference is made to “public officials & public service employees who during the course of their duties or who by the nature of their employment become aware that a prosecutable offence has been committed must report the fact in writing...”. In Greece a whistleblower is ‘a person who informs or makes an accusation against another whom he suspects of the violation of some penal statute’ and in Germany a whistleblower is ‘a person who, without being victim of the crime, provides information for the detection of criminal offences and is available as a witness in the criminal proceedings’.
The studies from Spain and Italy focused on the role of the State authorities in investigating and prosecuting frauds, rather than the means by which the investigations were initiated. In Portugal until recently the concept has not been developed and the only person or body understood to carry out such a role was a “functionary or institute with functions resembling a Fraud detection officer who has to officially report any infractions (breaches of the law) discovered or brought to his attention”. However new legislation recognises the role of whistleblowers in alerting the judicial police and a new anti-corruption inspectorate of financial malpractice and makes provision for their protection.
The Greek report drew on Aristotle’s maxim that ‘The roots of knowledge are bitter but the fruit is sweet’ and said there was a pressing need to address the issue of whistleblowing. The report added that the need to enlist the support of the citizen was all the more urgent as ‘Bureaucracy is one of the biggest obstacles in the fight against organised crime’ especially as few authorities know how to handle whistleblowers or to get information.
In Spain not only does whistleblowing sometimes suggest that something has been said ‘treacherously against another’, but it also implies that the person supplying the information has done so for financial gain. Like the national researchers of the Benelux states, the Spanish report said the term ‘denouncer’ was more appropriate and accurate. Certainly it has more in common with the English term ‘tip-off’ - in that the denouncer is not necessarily the victim or a court witness - and is also morally more neutral. It should be noted that in implementing the Money Laundering Directive the term ‘denounce’ was used in the French texts to mean the reporting of malpractice to the authorities.
The French reporter distinguished between an ‘indicateur’ who passed information for an advantage from an ‘informateur’ who had no private or selfish interest in the matter. In Germany there was a formal, legal distinction between an informant (someone who passes on information for a guarantee of confidentiality) and a ‘confidential person’ who is effectively retained by the authorities to pass on information about crimes.
In Denmark the concept of whistleblowing is apparently alien to Danish society where its small population and close ties make whistleblowing a ‘very unfamiliar method of revealing fraud’. The national report suggested that such abuses would come out through a vigilant political process. However, a recent study in Denmark into the Standards of Ethical Principles in Public Administration found that ‘whistleblowers do de facto exist in Denmark and that the situation of a whistleblower can be very difficult’. Similarly the recent report into Standards in Public Life in the UK (the Nolan Report) has addressed the role of whistleblowing in government bodies and recommends that internal procedures, independent of line management, are set up to deal with concerns about misconduct. These recommendations were accepted by the UK Government on 18th July 1995.
Additionally the national studies addressed the role of institutions and professionals subject to the Money Laundering Directive and of citizens who supply the customs and tax authorities with information for money. Other sources of information commonly identified by the national reports included public officials, ordinary citizens (with various motives), private sector employees, professionals, competitors, government bodies, reformed offenders and the police.
In a number of member states the courts themselves are required to report malpractice they come across. In France, the courts have a role as a whistleblower in that they are required to inform the Tax Authorities of any evidence they uncover indicating that a tax fraud has been committed. In Germany and Belgium the courts - among other authorities - have to report frauds (including EC subsidy frauds) to the authorities.
Where the role of employees as a source of information on fraud was specifically addressed (as in the reports from Netherlands, the UK, Greece, Portugal, Luxembourg, Belgium, Denmark and Ireland), the practical dilemmas facing such people were noted. While in most states such employees had a freedom or competence to disclose information on the fraud of his or her employer to the authorities they were afforded little or no protection against victimisation. As to protection against dismissal, the Luxembourg report says the position is ‘quite the contrary’ in that blowing the whistle can be a lawful reason to dismiss an employee and the system is ‘very discouraging’ to conscientious employees.
In summary the role of the whistleblower (as distinct from the informer) is not yet uniformily recognised across Europe. Little protection is afforded the conscientious citizen who reports financial malpractice to the authorities and national laws do little to encourage or protect employees who raise concerns internally. However the attitude is beginning to change with the introduction of free phone lines and a new approach by courts across Europe to the position of an employee who blows the whistle. Any initiative the Community takes should, as we recommend above, take full account of the role of internal whistleblowing.
8.0 Duties to Report Financial Malpractice
8.1 Duties on Public Officials
Public officials (or civil servants) by the nature of their positions often have access to sensitive information and because of their various duties they are often well placed to realise that a fraud may be taking place. This applies not only to frauds within the department they work for but also to external frauds which they come across in the course of their work.
In the Netherlands public officials are obliged to inform the authorities immediately of all ‘official misdemeanours’ which they encounter during the course of their work. This report should be made through the officials’ department, but where necessary it can be made directly to the police or to the Director of Public Prosecutions. However, breach of this duty is not sanctioned by criminal law and can only be enforced through disciplinary measures. The duty is in practice somewhat limited as it only arises when the public official has recognised that fraud is taking place, rather than when he suspects so. Public officials in the Netherlands also have the benefit of a new article of the civil service law which ‘allows civil servants, amongst others, the freedom of expression of opinion’, insofar as this can guarantee ‘the proper functioning of the public service’. Consistent with the position in many states, an official cannot go directly to an MP, but may in extreme cases go to his or her minister. The national report does, however, conclude that it is unlikely that a Dutch official would be held to have acted illegally if he or she sought to report any serious crime directly to the authorities rather than through internal channels.
In Greece and in Portugal public officials have a legal duty to inform the authorities of any criminal offences of which they are aware or of anything which they consider would amount to a crime. In Luxembourg public officials have legal duties to inform the State Prosecutor directly of any crimes which they become aware of in the course of their duties, but there is no sanction for non-compliance with this duty which until 1989 also applied to all citizens. Stricter and more enforceable duties require officials to report crimes relating to taxation. In Belgium a similar general duty applies to all officials (although here the report should be made through the departmental director), and the general public are expected to report crimes against individuals and public safety (though not financial crimes against the state or the EC). In Italy public officials must report - and the general public can report - ‘offences’ to the judicial police. In Denmark public officials have an ‘unspecified obligation’ (not a legal duty) to disclose information on fraud.
