The recently released Pandora Papers highlight the ways in which wealthy and powerful individuals hide money from tax authorities and criminal investigators. In response, some anti-corruption advocates say the Pandora Papers should reinvigorate President Biden’s anti-corruption agenda. And according to a leading whistleblower lawyer, whistleblowing should be a key aspect of any effective anti-corruption effort.
On June 3, 2021, President Joseph Biden issued a “Memorandum on Establishing the Fight Against Corruption as a Fundamental Interest of the National Security of the United States.” The memorandum places the fight against corruption at the heart of Biden’s foreign policy agenda. Directly linked to the Pandora Papers, the memorandum speaks of the need to fight “anonymous front companies, opaque financial systems and professional service providers” which “allow the movement and laundering of illicit wealth”.
In September, senior whistleblower Stephen M. Kohn published an article titled “Whistleblowing Should Be Part of President Biden’s Fight Against Corruption.” In the article, Kohn notes that Biden’s memorandum sets a deadline for obtaining recommendations from government agencies on the implementation of his anti-government agenda. According to Kohn, “These recommendations should include full endorsement of the use of the enhanced whistleblower protections under the Dodd-Frank Act as a key part of the president’s anti-corruption agenda. “
Kohn states that “[t]he issues that President Biden’s anti-corruption memorandum targets with a renewed effort to fight international corruption are remarkably similar to issues identified by the US Securities and Exchange Commission (SEC) and the US Department of Justice. United (DOJ) by supporting the prosecution of prosecutions under the Foreign Corrupt Practices Act (‘FCPA’), including the use of whistleblowers as a key tool to detect foreign bribery.
“Given these similarities, using FCPA should be the backbone of an effective anti-corruption program,” Kohn continues. Likewise, the use of the transnational Dodd-Frank whistleblower program needs to be expanded, especially in light of the evidence for the invaluable role played by whistleblowers in detecting corruption.
The FCPA, passed by Congress in 1977, is a U.S. anti-corruption law that prohibits payment of anything of value to officials of foreign governments in order to gain a business advantage. It also contains accounting provisions that require listed companies to establish and maintain books and records that accurately reflect the transactions of the company. In 2010, the Dodd-Frank Act, which established the SEC’s whistleblower program, added whistleblower provisions to the FCPA. Individuals may disclose information relating to potential violations of the FCPA to the SEC or the Commodity Futures Trading Commission.
Through the SEC and CFTC whistleblower programs, qualified whistleblowers, individuals who voluntarily provide the SEC or CFTC with original information leading to successful enforcement action, are entitled to 10-30% monetary compensation. funds recovered by the government. Additionally, under the related action provisions of the DFA, where a whistleblower’s disclosure to the SEC also leads to successful enforcement action by another agency, the whistleblower is entitled to a 10-30% allocation of funds. recovered in this action. For example, a whistleblower whose disclosure leads to accusations of FCPA by the SEC and the DOJ might be eligible for rewards based on sanctions collected by both agencies.
Whistleblowers do not need to be U.S. citizens to be eligible for the SEC and CFTC whistleblower awards. According to the 2020 Annual Report to the SEC Whistleblower Program Congress, in fiscal 2020, the program received whistleblower tips from people in 78 foreign countries.
Whistleblowing Should Be Part of President Biden’s Fight Against Corruption | CLS Blue Sky Blog
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