Banking StandardsWritten evidence from Ian Foxley, Lieutenant Colonel (retired)


1. I welcome this opportunity to respond to the Parliamentary Commission on Banking Standards. I would also welcome the opportunity to contribute in person to any further work investigating the broader issues of whistleblowing within the bounds of this and any future inquiry.

About Ian Foxley

2. Ian Foxley is a retired Army officer having served for 24 years in the Royal Corps of Signals which is the IT and Telecommunications arm of the British Army. He served in UK, BAOR, and overseas, attended Staff College both as a student and a member of the Directing Staff, commanded the Parachute Signal Squadron and 3rd UK Division HQ & Signal Regiment and served on operations in Northern Ireland and in Bosnia Herzegovina.

3. He was staff trained in Defence Procurement, won the Commandant’s Prize for his year at Staff College Camberley and was a staff officer in Counter Terrorist operations and Operational Requirements in the Ministry of Defence (MoD). Most recently, he was the Programme Director for GPT Special Project Management Limited, a UK subsidiary of the EADS Group, who are the Prime Contractors for a £1.96Billion programme to modernize the communications within the Saudi Arabian National Guard Communications (SANGCOM) Project. The contract is between the Prime Contractor, GPT Special Project Management Limited, and the UK MoD.

4. In December 2010, Ian Foxley discovered documentary evidence of gross irregularities, and attempts to cover them up, within GPT and the SANGCOM Project which he reported to EADS Group Compliance, the UK MoD and the Serious Fraud Office (SFO). He therefore has direct experience as a whistleblower, its primary and secondary effects and the manner in which whistleblowers are received and treated by corporate, government and law enforcement organizations. He is the first Chairman of Whistleblowers UK, a formative charitable organization formed in 2012 by whistleblowers to support current and future whistleblowers. He will also therefore explain how these issues and effects are pertinent to all public and private sectors.


5. Ian Foxley’s allegations of corruption and bribery within GPT Special Project Management Limited are the subject of a separate SFO criminal investigation and will therefore not be discussed within this evidence.

Recommendations for inclusion in Committee Report

6. (a) Greater protection for whistleblowers in UK Employment Law.

(b) Legislative change to institute and equivalent the US Dodd Frank Act.

Executive Summary

7. This evidence discusses whistleblowing, its processes and motivation, its primary and secondary effects, the deficiencies of current process and legislation and what possible changes might be wrought in policy, legislation and organization by a Government interested in protecting and supporting Whistleblowers and the propagation of truth and honesty across all sections of British society.

8. Whistleblowing

This evidence is about whistleblowing, its processes and motivation, its primary and secondary effects and the deficiencies of current process and legislation. It also indicates what possible changes might be wrought in policy, legislation and organization by a Government interested in protecting and supporting Whistleblowers and the propagation of truth and honesty across all sections of British society.

9. Whistleblowing starts before the actual process of disclosing information. It actually begins when the whistleblower recognizes that he or she has observed or discovered information or actions that are either illegal or immoral and which others might wish to conceal from wider general knowledge. The second key stage is the Whistleblower’s decision to do something positive about their possession of the information. The importance of this particular decisive act should not be underestimated: for many whistleblowers, the actual declaration is a point of critical importance and a time of extreme personal stress, and is often a moment of conflicting loyalties, values and personal vulnerability. It is at this point that the Whistleblower needs, expects, and deserves, the support of the corporate organization, the professional bodies that compose its staff and regulators, law enforcement agencies and the Government. Sadly, this is seldom the case.

10. What the Whistleblower should do?

Initially a complainant should disclose their observations or information about irregularities to internal line or functional management and to those responsible for Compliance within the organization. The problem for the complainant arises when either the management are involved in, complicit to or “wilfully blind” to the irregularities, refuse to take action or even victimise the complainant for raising an uncomfortable and awkward issue. It is at this point that most complainants become whistleblowers through a perceived need to take the issue outside of the internal organization to an external body.

11. So why does one blow the whistle?

“Blowing the Whistle” therefore is normally the result of an observation of wrong-doing which has been reported appropriately but which has not been, nor is likely to be, remedied effectively. The view trumpeted by City bosses that most whistleblowers are motivated by a lust for money or prestige in grandstanding in the Press, or are just disgruntled employees, does not stand up to rigorous examination. In reality, whistleblowers are merely observant individuals who just don’t agree with what’s being done, are honest enough to declare it and frustrated by an organization that tries to smother their complaint—or even victimize the complainant. At WhistleBlowers UK (WBUK) we see this frequently, no matter what the sector of society the Whistleblower comes from.