In Spain public officials in common with every Spanish citizen must report crimes against ‘life, freedom and personal security, sexual offences and crimes against integrity’. The penalty for not reporting this information to the authorities is a custodial sentence of up to six months in addition to a fine of between 100,000 pesetas to 1,000,000 pesetas. These obligations do not appear to extend to crimes against property or frauds against the public interest, which are covered by Article 264 of the Criminal Procedure Code. This puts a duty on all citizens to report any crime they witness. If the citizen fails to make such a report, he is liable to a fine of 25-250 ptas, a figure which has been unchanged since 1959.
By contrast in France public officials, in addition to a legal duty to report ‘matters which come to their notice’, have a specific legal duty to report frauds of which they become aware during their work. A general and unenforceable duty exists on all French citizens to report crimes. The French courts must report to authorities evidence of tax fraud they uncover.
In Germany public officials in investigatory roles are subject to obligations to report ‘irregularities’. Here, in common with all German citizens they must report knowledge of counterfeiting and there are criminal sanctions for failing to report such knowledge. No similar provision applies with respect to other financial crimes or EC frauds. However more specific duties do exist in Germany than elsewhere, and under the 1976 Subsidy Act and the Criminal Code the Federal and State courts and authorities have a duty to report suspicions of EU subsidy fraud and revenue offences to the authorities. However it is important to note that the duties fall on the authorities rather than on the individuals who work there.
Neither in Ireland or in the UK do public officials have legal duties to report any type of crimes, although there will often be contractual requirements to report such matters internally. Nor is there the official obligation that exists elsewhere in Europe on the courts in either country to refer malpractice to the appropriate authority - although the common law allows the courts to refuse to enforce contracts which have been tainted by illegality. In Ireland the Government is considering a recommendation that there should be a clear duty on all people (including public officials) ‘to report reasonable suspicions of serious fraud’.
Where - as in France and Germany - the duty extends to the reporting of irregularities and not just known crimes, it is not clear whether safe and simple procedures for reporting reasonable suspicions exist. However it is clear from the German report that any public official would be expected to have prior approval from his managers before he made any report to external authorities or in the courts. It should be added that the German tax authority’s duty of secrecy is overridden by the duty to report EC subsidy frauds.
In summary, therefore currently only in France do public officials have an express legal duty to report fraud. Public officials in nine other member states are subject to more general duties to report crimes, which would include frauds. The exceptions identified in the national reports are Ireland and the UK. However where such duties on public officials do exist, the national reports do not comment on how effectively the duty works in practice.
8.2 Duties on the general public
In many member states the duties on public officials are the same as - or stem from - general duties on the public to report crimes. While many such general duties do exist, the national reporters almost all point out that these duties are in effect unenforceable as there is no sanction if they are not complied with. However it should not be overlooked that in most European countries there is a long established tradition that the public should report serious crimes to the authorities.
In France, Greece, the Netherlands, Belgium and Spain, private individuals have legal duties to report serious crimes. As indicated above, in Spain the fine for failing to report a crime is insignificant and the law is not in practice an incentive to report. However, in France the amount of the penalty is greater and therefore the obligation to report may be a positive incentive as if a person knows that a crime is about to take place and fails to report this, he or she will be liable to up to three years imprisonment and a fine of Fr.300,000. If the crime is serious, for example where the state itself is under threat, the punishment is even greater.
In Germany every citizen has a legal duty to report information concerning counterfeiting to a government agency and to the Public Prosecutor. Private individuals who hold positions as ‘guarantors’ (that is, where they are liable to prevent the outcome of a criminal act under special circumstances which may arise from inter alia contract or from personal relations) are in some cases obliged to report offences which have not yet taken place. Likewise in France the directors of a Board are liable for their failure to stop the chairman of the Corporation from abusing company assets.
8.3 Duties on employees
Apart from the limited rules in the financial and banking sector, duties on other private sector employees to report fraud are far from common amongst member states. Where the issue is addressed employees are able or permitted to make such reports although they rarely have any duties to do so, and in any event they are not afforded any real protection against adverse consequences should they decide to act in the public interest.
In the UK the courts have established that senior managers, responsible to their employer for a sector of the business, will generally have a duty to report the frauds of their subordinates on the organisation. However the law does not presently suggest that employees have a duty to report their manager’s fraud elsewhere within the organisation and there is no general legal duty on employees to report the frauds of their organisation to the authorities. What is clear in the UK is that employees are subject to broad contractual duties of confidentiality which seek to prevent them from disclosing any confidential aspect of their employer’s business - including its fraud. However it should be noted that where an employee makes an unauthorised disclosure of fraud or serious malpractice to the regulatory authorities the case law is clear that this is lawful and in the public interest - notwithstanding that it contravenes an employees’ contractual duties. At present the courts have not developed this principle so that an employee who acts in the public interest in this way is himself protected from victimisation.
In the Netherlands employees have a ‘competence’ to report fraud which does not amount to a duty yet it notably overrides their duties of confidence owed to their employer if their employer’s culpability is subsequently established. There is a similar power or competence for employees in Germany, Denmark, Portugal and Italy. As mentioned above there is a recommendation in Ireland that there should be a clear statutory duty on all citizens and employees to report suspicions of serious crime.
In Spain from 1944 to the summer of 1994 employees were under a general duty of ‘keeping silent’, although now the position is more enlightened. In Luxembourg the report states that “company employees, apart from bank employees where laundering is suspected, are only very exceptionally whistleblowers on fraud. Their obligation of secrecy prevents it”. In Belgium, as in Spain, the position has improved in recent years and the courts have departed from a 1935 case where an employee’s dismissal for reporting his company’s tax fraud was held to be a serious breach of contract which justified the employee’s summary dismissal. A similar German decision of the Federal Labour Court in 1959 has also been departed from in recent years. The position in Italy is that if an employee was dismissed for reporting a fraud and challenged this in court, he would automatically be reinstated and compensated for any loss of wages.
8.4 Duties on professionals
Across Europe professionals are subject to duties of confidentiality to their clients. However, professionals in certain circumstances are subject to an overriding duty to report ‘irregularities’ to the authorities.
In the UK, there is an obligation on those conducting insolvency investigations to report to the prosecuting authorities any criminal wrongdoing which their investigations have revealed and to furnish them with all the documents and information which they might require. However, this duty only arises once an investigation is under way. It also applies to trustees in bankruptcy. Also in the UK auditors of banks, insurance companies, building societies and friendly societies are now subject to regulations which require them to report the institution to the appropriate regulator if they have reasonable cause to believe that it may be in breach of regulatory controls and that the information is of material significance to the regulator. A new Auditing Practice Standard has also strengthened the professional obligation of auditors to report malpractice both in the UK and in Ireland.
