Sadly, there is not enough space here to tell you the entire seven-year saga of whistle-blower Michael Winston but the bottom line is this: He got royally screwed by the California judicial system.
Winston, 62, is a mild-mannered Ph.D. and a veteran leadership executive who has held top jobs at elite corporations like McDonnell Douglas, Motorola and Merrill Lynch. After taking time off to nurse his ailing parents, Winston was recruited by Countrywide Financial to help polish its corporate image. He was quickly promoted – twice – and had a team of 200 employees.
It’s almost unheard of for a top-tier executive to turn whistle-blower but that’s what Winston became after he noticed many of his staff were sickened by noxious air in their Simi Valley, Calif., office.
When the company failed to fix the problem, Winston picked up the phone and called Cal-OSHA to investigate. Retaliation was immediate. Winston’s budget was cut and most of his staff was reassigned.
Several months later, Winston refused Countrywide’s request to travel to New York and, he says, basically lie to the credit ratings agency Moody’s about corporate structure and practices. That was the death knell for Winston’s stellar 30-year-long career.
When Countrywide was bought out by Bank of America in 2008 – following Countrywide’s widely reported lead role in the sub-prime mortgage fiasco that caused the collapse of the U.S. housing market – Winston was out of a job.
In early 2011, after a month-long trial, a jury overwhelmingly found that Winston had been wrongfully terminated and awarded him nearly $4 million. Lawyers for Bank of America, which had assumed all Countrywide liabilities, immediately asked the judge to overturn the verdict.
Judge Bert Gennon Jr. denied the request, saying, “There was a great deal of evidence that was provided to the jury in making their decision and they went about it very carefully.” Winston and his lawyer maintain they won despite repeated and egregious perjury by the opposition.
Winston never saw a dime of his award and nearly two years later BofA appealed.
In February 2013, the Court of Appeal issued a stunning reversal of the verdict. The court declared Winston had failed to make his case.
“This never happens … ,” Cliff Palefsky, a top employment lawyer in San Francisco, told me. “The appeal court is not supposed to go back and cherry-pick through the evidence the way this court did. And if there is any doubt about a case, they are legally bound to uphold the jury’s verdict.”
None of the legal eagles I spoke to could explain why the Court of Appeal would do such an apparently radical thing.
The Government Accountability Project, a whistle-blower protection group in D.C., has been watching the Winston case closely. Senior Counsel Richard Condit says he believes the appeal judge wrongly “nullified” the jury’s determination.
“This case is vitally important,” Condit told me on the phone. “Seeing what happened to Winston, who will ever want to come forward and reveal what they know about corporate wrongdoings?”
The Government Accountability Project and various legal academicians are trying to figure out a way to get Winston’s case before the U.S. Supreme Court.
There have been whispers about possible malpractice by Winston’s trial lawyer for failing to file crucial documents that might have satisfied the appeal court’s questions. His appellate lawyer didn’t even tell him when the appeals court was hearing the case and Winston was out of town.
The Los Angeles district attorney and the sheriff’s department refused to follow up on evidence that some Countrywide witnesses had blatantly committed perjury on the stand. Some court watchers speak of the “unholy alliance” between big corporations and the justice system in California.
Winston says he spent $600,000 on legal fees and further depleted his savings by appealing to the California Supreme Court, which refused to hear his case.
During one of our many hours-long phone conversations, Winston told me, “So, here I sit, the whistle-blower. The good guy loses. And the bad guy – officials at the corporation that cheated and lied, and nearly caused the collapse of the U.S. economy – wins.”
There’s a lot of talk out of Washington these days about “economic equality.” But seven years have passed since the housing crisis and the feds have not prosecuted one key executive from any of the financial giants that helped fuel the economic crash. Too big to fail – and too big to jail, I guess.
Bank of America has spent upwards of $50 billion in legal fees, litigation costs and fines cleaning up the Countrywide mess. Its latest projections indicate it will spend billions more before it’s over.
To my mind, a stiff prison sentence for the top dogs who orchestrated the original mortgage schemes would go much further than agreeing that they pay hefty fines. That’s no deterrent to others since they all have lots of money.
A recent email I got from Winston, who has been unemployed for four years, said: “I have just received (a) court order mandating that I pay to Bank of America over $100,000.00 for their court costs. This will be in all ways – financial, emotional, physical and spiritual – painful.”
If a top-tier executive can’t prevail blowing the whistle on a corrupt company, if the feds fail to pursue prison terms and if a jury’s verdict can be overturned without the opportunity to appeal – what kind of signal does that send to the dishonest?
You know the answer. We’re telling them it is OK to put profit above everything else. We’re telling them to continue their illegal behaviors because there will be no prison time for them. At worst they may only have to part with a slice of their ill-gotten gains.
This is not the way the justice system is supposed to work.