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Which State Has a Surprising Number of Whistleblowers?

Jan. 4, 2013 7:33am Guest Post

[Editor’s note: The following is a cross post by John Carney that originally appeared on CNBC.com]:

Washington State Leads the Nation in Whistleblowers

CNBC.com senior editor John Carney

Is Washington an especially corrupt state?

The Securities and Exchange Commission has published its report on the first full year of the Dodd-Frank whistleblower law. The law created financial incentives and legal protection for whistleblowers who come forward with evidence of fraud, securities law violations, and other corporate misconduct. And it’s been very successful. In total, more than 3,000 whistleblower tips were received.

But an unusual number of these tips came from Washington. No. Not our nation’s capital. Washington State, that one up there on the upper left of the map, by Vancouver. What is going on in Washington?

California leads with 435 whistleblower tips, with New York a distant second at 246. Florida and Texas follow with 202 and 199, respectively. That’s exactly what you might expect to find because those states have the highest GDP’s in the country. More business activity means more opportunity for wrong-doing, creating more potential whistleblowers.

What you wouldn’t expect to find is Washington sitting anywhere near the top of the heap. According to the SEC report, Washington is tied with New Jersey as the state producing the fifth highest number of whistleblowers, 102. It’s actually ahead of Illinois (99) and Pennsylvania (90), states with much larger economies.

Washington is ranked 14th in terms of its GDP (going by 2010 figures, which were the most recent I could find). So why is it over-producing whistleblowers?

One possibility is that workers in Washington are more eager than workers in other states to turn in their bosses for wrong-doing. Absent something that could explain why Washingtonians are extra-eager to blow whistles, however, we can safely put this aside. The odds are that Washington workers are not much more likely to turn their bosses in to the authorities than workers in other states.

We’re on safer ground if we assume that the level of whistle-blowing activity is at least somewhat reflective of the level of corporate misdeeds in a state. But that would be a huge indictment of the corporate culture of Washington. It implies that Washington is undergoing something of a corporate crime or disclosure fraud wave. (For more background on the whistleblower program’s first year, see this post on the University of Pennsylvania’s RegBlog.)

Washington is home to a number of well known American businesses, including Microsoft, Amazon, Boeing, Starbucks, and Costco Wholesale. So perhaps one or more of these companies are generating an outsized number of whistle-blower claims. The SEC doesn’t report on how many cases it is actually bringing as a result of the tips, so we can only speculate at this point.

Of course, the Dodd-Frank program has only been in effect for a year so we don’t have very robust data. Perhaps Washington’s out-performance in whistle-blowing is just a product of random chance.

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Comments (17)

******
Posted on January 4, 2013 at 10:30pm
The majority of the whistleblowers come from the west side, a whole different ideology on the east side. There needs to be two different states.

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SageInWaiting
Posted on January 4, 2013 at 3:51pm
“Tips by state” is a number.

What are the “Tips per capita” or “Tips per business” in the sate? You would expect the states with the largest populations or number of businesses to have the highest number of tips; is there a way to normalize the values?

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Henry22
Posted on January 4, 2013 at 12:40pm
I live just across the state border from Washington……………….they are way……way left and corrupt as the day is long………………….

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Abigail Adams
Posted on January 4, 2013 at 11:18am
I’m in Washington state and the number one recipient of complaints should be the Seattle Chief of police. He actually called the DHS to investigate officers….just in case they were violating anyone’s civil rights. It wasn’t based on any incident or information but rather something he felt was necessary.
He expressed concern that more than 80% of Seattle police officers live outside the city and why aren’t there more black officers……then when a black off-duty officer is attacked outside a bar because of race the charges are dropped. The officer was charged instead.
Yes, there’s all kinds of corruption in Washington state. Most of it’s in the government.

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sizzlinsexybeckster
Posted on January 4, 2013 at 10:41am
If the company is really corrupt, then I see nothing wrong with blowing a whistle. I’ve personally seen so much corruption out there in the business world it’s insane. However, some may just be complaining of a broken fingernail. It’s for the investigators to decide which is which.

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- SageInWaiting
  Posted on January 4, 2013 at 4:04pm
  My experience is inept management over corrupt management but that’s out there, too. Morality isn’t taught in business school – only how to evaluate the bottom line and play that high stakes game of chess. In the process of maximizing that bottom line or stock price, people do what they think is “legal” rather than “moral” and with our over abundance of conflicting, overlapping laws and regulations, of course they will cross a line… SOME line.
  
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marybethelizabeth
Posted on January 4, 2013 at 9:40am
Why does theblaze find it necessary to embarrass Mr. Carney like this? It’s time for a truce in this war with NBC.

It would have only taken a few more minutes to have a theblaze staffer actually read the report and write a factual story. Doing so would have been time better spent.

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SocialistSlayer
Posted on January 4, 2013 at 9:17am
What’s not surprising is most of the top ranked are Liberal Commie Blue State strongholds !

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- marybethelizabeth
  Posted on January 4, 2013 at 9:54am
  You are saying it’s better to go along to get along rather than fight corruption?
  
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decendentof56
Posted on January 4, 2013 at 9:14am
While some people do things “wrong”, no doubt…you have to look at where this could go. To what extremes could legislation such as Dodd-Frank be extended so that its tentacles reach into your personal life.

We already have seen the NY (ok, it ‘was’ NY) paper that posted names and addresses of legal gun owners, did we not? What else will be targeted? What else will be “justified”?

If your neighbor knocks at your door, sees you cleaning a gun and does not like guns, will they be able to have your info placed in the local paper so others will know you are armed? No…you say? Are you sure?

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woodyee
Posted on January 4, 2013 at 8:27am
Once trained, they’ll move the whistle-blowing population onto other endeavors, like Church-goers and gun-owners.

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SpankDaMonkey
Posted on January 4, 2013 at 8:02am
.
Not surprised to see California at the top of that list, except out there they call it “Whistlesucking”……

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- Eastinfection
  Posted on January 4, 2013 at 8:41am
  Peter Pipers
  
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- decendentof56
  Posted on January 4, 2013 at 9:16am
  Now that’s funny! Silly monkey!
  
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RJJinGadsden
Posted on January 4, 2013 at 7:38am
Really stunned. As soon as I spotted “Washington” in the story, I thought it was Washington DC. Who woulda thunk that any other location in this country could even hold a candle to DC when it comes to fraud and any other financial or political misconduct?

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- loriann12
  Posted on January 4, 2013 at 7:44am
  Yea, but in DC, nobody blows the whistle because they know they’ll end up with concrete shoes, or they’re in on it too.
  
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- WildschweinJager
  Posted on January 4, 2013 at 7:53am
  Mostly calls about Starbucks and their refusal to recognize: Large, medium and small.
  
  Evil corporate empire just can’t come together right now.
  
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