Issue March 17, 2009

Whistleblowers blocked?

Auditor says the mayor’s office killed plans for an ethics tip line, but any such action remains shrouded in secrecy

(N.B. Follow updates to this story on Fat Lip.)

For the past four years, Louisville’s chief auditor has urged the city to adopt an anonymous tip line for its employees to report fraud, abuse and other unethical activities.

But his recommendation has repeatedly stalled out in the office of Mayor Jerry Abramson, and the city is refusing to release any documents that might explain why.

In an open records request filed last week, LEO Weekly sought memorandums between Louisville Metro Auditor Mike Norman, the mayor’s office and various departments about their response to his tip line proposal.

In a written legal response, the county attorney’s office explained that Metro government believes any communication regarding the proposed anonymous reporting hotline is exempt from open records law.

“Although recommendations, opinions and ideas have been expressed and exchanged among various Metro agencies concerning such a project, no final action has resulted as to such a project,” wrote Terri Geraghty, assistant county attorney. “Therefore the preliminary characteristic of these records remain and are being claimed as exempt [sic].”

On several occasions since 2005, the city auditor has recommended the mayor’s office implement a comprehensive reporting hotline, suggesting such a measure would strengthen ethics and government oversight.

But Norman says the mayor’s office has consistently opposed the recommendation. “Yeah, to me the decision was made,” he says. “We weren’t going to move or do it.”

That decision was a disappointment to Norman, who believes the value of such a complaint line is in what it might prevent: “People will think, ‘I better not do something wrong because it’s so easy for somebody to tell on me.’”

When asked whether the mayor’s office blocked the tip line from being created, Chad Carlton, a spokesman, danced around the question, saying, “Did we stop it? We never started.”

Although Carlton initially said the discussion has been ongoing since 2005, he later suggested that in fact the conversation picked back up just recently.

The mayor’s office has a number of concerns about an anonymous tip line, says Carlton, like balancing the public’s right to know about complaints with protecting the reputations of the accused. Besides, he says there are already avenues to file such complaints, although those resources should be better publicized.

“The mayor certainly wants to have more tools and adequate ones in place for folks to bring problems to our attention,” he says. “But if the person is anonymous, well the complaint is still public and that’s an invitation of abuse.”

In August 2008, the city auditor finalized a report concerning Metro government’s effectiveness in ensuring acceptable ethical behavior in the workplace. Norman’s office concluded the city has no formal process to answer questions about the ethical behavior of its employees.

The city provides various channels to receive general complaints, although the process is piecemeal. For example, employees can call the Metro Police Public Integrity Unit, MetroCall or Human Resources with a grievance, but no confidentiality protections exist, inhibiting its effectiveness for those fearful of retribution.

The internal audit faults the lack of a comprehensive system for reporting criminal conduct or ethical violations anonymously.

Now, in the wake of a recent scandal in the city’s housing department — including findings of gross mismanagement and a failure to oversee $18 million in federal grant money — even the state auditor believes it’s time for Louisville to implement an anonymous tip line.

Testifying about the recent blistering audit of the Louisville Department of Housing and Family Services, Kentucky Auditor Crit Luallen told a Metro Council committee last week that creating an anonymous tip line is a vital step toward promoting an ethical work environment.

Citing the city auditor’s report, Luallen told the Government Accountability and Oversight committee that it’s not enough to have good ethics guidelines on paper. Employees need to be trained to understand their whistleblower rights and given an avenue for an independent recording of allegations.

“We absolutely have to have a tip line,” says Councilman Kevin Kramer, R-11, who plans to file an ordinance before the end of April to establish an anonymous reporting system. “People who work in this government, right now, are afraid and don’t know who to talk to.”

Kramer says the city auditor’s proposal is straightforward, but if the administration won’t move voluntarily, the council must debate the matter publicly.

State and city governments across the country have instituted such tip lines, often hiring fraud watchdog companies to monitor ethical misconduct.

“I think a lot of people assume that 99 percent of the calls aren’t going to amount to anything,” says Gabriel Romero, a spokesman for The Network Inc., a technology company that specializes in whistleblower hotlines. “Our interview specialists are trained to find those bad calls pretty quickly.”

In 2006, The Network, whose clients include Amtrak and the city of San Diego, partnered with two other fraud examiners and compiled a report that found 65 percent of their anonymous calls warranted an investigation and at least 46 percent resulted in corrective action. 

Costs vary depending on the scale and type of reporting service, but Romero contends a tip line is worth the cost because more than uncovering misconduct, it encourages an ethical culture.

“If they have a serious allegation regarding fraud or misconduct, it’s a comfort level that you need to establish. The big thing is anonymity and privacy,” he says. “If you have a third party, you’re ensured that comfort level.”

The administration may have successfully blocked the city auditor’s successive attempts to get the tip line off the ground, but the state auditor’s scathing report on the housing department has heated up the debate.

Councilwoman Judy Green, D-1, says she would support creating a 24-hour hotline for employees to report unethical behavior. The west Louisville Democrat says the tool could help uncover misconduct before it turns into a scandal.

“If the internal auditor suggested it last year and we’re hearing it again from the state auditor,” she says, “we should look at that and the improvements it could make.”