In Greece the Criminal Code puts the duty to report serious crime above the obligations of confidentiality that are owed by professionals and in Portugal under a 1994 law professional duties of confidence have been overridden by a duty to report serious financial malpractice.
Both the French and the Italian reports refer to the role of auditors in blowing the whistle on fraud. However outside this professional area, the French report states that a professional duty of secrecy will override any general duty to report crime or irregularities.
8.5 The Money Laundering Directive (91/308/EEC)
Any organisation providing banking or financial services and any professional engaged in specified activities is obliged under the Directive to report unusual financial transactions which it is suspected may be connected with money laundering to the relevant authorities. Article 9 of the Directive releases the organisation and its employees from the duty of confidence they owe bank clients insofar as money laundering is suspected. Article 10 imposes a duty on the institution to report (or in the French text denounce) the suspicion to the authorities. Under article 11 credit and financial institutions are required to set up internal procedures and to inform and train employees in the purpose and provisions of the Directive.
Under the 1991 Directive there is a discretion for member states to extend the effects of the Directive to include the proceeds of all criminal activities ( such as organised crime and terrorism ) so that the duty does not only apply in relation to the laundering of money connected with drug trafficking. As at Easter 1995, eight member states had extended the scope of the directive to cover the proceeds of all crimes and as such in principle those states accept it should apply to frauds on the EU. In December 1994 a Council Resolution proposed that the scope of the Directive should be explicitly extended to cover the laundering of money from EU frauds.
This Directive provides a direct and practical precedent on how the Community can deter financial malpractice on its funds. EU grants and subsidies, whether direct from the Commission or from member states, are paid through financial institutions and these are well placed - whether in rural communities or towns - to identify frauds by the grant recipient. We recommend that the directive be extended as proposed by the Council and also that the Commission should provide training materials to banks and other institutions to help staff identify suspect transactions.
9.0 Rewards for reporting financial malpractice
9.1 Financial rewards
To deter and detect frauds on the Pentagon, the US False Claims Act provides that whistleblowers can receive up to 25% of any savings the Federal Government make as a result of their disclosure about financial malpractice on the Government. Although there is no comparable provision in any European state, there is in most member states some provision for paying informers and this is especially the case in areas of revenue and customs.
In Ireland for example, Revenue Commissioners can make payments at their discretion to informers in their field. In 1993, 13 payments were made, averaging £4,361.53 each. The Customs Commissioners made 24 payments in the same year to informers averaging £486.45 each. More generally the police had a budget of £220,000 in 1994 to pay informers.
In France an informer to the customs authorities will receive payment if the following conditions can be met:-
- The informer must not be a public sector employee
- The informer must have provided the Customs authorities with information / warnings about fraud
- The informer must not have been an accomplice in or instigator of the fraud.
Unless the Director-General of Customs agrees otherwise the payment cannot exceed 20,000 FF or one third of the sum recovered by the authorities. However these rewards cover information from citizens in general and are not geared toward compensating employees who may lose their job as a result of passing the information.
Likewise tax law in France provides that ‘no informer may claim any remission or remuneration unless it is demonstrated in writing that the information he supplied was supplied prior to the official report’. The information supplied must also be validated. The French report stated that details of payments were not accessible as they were made ‘on the basis of confidential administrative instructions’.
In Germany if information that the Customs or Tax authorities receive results in a recovery of money by the federal or state government then 5-10% of that sum can be awarded to the informer.
In the United Kingdom, those who provide information to the Inland Revenue can be rewarded on a statutory basis. The consent of the Treasury Department is required for a reward of more than £50. The reward is payable once the offence is established and payment is at the discretion of the Inland Revenue. In the area of Customs and Excise, the Commissioners may pay rewards also on a statutory basis, in respect of any service rendered to them by any person.
Outside the fields of Customs and Excise and Tax, in the Netherlands, Denmark, Ireland, Greece, Belgium, France and Germany (but not in Luxembourg, Portugal or Spain), the criminal police pay those who provide them with information. This may be from an official transparent budget or there may be no distinct account for such payments. In Belgium 32 million BF is allocated to pay informers.
In Italy financial rewards are provided for under their Criminal Code if fraud against the European Union is linked to associations with the Mafia. In the Netherlands according to ‘the Regulation on the Funding of Tips, Displays and Advance sales’ informers are paid and the funds granted from the Ministry of Justice can amount to as much as 15% of the amount recovered. However, the amounts and extent of the payments made are not publicised. In Greece there exists a legal basis for rewards for information relating to ‘certain fraud cases’ and the Minister of Finance decides upon the amount of the reward. Also in Greece, in cases of ‘major crimes’ the police can make payments to obtain information. In France, special funds from the Ministry of the Interior are allocated for paying informers. In the criminal courts in the UK, there is a law which enables payment to be made to those involved in the arrest of any person charged with an arrestable offence; however, as the UK report notes, this is so little known that it is almost certainly not an incentive to reporting fraud.
Some national reports have remarked that as the actual amounts paid by the police to informers are so small that the practice of paying for information is little incentive to those who have information to come forward.
The practice of both the criminal police and private individuals to publicly offer rewards in return for information concerning a particular crime appears to be similar in France, Belgium, Denmark, the Netherlands and the UK. This is in circumstances where the crime has already been committed although the practice could lead the authorities to uncover further fraud. A court decision in Belgium relating to an insurance fraud suggests that the cost of the reward can be recovered from the perpetrator.
In the United Kingdom, a television programme ‘Crimestoppers’ advertises rewards for information about non-commercial crimes. The money is offered by local business interests. In order to encourage people to come forward with information, those who contact Crimestoppers are allocated a number and do not have to identify themselves. A similar scheme exists in Ireland. Also in the UK, the British Software Alliance have recently set up a crimeline to combat the illegal copying of software and rewards of up to £2,500 are being offered for information about piracy of software. Private commercial organisations also offer rewards for the provision of information leading to the detection of criminals.
It should be noted, however, that in all member states it is illegal for public officials to receive payment for the provision of information.
9.2 Other incentives: reduced sentences/immunities from prosecution
For many years those who have provided the authorities with information leading to the resolution of a criminal investigation have received rewards in the form of immunity from prosecution or a more lenient sentence. Today in each member state the practice continues and is particularly apparent in Luxembourg, Greece and Belgium in relation to those providing information relating to narcotics offences. In the UK, a 1988-89 Report of the Committee of Public Accounts on the Inland Revenue recommended extra incentives such as immunity from prosecution, to encourage employees to inform the Inland Revenue of their employers’ tax evasion. In France and Ireland people whose actions help in the prevention and punishment of serious crime can be granted immunity from prosecution. In Germany, Portugal, Denmark and Italy similar provisions apply and a reduced penalty is available to those who help secure convictions of former accomplices and/or stop crimes continuing. In Belgium, those who report on their own fraud and who pay the outstanding amounts owed are exempted from prosecution. In Greece, a provision incorporated into recent legislation (1994) to implement the Money Laundering Directive, states that ‘agents, collaborators and criminals showing remorse who supply the authorities with information which leads to the arrest of those responsible for economic or financial crime, will receive reduced punishment’.
