We all know this well-worn concept: An organization’s reputation takes years to develop, but it can collapse overnight if it didn’t originally possess integrity from the top down. “It took 160 years for Siemens to build a reputation and only five minutes to ruin it,” said Dr. Andreas Pohlmann, the former chief compliance officer of Siemens, at the 29th Annual ACFE Global Fraud Conference in June. A little ill-gotten profit means nothing if a business has to close its bank accounts when it goes belly up.Read More
FROM THE PRESIDENT AND CEO
Through the years, I've met scores of whistleblowers — the ACFE likes to call them sentinels — and all of them have suffered. Many have lost their jobs, relationships and health. But I don't think I've known of a sentinel who's paid the cost of integrity more than James Holzrichter.
Back in the 1980s, Holzrichter — then an eager young analyst and systems auditor for Northrop (later Northrop Grumman) — brought to his supervisor some problems of materials acquisition and management.
"What I most especially did not know at that time [of the meeting with the supervisor] and would not even begin to grasp until some time later (and only when it was too late) was that I had just crossed what was probably the single mfalost significant invisible and irreversible line in this entire journey," Holzrichter wrote in his 2011 book, with Patrick A. Horton, Ph.D., A Just Cause: A True Story of Courage, Hope, & the Integrity of the American Dream.
"At that moment, the nightmare that was to become my life and that of my longsuffering family had been set in stone," he wrote. "It was not that I had just officially pronounced finding problems with procedures and possibly a few rogue employees: I had discovered the first visible signs to institutionally intentional and pervasive practices that if fully known and verifiable by the right parties, could threaten the very existence of the company itself."
Holzrichter eventually discovered alleged overcharging of the government and selling of defective equipment to the tune of millions of dollars.
He and another Northrop whistleblower filed a qui tam suit under the U.S. False Claims Act. The aerospace community blackballed him, so he had to deliver the Chicago Tribune newspaper and clean toilets for a living. Holzrichter and his family would live in a homeless shelter and later subsidized housing. Someone would actually try to kill Holzrichter, his oldest son and his oldest daughter. Not death threats but attempts.
Yet, Holzrichter wouldn't relent. Finally on March 1, 2005, 17 years after the qui tam filing, Northrop Grumman settled with the U.S. government for $134 million.
Holzrichter has said that he's far from a perfect man. But early in his life he took to heart his dad's words: "When is it ever wrong to do the right thing?" Those words propelled and sustained him through almost 20 years of suffering. During the 26th Annual ACFE Global Fraud Conference in June we presented Holzrichter with the 2015 Cliff Robertson Sentinel Award "For Choosing Truth Over Self." Well deserved.
For more details about Holzrichter's harrowing account, read his recent interview on Fraud-Magazine.com.