engineers, white-collar crime & whistleblowing

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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.”. - PowerPoint PPT Presentation

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  • Engineers, White-Collar Crime& WhistleblowingDouglas Oliver, PhD, PE & Esq.AAAS Fellow NSF-EHR/DRL(The opinions expressed are the authors alone.)

  • 2008 Josephson Institute Survey of 30,000 US High School StudentsA person has to lie or cheat sometimes in order to succeed. HonorsStudents

    AgreeDisagreeFemale33%67%Male 48%52%

    Female 31%69%Male46%54%

  • 2008 Josephson Institute Survey of 30,000 US High School StudentsIn the real world, successful people do what theyhave to do to win, even if others consider it cheating.HonorsStudents

    AgreeDisagreeFemale54%46%Male 65%35%

    Female 53%47%Male63%37%

  • What is the Perception of the Honesty of Engineers?

    Chart1

    0.82

    0.69

    0.69

    0.63

    0.58

    0.58

    0.51

    0.26

    0.01

    -0.06

    -0.2

    -0.48

    0

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

    Sheet1

    Nurses0.82

    Pharmacists0.69

    Veterinarians0.69

    MD's0.63

    Dentists0.58

    Engineers0.58

    Professors0.51

    Psychiatrists0.26

    Journalists0.01

    Stockbrokers-0.06

    Lawyers-0.2

    Car Salesman-0.48

    Sheet1

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

    Sheet2

    Sheet3

  • Typical White-Collar Crimesback-dating stock options,bribes and kick-backs,embezzlement, insider trading, environmental crimes, andobstruction of justice.Common Element: FraudCharles PonziPhoto: Independent

  • Case Study: Engineers & White Collar CrimeAndrew 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 RefuelingSiemaszko pushes for permission to clean the reactor head during the 2000 refueling outage.Siemaszkos 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-Besses management congratulates Siemaszkos team for cleaning the head for the first time ever.1998 photo2000photo

  • 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 managements effort to convince the NRC that Davis-Besses reactor head was safe.NRC approved a delay in shutting down Davis-Besse until 2002.

  • 2002 Refueling DiscoveryThe 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 Companys response(s) to [the] NRC which contained inaccurate and/or incomplete statements.

    Result: Siemaszkos case was dismissed by OSHA.

  • EpilogueIn 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-BlowingInnocent 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-blowingEmployees 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.

  • ConclusionsFuture 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.