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Whistleblower Protections: A Living Example of Their Relevance

December 20, 2012

This past November NTU celebrated the signing into law of the Whistleblower Protection Enhancement Act, after a decade-long campaign to strengthen the process by which federal employees who report waste, fraud, and abuse are shielded from on-the-job retaliation. From time to time, we’re reminded that the issues of transparency and insight into the inner workings of government surrounding whistleblower laws have human dimensions. They’re not just about dry language in some obscure federal statute.

Karen Hudes, a former US Export Import Bank employee who served in the Legal Department from 1986 to 2007, is one such example. She contacted NTU after learning of a grassroots petition on World Bank shenanigans we conducted with the Government Accountability Project. According to Hudes’ website, after witnessing what she believed to be a flawed and fraudulent takeover of a Philippine bank in 1999 she voiced her concerns to the World Bank’s Internal Audit Department. Hudes alleges that instead of having her concerns addressed she was placed on probation while the matters she raised were swept aside:

“The Bank’s Country Director in the Philippines reassigned Karen when she asked him to sign a letter warning the Philippines’ government that the Bank could not disburse its loan without a waiver from the Board of Executive Directors since the loan conditionality was not met. The World Bank’s Internal Audit Department refused to correct the satisfactory evaluation of the Bank’s supervision performance or the flawed report of the Institutional Integrity Department to the Audit Committee of the Board of Executive Directors.”

Hudes’ attempt to report what she had experienced has gone on for several years now. The Senate Committee on Foreign Relations and Senators Richard Lugar, Evan Bayh and Patrick Leahy made attempts to gain answers from the World Bank concerning Hudes’ findings, but those efforts did not, she contends, prove conclusive. After Hudes brought her complaint to the Internal Audit Department, the World Bank proceeded to fire her, as well as the Staff Association’s lawyer. In 2009, after years of legal battles, the Chairman of the World Bank's Committee on Governance and Administrative Matters and Dean of the Board of Executive Directors reversed her firing, but the Bank’s President at that time did not recognize the decision. Hudes still currently has cases in the U.S. District Court and in the U.S. Court of Appeals.

Although we do not claim to have the expertise that could judge the merits of the highly technical financial details behind the World Bank’s practices, Hudes’ story illustrates one important point: how vital the recent victory of the Whistleblower Protection Enhancement Act is in at least helping to provide government employees safe avenues to report information that can then be evaluated without fear of reprisal.


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