As a result of the call and the meeting, both Duke and the PSCSC launched investigations into the accounting disputes, which to varying degrees vindicated Stone’s claims that earnings had been understated. In November 2002, Duke agreed to pay the states of North Carolina and South Carolina $25 million to be applied toward rate reductions in connection with the charges.
Stone went public with his story last August because he believed that Duke officials had apprised senior finance staff of his call to the ethics line and had dropped hints to his colleagues as well (see “Talk, or Walk?” October 2002). Since then, Stone has also revealed that he tipped off the SEC about some other efforts to manipulate earnings in Duke’s unregulated businesses.
Through it all, incredibly, Stone has hung on to his job (and even received an 8 percent raise)—but not to his career prospects, he says. Once a senior forecast analyst, Stone says he was essentially demoted to an undefined role in February 2002, and passed over for a new position that August after a history of frequent promotions and increasing responsibilities. He has been assigned to execute entry-level projects, and has been moved to an office far away from the rest of his unit. While he is technically a manager, he has no employees to manage—and has been told he will not get any. “They have been very calculated and very precise in trying to wear me down,” he says. “They would never promote me again. They probably never will if I stay here 30 years.”
For that reason, Stone and his attorney, Gerry Bos, sought whistle-blower protection under Sarbanes-Oxley in November 2002. But the DoL dismissed the case in March 2003, in part because the alleged retaliation started before the law went into effect, and in part because of insufficient evidence.
Stone and Bos contend that the dismissal was based on OSHA’s deficiencies, not theirs. For instance, Stone says that for lack of subpoena power, OSHA investigator Dale Boyd “told me point-blank, ‘I can talk to the controllers and the vice presidents, et cetera, but if they lie to me, I accept whatever they tell me.’” Boyd was also of little help in building Stone’s case, the accounting manager says, eschewing much of the critical information he had previously provided to regulators. “He was very unclear about what he wanted, how he wanted it, and the ramifications of what had happened,” says Stone. “I spent inordinate amounts of time getting him what he said he needed, and then he didn’t use most of it.”
Duke, for its part, sees the dismissal as the final chapter in the case. “Obviously, the [DoL] has looked at this case and found no wrongdoing on Duke’s part,” says spokesperson Randy Wheeless. Duke has contended all along that Stone’s manager didn’t know that Stone was a whistle-blower when he transferred him. The company maintains the transfer was part of a larger reorganization. “From our perspective, it’s pretty much settled,” says Wheeless. Stone notes that there is still a complaint pending in federal court in Charlotte filed on his behalf.