The thing about a corporation committing widespread fraud is that it tends to involve a lot of people, some of whom will not be enthusiastic about committing fraud and may even try to stop it. Michael Hudson at iWatch News reports on how Countrywide Financial Corp. protected its ability to commit fraud by
firing whistleblowers, behavior that continued after Countrywide was bought by Bank of America. In fact, they fired the person in charge of fraud investigations; recently, "the U.S. Department of Labor ruled that Bank of America had illegally fired her as payback for exposing fraud and retaliation against whistleblowers. It ordered the bank to reinstate her and pay her some $930,000."
But Countrywide/Bank of America didn't just get in the way of investigations at the top. At least 17 other former employees allege that they were demoted or fired for raising the alarm about fraud they witnessed. For instance:
Mark Bonjean, a former operations unit manager in Arizona, complained to a divisional vice president, according to a lawsuit in state court in Maricopa County. Within two hours of sending the VP an email about what he believed were violations of the state’s organized crime and fraud statutes, the suit said, he was placed on administrative leave. The next day, according to the lawsuit, he was fired.
And:
Lupe Manegdeg, a loan specialist at a Countrywide office in Glendale, Calif., claimed that, in early 2007, she discovered that loan officers in her branch were defrauding borrowers in a variety of ways — including forging their signatures on documents and lying to them about the type of loans they were getting.
She reported this, she said, to her supervisors, to Countrywide human-resources officials and to the company’s fraud hotline. The company responded, her lawsuit in state court in Los Angeles said, by firing her.
Corporate corruption of the pervasive kind that helped bring on the mortgage crisis and victimized so many homeowners comes from the top. But here it succeeded by involving employees throughout the company—and by penalizing those who resisted. Neither was Countrywide alone in abusing its employees in order to sign more and more dubious loans, as Hudson's book The Monster details. Strong protections—whether through government oversight or unions—for workers who push back on troubling or outright illegal actions by employers don't just protect the workers, they protect us all.