Management - hear no evil, see no evil
Having worked in a very large organization, I always felt the primary role of middle management was to make sure senior management never knew about any problems. This is why it is critically important for management to "NEVER" jump on an employee for reporting a problem. This just leads to an environment where no one wants to be the messenger with bad news, and problems fester until they are so bad they can no longer be hidden. I've seen hundreds of millions of dollars flushed down the drain because senior management said they "didn't want to hear negative comments" about a project, and they didn't - at least until it was implemented and proceeded to implode. I don't know if this is the case here, but I wouldn't be surprised.