World
The Whistleblower’s Tale: How an Accountant Took on Halliburton
In 2005, Tony Menendez blew the whistle on Halliburton’s accounting practices. The fight cost him nine years of his life 
 
This story was co-produced with Marketplace.
 
The email that ruined Tony Menendez’s life arrived on a warm and sunny February afternoon in 2006. Menendez is, by nature, precise and logical, but his first instinct was somewhat irrational. He got up to close the door to his office, as if that might somehow keep the message from speeding across cyberspace. Then he sat down at his desk to puzzle out what had just happened.
 
The email was sent by Mark McCollum, Halliburton’s chief accounting officer, and a top-ranking executive at Halliburton, where Menendez worked. It was addressed to much of the accounting department. “The SEC has opened an inquiry into the allegations of Mr. Menendez,” it read. Everyone was to retain their documents until further notice. 
 
Panic gripped Menendez. How could McCollum have learned he had been talking to the SEC? The substance of the email was true. After months of raising concerns inside the company, Menendez had filed a complaint with regulators and Halliburton’s audit committee that accused the giant oil services company of violating accounting rules. But those complaints were supposed to be kept strictly confidential. Did the agency violate that trust? Did a board member? Somebody had talked.
 
Ten minutes passed, maybe fifteen. Menendez finally could move. He got up, opened his office door carefully and looked out. The floor normally bustled at that hour in the mid-afternoon. It had cleared out. He turned around quickly, grabbed his computer and rushed out of the heavily secured Halliburton complex north of Sugarland, Texas.
 
Menendez drove around for hours. He doesn’t remember much about where he went or for how long. At some point, he called his wife. 
 
“Ondy,” he cried out to her, frantic. “They outed me!”
 
As shocked as Menendez was, his wife had seen something like this coming. Tony was a perennial optimist, even naïve. He always thought the company would do the right thing and fix its accounting problem. More jaded, his wife was prepared for the worst. She’d even urged Tony to start secretly taping his bosses.
 
“Is anyone following you?” she asked. “Make sure.”
 
Menendez looked around, seeing only a blur of cars pass at the beginnings of evening rush hour. He didn’t think anyone was tailing him. Then again, how would he know? He needed a lawyer – right now. Only months into the best job he’d ever had, he was in the most trouble of his professional career.
 
Menendez quickly googled “whistleblower” and “lawyer” on his phone and came up with Philip Hilder, the attorney who had represented the Enron whistleblower, Sherron Watkins. He placed the call and got through. Hilder heard Menendez out and then told him to listen carefully. Hilder instructed Menendez not to tell anyone, not even his wife. Too late for that, and he wouldn’t have kept it from Ondy anyway. They were partners.
 
“Ok. Then don’t talk on the phone anymore. Don’t talk in your office. Don’t talk in your house,” Hilder continued. 
 
“How quickly can you come in to see me?”
---------------------------------------
I met Tony and Ondy Menendez this past winter, in a suburb less than an hour outside Detroit. Now 44, Menendez speaks earnestly and insistently, with the carefully chosen words one would expect from an accountant. His cheeks carry a tinge of pink and, at the slightest smile, his eyes are consumed by crow’s feet. He hid a bulky frame with a corduroy jacket over a black V-neck sweater.
 
They told me about their long and agonizing fight against a powerful corporation. It’s a story of what it takes to be a whistleblower in America – and what it takes out of you.
 
Many whistleblowers come undone after they launch their fights. They have trouble keeping their jobs, their marriages, their sobriety. Even friends who are sympathetic often see them as pains in the ass. They are forever marked by a scarlet “W.” And while whistleblowers naturally start off more skeptical than the average, the experience pushes some into often justifiable paranoia. If you want to know why whistleblowers can seem a little crazy, it’s because anybody who is not a little bit crazy would back away from the ordeal of confronting a corporate behemoth or grinding government bureaucracy.
 
There’s nothing crazy about Menendez, however, beyond an optimism that persists even when the facts don’t warrant it. Throughout the whole struggle, he just knew that somehow, sometime, the world would come around to seeing he was right about Halliburton.
 
 
Courtesy: ProPublica.org
 

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COMMENTS

Mahesh S Bhatt

2 years ago

Here mafia kills whisleblower.

Sucheta lost her job at TOI for Harshad Mehta scam.

Khemka is transfered again.

Air India's Director had his book banned now the court has looked into thanks to Prashant Bhushan.

PM has got 5 years for Coal scam next summon who will remember?

Oil prices raise to $ 5.6 has been quashed by court as Economic decision in arbirartion case of RIL.

Hope is there as we have Subrata Roy & Raju behind the bars.

