NCJ Number: 155349
Title: Whistleblowing and Corruption Control: The GE (General Electric) Case
Journal: Crime, Law and Social Change Volume:22 Issue:4 Dated:(1994/95) Pages:381-390
Author(s): L M Seagull
Date Published: 1995
Page Count: 10
Type: Report (Study/Research)
Format: Article
Language: English
Country: Netherlands
Annotation: This paper focuses on the use of the amended False Claims Act to counter defense contract fraud against the U.S. Government.
Abstract: In 1991 and 1992 a high-stakes corruption drama unfolded in Israel and the United States. At its core, beginning in 1984, was a scheme led by former Israeli Air Force Brig. General Rami Dotan and former General Electric (GE) marketing specialist Herbert Steindler to divert U.S funds earmarked for Israel's purchase of GE jet engines and support services for their own use and for unauthorized projects in Israel. A key player in the unfolding drama in the United States was the informer or whistleblower, Chester L. Walsh, a former GE manager in Israel, who provided crucial evidence and sued GE under the provisions of the amended False Claims Act. Between 1984 and 1990, Dotan and Herbert Steindler, once GE's top employee in Israel, laundered approximately $40 million of U.S. military assistance funds through GE by writing vouchers for military equipment that was never delivered. Additionally, the price of other equipment was inflated. The article concludes that countering commercial fraud against the government has been more successful because of the strengthened False Claims Act. Whistleblowers in the United States still face great obstacles and odds, not the least of which is the seeming indifference or even hostility of the government that stands to gain from their efforts. Additionally, philosophers of business ethics should recognize the risks and also high stakes in which whistleblowing occurs and not insist on internal reporting of fraud before "going public." The primary paradox remains: substantial economic incentive is a powerful weapon in countering fraud, even though it is an ethically questionable one. 17 references and 20 notes
Main Term(s): Criminology
Index Term(s): Corruption of public officials; Crime specific countermeasures; Informants
Note: An earlier version of this paper was presented at the third International Conference on Ethics in the Public Service, Jerusalem, Israel, June 6-11, 1993.
To cite this abstract, use the following link: http://www.ncjrs.gov/App/publications/abstract.aspx?ID=155349
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