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

Last week, I blogged about the recent critical GAO report which found that Congress and the Administration have not done enough to implement oversight of the $700 corporate bailout bill that was passed in October. Well, after weeks of foot-dragging, the Senate has finally voted to appoint former New York Prosecutor Neil Barofsky to the position of Inspector General of the Troubled Asset Relief Program (TARP) -- the program responsible for doling out all of that money.
 

This is a good first step, but much more needs to be done. As this exceptional article in the Washington Post reports, IG's serve at the pleasure of the president, and some have been notoriously loyal to the administration. Further, the IG will not be effective unless he can get credible information about illegal or wasteful spending from employee whistleblowers who can speak up without fear of retaliation. That's why the most important piece of this, and any oversight effort, is a strong whistleblower law. Congress should pass one immediately.

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Yesterday the Government Accountability Office, which is responsible for overseeing wasteful spending in the federal government, issued a 66 page report (see the summary here, with link to the full report) concluding that the Treasury Department and Congress have not done enough to prevent waste, fraud and abuse in the $700 Billion bailout bill passed in October:
 

"Treasury has yet to address a number of critical issues, including determining how it will ensure that CPP is achieving its intended goals and monitoring compliance with limitations on executive compensation and dividend payments. Moreover, further actions are needed to formalize transition planning efforts and establish an effective management structure and an essential system of internal control. To help ensure the program's integrity, accountability, and transparency"
 

Although this report does not recommend specific legislative proposals, the best thing that Congress could do to stem financial misconduct and waste is simple...protect whistleblowers.


In September, the National Whistleblowers Center joined with over 200 other public interest organizations in calling for Congress to include whistleblower protections in the bailout legislation. Yet, Congress failed to act.
 

The GAO calls for several reforms in the administration of the Troubled Asset Relief Program (TARP) -- which is responsible for doling out the billions -- but whistleblower protection should be the centerpiece of any reform package, as it is a necessary prerequisite for these reforms to work. Without protecting the whistleblowers who report misconduct, other reforms are doomed to fail. Two recent studies, one by PriceWaterhouseCooper, the internationally respected auditing agency, and another by the University of Chicago, both found that whistleblowers are the #1 way to ferret out corporate fraud.
 

Also ABC News ran this story on the need for corporate whistleblower protection in the wake of the bailout.

Let's not forget that it was corporate greed and lack of oversight that got us into this financial mess, and that is precisely why Congress, the administration (and the next administration) should take decisive action, now.

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In September, as Congress was racing to put together the Wall Street bailout legislation, the National Whistleblower Center was calling for whistleblower protections to be added to the bill. Despite their efforts, Congress did not listen. They authorized the Administration to distribute $700 Billion of taxpayer money, but refused to protect employee whistleblowers who would ensure that it would be spent correctly.

ABC News has this story detailing how the Administration and Congress have done nothing to exercise oversight while the Administration is doling out billions of bailout dollars. But, even if these measures (appointing an inspector general, and setting up a congressional oversight committee) were to materialize, they still will not be effective unless we protect employees who would step forward to report the fraud.

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 As you know, Congress is about to vote on a bailout bill for the financial
 sector. Whether you support this bill or not, we ask that you immediately  call your Senators and demand that strong whistleblower protections be  included in the bill because if we had meaningful whistleblower protection  we probably wouldn't be in the mess we are in today!!!
 
 Just call 202-224-3121 and ask for each of you Senator's offices. Tell them
 that there can be no meaningful accountability in the bailout bill without
 strong whistleblower protections. If you are going to call it has to be done
 today and right away!!!

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