Debunking the Myth of the Greedy Whistleblower
In my last few posts, I’ve demonstrated just how successful recent whistleblower cases have been in the United States. Unfortunately, certain parties would like to limit, or rein in these laws, claiming that they incentivize or otherwise generate fraud in order to create the conditions necessary to report that fraud. In reality, though, these complaints about whistleblowers collecting their share of the recovery mask the true problem critics have with whistleblower reward the laws—which is that they get results. Yes, it’s the results they can’t stand.
The latest lame attack was published by New York Times Deal Book. The author selects a few famous whistleblower cases and provides his own conclusions. He selects what presumably are, to him, the most offensive whistleblowers he can find to say that the laws reward “bad people.” Are they bad people? The only thing each of his example cases have in common is that they generated spectacular results on behalf of the United States government and the everyday taxpayer.
The author says, for example, the only thing we know about the whistleblower who was rewarded by the SEC to the tune of $30 Million is that he “unreasonably delayed filing his action.” That is not correct. We know something else: we know for certain that the information that whistleblower provided the SEC led to a collection of at least a hundred million dollars by the SEC for a serious violation of securities law. We also know that this particular whistleblower was a foreign national, which demonstrates the far-reaching success of U.S. whistleblower laws in the international arena, helping our government prosecute fraud in today’s borderless electronic age.
The author of the article in question seems to think the only reason any whistleblower ever provides information is the financial incentives provided for by the law. If this is true (and I don’t think it is), then what is his solution? Would the professor prefer that the whistleblower not have reported anything at all? Would he prefer that the huge fraud the SEC was able to fight continue to go on unabated? That is the dangerous and unspoken logic of his position. It is also the conspicuous effect of the policy positions taken by the organized attempts to attack whistleblower reward laws. These “reformers” label a whistleblower who gets the reward as “greedy” or a bad person, but somehow that same attack is never leveled on the companies who perpetrate the fraud…so it’s greedy to blow the whistle in this writer’s eyes, and yet he spends not a line of his op-ed to condemn the executives who thrived off such scams. Are they his idea of “good people?”
Of course, a real whistleblower lawyer could name a hundred heroes who risked their career to expose huge financial frauds and frauds that threatened our health and safety. Even that misses the point.
The bottom line is that the laws do not reward individual people, they reward the act of whistleblowing. They thereby get results, and those results save the taxpayer millions and prevent companies from continuing to commit massive fraudulent activity. The simple logic of the rewards is this: If you are against awarding a reward to a whistleblower, then you endorse the companies that commit the fraud. If you don’t like results, results that this year included the collection of billions of dollars on behalf of the taxpayer, then yes, by all means demonize the people who help get them. But if you do, don’t claim in the same breath that you oppose fraud.
Be on the lookout for this kind of criticism, because as these laws continue to succeed there will be more attempts to make an issue of the award to the whistleblower while glossing over the real issue, which is the difficulty of finding out about and stopping fraud. There will be more cute uses of the language such as when this writer refers to False Claims Act cases as “so called qui tam actions.” Sounds bad right? It’s a gimmick. It would be like me referring to the author as a “so called professor.”
Meanwhile, the reality is nothing at all scary unless you want to get away with stealing from the United States. Qui tam is just short for an old Latin phrase used in the middle-ages meaning “he who sues on behalf of himself and the king.” We use it in this country to refer to the special right we have to sue on behalf of our government when it is being defrauded, and we call cases filed under this right qui tam actions. In the past year that law alone succeeded in recovering billions for the government and the taxpayer. It rewarded whistleblowers who had the crucial information needed to make cases. Getting results fighting fraud committed against your country is a patriotic act and yet this author wants to attack the whistleblowers instead.