Accordingly it does seem to be the case that national authorities in many member states show more generosity and consideration to those who provide information about frauds they have participated in than is given to those who raise concerns about financial malpractice, even if it is at some personal risk. The reason for this appears to be due to the imperative of the prosecuting authorities to secure evidence to convict fraudsters. It is not clear there has been proper consideration of the benefits that might be gained by encouraging and enabling those who suspect serious malpractice among colleagues to report it to the authorities, thereby deterring the malpractice in the first place.
10. Disincentives to Reporting Financial Malpractice
This section is divided into a discussion of the limitations on the ability to disclose information affecting public officials followed by a review of the restrictions on private sector employees, before turning to the duties of confidentiality to which professional groups are subject.
10.1 Public Officials
The weight of secrecy legislation affecting public officials varies from one member state to another. The UK, Ireland, Belgium, Portugal and Spain all have relatively onerous restrictions on their public officials’ ability to disclose information.
In the UK civil servants are subject to the Official Secrets Act. Under the Act if anyone who is or has been a Crown Servant or contractor makes a damaging disclosure of information without authority relating to, inter alia, international relations, crime & special investigation powers, it is a criminal offence. There is no defence of public interest. A damaging disclosure in relation to international relations is defined as one which seriously obstructs the promotion or protection of those national interests which endangers the lives of British citizens abroad or which would be likely to have any of those effects. Although it is most unlikely the Act would apply to the unauthorised reporting of fraud to the EC, it is generally accepted that it creates a culture where officials would be unlikely to make such a report. However in November 1995 the UK amended its Code for civil servants and introduced practical measures to encourage and facilitate the reporting of serious malpractice by public officials.
In Ireland under a very restrictive Official Secrets Act, public officials commit a criminal offence if they communicate any official information to any other person without authority or when it is their duty in the interest of the state to communicate it. Public officials are also restricted in their ability to make public statements conveying information of current political interest. However a Freedom of Information Act is being introduced by the Government and this will create a much more open system of government.
In Belgium, despite the provisions of the civil service law granting public officials ‘freedom of expression with regard to facts which they learn during the course of duty’ they are unable to reveal any facts relating to national security, the protection of public order, the financial interests of the authority which they work for, the prevention of crime, medical secrecy, rights and freedoms of the citizen and the right to respect for privacy. This is known as a ‘duty of discretion’.
In Portugal, public officials cannot breach their duty of secrecy but must report the matter internally. In Spain, public officials are subject to duties of confidentiality with regard to what they learn in the course of their work and if they reveal information which damages the public interest, they will be liable to imprisonment up to a maximum of six years and a ‘special disability’. The Netherlands, Denmark, Luxembourg, France and Germany display a more liberal approach in this respect.
In the Netherlands, according to State Regulations, public officials have a duty to keep secret what they come to know in the course of their work in so far as the obligation flows from the nature of the business which they are concerned with. Breach of this duty can lead to disciplinary punishment or dishonorable discharge. In some cases criminal sanctions are available. However, even then public officials are able to pass on ‘sensitive information’ if it is held to be in the public interest. In debating the issue in 1984 the Government Minister said: “The interest served by the requirement to report crimes is of such an order that the legal stipulation to maintain secrecy must yield to it”.
In Denmark under criminal law it is an offence for anyone in public office unlawfully to exploit confidential information and the penalty ranges from a fine to imprisonment from six months to two years. However, where such a person was under a duty to pass on the information or acted in order to lawfully safeguard obvious public interests then no penalty will result. Here as in the Netherlands, according to the Law on Public Administration ‘sensitive information’ can be passed on if it is in the public interest and provided that interest is more important than the interests which causes the rules of secrecy. This is similar to Luxembourg, where the duty to report fraud overrides a public official’s duty of confidence if the information can be said to be in the public interest.
In France a public official’s duty of confidentiality prevents disclosure of information to individuals, however they have a duty to report fraud to the Procureur de la Republique which overrides their duties of confidence.
In Germany, again public officials are subject to duties of confidentiality with regard to the knowledge which they gain in the course of their duties, however this does not apply to ‘facts which are obvious or which do not require secrecy’. A public official would suffer criminal penalties for revealing trade secrets or official secrets. Breaching these duties would however be justified if : ‘whoever, if in danger to life, limb, liberty, honour, property or another legal right which cannot be averted in any other way, commits an act to avert the danger from himself or another, does not act illegally if, in consideration of the interests in conflict, particularly the legal rights concerned and the degree of danger by which they are threatened, the protected interests substantially outweigh the impaired interests’.
This applies only insofar as the action taken is considered to be proportionate to prevent the perceived danger. More generally where obligations of secrecy conflict with the interests of prosecuting authorities in the detection and sanctioning of crimes, the conflict is resolved mainly in favour of prosecution authorities, especially where the crime is serious.
In Luxembourg, the Netherlands, Germany and Belgium public officials working for the tax administration are additionally bound by ‘tax secrecy’ which extends to ancillary staff and which is more restrictive than the general secrecy legislation to which public officials in these countries are subject. For example in Luxembourg there is no public interest defence to anyone working within the administration who breaches this duty.
10.2 Employees
In Luxembourg employees may be subject to more stringent duties as they can only reveal confidential information in circumstances envisaged by the law. Although these were not identified in the report, it was clear that as to the reporting of fraud ‘the employee’s obligation of secrecy prevents it’. Similarly in Greece duties of confidentiality and the employee’s weak position deter them from reporting fraud to the authorities.
In the UK, both current and former employees are subject to duties of confidentiality not to use or to disclose information if it amounts to a ‘trade secret’. Express and implied terms in employment contracts also prohibit employees from disclosing any confidential information, whether or not it is a trade secret. However, such contracts rarely define what is meant by confidential information, with the effect that in the absence of legal advice or other information, the assumption will be it is best to say nothing. This is all the more so as if their employer believes they have broken this duty in practice they have the power to discipline or dismiss the employee.
