The issue of how to treat whistleblowers who themselves participated in wrongdoing – the very actions and schemes that they are blowing the whistle on – is a difficult one. Specifically, the ramifications for these whistleblowers coming forward, and the fallout, is a bit dicey regarding two areas: prison time, and 'bounties.'
With bounties, I'm talking about government agencies that reward whistleblowers for coming forward. The SEC just issued rules regarding its new whistleblower bounty program (after months of debate on multiple issues), a result of the Dodd-Frank Financial Reform Act. Basically, whistleblowers from corrupt companies can now report financial wrongdoing on Wall Street, and when the government recoups over $1 million as a result of their disclosures, they get a cut.
But on "culpable whistleblowers," the agency's rules clearly dictate that no payment shall come their way:
Under the final rules, the Commission also will not pay culpable whistleblowers awards that are based upon either:
- The monetary sanctions that such culpable individuals themselves pay in the resulting SEC action.
- The monetary sanctions paid by entities whose liability is based substantially on conduct that the whistleblower directed, planned or initiated.
The purpose of this provision is to prevent wrongdoers from benefitting by, in effect, blowing the whistle on themselves.
The IRS also offers a bounty program similar to the SEC, but it's a little unclear how that agency deals with culpability when issuing rewards. Lastly, the False Claims Act, the most common way that whistleblowers are rewarded (the act allows for private citizens to sue corporations, or others who defraud the government, on behalf of the government) doesn't allow for culpable whistleblowers to receive money.
That's all well and good, and frankly, culpable whistleblowers and rewards (in general) are not something that GAP gets very involved with -- our whistleblowers predominantly raise concerns about wrongdoing that affect the public interest.
This idea of culpable whistleblowers receiving some form of leniency for coming forward, as with Deanna Coleman, isn’t something that we usually deal with either. However, there is no question that these individuals should receive some form of leniency when they do come forward.
Why? Simple. Whistleblowers, culpable or not, are typically the only individuals who can (and often do) expose wrongdoing. Without whistleblowers, the scandals they report on may never be known. It really is that straightforward.
Imagine the alternative in this case -- if Coleman hadn't come forward when she did, isn't it reasonable to assume that the $3.65 billion ponzi scheme would have ballooned to much, much more? Meaning that the fraud would have engulfed more people and communities?
Worse yet, what message would it send to all future culpable whistleblowers that are having second thoughts about their illegal participations? Throwing the book at Coleman almost ensures their future silence. Leniency promotes that more future fraud is uncovered.
Of course it's not a perfect situation. In Utopia, fraud wouldn't exist in the first place. But this country, and its citizens, is far from perfect. And going easy on culpable whistleblowers makes things better in the long run.