Tipsters Telephoning Ethics Hot Lines
                   Can End Up Sabotaging Their Own Jobs
                   By Joan E. Rigdon

                   The Wall Street Journal
                   PAGE B1
                   (Copyright (c) 1992, Dow Jones & Co., Inc.)

                   Employees who call their companies' ethics hot lines with anonymous tips
                   about bosses and others are often finding themselves in the hot seat

                   Thomas Pratt says this happened to him. A former chief aerospace
                   engineer at Cleveland defense contractor Parker-Hannifin Corp., he and
                   his co-workers decided to tell the hot line about a senior manager who
                   had allegedly harassed a black draftsman on his birthday with a long
                   diatribe of racist jokes.

                   Parker says its hot line investigated by talking to the manager, who
                   apologized, and to the draftsman, who didn't mind the jokes. But soon
                   after Mr. Pratt identified himself as the hot-line caller, he was fired. The
                   stated reason: downsizing. "Pratt was let go because the decline in general
                   aviation business necessitated making further reductions in payroll,"
                   Parker-Hannifin said in a written statement.

                   Mr. Pratt, who says he was ordered to clean out his desk in full view of
                   colleagues, thinks otherwise. "They were supposed to investigate the
                   incident, and instead they investigated who reported the incident," he

                   While corporate whistle blowers often find themselves ostracized, the
                   incident raises questions about ethics hot lines, an increasingly popular
                   device for ferreting out wrongdoing. It is estimated that more than 100
                   companies now use hot lines. They have gained popularity partly because
                   new federal sentencing guidelines require stiffer fines for corporate
                   crimes. Under the guidelines, fines are reduced when companies can
                   prove they teach employees about ethics.

                   Usually toll-free and anonymous, the hot lines bear such names as
                   "Helpline" (Waste Management Inc.), "Guideline" (Nynex Corp.) and
                   "We Care Hotline" (American Greetings Corp.). Raytheon Co., however,
                   calls its line "the 800 number" because "hot line" has negative
                   connotations, says Paul Pullen, director of ethics compliance. Companies
                   without hot lines encourage workers to report corporate crime to
                   ombudsmen's offices.

                   In some cases, the hot lines and ombudsmen tip off companies to serious
                   crimes. Raytheon, with 68,000 employees, says it fires about two people
                   a month and disciplines about three or four others based on its
                   investigation of hot-line tips. Pinkerton Security & Investigative Services
                   Inc., a unit of Pinkerton's Inc., answers hot-line calls for clients and says
                   many of its calls lead to convictions.

                   But critics say that unless companies conduct independent investigations
                   of the tips, the hot lines can be useless. While many companies use
                   internal security forces to investigate allegations of fraud, they routinely
                   refer allegations of harassment and other non-monetary crimes back to
                   senior management -- which assumes the managers aren't involved in the
                   alleged scandal or aren't friendly with those who are. In many cases,
                   employees say, such investigations are tainted because junior employees
                   are pressured by their bosses to say they didn't regard the action as

                   Even when hot lines or ombudsmen have the authority to conduct
                   independent investigations, response can be slow. Waste Management,
                   for instance, staffs its hot lines with volunteers -- raising security questions
                   -- and takes three weeks to get back to callers, the company says.

                   Another problem: Some employees use hot lines to level false criticism at
                   rivals in hopes of crippling their careers, says Barbara Ley Toffler of
                   Resources for Responsible Management, Boston. Faced with these
                   obstacles, companies say, "`Wow, we've put in the hot line. Now what in
                   the hell do we do with the calls that come into it?'" she says.

                   At their worst, the hot lines and ombudsmen can be used to cover up
                   crime and silence the tipster. So says Ria Solomon, a former Unisys
                   Corp. employee who complained when Unisys allegedly asked her to
                   help falsify time sheets that could be used to fire another employee. That
                   employee, Sylvia Robins, had complained about allegedly shoddy testing
                   and security for National Aeronautic and Space Administration projects,
                   including the Challenger space shuttle that blew up in 1986. Unisys was a
                   subcontractor for the shuttle, supplying parts to a unit of Rockwell
                   International Corp.