12. What should one expect as a response?

In drawing attention to an irregularity within an organization, a complainant places themselves in a position of uncomfortable vulnerability. Traditionally, the bearer of bad news is seldom rewarded and it is thus, often with one’s heart in one’s mouth and trust in the integrity of the organization, that one crosses the line to report misdemeanours. One expects a sympathetic response with a willingness to hear the “bad” news, validate it, and do something about it, and its proponents, in the short and long term. Most complainants and whistleblowers do not expect a reward for making a complaint—but neither do they expect the hostility and victimisation of the organisation to which they are reporting the irregularity, especially when that organization should benefit from the knowledge and rectification of the circumstances.

13. That does one find in reality?

The reality is ashamedly different. The initial reaction is normally a downward spiral of disbelief, immediate personal and corporate protectionism, direct and implied threats, loss of position and responsibility, isolation and oppression. In extremis, a process of “Mad or Bad?” demonization is initiated which leads to a loss of job, with financial loss and reputational loss as direct effects, and with deeper, indirect, secondary effects: stress on family life leading to divorce, depression and even death. Examples come not just from the Banking Sector but from all sectors of British society: Dr Kim Holt (Baby P), Kay Sheldon (Care Quality Commission), Eileen Chubb (BUPA), Peter Gardiner (BAe/Al Yamamah), Paul Moore (HBOS), Martin Wood (Wachovia and Coutts Banks), myself (EADS/GPT), Craig Murray (CIA/FCO/MI6 Rendition Agreements) and even the unfortunate death of Dr David Kelly (the Dodgy WMD files). These are not isolated cases: hostility and victimisation of whistleblowers is endemic in corporate and governmental structures and something needs to be done to protect the Whistleblower now.

14. Why do we get this reaction?

The source of most aggression is fear. In the context of the Whistleblower, corporate reactionary hostility, and any subsequent victimisation, is born out of Reputational Fear. This is manifested either as a personal fear, due to the disclosure of a personal culpability or complicity to the source of the revelation, and thus the ruination of personal reputation and future, and/or a corporate fear emanating from an immediate sense of failure of responsibility to protect the corporate reputation and future. The latter fear is, of course, exacerbated by the effect publicity of the irregularity might have upon on share price, corporate futures, stock options of participatory staff and management and the inevitable impact on personal wealth.

15. Whistleblowing threatens whatever belief systems and defences institutions have developed to permit the behaviour that is being exposed. They regard revelations as humiliating and attacking the institution itself and, therefore, its staff and professional advisors therefore see themselves as justified in retaliating against a Whistleblower, even to the extent of discrediting and pathologising them (the Mad or Bad? strategy). The motives and personal integrity of the Whistleblower may be publically questioned so that, through reversal and projection, the institution that is being questioned can evade any sense of responsibility or wrong-doing. It is the classic ploy of the guilty to point the finger in the opposite direction: in extremis, when the strategy works, the Whistleblower is made to feel to be the wrong-doer which, in turn, arouses feelings of serious self-doubt and depression, whilst the institution stands firm, and free, in its position as a “pillar of society”.

16. So what Support Structures exist for Whistleblowers?

There is a dearth of support and appropriate advice for Whistleblowers in the UK. Public Concern at Work is singular in offering a conduit for information about the Public Information Disclosure Act (PIDA) (1998) but does not go so far as to offer legal and psychotherapeutic advice and support. Nor does it provide a focus for whistleblowers to share their experience to benefit current and future whistleblowers or appear to be actively lobbying for legislative change. It is to fulfil this need that Whistleblowers UK has been formed, by whistleblowers and their supporters, in order to provide experiential advice and focused support for whistleblowers. WBUK also seeks to communicate the mechanisms and benefits of whistleblowing and to research and promote policy development in whistleblowing law and practice, in order to effect legislative change.