Jayalitha is doging courts.Sukhram went behind the bars.

God Bless Raise the bar for Personal/Professional Values Systems corruption shall die.

Mahesh

Rahul Gandhi, Prasad spar over net neutrality
Congress vice president Rahul Gandhi on Wednesday accused the government of floating a “trial balloon” on net neutrality even as Communications and IT Minister Ravi Shankar Prasad said his regime was in favour of free and fair access to the World Wide Web.
 
In his second intervention in the Lok Sabha since his return from a 56-day sabbatical, Gandhi raised the issue of net neutrality and said: "Every youth should have a right to the net. But the government is trying to hand over the internet to some corporates."
 
He said: "I would request the government to please change the law or make a new law to ensure net neutrality."
 
The 44-year-old Congress leader continued with his support for net neutrality outside the house as well. 
 
"If the government wanted to protect net neutrality, why did it begin a consultation. It is a trial balloon to see if the reaction is strong. We are giving a strong reaction so that the process is closed."
 
Gandhi also found support in the new general secretary of the Communist Party of India-Marxist, Sitaram Yechury, a Rajya Sabha member.
 
"I think ours is the only party which has passed a motion on this in its national congress," Yechury said.
 
Prasad, who also spoke both inside and outside the house, said: "This government appreciates the net activism of the youth. Our prime minister (Narendra Modi) has said we have to make the net available without discrimination."
 
The minister said there was, indeed, the need for mobile governance, and the government wanted the net to reach everybody. 
 
"Neither is our government under pressure of any corporate nor will it ever be."
 
Referring to the Telecom Regulatory Authority of India (TRAI) initiating a debate on the matter, the minister said the watchdog has the mandate to debate, but it is the government that has the power to take a decision.
 
"We want to ensure internet for everybody. We have asked for a report within two weeks."
 
Network neutrality, or open inter-working, means that in accessing the World Wide Web, one is in full control over how to go online, where to go and what to do as long as these are lawful. It advocates that firms that provide internet services should treat all lawful internet content in a neutral manner. 
 
In March, telecom regulator TRAI released a paper inviting comments from users and companies on how over-the-top services should be regulated in the country. It has asked stakeholders to send suggestions by April 24 and counter-arguments need to be submitted by May 8.
 
A committee on net neutrality was also set up by the Department of Telecommunications (DoT), which will submit its report by the second week of May to help the government make a comprehensive decision on the contentious issue.

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COMMENTS

MOHAN

2 years ago

"Politics is everywhere, it's in your shirt, it's in your pants" - RaGa

SEBI restrains Ganesh Stocks and Shares from accessing the securities market
Sri Ganesh Stocks, C Venkatesan and Vijaya Bharathi had acted as unregistered stock broker, sub-broker and also indulged in portfolio management services without obtaining registration from SEBI, according to a SEBI Order
 
SEBI in its order against Sri Ganesh Stocks and Shares, C Venkatesan  and Vijaya Bharathi under section 11(1), 11(4), 11B and 11D of the SEBI Act 1992, directed the following: 
 
i. restrain the three entities from accessing the securities market and further prohibit them from buying and selling;
 
ii. direct the three entities to cease and desist from undertaking the portfolio management activities in the securities market;
 
iii. direct the three entities to immediately withdraw and remove all advertisements, representations, literatures, brochures, materials, publications, documents, websites, etc. in relation to the portfolio management activities in the securities market;
 
iv. prohibit the three entities from mobilising funds from its clients or other general investors or offering any PMS-related activities.
 
The entities had acted as unregistered stock broker, sub-broker and also indulged in portfolio management services without obtaining registration from SEBI.      
 
SEBI had received a report from National Stock Exchange of India Limited (NSE) in respect of Sri Ganesh Stocks and Shares (Ganesh Stocks) alleging that:
 
(a)  In advertisements issued in some newspapers (viz. “Nanganallur Talk”) by Venkatesan Chandran (Venkatesan), he was inviting general public to make investments and get assured monthly returns.
 
(b)  He  has  claimed  himself  to  be  a  sub-broker  and  affiliated  to  Saravana  Stocks  P.  Ltd. 
(Saravana), a Trading Member of NSE to the officials of NSE who had visited his office for enquiry on advertisement.
 
(c)  In these advertisements, Venkatesan has used the trade name “Sri Ganesh Stocks and Shares", and invited the general public to make investments and get assured monthly returns.
 
(d)  Venkatesan is acting as business partner of Sarvana and a business partner agreement has been entered into between them. 
 
