Last year the Dutch House for Whistleblowers published a report on an investigation into the possible retaliation against a whistleblower, from which managers, integrity coordinators and ethics & compliance officers can learn some important lessons.

When the House for Whistleblowers finishes an investigation, it publishes an anonymized report. Until now nine reports have been published.

One year ago, in January 2021, the House published a report from which managers, integrity coordinators and ethics & compliance officers can learn some important lessons. The report may have been anonymized, but those who are familiar with the case quickly recognized the people involved. Not in the least because the whistleblower conducted an interview with the NRC Handelsblad newspaper quickly afterwards.

The whistleblower had already written a book about the case in 2013. She also appeared in a documentary directed by Frans Bromet about whistleblowers, named “Stank voor dank”, a saying best approximated by “No good deed goes unpunished”, which premiered in 2016 at the Fraud Film Festival. There she also participated in a panel discussion.

Everyone who watched the documentary on television will be inclined to acknowledge that she is a whistleblower. Without a doubt she has disclosed wrongdoing that had a large impact on society. She was fired and has clearly suffered from this for years. The facts, however, paint a more subtle picture. We will describe these below, largely based on the report of the House.

The reporter is an ex-employee of SNS Property Finance, later rebranded to Propertize. In 2010 the Chief Restructuring Officer (CRO), Buck G., asked her to come on board as a freelancer to work on selling the SNS international real estate portfolio, which included a foreign holiday resort.

Mid 2011 the company decided to sell the holiday resort as a whole and not in parts, as originally planned. Because of this, she would spend less time on the project. According to the employee, this was not in the interest of the organization; she felt like the decision was made by the CRO and others with bad intentions. From August 2011 to April 2012 she had a number of arguments about this, mainly with the CRO.

Nevertheless she came up with a buyer, who was rejected by SNS beginning of April. Shortly thereafter her contract was terminated. A discussion followed regarding both the rejection of the buyer and the termination of the contract. The employee then disclosed large-scale fraud and serious conflicts of interest to SNS. In retrospect, the employee considered this to be her whistleblowing report. A court later ruled differently, because the report was not submitted through the appropriate channels and in the same email the reporter expressed the wish to come to a settlement. Later, on 26 April 2012, she received a letter from a foreign English-speaking lawyer from the company rejecting the accusations and warning her that revealing information for financial gain could be a serious criminal offence.

On 25 May 2012, the employee handed over a letter to this lawyer, addressed to the Compliance Department, in which she stated that there was fraud and malpractice within SNS Property Finance. The letter contained 11 examples, including kick-back fees that the CRO charged to persons he had hired on behalf of the company.

The board of the SNS holding company received the letter on 8 June 2012, after which it was immediately forwarded to Compliance and to the CRO. The Compliance Officer then started an investigation and concluded that the accusations lacked factual evidence, but that they did lead to points of attention for the company and the CRO. Subsequently, in July 2012, a firm conversation took place between the CEO of the company, the Compliance Officer and the CRO, in which the latter was reminded of the importance of transparency and the prevention of conflicts of interest.

In June 2012, the employee filed a report with the FIOD, the Dutch criminal investigations unit. She submitted an additional report in October to SNS and provided supporting documents. This triggered an extensive internal investigation by SNS, after which they filed charges against a number of (former) employees and the CRO in 2013. The company also filed charges against the employee, because it suspected her of (limited) involvement. She allegedly knew about the CRO’s kick-back arrangement since 2010, cooperated with it and, albeit reluctantly, paid some kickbacks herself.

Nevertheless, the Public Prosecutor’s Office decided not to prosecute her, as the case had come to light through her report, due to her openness on the issue, lack of evidence and the limited scale of her payments.

In 2018, the CRO was sentenced on appeal to two years in prison for bribery, forgery, money laundering and leading a criminal organisation. Others involved were also given sentences.

In May 2016, the employee and the real estate company agreed on a settlement, with the aim of finally settling the dispute amicably. In 2017, the employee asked the Dutch House for Whistleblowers to start an investigation into the way that SNS had treated her. The House started the investigation in 2019 and published the outcome in early 2021. The conclusions are as follows:

  • The House for Whistleblowers Act states that the House can investigate events that took place before the Act entered into force.
  • This was a case of misbehaviour with an impact on society, partly because of the financial damage (SNS ultimately had to be bailed out by the government because of problems in the real estate branch) and the damage it caused to the reputation of and trust in the financial services industry.
  • The employee therefore had a reasonable suspicion of wrongdoing with an effect on society.
  • She first reported this to SNS in a letter dated 25 May 2012.

However, she had already been dismissed in April 2012. The dismissal was therefore not a result of the whistleblowing report! In a previous court case, the court did not consider the economic and strategic reasons put forward by SNS for the dismissal to be unreasonable. And earlier, a court already ruled that she could have reported the fraud a bit earlier.

Despite that, the House believes that the employee has been disadvantaged as a result of her whistleblowing report. How so?

The House argues that the SNS holding had sent the letter of 25 May 2012 to the Compliance Officer and to the CRO simultaneously. This meant that the CRO was involved too early and also involved too closely in the handling of the report. As a result, the trust that the reporter had in the careful and discrete handling of her report was damaged. In addition, SNS had given the wrong impression to the reporter, as she was informed that her report had led to nothing.

According to the House, these two cases of carelessness lead to at least a procedural injustice of such a nature that this can be considered disadvantageous. The House has not been able to establish any other disadvantage.

In my view, the House is following a narrow path here to reach a conclusion, which many people will intuitively judge to be a fair conclusion.

The House also notes that both parties made insufficient efforts to separate the dispute about the termination of the contract from the whistleblowing report. The reporter repeatedly suggested to SNS that a good resolution of the business dispute would influence her reporting behaviour. This is not the kind of behaviour one can expect from a “good reporter”. However, SNS also did not sufficiently separate the two processes. For example, in the letter of 26 April the reporter was only warned, without showing her the proper way to make an internal whistleblowing report. It was also unhelpful that SNS had represented itself by foreign, non-Dutch-speaking lawyers who were not familiar with Dutch law.

Finally, the House indicates that the internal report and the report to the FIOD ultimately played an important role in uncovering and stopping the misconduct (the corruption), after which several (former) employees were convicted.

So what can ethics and compliance officers, integrity coordinators and managers learn from this case?

  1. It is important that a report is recognised as a whistleblowing report. Employees and management should be trained on this.
  2. Also, the investigation as a result of a report must take place in an independent and confidential manner. It is of course not the intention that a report is sent straight to the accused party.
  3. It is also important that the feedback to the reporter is correct.

With the entry into force of the European Directive for the Protection of Whistleblowers, this has become even more important. The directive and the new (not yet finalised) Dutch Whistleblower Protection Act explicitly state that the receiving of and follow-up on the report must take place confidentially and independently. Reporters must also receive a confirmation of the receipt of their report within seven days and be informed within three months of the assessment and, where applicable, the follow-up on the report. It goes without saying that this information must be correct.