Question

Read the assigned article and  answer the question at the end of the article:

Whistleblower wins $51 million in kickback and bribery case.

A whistleblower will collect a $51 million payday after sounding the alarm about bribes and kickbacks at the medical device company where he worked.

Olympus Corporation of the Americas agreed Tuesday to pay $646 million in fines after it admitting to a pattern of bribery and kickbacks. About half of that fine was a criminal penalty for violating the federal anti-kickback statue, making it the largest amount ever paid for breaking that law. The payment to the whistleblower will be paid out of the company's fines.

John Slowik, 53, worked for 20 years for Olympus, which is the medical device unit of the Japanese company that also makes cameras. In 2009 he was named the company's compliance officer. But he said that his complaints about the company's policy of disguising payments as grants and lavishing expensive trips and entertainment on doctors and hospital administrators in order to sell equipment fell on deaf ears within the company.

Slowik was fired in 2010, and has not worked since, according to his lawyer, Kathryn Schilling. But he filed a sealed federal lawsuit, using the federal whistleblower act, on behalf of the federal government, which was being cheated by the company's illegal acts.

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The kickbacks and bribes "can improperly influence a provider's judgment about a patient's health care needs, result in the use of inferior or overpriced equipment, and drive up health care costs for everybody," said Deputy Attorney General Benjamin Mizer.

Slowik's suit said that when he was named compliance officer, it was a new position at the company and he had no resources or training to perform the job. He said that Mark Gumz, who was Olympus CEO at the time, told him the job as compliance officer was "to try to figure out how to 'work around the rules' so as to 'not impact the business.'" He said when he tried to come up with a compliance program to stop the bribes and kickbacks Gumz "began to ostracize and harass" him.

"He's extremely honest and intelligent," Schilling said about her client. "He was just very intent on doing the right thing."

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Slowik declined to be interviewed about the case. He issued a statement thanking his attorneys as well as the Justice Department lawyers and other government investigators who worked on the case.

"I would also like to thank my family and friends who have stood by me and supported my efforts to do the right thing under difficult circumstances," he said.

In a statement, Olympus said that its previous conduct did not adversely affect patient health or patient care. It said that while it acknowledges responsibility for that conduct it "does not represent the values or Olympus or its employees" and that it is committed to complying with the law going forward.

QUESTIONS:

1. Should whistleblowing be encouraged by businesses? Why or why not?

2. Do you think the amount the whistleblower received for reporting the bribes and kickbacks is appropriate? Why or why not?

Answer 1

Q-1. Should whistleblowing be encouraged by businesses? Why or why not?

A: Yes, definitely whistleblowing should be encouraged by businesses. It is an ethical aspect. Businesses can suffer in the long run and fold up/get liquidated and lose all credibility with external stakeholders if malpractices like corruption or bribery are allowed to continue unchecked. So, it is necessary to curtail such malpractices and set them right before it gets too late. What is essential to note is that having a compliance and vigilance department will help in the cause of transparency and accountability but having a proper whistleblower policy will ensure protection to whistleblowers therefore supporting and encouraging such a cause. Whistleblowers are honest and passionate about their work place ethics and it pricks their conscience to allow such malpractices if and when they come to their notice. Whistleblowers are the conscience of the business and having a strong and clear policy on whistleblowing is in the best interests of the business owners/shareholders and management. In this case, John Slowik did the right thing of reporting and using the Federal Whistleblower Act as protection as corruption and bribery in the medical devices sector can wreck havoc by improperly influencing a provider's judgement about a patient's health care needs, result in the use of inferior or overpriced equipment, and drive up health care costs for everybody and may even result in patient fatalaties which is unethical and immoral.

Q-2. Do you think the amount the whistleblower received for reporting the bribes and kickbacks is appropriate? Why or why not?

A: Yes, the amount the whistleblower John Slowik received for reporting the bribes and kickbacks against Olympus was appropriate because he had acted out of his conscience and saved several patients and the medical devices manufacturer Olympus in the long run. John Slowik had done a great public service by being a whistleblower and even supported the government under the Federal Whistleblower Act. In the initial days of his reporting to the management, the then CEO of Olympus, Mark Gumz, was unsupportive and discouraging at that time. John Slowik had to face several hardships for acting in good faith against Olympus and was fired by its management in 2010 and wasn't able to work since then after having spent 20 years with the company Olympus which was a long tenure which should have been rewarded with gratuity and loyalty by the employer but instead he was unceremoniously fired for reporting bribery and kickbacks. Also, since John Slowik was 53 years old, he had reached crossed his prime of his career and would have been reaching retirement would have been very difficult for him to find alternative employment and livelihood which would be against the protection accorded under the Whistleblower Act as well as go against the 5th Amendment of the U.S. Constitution - Right to life and liberty. Thus, providing compensation to John Slowik for his hardships as a whistleblower was just and fair and what better way that the same company who fired him against the principles of natural justice to provide compensation to him for all the time he had lost.