(e)  Venkatesan informed officials of NSE who had visited his office for enquiry about the 
advertisement  that  there  were  2  ways  in  which  the  amount  can  be  invested  in  the  stock market:
(i)  become a direct client of Saravana; or
(ii)  the clients can deposit the money with Ganesh Stocks who in turn will invest the same in the stock market on their behalf.
 
(f)  The investors desirous of opening the account with Ganesh Stocks were required to enter into a private agreement with Venkatesan.
 
(g)  As per the arrangement between Venkatesan and the investors, the return on investments was directly transferred to the bank account of the individual investors and in few cases, it was paid in cash.
 
(h) Venkatesan has informed that out of Rs4.36 crore collected from his clients with whom he had entered into private agreement, he had invested only around Rs85 lakh through the two trading accounts maintained with Nirmal Bang on behalf of other investors. The remaining fund was used to settle the financial commitment of the investors with whom the assured returns were promised through the private agreement that were entered into with them.
 
(i)  Venkatesan has claimed to have repaid Rs3.71 crore (which includes principal amount and returns) to some of its investors.  However, he did not provide any proof for repayment to NSE.
 
The SEBI Member based on his investigation after receiving the NSE report says, “As such, it is evident that Venkatesan, while dealing in securities have functioned in his capacity as an unregistered sub-broker by dealing with ultimate clients, had entered into separate private agreements with clients for dealing in securities on their behalf without appropriate registration from SEBI. I also find from the contents mentioned in the advertisements issued by Venkatesan as  stated  in the pre paragraphs and also from the  various covenants of the private agreements that  were  entered  into  with  the  investors  by  Venkatesan  that  the  investors  were  promised unrealistic and assured monthly returns.  The private agreement which Venkatesan had apparently entered into with investors had enabling clauses whereby the investors were assured about the management  of  their  investments  and  also  the  fact  that  they  would  not  interfere  with  the investment  strategies  employed  by  Venkatesan,  etc.  These ingredients contained in the private agreement are typical of a discretionary portfolio management activity undertaken by Venkatesan on behalf of the investors. I, therefore, prima facie find that Venkatesan has not only functioned in his  capacity  as  an  unregistered  sub  broker  in  the  securities  market  but  have  also  indulged  in unregistered  portfolio  management  activities.  The entire act of Venkatesan is, therefore fraudulent, illegal and unauthorised.”
 
On the activities of Vijaya Bharathi, wife of Venkatesan, the SEBI Order infers, “A  perusal  of the  documents  furnished  by  NSE  along  with  their  report  indicated  that  Vijaya Bharathi  had  been  indulging  in  direct  clientele  dealing  by  executing  trades  through  her  own  account  and settling the transactions  by receipt and payment of funds,  which is not permitted for  a  licensed  authorised  person  as  stated  above.  The same  is  amply  corroborated  from  the observations made in the pre-paragraphs regarding deposit of money both in cash and by way of cheque receipts from various investors and deposit of the same into her bank account.”
 
“Vijaya Bharathi has clearly  aided  and  abetted  Venkatesan  and  have  indulged  in unauthorised  sub  broking  activities under  the  guise  of  a  private  agreement  which Venkatesan  had  entered  into  with  the  gullible investors,” points out the SEBI Member.
Hence, the SEBI Order finds Vijaya Bharathi and Ganesh Stocks to be at the same level in working with investors as Venkatesan himself and says, “I  find  that  the  schemes devised/offered  and  operated  by  Venkatesan  through  his connected/related  entities, namely, Ganesh Stocks  and  Vijaya  Bharathi  were with  their  complete knowledge and as such they were not only responsible for misleading the clients of  Ganesh Stocks and  other  general investors  from  the  public  but  also  for  collecting  funds  from  them  and promising  unrealistic returns  and  for  other  contraventions.”
 
Hence, the SEBI Order has gone to the extent of restraining the three entities from accessing the securities market.
 
The SEBI Order concludes by saying, “the directions are without prejudice to the right of SEBI to take any other action that may be initiated against Ganesh Stocks and Shares, C Venkatesan and Vijaya Bharathi in accordance with law.”

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COMMENTS

mm sundram

2 years ago

it is very poor> while the NSE have taken such kind of investigations why the same, the largest and tech savvy exchange allowed their member broker religare securities limited to misuse and misappropriated the PAYOUTS and Purchased shares, worth of several crores to the two different account without any kind of authorisations from the client. the RELIGARE, nse member conveniently declaring the Client REGISTRATION form was lost. When it is reported to SEBI and NSE. Why it is not properly investigated and why it is not order by the SEBI members. all are very very serious but the sEBi chairman and all WTMS are mysteriously keeping the matters suspense. but the matter have been taken up with the Finance Minister and PMO

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