Engineers, White-Collar Crime& Whistleblowing

Douglas Oliver, PhD, PE & Esq.AAAS Fellow – NSF-EHR/DRL

(The opinions expressed are the author’s alone.)

2008 Josephson Institute Survey of 30,000 US High School Students

“A person has to lie or cheat sometimes in order to succeed.”

Agree Disagree

Female 33% 67%

Male 48% 52%

Female 31% 69%

Male 46% 54%

HonorsStudents

2008 Josephson Institute Survey of 30,000 US High School Students

“In the real world, successful people do what theyhave to do to win, even if others consider it cheating.”

Agree Disagree

Female 54% 46%

Male 65% 35%

Female 53% 47%

Male 63% 37%

HonorsStudents

What is the Perception of the Honesty of Engineers?

Gallup (2006): Perception of Ethical Standards(positive minus negative)

-1

0

1

Typical White-Collar Crimes

• back-dating stock options,

• bribes and kick-backs,

• embezzlement,

• insider trading,

• environmental crimes, and

• obstruction of justice.

Common Element: Fraud

Charles Ponzi

Photo: Independent

Case Study: Engineers & White Collar Crime

Andrew Siemaszko – Systems Engineer at Davis-Besse Nuclear Power Plant.

Major Environmental, Safety, & Mgmt. Problems at First Energy: A) 2003 Blackout – attributed to First Energy

B) In 2005, First Energy settled major lawsuit with EPA & DOJ.

C) Davis-Besse had 6 of the 34 significant “accident sequence precursor”

incidents in the US.

• Siemaszko was hired at Davis-Besse in 1999. Responsible for the reactor head.

• Refueling outage scheduled for early 2000.

• Boric acid buildup on reactor head had never been cleaned.

• 1998 photo clearly shows boric acid on the head.

2000 Refueling• Siemaszko pushes for permission to clean the reactor

head during the 2000 refueling outage.

• Siemaszko’s team is given only 1 day to clean the head. They do not finish in that time.

• The cleaning equipment is removed by management.

• Davis-Besse’s management congratulates Siemaszko’s team for cleaning the head for the first time ever.

1998 photo

2000photo

2001: NRC Worried About Reactor Head Problems & Sought Assurances from Davis-Besse

• Davis-Besse management sought to wait until 2002 to shut down for inspection.

• Siemaszko and his documentations were used to support management’s effort to convince the NRC that Davis-Besse’s reactor head was safe.

• NRC approved a delay in shutting down Davis-Besse until 2002.

2002 Refueling Discovery• The boric acid had corroded a football-sized hole in the

reactor head.• Only a thin sheet of stainless steel liner remained.

• Management told Siemaszko to quit or be fired. He chose to be fired, then sued as a whistle-blower.

Management Defended, Claiming:

• “Siemaszko failed to follow the Boric Acid Corrosion Control procedure and inaccurately recorded the results of his 2000 … inspection and cleaning activities”,

• “Siemaszko was a key technical contributor to the Company’s response(s) to [the] NRC … which contained inaccurate and/or incomplete statements.”

Result: Siemaszko’s case was dismissed by OSHA.

Epilogue

• In 2005 Siemaszko was banned from working in the nuclear industry for 5 years.

• In 2008 Siemaszko was convicted for “concealing information from and making false statements to” the NRC.

• The Union of Concerned Scientists views Siemaszko as a “scapegoat”.

• The Federal Judge called this a “close case”.

Cartoon in Local Newspaper

Federal Prosecution of Corporations and Reverse Whistle-Blowing

• Innocent people may lose their jobs when a corporation is prosecuted. Hence, there is a reluctance to criminally prosecute corporations. (Neither FirstEnergy, nor Boeing were prosecuted.)

• Federal prosecutors tend to bargain with

corporations in exchange for avoiding a criminal indictment of the corporation.

Reverse Whistle-blowing

• Employees are encouraged to be “team players”.

• There is an expectation that if you cover for the “team” then the team will support you.

Result: Some corporations tacitly encourage illegal employee behavior. In spite of this, employees

should expect that, once the illegal activity becomes known to authorities, a corporation will likely testify against partially culpable employees.

Conclusions• Future engineers have serious ethical

challenges.

•The fraud triangle is a useful tool for science & engineering ethics education.

•Employees who are pressured to commit a crime on behalf of an employer, should expect that the employer will provide evidence against them should the crime be exposed.