An employee, however, will not be stopped by the courts from communicating information concerning the misconduct or malpractice of their employer - as in such cases the public interest in checking crime or malpractice outweighs the public interest in keeping confidences. Reporting fraud on the EC would clearly be malpractice of such a nature as to justify disclosure of confidential information. However this generally will not be known or clear to the employee who will normally simply have a contract warning him against disclosing any confidential information on threat of discipline or dismissal. Even if an employee does report such a fraud to the authorities and is held to have done so lawfully and in the public interest, it does not automatically follow that any action taken against the employee on account of the disclosure is unlawful. Where such an employee is dismissed, he or she may well succeed in a claim for unfair dismissal where the proper procedures have not been followed but in any case the protection afforded is modest and the maximum financial compensation is £11,000. This is a sum which will be inadequate compensation to a person who has severely damaged their career prospects as a result of raising a concern in the public interest.
In Ireland, the Constitution provides that the State guarantees, subject to public order and morality, the right of the citizen to express freely their convictions and opinions. However, an employee who cited this right as a defence to their breach of confidentiality would only be protected if, under the Employment Protection Law, the breach of confidence was found to be justified in all the circumstances.
In the Netherlands according to the Law of Open Administration employees are forbidden to reveal confidential information concerning their employers business which would amount to a ‘trade secret’. However, as with every other Dutch citizen apart from civil servants, they have a ‘competence’ to report crimes which could include those of his or her employer. Yet in practice an employee may still not avoid sanctions for breaching his or her duty of confidence. A 1994 case, CR v.B, however indicates that the tide may be turning in favour of the employee who reports malpractice. Here, a security guard who reported to the police that his colleagues were receiving and trading stolen merchandise at work was sacked after his management did not respond to his concerns and after he had been severely ostracised by his colleagues. The Dutch Appeal Court held that management had been seriously negligent in its duty to protect a well reputed and loyal servant. However it is not clear how the court protected or compensated the employee. An earlier decision of the Supreme Court held that an employee who reported to the Government mismanagement in a state subsidised shipyard, copying his letter to the press, had been lawfully dismissed. However that decision was not about the reporting of fraud or crime and the disclosure was made to the media.
In Denmark employees have general duties of confidence to their employer and employees are legally prohibited from using or revealing trade secrets to anyone outside the organisation. However if an employee is fired for reporting the fraud or serious malpractice of their employer this would amount to an unlawful dismissal. The Danish report noted however, that in practice other reasons for the dismissal would be claimed by employers in such a case.
In Belgium, again employees are under a duty of discretion or confidence and are unable to reveal their employers’ trade secrets either during their period of employment or after their employment has ended. A court decision in 1991 held that employees can breach their duty of ‘discretion’ where ‘they know of a violation of Public Order legislation’ for example tax and criminal law. This is a marked move away from a 1935 decision that the summary dismissal of an employee who reported his employer’s tax fraud was justified. In 1993 a court held that ‘the statutory obligation of the duty [ of confidentiality ] on the worker should not be enforced provided there is no denunciation of events or conduct of a personal or confidential nature but rather of alleged irregularities contrary to regulation’. Therefore in these circumstances the employee is entitled to protection but it is unclear how comprehensive this is (whether it be reinstatement, limited damages or compensation for all his losses).
In Spain the duty of fidelity an employee owed to an employer was changed in 1994 to a general duty of good faith (bona fides), the effect of which has been to place employees in a position of greater strength vis-à-vis their employer. Here, as no one can be made to act unlawfully by or for their employer, an employee may be legally justified in publicly revealing their employer’s fraud. According to case law, ‘disobedience to the employer is legally justified under circumstances of illegality in the performance of employment’. Also, according to case law, it would be illegal for an employer to discipline or dismiss an employee who has reported malpractice to the authorities whether he or she does it in good or bad faith. Similarly in Portugal an employee can now freely report a crime to the authorities and it appears there is some protection against being disciplined for doing so, provided the information is valid.
In France an employee will be in breach of their duty of manufacturing secrecy for revealing trade secrets. As in the UK it is possible for employers to seek to broaden the duty of confidentiality but this would never lawfully extend to stopping an employee from reporting a fraud.
In Italy, employees are again unable to reveal their employers’ trade secrets. For doing so they could receive a custodial sentence of up to one year or a fine. However according to the Italian researcher, ‘revelation of certain information could be permitted if there is just cause’ and this would include the reporting of a fraud. If the employee was dismissed he would be able to go to court and obtain immediate reinstatement and compensation for his lost wages. However as the reporter - like his Danish counterpart - comments “Of course the employer could get round the legal obstacles by using false pretexts for the dismissal”.
In Germany, employees must not reveal their employers’ trade secrets. However case law from May 1990 has established that employees can disclose information concerning any illegalities of their employer to the appropriate authorities if their employer is not heeding their concern. The duty of loyalty is overridden if the employee has raised the concern internally first before approaching the authorities; any resulting dismissal is unlawful. This is a welcome departure from a 1959 Federal decision that reporting an employer’s malpractice justified summary dismissal. However it appears the court will do no more than decide whether the dismissal was lawful and, if not, order the employee’s reinstatement. It seems no further protection is offered in these cases.
10.3 Professional Groups
Obligations of professional secrecy which prevent the disclosure of information received from clients depend on the ‘bye-laws’ of the particular profession or on the specific laws which regulate it. These are for the most part similar in every Member State. While in most countries professionals have a competence or power to make disclosures in serious cases it appears that it is common for professional to err on the side of caution, rather than report his or her client to the authorities where they are engaged in serious malpractice.
In the Netherlands the professional associations for tax consultants, lawyers and notaries are now considering how the rule to report and their professional obligations to their clients should be reconciled. As detailed above, a new accountancy law provides clear and practical rules on how this conflict should be resolved and how this issue should be handled.
In Denmark, when accountants are of the opinion that fraud is having a significant impact on the accounts, they are obliged to state this opinion in the accounts. They must also state if in their opinion, the Board of Directors or persons responsible for the organisation concerned, could be held responsible for certain acts including abuse of EU subsidies. Apart from this, accountants are not obliged to report fraud to the authorities and are bound by duties of confidentiality. Also in Denmark, as in the UK, trustees in bankruptcy must inform the police if they receive information that criminal proceedings could be instituted against the bankrupt.
In Greece professionals will be liable to a custodial sentence of one year for breaching their duties of professional secrecy unless they reveal information which is of ‘serious public interest’ and this may include substantial frauds.
