The Corporate Whistleblower - From Dr. Wigand To Enron

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Large publicly traded corporations have an obligation to their share holders to conduct their affairs properly, not to cut corners and to provide profits but in a fair and honest manner. There have been cases over the years that the hunger to produce profits has led to major corners to be cut and eventually laws being broken, in some case causing people to lose their life and countless others to have their health permanently damaged.

One of the most famous corporate whistleblowers was Dr. Jeffrey Wigand who revealed to the investigative press that all the major United States based tobacco companies and cigarette companies were very well aware that cigarette smoking was addictive and in fact they added further carcinogenic ingredients to add to their addictive characteristics. The effects of this case was so well know and went a long way to add legitimacy to whistle blowing, even though Dr. Wigand was subjected to strong pressure from the cigarette manufacturers, including being sacked from his job, ostracized from the tobacco industry, and he became a victim of a public campaign to besmirch his good name. Such was the drama of the situation that a film was made of Dr. Wigand's battle with the tobacco companies, starring Oscar winning actors Russell Crowe and Al Pacino. The film was a major box office success and was probably the first time that the general public were exposed to the reality of corporate whistleblowing and how a braze and strong individual discovered the courage and fortitude to stand up and speak out against something that he knew to be innately incorrect.

Another major corporate scandal which was exposed through whistle blowing was the Enron accounting fraud scandal. Enron was formed to act in the energy trading industry and in a very short time succeeded in becoming one of the largest companies in the World, with turnovers running into billions of dollars.

However the company had in actual fact expanded too quickly and was severely lacking in cash resources. In order to keep themselves afloat the company's accountants, connived with one of the largest and most respected global accountancy practices, Arthur Andersen, to blow the company's profits out of all proportion, to allow them to show a positive cash flow. Gradually one or two key staff members began to feel uncomfortable about the situation. Eventually someone, who remains anonymous to this day, reported the company's illegal accountancy practices to the relevant authorities. The result investigation saw the company being forced to cease operations immediately.

As their huge losses came to light, the company had no option but to file for bankruptcy and their shareholders took a very severe beating. Although people lost vast personal fortunes, and Arthur Anderson went down with Enron, the scant compensation that the shareholders received was to see most of the top management of Enron sentenced to long prison terms.

Whoever the Enron whistleblower was we may never know, it is possible that he or she is now also serving a prison term for being involved in the fraud, and who decided, sadly too late, to blow the whistle on the murky dealings of the company.