IEEE Cases 1999 - Flight is Also Risky

Ralph Sims had worked for the US Government for many years as an engineer, rising to a fairly high managerial position. On retirement, he accepted an executive position with SuperCom, a company producing electronic equipment for the military.

Shortly after coming on board, Ralph was informed by a subordinate that, for a long time, a key test on an important product was not being made in the manner specified by the contract. This had been going on for several years and the subordinate felt very uncomfortable about it. Ralph, who had considerable expertise in the technology involved, looked into the matter carefully. It turned out that, in his previous career, he had acquired some knowledge about the specified test.

He found that, a shorter, and hence less costly, test had indeed been substituted for the required one. But, after some study, he concluded that SuperCom's test was actually as effective as the specified test. Nevertheless, by this unauthorized substitution, SuperCom was violating the contract and exposing itself both to criminal and to civil prosecution. He took his findings to upper management and urged them to apply to the contracting agency for a contract change authorizing the simpler test. Ralph felt confident that such a change would be accepted.

But his arguments were not accepted and SuperCom continued on their previous course. Ralph did not see why he should get into an unpleasant battle with the SuperCom's leaders over this, since there were no safety issues and even the quality of the product was not actually at stake. Nevertheless, he did not wish to be involved in a dishonest and probably illegal operation. Therefore, he chose the course of quietly resigning, without "turning in" the company.

About three years later, a SuperCom employee reported the deception to the government, and a criminal investigation was launched. When he resigned, Ralph had signed a non-disclosure agreement as a condition for receiving some severance pay. Nevertheless, when called upon by the prosecutor's office to give information about the situation, he cooperated fully.

To his dismay, when the indictments came down, he was one of the people charged with complicity in the fraud. This necessitated his hiring an attorney and undergoing both the expenses and anguish of being a defendant in a criminal case. Fortunately for him, after many months, a new prosecutor was assigned to the case. Shortly afterward, the charges against Ralph were dropped. But, meanwhile, the affair had cost him tens of thousands of dollars in out-of-pocket expenses, not to mention lost time and anxiety.