The Whistleblower #2
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The Whistleblower

The Whistleblower #2 - Feb 15, 2002

Corporate whistleblower blows whistle on Enron "whistleblowers." When Dr. Linda Peeno went to Congress in 1987, it wasn't because her employer, HMO giant Humana Health, was suddenly broke or even in financial or legal trouble. She blew the whistle on that company because its corporate practices were abhorrent. And so have many other consumer protectors, who risk their own job and security to go public with unspoken dangers lurking in corporate towers. So Dr. Peeno is understandably miffed that Enron managers and execs are getting a heroes welcome as they cover their own behinds in the Enron investigation. As Dr. Peeno explains it:

It is a perverse culture of business ethics that an individual can be described as "courageous" because they take bad news to a boss, and they can be called a "whistleblower" only when demise reveals foreknowledge. The real test of courage would be in her actions when she did not get any response. What did she do? Nothing. She did not go to the Board of Directors, she did not seek outside assistance, she did not resign, and she did not go public. She risked nothing.

Oops! I opened my mouth. Enron insider Sherron Watkins (the alleged whistleblower described above) called Jeff "Nothing to Hide" Skilling (a former Enron CEO) a liar during Congressional testimony Thursday. But there's one bit of Skilling's testimony from last week that may be the most honest sentence to come out of an Enron exec in years. He told a congressional panel that Enron faced "terrible problems" last year because the California energy crisis had been "solved." The admission that Enron's profiteering was part and parcel of the California energy crisis is a reason so many other Enron execs had their mouth sewed shut when called to testify. Unfortunately, no politician picked up on that dramatic admission, but for Californians the meaning is clear: The Enron pyramid was built on its ability to gouge in California. Once regulators came in and began to chip away at the profiteering, Enron's slot machine stopped hitting triple cherries.

CNN got it right. Enron's political ties to the Bush administration are well known. But members of Congress seem to think they can elevate themselves above the scandal simply by asking tough questions of Enron and Andersen executives in front of the news cameras. CNN exposed what the cameras couldn't show--and what legislators didn't want to be seen. During CNN's coverage of the Enron hearings recently, on-screen text identified lawmakers' total campaign donations received from Enron. Kudos to CNN.

Cal. Governor Davis's federal court two-step. California Governor Gray Davis -- through his appointed commissioners at the PUC -- proposed a massive utility bailout of Pacific Gas & Electric in federal bankruptcy court Thursday. This is the second time (the first, an October bailout of Edison) that the Governor has danced around state law and used the federal courts to offer billions in consumer cash to a big electric company even though state lawmakers refused to enact a bailout. Incidentally, it was one year ago to the day, (Bailout Watch #8) that FTCR warned that politicians were looking for ways around state law to bail out the utilities, which had become insolvent as a combined result of corporate greed and the deregulation law the energy industry promoted. This proposed PG&E deal is estimated to cost consumers at least $5 billion; the Edison deal, which consumer advocates are appealing, costs another $4 - 5 billion.
The Foundation for Taxpayer and Consumer Rights (FTCR) is a non-profit, non-partisan advocacy organization. For over a decade FTCR and its advocates have exposed and challenged injustices that betray the public trust. The Whistleblower newsletter addresses core issues of the corporate and governmental crises of today and blows the whistle on the brewing fiascos of tomorrow. FTCR does not take a position on candidates for any elected office.
For more information about FTCR's work, to DONATE, to join the fight, or to comment, visit our web site at 310-392-0522 xt.309.
2002 FTCR

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