In Belgium, there are two exceptions to the duties of professional secrecy: first, where a professional is summonsed to give evidence in court; and secondly when obliged by law to reveal information. Under the latter exception, a doctor could reveal the incidence of disease to the authorities without breaching duties of confidentiality towards his or her patient. A recent case in Belgium Cass:13.5.1987, Pas., I.1987,1061 where a doctor gave information to the police concerning his patients, held that the efficiency of police investigations took precedence over the statutory guarantee of professional secrecy and therefore that the revelation was justified by ‘unavoidability’. Otherwise, penalty for breach of professional duties of secrecy in Belgium ranges for a custodial sentence of 8 days to six months, in addition to a fine of 100-500 Belgian Francs.
In Luxembourg, if a professional is summoned to give evidence in court, they will not be liable to prosecution for breaching their duties of professional secrecy although they are not obliged to divulge any confidential information in court. However, a legal decision in 1991 held that such ‘evidence obtained by an unjustified breach of professional secrecy is illegal’. The criminal sanction for breaching professional secrecy ranges from eight days to twenty six months custody in addition to a fine.
In France, breach of professional secrecy is punishable by one year’s imprisonment and a fine of FF.100000 unless there are exceptional circumstances (which are not relevant to this study). The offence of failing to report a crime - which applies to all citizens - does not generally apply to those bound by professional secrecy. However, auditors have a duty to reveal criminal acts of which they are aware to the prosecuting authorities and in practice auditors frequently sound the alarm so that cases of fraud can be detected.
In Ireland, according to the professional guidelines for auditors, if they discover fraud they must weigh up the public interest in maintaining confidential client relationships against the public interest in disclosure of fraud to the proper authorities. Auditors here are said to be ‘watchdogs’ and not ‘bloodhounds’.
In the UK, the position of auditors is similar to Ireland. Generally an auditor is able to disclose information if he or she reasonably believes it is in the public interest, or for their own protection. As indicated above, new rules require auditors in the regulated financial sector to report material irregularities to the regulator. Otherwise the presumption is that, as elsewhere, it is in the public interest that the confidential relationship is maintained. From June 1995 new professional obligations on auditors in the United Kingdom and Ireland require them to report material irregularities to the authorities where they have raised the matter with the company concerned and it has not been satisfactorily resolved within a reasonable time. In the UK, the duty of a solicitor to keep a client’s confidences can be overridden only in certain exceptional circumstances. Notably for the purpose of this study these include:- where a court orders a disclosure; where the information relates to money laundering; and in relation to communications made by a client to the solicitor before the commission of a crime for the purpose of being guided how to break the law.
By contrast professional obligations appear to be less rigorously upheld in Spain and Portugal. In Portugal, duties of professional secrecy can be overridden when ‘the information is of great interest to finding out the truth’, though this proviso will not apply where there is a strong professional obligation of secrecy, such as is owed by a lawyer, doctor or priest. In Spain, professionals may not breach their duties of confidentiality and if they do they are liable to a very moderate fine. However, Spanish lawyers would commit the crime of ‘betrayal of trust’ for breaching client confidentiality.
11.0 Collecting Information on financial malpractice
An obvious disincentive to those who wish to report fraud is that they may not know where to go to with their information. Additionally they also need to have the confidence that those receiving the information will be able to investigate and where possible and appropriate, to correct whatever it is they are concerned about.
The national reports reveal that there is no single body in any member state responsible for receiving information concerning fraud on the European Union or indeed for any other type of fraud. Each country has established its own array of organisations. When asked to detail the authorities responsible for collecting information concerning fraud, bodies commonly cited in the national reports included:-
a) The police - and their particular units responsible for tackling fraud
b) Customs / tax authorities
c) Public prosecutor / public prosecution services
d) Intelligence services
e) State Counsel
f) Bodies which receive information from Company Auditors
In addition to the above authorities, in response to the Directive on Money Laundering the following countries have specific authorities to monitor money laundering; the Netherlands (‘Special Report Station’), Belgium (‘Financial Information Processing Unit’), France (‘TRACFIN’) Spain (‘New Commission’) and Portugal ((Direcção Central para o Combate à Corrupção, Fraud e Infrações Económicas e Financeiras). The success of these bodies is as yet unknown. Whether they can be useful models for gathering information on EU frauds has yet to be ascertained.
Some member states have specific bodies responsible for gathering and investigating information concerning fraud on the European Union. Portugal has established more bodies than any other member state for this purpose:-
a) Central Investigation Department of Economic / Financial Frauds & offences which is part of the criminal police and which deals with preventing fraud relating to subsidies, grants or credits from the European Social Fund (Judicial Police).
b) ‘F.E.O.G.A.’ ‘Guaranty Department’ which is concerned with frauds & irregularities against Agricultural subsidies and is made up of inspectors. It has responsibility for collecting information connected with frauds and for instigating procedures to recover amounts paid unduly.
c) Department of Matters Relating to the European Social Fund (DAFSE)
d) ‘Divisão dos Recursos Próprios Comunitários da Receita Nacional’ (Customs), which is concerned with frauds relating to community resources.
In Spain a body entitled ‘Public Expenditure Intervention’ is concerned with fraud on the European Union. The main way that EC frauds have been controlled since 1987 has been through field audits. The Spanish national report does not reflect the view of the Italian reporter that audit controls are well known and easy to deceive. In Denmark the prosecuting authority in January 1991 entered an agreement with the Ministry of Agriculture to combat fraud on European Union subsidies. These must now be reported to the police and investigated in accordance with set guidelines. If the recipient of the subsidy was not entitled to the subsidy or to only part of it, a report must be sent to the police if there is an obvious case of fraud or ‘if one cannot exclude an intention to commit fraud’ and:
a) the recipient has previously received subsidies without being entitled thereto, or
b) at the time the subsidy was granted the recipient was not entitled to the entire or part of the subsidy; or
c) the amount unduly received exceeds DKR. 20 000 (ECU 2500); or
d) the subsidy unduly received has been paid for more than one year.
In Italy, while the ‘Guardia di Finanza’ (state police) carry out ‘occasional controls’ on the use of EU funds, an organisation known as Agecontrol s.p.a has been set up to deal with ‘irregularities’ in olive oil subsidies. This organisation receives information by phone and letter and allows whistleblowers to maintain their anonymity if they so wish. Notably its experience has been that most of the information it has received from such sources has related to people already suspected of some malpractice. Recently in Italy an organisation called ‘SECIT’ has been given a dedicated role in investigating Community VAT fraud as well as strengthening the checks on fraud performed by the customs and the state police.
