Batuhan: Never be unearthed

“THE former Enron executive who privately warned company founder Kenneth Lay of impending financial doom in the fall of 2001 had another critical meeting with him Wednesday — as well as with former Chief Executive Jeffrey Skilling, a jury and a phalanx of lawyers in his fraud and conspiracy trial.

Sherron Watkins, the plainspoken former vice president, whom Congress anointed as a whistleblower after the company’s collapse, repeated much of what she said then: Enron needed to come clean about potentially disastrous accounting tricks or face implosion.

In mid-October 2001, two months after her meeting with Lay, Enron announced massive losses, slashed shareholder equity by US$1.2 billion and came under intense pressure from investors. What was once the nation’s seventh-largest company sought bankruptcy protection by year’s end.” (NBC News, “Enron Whistleblower Tells of Crooked Company, The Associated Press, 2013)

“The Armed Forces of the Philippines (AFP) was embroiled in a corruption scandal in early 2011 after its former budget officer George Rabusa testified in a Senate Blue Ribbon Committee of the pabaon (send-off money) system. The pabaon system refers to the money given to a retiring chief of staff as send-off money. The money used for pabaon system was derived from funds which were diverted to retiring chiefs of staff. The way the money was diverted was uncovered by Commission on Audit auditor Heidi Mendoza when she testified on a House of Representatives Committee on Justice.

Generals Jacinto Ligot and Carlos Garcia, who were the AFP’s comptrollers when the system was in place, were detained; however, the Office of the Ombudsman went into a plea bargaining agreement with Garcia, in the government to withdrew their cases against him as they contended the evidence was weak.

Rabusa testified that all of the AFP chiefs of staff were recipients of send-off money. They all denied knowingly receiving such send-off money. Angelo Reyes, one of the accused recipients, committed suicide as he was compelled by Congress to testify on the matter.” (Wikipedia, “2011 Armed Forces of the Philippines corruption scandal”)

Perhaps the most infamous financial scandal in recent financial history and one of the most controversial corruption abuses in contemporary Philippine society were brought to light by the actions of brave citizens, known as whistleblowers.

Sherron Watkins was an accountant at Enron, the giant Houston-based energy company, that was embroiled in what was then the biggest fraudulent scheme ever hatched, pulling wool over the eyes of thousands of investors, who had no idea of Enron’s true financial state. The Enron fiasco would teach our modern financial system so much, to the extent that it gave rise to what is now an ubiquitous requirement for all listed companies in the US— the Sarbanes Oxley Act.

And while many Filipinos still doubt the integrity and motivation of army officer George Rabusa, it was his testimony that uncovered the “pabaon” system of corruption widely practiced then by the AFP leadership in order to enrich themselves at the expense of the ordinary soldier.

Whistleblowers have definitely an important role to play in ensuring transparency and accountability among those otherwise not accountable to anyone—and these include those high up in the corporate and public sector spheres. And yet, they are coming under attack from a very ominous source.

By his scathing attacks on the whistleblower who leaked information against him, US President Donald Trump himself is undermining the very system that gave America the critical and important lessons that it needed in order to resurrect itself as an economic and political powerhouse. Without people like Watkins, much of what the US economy is today, will probably not have come to pass.

That’s why this impeachment trial should not be used as an excuse to throw the baby out with the bathwater.

Whistleblowers deserve all the protection that the law allows. Without these protections, the Enrons and “pabaons” of the future may never be unearthed again.


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