Whistleblowing Case Studies

Why This Matters

Whistleblowing sits at the intersection of individual ethics, organizational accountability, and public policy—three pillars you'll be tested on throughout this course. These cases aren't just dramatic stories; they demonstrate how single individuals can trigger massive shifts in corporate governance, regulatory frameworks, government transparency, and stakeholder relationships. When you study these whistleblowers, you're really studying how ethical breakdowns occur in organizations and what mechanisms (or lack thereof) exist to correct them.

Don't just memorize names and scandals. For each case, know what type of misconduct was exposed, what systemic failure allowed it to happen, and what reforms resulted. Exam questions often ask you to compare whistleblowers across sectors or analyze whether internal vs. external disclosure was appropriate. Understanding the why behind each case—not just the what—will prepare you for FRQs that test your ability to apply ethical frameworks to real-world scenarios.

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Corporate Financial Fraud

These cases expose how information asymmetry between executives and stakeholders enables massive deception. When internal controls fail and external auditors miss red flags, whistleblowers often become the last line of defense against fraud that harms investors, employees, and market integrity.

Sherron Watkins and the Enron Scandal

• Internal whistleblower who used proper channels—as Vice President, she sent a memo directly to CEO Kenneth Lay warning that Enron would "implode in a wave of accounting scandals"
• Exposed off-balance-sheet partnerships that hid billions in debt, demonstrating how special purpose entities can be manipulated to deceive investors
• Catalyzed the Sarbanes-Oxley Act (2002), which established whistleblower protections and required CEO/CFO certification of financial statements

Cynthia Cooper and WorldCom Accounting Fraud

• Discovered $3.8 billion in fraudulent accounting entries—her internal audit team found expenses improperly capitalized to inflate profits
• Acted despite pressure from superiors who told her to delay the investigation, demonstrating the conflict between organizational loyalty and professional ethics
• Triggered the largest bankruptcy in U.S. history (at the time), reinforcing demands for the corporate governance reforms in Sarbanes-Oxley

Harry Markopolos and Bernie Madoff's Ponzi Scheme

• Warned the SEC repeatedly over nine years—submitted detailed mathematical proof that Madoff's consistent returns were statistically impossible
• Exposed regulatory failure, not just individual fraud; the SEC ignored his warnings due to regulatory capture and institutional incompetence
• Demonstrated limits of external whistleblowing when agencies lack resources or will to investigate, leading to Dodd-Frank whistleblower bounty provisions

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Government Secrecy and National Security

These whistleblowers challenged the social contract between citizens and government, raising fundamental questions about transparency, democratic accountability, and the limits of state power. They force us to weigh national security interests against the public's right to know.

Daniel Ellsberg and the Pentagon Papers

• Leaked 7,000 pages of classified documents revealing that four presidential administrations had systematically misled the public about the Vietnam War
• Established the "prior restraint" precedent—the Supreme Court ruled in New York Times Co. v. United States that the government couldn't block publication
• Raised foundational questions about whether government officials have an ethical duty to expose deception that costs lives, even when classified

Edward Snowden and NSA Surveillance

• Revealed mass surveillance programs including PRISM, which collected data from major tech companies, and bulk collection of phone metadata on millions of Americans
• Sparked global debate on privacy rights and the Fourth Amendment implications of warrantless data collection in the digital age
• Led to the USA Freedom Act (2015), which ended bulk phone metadata collection and increased FISA court transparency

Chelsea Manning and Classified Military Documents

• Released over 700,000 documents to WikiLeaks, including the "Collateral Murder" video showing a U.S. helicopter attack killing Iraqi civilians and journalists
• Exposed gaps between official narratives and ground reality in Iraq and Afghanistan, raising questions about informed consent of citizens in democratic war-making
• Highlighted harsh treatment of whistleblowers—sentenced to 35 years (later commuted), fueling debate about whether punishment deters legitimate disclosure

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Public Safety and Industry Deception

These cases involve industries that knowingly endangered public health while concealing evidence. They illustrate how regulatory capture, industry lobbying, and information control can delay accountability for decades—and how whistleblowers can break through.

Jeffrey Wigand and the Tobacco Industry

• Revealed that tobacco executives lied under oath about knowing cigarettes were addictive; companies had manipulated nicotine levels to enhance addiction
• Testified despite industry intimidation—faced threats, smear campaigns, and a confidentiality agreement his former employer tried to enforce
• Contributed to the 1998 Master Settlement Agreement, which required tobacco companies to pay $206 billion to states and restricted marketing practices

Karen Silkwood and Nuclear Safety Violations

• Documented plutonium contamination at the Kerr-McGee plant in Oklahoma, including evidence that workers were exposed to dangerous radiation levels
• Died under suspicious circumstances in a car crash while traveling to meet a journalist with documentation—her case became a symbol of corporate retaliation risks
• Led to increased nuclear safety oversight and raised awareness about the vulnerability of workers who challenge powerful industries

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Government and Law Enforcement Corruption

These whistleblowers exposed misconduct within institutions meant to uphold the law, creating unique ethical tensions around loyalty, institutional reputation, and the public interest.

Mark Felt (Deep Throat) and the Watergate Scandal

• Provided anonymous tips to Washington Post reporters Woodward and Bernstein, guiding their investigation into the Nixon administration's cover-up of the DNC break-in
• Remained anonymous for 33 years—his identity as "Deep Throat" wasn't confirmed until 2005, demonstrating how anonymity can protect whistleblowers while enabling disclosure
• Led to President Nixon's resignation and passage of ethics reforms including the Ethics in Government Act, which established independent counsel investigations

Frank Serpico and NYPD Corruption

• Refused to participate in systemic bribery and reported fellow officers taking payoffs from gamblers and drug dealers throughout the department
• Faced retaliation from colleagues—was shot during a drug bust under suspicious circumstances after his complaints were ignored internally
• Triggered the Knapp Commission investigation, which documented two types of corrupt officers ("grass-eaters" who accepted small bribes vs. "meat-eaters" who aggressively pursued payoffs)

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Quick Reference Table

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Self-Check Questions

1. Compare and contrast Sherron Watkins and Cynthia Cooper: Both exposed corporate fraud, but how did their methods and outcomes differ? What does this suggest about the effectiveness of internal whistleblowing?

2. Which two whistleblowers' cases best illustrate the tension between national security and democratic transparency? What ethical framework would you use to evaluate whether their disclosures were justified?

3. Harry Markopolos warned regulators for nearly a decade before Madoff's scheme collapsed. What concept does this case best illustrate: regulatory capture, information asymmetry, or principal-agent problems? Defend your answer.

4. If an FRQ asked you to discuss whistleblower protections and why they matter, which three cases would you cite as evidence, and what specific reforms did each trigger?

5. Karen Silkwood and Jeffrey Wigand both exposed industry health risks. How did the personal costs they faced differ, and what does this reveal about the factors that influence whether whistleblowers come forward?