In honor of National Whistleblower Appreciation Day, it’s important to take a look at the extensive history that whistleblowing has within the United States, and the implications that this courageous and critical role will have for bad actors.
In 1777, naval officers Samuel Shaw and Richard Marven reported their commanding officer, Commodore Esek Hopkins for torturing British prisoners of war. Hopkins retaliated against the two by dismissing them from the Navy and filed a criminal libel suit against them. They were arrested and awaiting their trial when Congress ultimately intervened and unanimously enacted the Whistleblower Protection Act in 1778. Congress authorized a financial reward for the two men and ordered that Hopkins be fired. Shaw and Marven eventually won the lawsuit.
In 1961, when the American Civil War broke out, it was evident that fraud was rampant in the country, both on the Union and Confederate sides. Contractors knowingly sold faulty rifles, unfit horses, and rotten food to soldiers. To address the issue, Congress passed the False Claims Act, informally known as the Lincoln Law, on 2 March, 1863. It included a qui tam provision, which allowed citizens to sue others on behalf of the government, thereby earning a fraction of the damages. Additionally, the False Claims Act provides protection from employer retaliation and provides relief to any whistleblowers.
Since then, whistleblowers have been active across the country, from Frank Serpico calling out NYPD corruption in the 60s and 70s, to Edward Snowden leaking information about the NSA’s activity regarding data privacy and protection in 2013. Snowden’s actions in particular spurred Congressional action that led to National Whistleblower Appreciation Day.
In more recent news, Donald Trump, the official candidate for the Republican Party, was impeached while in office, with the proceedings stemming from a whistleblower’s actions. The whistleblower complained that Trump used “the power of his office to solicit interference from a foreign country in the US 2020 election”. Without this complaint from a whistleblower in the intelligence community, it would have been nearly impossible to challenge the conduct of one of the most powerful heads of state.
On July 30th, 2015, National Whistleblower Appreciation Day was born to honor the day, 30 July, 1778, when Congress passed the Whistleblower Protection Act. Each year since 2013, both the United States Senate and the House of Representatives pass resolutions that designate 30 July as National Whistleblower Appreciation Day. In fact, in 2021, over 10,000 people attended the virtual celebration, which spanned over three days. Whistleblowing is a career-limiting act, especially in the federal space, so it’s important to acknowledge and appreciate the sacrifices they make to put a spotlight on bad actors.
In the international corporate world, whistleblowing is a way to hold companies accountable for possible FCPA violations. The United States Securities and Exchange Commission, and the United States Department of Justice have launched programs to encourage whistleblower activity. Beginning in 2012, the SEC has provided whistleblowers with the SEC Whistleblower Program, and since its launch, the program has awarded hundreds of millions of dollars in whistleblower awards. In fact, on 5 May 2023, the SEC issued the largest whistleblower award to date, $279 million, over Ericsson’s violation of the FCPA by bribing government officials and falsifying company records.
On 22 April, 2024, the DOJ announced a pilot program designed for individuals to disclose wrongdoing, allowing the government to investigate, identify, and prosecute the culpable individuals responsible for corporate misconduct.
The role that whistleblowers play will continue to change the compliance landscape. With more governments and enforcement agencies recognizing the importance of whistleblower protections, the hope is that, as time passes, more and more individuals will feel empowered to speak up against misconduct and hold corrupt leaders accountable – furthering the goal of international transparency, cooperation, and good governance.
J.D. Candidate, The George Washington University Law School, Class of 2026
It is an exciting time for the world of sports. As the UEFA European Championships of Soccer kicks off, famous footballers take the stage to compete on behalf of their respective countries, while avid sports fans from all over the world anxiously await the Opening Ceremonies for the Summer Olympics in Paris next month.
Still, amidst all this excitement there remains a concern regarding Russian athletes. The World Anti-Doping Agency (WADA) has raised skepticism over Russia's anti-doping practices in the past, causing concern of fair competition. But more recently, given current geopolitical issues, namely the war in Ukraine, Russian competitors will be at the Games as “neutral” athletes, banned from competing under the Russian flag.
Additionally, in recent months, there have been several stories released about threats of violence at the Paris Games, concern over the validity of the International Olympic Committee (IOC), and overall distrust of the Western world and its institutions.
All of these stories appear to have one thing in common: they were developed and disseminated by Russian actors who are attempting to sow discord at the Olympics as a means to punish those involved with banning Russia from the competition.
A group dubbed “Storm 1679” has created a fake Netflix documentary, Olympics Has Fallen, using AI tools to mimic the voice of actor Tom Cruise and creating fake 5-star reviews to besmirch the members of the IOC, and the overall integrity of the Olympics.
It seems when Russia is unable to compete in the Olympics, it turns to degrading the games in an attempt to sour the event. When we reflect on the 1984 Summer Games, the Soviet Union boycotted the games and asked other countries to do the same, again in an attempt to discredit the competition.
The message, however, remains clear: if Russia cannot be seen as a world leader, then the institutions making that claim (or any claim against Russia for that matter!) must be weakened. And while this is a typical message from Russia —where dissidents are jailed, and even killed—with new technology, like AI and “deepfakes," it is becoming increasingly difficult to see what is information, and disinformation.
Nevertheless, we cannot allow the bad actions of one to degrade the hard work of many. The world looks forward to the healthy competition— seeing in action the best of their nation competing on the world’s stage. As global citizens we must remain ever vigilant. For many, sports are the purest form of competition. Current events remain an unfortunate reminder that even sports at the global level can breed political mistrust and corruption if not monitored and regulated appropriately.
