This year will be remembered for its global public health and economic crises, with the deadly COVID-19 virus spreading around the world, megafires burning large portions of the western U.S., and heatwaves melting permafrost in the Siberian Arctic. In the U.S., positive federal action on climate change remained elusive, but agreement on massive government spending to address the pandemic and resulting economic fallout was reached in Congress early in the year.
Unfortunately, the rapid pace and volume of federal spending created new opportunities for misconduct and these opportunities were seized by powerful corporate actors. As we learned during past accounting and financial crises, industries in distress are more likely to engage in fraud. In our July 2020 report, Exposing a Ticking Time Bomb, the National Whistleblower Center explained why the risk of widespread fraud is particularly high in the troubled fossil fuel sector, why this fraud threatens the global financial system and why whistleblowers are needed for detecting and preventing it.
Whistleblowers are already playing an essential role in fraud prosecutions, but more could be done with stronger policy. In our July 2020 report, we identified a variety of policy improvements needed to ensure that regulators and prosecutors work in partnership with whistleblowers to address fossil fuel industry corruption.
A Whistleblower News Network poll released earlier this month shows that the American public considers corporate fraud a national priority and wants to help whistleblowers who expose it. When asked if passing stronger laws that protect employees who report corporate fraud should be a priority for Congress, 81 percent of registered voters agreed, with 28 percent stating that it should be an immediate priority.
This poll should provide Congress with all the encouragement it needs to act on pending whistleblower bills addressing private sector corruption, such as those dealing with securities and commodities fraud, money laundering, and the trade in endangered wildlife and illegal timber and seafood.
Building a comprehensive legal framework for regulators, prosecutors and whistleblowers to collaborate around corruption-fighting will take years, but fortunately there are opportunities in the very near term to make meaningful progress toward that goal. In the U.S., there is still time in the current Congressional session to strengthen the Dodd-Frank Act, the law that protects and rewards whistleblowers who expose and help prosecute securities and commodities fraud.
A recent U.S. Supreme Court ruling known as Digital Realty mistakenly interpreted Dodd-Frank as offering no protection to “internal whistleblowers,” i.e., those who report frauds to the SEC after first attempting to resolve the problem within their companies. Fortunately, the House of Representatives passed a bill to reverse this ruling last year, and Senator Chuck Grassley (R-IA) is leading efforts in the Senate to pass a companion bill this year. Known as the Whistleblower Programs Improvement Act (S. 2529), this bill would restore protection to internal whistleblowers and also expedite rewards to those whistleblowers who help bring about successful prosecutions.