In Greece the Chancellor is introducing a unified financial police, which should also be able to deal with EU frauds. Similarly in Ireland the Government Advisory Committee on Fraud (1991) recognised the importance of the co-ordination of information in the investigation of fraud. It recommended, in view of the substantial size of EU funding in Ireland, the creation of a permanent Committee. This would comprise senior representatives of the relevant Government Departments and agencies which have a role in managing funds and investigating fraud. The Committee would exchange advice and information regarding suspicions of fraud. However it was noted that account would have to be taken of the special duties of confidentiality which might apply to members of such a Committee.
The Belgian report alone indicated that the information could be conveyed to the European Commission.
Not only is there a wide array of bodies in most member states but there is little to suggest that these bodies are readily accessible or known to citizens and employees with information about serious frauds. Germany, Denmark, Greece and Italy have no or little experience of telephone reporting schemes. However these are more common in the UK, the Netherlands and Ireland.
Telephone contacts are particularly valuable because if the source is nervous or apprehensive they can decline to identify themselves or to reveal too much information until they have established a rapport with an officer of the investigating authority. They are also readily accessible and are trouble-free to use. However as a tool to obtain valuable information and to have some chance to identify the malevolent or vexatious informant it is preferable that the telephones are staffed by humans and not left to answering machines. Not only is an answering machine unable to secure the confidence of the caller, but for some apprehensive individuals they may fear that they can be identified by the recording. Insofar as anonymous allegations are encouraged by answering machines they also make it difficult to screen out malicious or unsubstantiated allegations and to investigate the concern.
12.0 Questions of Anonymity & Evidential Issues
If a whistleblower gives the authorities a tip-off or some information anonymously or even confidentially then they are helping to initiate an investigation. If that investigation uncovers sufficient evidence of fraud to justify a criminal prosecution or conviction then the tip-off itself is of no or little relevance to the court proceedings. If the investigation finds no other evidence of fraud then it is most unlikely the authorities in any member state would bring a prosecution. As the Spanish reporter remarks: “From the point of view of a preventive criminal system, whistleblowers may be considered necessary and therefore desirable”. However, from the perspective of the legal system and due process, any “anonymous evidence is of no legal value”.
This is essentially the comment in all the national reports. A number of reporters referred to a decision of the European Court of Human Rights in Kostovski where a conviction which rested heavily on anonymous information was held to be a breach of the right to a fair trial under article 6.
Where the whistleblower has identified him or herself to the authorities, there may be a duty on the prosecuting authorities to identify the informant either to the court or to the defence. In many member states the clear approach is that the safety of the witness cannot be a justification for denying the accused a fair trial and the decision on the confidentiality of the source is left to the court on a case by case basis. The effect of this is that as a matter of law in these countries the police cannot make lawful guarantees of anonymity to their sources. However as the Danish, Belgian and Luxembourg reports state, where there is a real risk that a police officer will be required to name a source, in practice the officer will make no mention of the fact that information was received or will ensure he or she does not know the identity of the source.
In Germany any guarantee of confidentiality or anonymity to an informant will lapse if and when it is discovered that the source was an accomplice to the crime. Likewise in Britain and Ireland the court must give special warnings where one of the prosecution witnesses is a former accomplice of the accused.
In England & Wales if the whistleblower gives evidence in court there are only a few exceptional cases where he or she can remain anonymous and if the whistleblower does not give evidence in court, any earlier statement is inadmissible as hearsay, though again there are a few particular exceptions to this rule (however a different approach is taken in Scotland). Where the identity of the source is known to the police, as we have seen above they are increasingly obliged to identify the informant. Again the opposite is the case in Scotland where neither the police nor the prosecutors have to reveal sources of information and hence they are able to make cast iron undertakings of confidentiality to whistleblowers. In England the use of anonymous information through Crimestoppers is also a practical way of avoiding having to name the source, whether or not it is considered desirable. However, the Metropolitan Police in London report that they are increasingly dropping criminal prosecutions rather than identifying their sources of information.
Journalists in the UK and in Ireland have some protection against revealing the identity of their sources of information unless disclosure is found to be necessary in the interests of justice, national security, the prevention of disorder, or crime. In Ireland, the rule against admitting hearsay evidence in court is the same as in the UK, and it is only witnesses in cases of sexual offences or in matrimonial matters who are entitled to have their anonymity preserved.
In France, those who provide the Customs authorities with information are entitled to remain anonymous and their anonymity is strictly observed. Their name does not appear on the accounting documents, they are referred to by number and the Director of Customs receives a cheque drawn on the Treasury in the name of the informant but the informant receives a cash payment.
In Portugal, a new law passed in 1994 made provision for the use of ‘informer citizens’ by the police who will give information to the new authority set up to combat fraud (Direcção Central para o Combate à Corrupção, Fraud e Infrações Económicas e Financeiras). These informers will have a right to remain anonymous (though not if their evidence is to be used in criminal proceedings) and they will receive no payment for providing the information.
In Germany, the identity of a witness cannot be kept from the Chairman of the Court. However certain witnesses are entitled to anonymity if their presence at the hearing would endanger the purpose of the investigation, or if the life or freedom of the witness or a third person would be endangered through revealing their identity. ‘Collaborators’ and informants can be granted anonymity if the crime is serious or if the public interest is at stake; or, with regard to informants, if their life could be endangered or they could expect unreasonable detriment after his or her co-operation with the prosecution authorities became known.
To conclude, all the national reports recognise the role of the whistleblower in deterring and detecting fraud on the EC budget. This role is largely seen as the source of confidential or anonymous tip-offs which lead to investigations. It is also recognised that it can also be as a formal witness in court. In the latter case the whistleblower’s evidence is treated no differently from any other witness. The effect is that there is no reason why whistleblowers should not at the outset be offered confidentiality by the authorities, provided it is made clear that their identity will not be disclosed without their consent or where required by the judicial authorities should the matter proceed and their evidence is material.
ANNEX
Details of the study
This report is the summary of a study initiated by the European Parliament’s Budgetary Control Committee and undertaken by DG XX of the European Commission to identify common principles in the way citizens, employees and officials across the European Union are able and encouraged to play a part in the fight against fraud both on a national and Community level. In particular the study sought to identify the potential value of and problems with whistleblowers as a means to deter and detect fraud on the EU budget.