“Citius, Altius, Fortius – Communiter” and “Faster, Higher, Stronger – Together”
Blaise Stanicic
Associate Director, Compliance Training, TRACE
Corruption is notoriously difficult to detect. As I describe in the book that I recently published with Professor Sope Williams, The Routledge Handbook of Public Procurement Corruption, to help expose illegal activities, governments often rely on a series of tools designed to incentivize disclosures of wrongdoing. The most powerful incentive, by far, is whistleblower rewards. Yet despite evidence demonstrating the effectiveness of whistleblower programs, very few governments embrace them.
It is well accepted that whistleblowing is a risky endeavor–often resulting in grave consequences for the brave individuals who step forward to report wrongdoing. Unfortunately, many whistleblowers experience severe retaliation both professionally and personally because of their actions. To reduce the risk of backlash these individuals may encounter, many governments have passed whistleblower laws to protect them against retaliation.
To further incentivize the reporting of illegal activity, some governments offer whistleblowers financial “rewards” for disclosing information that leads to successful enforcement actions. The United States utilizes two different models in its whistleblower reward programs. The “qui tam” model, associated with the False Claims Act, empowers whistleblowers (qui tam relators) to file “fraud” cases on behalf of the U.S. government. If the case is successful, whistleblowers receive a 10 to 30 percent share of the recoveries. Notably, this “qui tam” model enables whistleblowers to litigate fraud cases on behalf of the government even when the government declines to intervene in the matter itself. Widely considered one of the most powerful anti-fraud statutes in the world, annual False Claims Act recoveries often exceed a billion dollars.
In contrast, the other whistleblower reward programs in the United States use a “gatekeeper” model. The Dodd-Frank whistleblower program is a prominent example of this model. In a “gatekeeper” model, the government retains the exclusive right to bring an enforcement action based on the information shared by the whistleblower. But if the case is successful (resulting in over $1m in sanctions), a whistleblower may still receive between 10 and 30 percent of the money collected. U.S. agencies, such as the Internal Revenue Service and the Treasury Department, also maintain similar rewards programs.
To be clear: when it comes to whistleblower rewards, the United States is all in – making them available in an ever-growing list of enforcement actions. Indeed, in April 2024, the U.S. Department of Justice (DOJ) announced that it would be creating a new, department-wide whistleblower rewards program to further incentivize reporting of corporate or financial misconduct to the DOJ.
When you consider the data, it is easy to see why the United States has firmly embraced this tool. Whistleblower rewards work. A 2021 study found that rewards programs help expose corporate misconduct. Similarly, a 2021 working paper found that “whistleblower reward programs work well and increase detection and deterrence of crime in a cost-effective way.” Yet another study found that “offering financial rewards to whistleblowers can make a regulator more effective, deters wrongdoing, and strengthens the internal governance of regulated entities.”
Despite many governments' desire to increase whistleblower reporting, few have implemented rewards programs (and those that have are significantly more limited in scope and scale than in the United States). Critics often argue that rewards programs encourage abuse and frivolous lawsuits. Although any program offering monetary incentives has the potential to be abused, studies have shown that with appropriate safeguards, the potential for abuse can be minimized. For example, in the United States, the DOJ has been increasingly exercising its authority to dismiss meritless qui tam cases (though many critics reasonably argue that DOJ could be even more aggressive in this regard). In addition, the agencies that utilize the “gatekeeper” model maintain the ability to weed out cases with little likelihood of success.
Critics also often complain that rewards programs undermine corporate whistleblowing programs by encouraging individuals to avoid internal reporting channels in favor of government rewards. Yet numerous studies and reports have debunked this claim, finding that the overwhelming majority of whistleblowers first report their concerns internally before sharing this information with the government.
Others raise concerns over the possibility that whistleblower reward programs create an opportunity for false reports, opportunistic reports, entrapment, and conflicts of interest. Nevertheless, statistics illustrate that these worries are misplaced and do not outweigh the benefits of rewards programs.
Further, countries may perceive the complex nature of reward program administration as a costly bar to implementation. While it is true that any government program that pays reward money to individuals will have its fair share of bureaucratic red tape, a rough back-of-the-envelope analysis demonstrates how these programs can pay for themselves.
And of course, there is my personal favorite: that whistleblowing rewards are morally distasteful or simply “wacky.” Frankly, I do not have a satisfying response to critics who claim that whistleblowers’ motives must be pure and altruistic. If we required this of all cooperators in government enforcement actions, the U.S. criminal justice system would crumble.
This leads me back to my initial question. If whistleblower rewards programs work, why aren’t more governments adopting them? Whether it is genuine concern about the potential for abuse, the complexity of administration, or simply a lack of inertia, governments desiring to increase the reporting of wrongdoing should strongly consider the benefits of buttressing any current reporting incentives with a rewards program. With an increasing number of studies demonstrating that the benefits of these programs outweigh the costs, rewards should be considered a global “best practice” alongside anti-retaliation protections in whistleblowing regimes.
Jessica Tillipman
Jessica Tillipman is the Associate Dean for Government Procurement Law at The George Washington University Law School. She would like to thank GW Law student, Brittany Broome, for her excellent assistance and contributions to this post.
Note: Some actions initiated against individuals in the first quarter of 2024 may have been filed under seal, so the view may change in the coming months as indictments are unsealed by the courts.