Whistleblower Protection Blog : Whistleblower Lawyer & Attorney : National Whistleblower Legal Defense and Education Fund : Whistleblower Protection, Fraud Claims : Washington DC

The Council of Europe Parliamentary Assembly has adopted a resolution to protect whistleblowers. Drafted by the Assembly's Committee on Legal Affairs and Human Rights, the resolution expresses appreciation for whistleblowers who "stop wrongdoings that place fellow human beings at risk, ... strengthen accountability and bolster the fight against corruption and mismanagement, both in the public and private sectors." The resolution responds to the fear of reprisals, and the risk of official inaction after wrongdoings are disclosed. The Parliament looked favorably on a recent British law protecting whistleblowers, and on the laws of the United States (apparently unaware of the patchwork nature of our laws). By a vote of 21 to 0, the representatives agreed that:

Whistle-blowing has always required courage and determination. But “whistle-blowers” should at least be given a fighting chance to ensure that their warnings are heard without risking their livelihoods and those of their families. Relevant legislation must first and foremost provide a safe alternative to silence, whilst avoiding offering potential “whistle-blowers” a “shield of cardboard” which would entrap them by giving them a false sense of security.

Europe now calls for protection of media sources and "against criminal prosecution for defamation, breach of official or business secrecy, and protection of witnesses." The full text of the resolution, and a few of my comments, are in the continuation of this posting.

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Business Ethics magazine is reporting on the anticipation of corporate lawyers for more work in defending corruption cases.  In an article yesterday, Michael Connor writes about a whistleblower reward provision in the current draft of the financial reform bill. The bill would guarantee a reward of up to 30% for whistleblowers who provide original information about violations to the Securities and Exchange Commission (SEC). This reward program will be similar to the provisions of the False Claims Act (FCA) which brings billions of dollars back to the U.S. treasury every year through disclosures made by whistleblowers. (See page 9 of the linked report.) Connor says that if the financial reform bill passes with the current whistleblower provision, it would lead to increased detection of violations of the Foreign Corrupt Practices Act (FCPA) which provides penalties for U.S. companies that engage in bribery. Connor cites reports by corporate defense firms Morgan Lewis and Latham & Watkins indicating that the nature of enforcement is likely to change with the whistleblower reward.  Instead of raising disclosures internally, whistleblowers will be more likely to file disclosures with the SEC in hopes of securing a reward for the first to disclose original information.  Company managers are then more likely to learn about the allegation from the SEC rather than from a company hotline. The whistleblower could actually be competing with company management to see who can make the first disclosure and reap the statutory reward. One way company managers could keep whistleblowers reporting internally would be to demonstrate that company management will not tolerate any retaliation against whistleblowers. It would be nice of companies had such an incentive.

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