The study was carried out by requesting data from each member state via a questionnaire (reproduced on the following pages) drawn up by the European Commission and circulated in June 1994. This was sent to academic and practising lawyers and prosecuting authorities through the Associations of lawyers for the protection of the financial interests of the European Communities (ALPFIEC). A meeting of all the researchers was convened in Brussels in November 1994. The national reports were then finalised and made available to DG XX and Public Concern at Work by the end of February 1995. It is these reports and information obtained during the seminar which form the basis of this analysis and inform the recommendations in this paper. A draft report was circulated to DG XX and the national researchers on 19 July 1995. Minor comments from the Portuguese and Luxembourg experts were received in October 1995, which were subsequently incorporated into this final report. In December 1995 DGXX gave Public Concern at Work permission to publish the final report.
As the study was commissioned when membership of the Community numbered 12, all references in this report to member states do not include the new members of the Union - Finland, Austria and Sweden - from whom national reports were not commissioned.
Specifically the national studies aimed to collect information on the following:
- Whether any member state made specific provision for whistleblowers;
- Express duties to report fraud and associated responsibilities of certain individuals;
- Criminal & civil controls on the disclosure of fraud by private citizens, employees, official bodies;
- Incentives or rewards for reporting fraud generally or in any particular sector;
- Types of protection available to those who ‘blow the whistle’; and
- Procedural and evidential consequences for investigations and prosecutions.
Inevitably those national reports prepared by criminal and penal lawyers focused more on the value and use of information in legal proceedings and the role of regulatory authorities in their country, rather than on the dilemma and potential of the whistleblower, as defined in this study, to cover the situation of employees and others who discover serious financial malpractice in their workplace.
Questionnaire from DGXX
Note on Methodology
The study should provide answers at least to the following questions and the national report should be produced either in English or French.
1. Does your national legal system provide for the use of “whistle blowers” in cases of fraud, and if so in what field(s) (taxation, criminal, administrative, customs, banking etc.)?
2. Does the national legislation or jurisprudence offer a definition of “whistle blowers”?
If so, does it make a distinction between persons reporting offences (who provide information which constitutes full evidence of the offence) and intervening parties (who have played a helpful role in the operations preceding detection of the offence, or supplied useful evidence after detection, or assisted in the identification of accomplices)?3. Who are the “whistle blowers”
- natural persons, i.e. ordinary individuals?
- legal persons, i.e. bodies formally constituted with the aim of combating fraud?
- reformed offenders, super grasses?
- civil servants?
- employees of a firm or organisation?
others, i.e. auditors?
4. Are there legislative express duties on certain individuals to disclose information about fraud to the appropriate authorities?
5. Which authorities have the power to collect information?
6. Does your national legal system and practice tend to dissuade the reporting of fraud?
a) are there any legal or administrative controls against the disclosure of fraud to an appropriate national or EC authority?
b) does the disclosure of fraud to an appropriate authority override any duty of confidence owned by an employee or a civil servant?
7. What practical measures are used for gathering this information (freephone lines, etc.)?
8. Does the national legislation provide for payments to “whistle blowers”? If so, how is the amount of the payment calculated:
- according to the quality of the information?
- in proportion to the sums recovered?
- is there a maximum and/or a minimum payment?
- can civil servants be paid a bonus or have some other benefit? In what circumstances?
- can reformed offenders also claim a bonus payment and/or immunity from prosecution?
9. Is any special type of protection available to informers in fraud cases, e.g.
- anonymity or confidentiality?
- protection against possible sanctions of economic nature (dismissal, etc.)?
10. What punitive measures can the authorities take against the “whistle blower” himself if it emerges that he was partly responsible for the acts constituting the fraud?
11. If the source of information is guaranteed anonymity, what are the implications for the rights of the person prosecuted?
12. If the information is obtained from an anonymous source, what are the implications on the legal process, i.e. what use is made of it in the administrative or legal proceedings and does it have evidential value?
The national experts selected by DG XX and ALPFIEC
Christian de Valkeneer
Belgium
Vicestatsadvokat Lars Plum
Denmark
Anne Rouilly
France
Prof Dr. Ulrich Sieber & Stefan Spielbauer
Germany
Nicolas Simantiras
Greece
Eileen Barrington BL
Ireland
Enrico Mezzetti
Italy
Jean-Paul Hoffmann
Luxembourg
Dr Mark Bovens
Netherlands
Manuel de Santos Variz
Portugal
Prof. Dr. Carlos Suárez González
Spain
Farzana Aslam & Alastair Brown
United Kingdom
Public Concern at Work
The Trustees
Michael Brindle QC, Chairman of the Board, has a legal practice which focuses on commercial, financial and professional issues. Farzana Aslam is also a barrister; Maurice Frankel is the Director of the Campaign for Freedom of Information; Rosalie Langley Judd is the Manager, Intelligence & Records at the Financial Services Authority; Michael Moore CBE holds a number of directorships; James Tickell is the Assistant Chief Executive of the National Housing Federation and Marlene Winfield OBE is the Acting Head of Policy at the National Consumer Council.
The Patrons
Our four patrons have all been closely involved in our work. From 1992-96 Lord Borrie QC (a former Director-General of Fair Trading) was the Chairman of the Trustees and Lord Oliver of Aylmerton (a former law lord) was Chairman of the Council. When Director-General of the CBI, Sir John Banham was closely involved in the research which led to our establishment. Sir Ralph Gibson (a past chairman of the Law Commission) chaired the Council from 1996 to 1999.
The Council
The members of our advisory Council are our patrons and Steve Burkeman, Gerald Bowden, Tony Close CBE, Dr Yvonne Cripps, Jo Cutmore, Baroness Dean, Zerbanoo Gifford, Lord Gladwin CBE, Edwin Glasgow QC, Peter Goldsmith QC, John Healey MP, Ole Henriksen, Roger Jefferies, Graham Melmoth, David Owen, Chris Price, Anthony Sampson, Dr Elaine Sternberg, Dr Marie Stewart and David Wellings. They are assisted by John Bowers QC, our Honorary Legal Adviser.
The Staff
Guy Dehn, the Director, is a practising barrister. Our legal officer, Anna Myers, is a practising solicitor. The legal caseworker is Ben Urdang, was called to the Bar in 1999. Caroline Millar runs our business and education services. Emma Phillips is our office administrator. Caroline Khazai-Nejad looks after our accounts. Josh Winfield and Georgina Brown - now studying for the Bar - continue to assist on our helpline when possible. Our volunteers are Nicola Walker, a senior City solicitor assists with legal consultancy work and Jean Brown assists with office administration. (This staff list is accurate at July 2000)
Worried something is going seriously wrong in your workplace? Not sure what to do?
Whether you plan to say nothing or to blow the whistle, talk to us first in strict confidence and without obligation. Public Concern at Work is a charity which offers free legal advice to people concerned about serious malpractice at work.
Phone 020 7404 6609