Another ethical dilemma

Dear Bob …

Another ethics question… what was the best ethical way to let a client know the contract company I worked for was allegedly defrauding the client of billing fees?

I worked as an IT contractor for a large company through a small local IT services group. The local IT services group had been found by the client company to have repeated labor billing overcharges that could not be substantiated by payroll records in the past year. The client had issued a warning to the contractor/reseller company a year prior to my joining the company.

The IT services group was difficult to work for because of behind the scenes company politics. While working for them I became aware of suspected billing irregularities caused by a supervisor on another project to maximize his department earnings and pad his yearly bonus. Other contractor employees were aware of the billing fraud and said nothing about it to the contract company management or the client.

What should I have done?  I kept quiet for several months about the billing overcharges as I stewed with concern about what I knew and unwilling to act upon it. I did not know if I would get fired by the contract company for reporting alleged billing fraud. One of my parents advised me to ignore the alleged fraud because it was hear-say and I could not adequately substantiate my suspicions.

The IT services company made my decision for me through its twisted company politics. I received a formal commendation from the client (unknown to me at that time) for service actions above the call of duty on an unrelated project. My employer did not even let me know about the commendation that I earned and had been awarded by the client. Instead, they fired me a week later with no warning, notice, or severance claiming a 3rd party contractor had complained about my work. I felt this was a bogus complaint because I was not allowed to address or refute the it in this strange meeting.  However, the unethical firing I experienced released my silence about alleged unethical billing practices by the former company.

I decided at that time to keep the contractor over billing quiet as I searched for a new job and soon found one working through another IT services company doing the same job for the client.

Several months later I was assigned to work with another senior exec at the client on a new project. He and I worked well together on the project and I later confided what I knew about the billing fraud.

It hit the fan when the senior exec investigated my allegations and found all of them to be true and valid.

What do you recommend I should have done about my former employers fraud?  I was eventually proved correct, but when should I have revealed what I knew, given I was fearful of losing my job?

– Torn

Dear Rip …

I think your parent gave you good advice. There are lots of allegations, and in the absence of evidence they’re nothing more than gossip.

I’d also say that to the extent you thought the allegations were credible, you should have immediately found other employment. Never mind the ethical considerations – there’s your reputation to consider, and hanging on with snakes like that doesn’t do it any good.

I’m sorry – that wasn’t fair to snakes, which in general are useful and productive members of the ecosystem.

One last thought on the subject: The client company had an obligation here as well – to maintain proper controls so that it couldn’t be victimized in this way, especially since it had previously caught your former employer in billing irregularities. Failing to have them is, to my way of thinking at least, unprofessional. They certainly shouldn’t be relying on either universal honesty or getting word from a whistleblower.

– Bob