                   In a 1987 lawsuit filed in a federal court in Houston, Ms. Solomon
                   alleged that after she complained about Unisys to a Rockwell
                   ombudsman in February 1987, the ombudsman's office ordered a
                   security unit to investigate her instead. Among other things, she alleged
                   that security staff trailed her after work, made threatening phone calls to
                   her home during sleeping hours, cut her home phone lines, destroyed her
                   home's fuse box and secretly monitored her phone calls at work. She was
                   fired -- for incompetence, according to Unisys -- in May 1987.

                   According to the lawsuit, a Rockwell security worker allegedly said that
                   Rockwell International's ombudsman routinely passed information to the
                   security staff so they could investigate the caller and monitored
                   employees' phone calls in hopes of identifying whistle blowers.

                   Rockwell says it investigated those allegations and found them to be
                   without merit. Also, "Rockwell would like to refute each of Ms.
                   Solomon's allegations" but can't comment because the case is in court, a
                   spokesman says.

                   Unisys settled with Ria Solomon in October 1989. Because of the
                   settlement, under terms of which Unisys paid an undisclosed sum to Ms.
                   Solomon, the court released Unisys from the suit. The case against
                   Rockwell is pending.

                   Because of such cases, Ms. Solomon's lawyer, Lynne Bernabei of
                   Washington, D.C., tells would-be tipsters not to contact hot lines or
                   ombudsmen but to go outside the company instead. "In every instance
                   I've known of, they operate as an internal security mechanism," she says.

                   Mr. Pratt says he expected Parker-Hannifin would seriously investigate
                   hot-line complaints because its ethics code requires employees to report
                   even suspected ethical transgressions. "Looking the other way on
                   potential ethical violations is in direct contradiction to Parker's
                   commitment to honesty and integrity and will not be tolerated," the policy
                   states. Each employee must sign a pledge to abide by the code or be

                   Feeling that pressure, Mr. Pratt and his co-workers gathered on Jan. 8,
                   the day the manager allegedly harassed the draftsman. They decided to
                   call the hot line as a group, Mr. Pratt and two others say. The actual
                   caller, who declines to be identified, called the hot line three times
                   between Jan. 13 and Jan. 21.

                   At first the hot line seemed to ignore the complaint. But on Feb. 10 --
                   almost four weeks after the first call -- the draftsman got an apology from
                   the manager, Larry Butler, who is the general manager of the aircraft
                   wheel and brake division. Parker says the apology was delayed because
                   it needed time to discuss the issue with Mr. Butler in person in Irvine,
                   Calif., where the aerospace group is based.

                   On Feb. 12, Mr. Pratt was asked by Mr. Butler if he was the one who
                   had alerted the hot line, Mr. Pratt says. He claimed credit because he had
                   vocally supported the decision to call, says Mr. Pratt, a former U.S.
                   Marine pilot whose first corporate job was at Parker.

                   David Ramsay, head of human resources for Parker's aerospace unit,
                   was handling the case but never interviewed the caller, the draftsman or at
                   least two other witnesses, according to Parker employees. Indeed, the
                   only time Mr. Ramsay talked to Mr. Pratt was while firing him.

                   Mr. Ramsay says he investigated the case by talking to Mr. Butler, who
                   promised to apologize to the draftsman. "I didn't see the need to talk to
                   other people, since the employee was going to be talked to by Mr.
                   Butler," Mr. Ramsay says, adding: "I didn't see it was my position to
                   escalate the matter any further," especially since the draftsman told Mr.
                   Butler he didn't mind the jokes.

                   Mr. Pratt, who now works as a vice president and engineer for a start-up
                   company, has soured on ethics hot lines, explaining: "It's actually a great
                   idea -- if you're naive enough to believe it."


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