17. Legislative failure: Employment Law and Tribunals.

It is apparent that current UK Employment Law is deficient in its protection of whistleblowers. For example, I made a claim for unfair dismissal on the grounds of my whistleblowing against GPT Special Project Management Limited in the Employment Tribunal in London in August 2011. A copy of the judgment is attached. In summary, it found that the Employment Tribunal had no jurisdiction and that, even though the cause of the dismissal may have been whistleblowing, there was no statutory position to support such a claim. Thus, the Employment Tribunal could not deal with this genuine whistleblowing and regulatory matter because of an insufficiency in current British Law. The recent Employment Tribunals (Constitution and Rules of Procedure) (Amendment) Regulations 2010 permits referrals by an Employment Tribunal to the relevant UK regulatory agency but contains no provisions for how the UK should make international referrals—such as to the Securities Exchange Commission (SEC) in the USA.

18. To exacerbate the issue, the current legislation provides at Section 43B: “(2) For the purposes of subsection (1), it is immaterial whether the relevant failure occurred, occurs or would occur in the United Kingdom or elsewhere, and whether the law applying to it is that of the United Kingdom or of any other country or territory.” Plainly therefore referral to a regulatory body should have occurred especially given that the contract is between a corrupt UK registered Company, not Saudi Arabian, and the UK Government under the terms of an International Memorandum of Understanding between the governments of the United Kingdom and Saudi Arabia. But even with this referral, there is no whistleblowing protection for a UK citizen. Surely this cannot be what HMG and Parliament intends and very certainly needs to be changed and properly reflected in any upcoming changes to the Employment.

19. The Phase 3 Report on the United Kingdom by the OECD Working Group on Bribery, published in March 2012, evaluated and made recommendations on the United Kingdom’s implementation and application of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the 2009 Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions. In section 199—200, it noted that PIDA’s scope of coverage may be insufficient in foreign bribery cases. The Act does not apply to expatriate workers of UK companies who are based abroad unless there are strong connections with Great Britain and British employment law. Thus, this effectively excludes many foreign-based employees who are most proximate to, and thus most likely to report, acts of foreign bribery. My own recent case of Foxley v GPT starkly illustrates this limitation. The UK “explained” to the working Group that I “chose his contract to be governed by Saudi law” which thus deprived me of PIDA protection. However, the policy reason underpinning PIDA is to detect crime and protect those who report wrongdoing, and it singularly failed to do so in this case. This policy objective is undermined when the application of PIDA is dictated solely by the law governing an employment contract. I cite this, not as a personal issue, but as a clear example where the current Employment Law does not reflect the purpose for which is it was set in place.

19. Contrast with the USA.

The USA is far more advanced than the UK in its consideration and treatment of whistleblowers. It has a formally established Office of the Whistleblower as a subset of the Securities and Exchange Commission (SEC) and Department of Justice (DoJ) with clear mechanisms for the reporting of irregularities and misdemeanours in corporate practice. Moreover, it has established a fund for compensating whistleblowers which has had a recognized, and dramatic, effect in inducing whistleblowers to come forward. Had a similar structure encouraged whistleblowers to raise concerns about the Barclay’s attempted manipulation of Libor, the abuses might have been caught earlier. But any attempts to parallel such structures will have to overcome the widespread scepticism and inbuilt prejudice against whistleblowers that would prefer to “debag the sneak” not thank an honest worker for their courage in coming forward.

20. Whistleblowers are NOT supported in this country: there is muted applause for the integrity and honesty of a brave man or woman but, in reality, corporate business reverts to snide sniggering at the naïve foolishness of those who do not understand “hard nosed commercialism”. Whilst the moral support is most welcome and necessary, it does not pay the bills! Most complainants do not assume the position of a Whistleblower out of any need for public acclaim or compensatory money, but neither did they do it to be left bankrupt and destitute for the future! The Financial Services Authority and HM Revenue & Customs can compensate whistleblowers for loss of earnings if they lose their jobs, but this principle needs to extended widely across British society to reflect the “qui tam” legal actions that private citizens were encouraged to take between the 13th and 19th Centuries by a cash-strapped English Crown in return for a cut of any fines. In the USA there is the Dodd-Frank Act which allows whistleblowers to be compensated from the fines levied on those who are found guilty of corruption, why cannot the United Kingdom have a similar process? Current legislation needs changing and we, the whistleblowers, are looking to our parliamentary representatives to do so.

24 August 2012

Prepared 19th June 2013