If your allegiance is to the tribe, which is the more instinctive call, keep in mind that the idea behind supporting one another when the chips are down is to foster trust and loyalty throughout the company. It’s nearly impossible for a company to be able to maintain one set of ethics with partners and an entirely different set in-house. If you support the employee, he will learn two lessons: 1) you have his back, and 2) dropping the ball is totally acceptable. The way you treat that partner will eventually be the way your employees treat each other.