Whistleblowers come in all shapes and sizes and my friend and fellow Bank Whistleblowers United colleague is certainly not one that fits most descriptions of a whistleblower. I’d mentioned Michael before in two fairly recent posts (see here and here).
Former Countrywide Financial executive Michael G. Winston, PhD, was at the pinnacle of establishment success. He’d held C-suite positions at Motorola, Lockheed, and Merrill Lynch before being enticed by Countrywide’s potential.
The company was one of the fastest growing in the country, with a 15,000% growth rate and one of the fastest growing stocks on Wall Street. It’s founder, Angelo Mozilo had been named CEO of the year just the year prior. They wanted Michael to help them build the “Goldman Sachs on the Pacific.”
Michael was interviewed this last week by Gretchen Morgenson of the New York Times on their new whistleblower series on the Times’ Facebook channel, which I’d had the opportunity to help initiate just the month before. In his interview, Michael talked about the signs he saw at Countrywide that led him to the choice he made.
In the first week in his new position as Managing Director and Enterprise Chief Leadership Officer, he noticed a car in the company lot with a license plate that said “FUND ‘EM.” (CE = Countrywide Employee)
MW: What does that mean?
CE: That’s our policy: fund em.
MW: What if they have no assets?
CE: Fund em. We’ll fund any kind of loan.
MW: No income?
CE: Fund em.
MW: What criteria do you use?
CE: If they can fog a mirror, we’ll give them a loan.
Alarmed, he took his concerns to the head of operations, the President of the company. They subsequently met 17 times.
Michael, thinking they wanted to learn the Motorola Way, orchestrated a number of changes. And then he was asked to misrepresent information about the company to Moody’s. Asked to play ball with Countrywide on their spin, he refused.
“I’m not going to lie,” he said. Later he was told, “you are (just) grill work and that’s why you were hired.”
That’s when the retaliation started. And Michael blew the whistle.
He later filed suit and, after a 31-day trial, a jury awarded him $3.8 million dollars in wrongful dismissal in what the trial judge termed an “overwhelming verdict.” Two years later, in an almost unprecedented action, the verdict was overturned on a technicality, with the appeals court throwing out most of the extensive evidence.
And, in an even more bizarre proceeding, a California Superior Court judge then ruled that Michael did not prove a “disparity in resources between himself and Bank of America (BofA purchased Countrywide),” and he was held responsible for $100,000 in BofA’s court costs!
So, there was no disparity of resources between a multi-trillion dollar corporation and an unemployed whistleblower?! HUH!!
Michael believes that this was done to send a very strong warning to any employees thinking about becoming future whistleblowers.
A great 35 year career, gone.
He says,” the psychological costs were incalculable.” His financial situation? Well it was financial terrorism. The man who was once called “Wall Street’s Greatest Enemy” by Salon, and by the New York Times as “The Man Who Conquered Countrywide” was now fighting for his life.
In a January 2013 Frontline episode called “The Untouchables,” Michael described Countrywide’s funding plan. The documentary inspired Senate hearings and started the crafting of new legislation to combat the too-big-to-jail in the financial world.
However, all of this has come at a substantial cost. To date, Winston has spent over a million dollars fighting Wall Street and Bank of America. Looks as if what started out as a good gamble has backfired. Not only did Michael have to pay BofA’s court costs of $100,000, they put a lien on his home, ironically originally funded through a Countrywide mortgage!
Michael Winston experienced mental and financial terrorism. Yet he believes you have no choice but to blow the whistle. You have to call the systemic abuses before we get into an even deeper recession. You have no choice but to shed light on who the big are, what they are doing and who are the bad guys.
Right is right. He says, “I’m filled with worry not only for my case but for our country.” As well he should be.
In one of my posts referenced above I talked about another appeals court throwing out another jury verdict against Bank of America/Countrywide for $1.27 billion…stating my opinion that this “opens up the floodgates to additional future fraud by the banks!” And this came on the heels of Michael’s appellate decisions!
The TBTF banks have the assets and the influence, regardless of what they may claim. Folks like Michael, myself and our other Bank Whistleblowers United colleagues are one small voice.
We need yours, too.
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Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.
