New Whistleblower Protection Signed into Law

Date Published:

by Cynthia A. Diaz-Shepard

The president just signed new whistleblower protections into law, the White House has said.
The new law—the Whistleblower Protection Enhancement Act—broadens protection for federal workers who report misconduct, fraud, and “illegality,” the Wall Street Journal explained. The law also serves to better explain protected disclosures, strengthens mandates for non-disclosure agreements, increases some federal agency staff to include an ombudsman who will educate agency staff of their rights, and increases penalties for violating protections, the Journal added.
The Whistleblower Protection Enhancement bill passed the Senate earlier this month by unanimous consent; the House passed the bill in September during a pro-forma session, said the Journal.
“This is a small but meaningful step,” Stephen Kohn, executive director of the National Whistleblowers Center, said in a statement. “The bill contains important reforms, but federal employees still lack most of the basic rights available to whistleblowers in the private sector,” Kohn added, according to the Journal. “We hope that President Obama and Congress will continue their efforts to ensure federal employees are fully protected during the next Congress,” Kohn said.
In the private sector, informants who report securities law violations are eligible to receive 10-30 percent of a penalty if that penalty is in excess of $1 million under a program created by the Dodd-Frank Act, the Journal pointed out. The program received more than 3,000 tips in the past year, alone.
The False Claims Act, passed during the Lincoln administration provided a way in which third parties—so-called “whistleblowers’’—could sue contractors for perpetrating fraud against the government. Today, the law is used against defense contracting fraud, but drug companies have made their way onto the list, said Fair Warning. Now, the Whistleblower Protection Enhancement Act provides better protection for whistleblowers.
A prior report, released by the advocacy group, Taxpayers Against Fraud Education Fund, revealed that drug manufacturers were the key payers in government fraud settlements under the False Claims Act. In fact, eight out of the 10 largest settlements under the Act in federal fiscal year ended September 30, 2010, were from Big Pharma. The remaining two were in the health care field, Fair Warning previously wrote.
Taxpayers Against Fraud reported that the U.S. Department of Justice recovered over $3.1 billion in stolen money in fiscal year 2010 following whistleblowers reports; over 80 percent of all successful False Claims Act recoveries were due to whistleblower reports. Under the Act, triple damages and statutory fines up to $11,000 per claim are also provided.
Most fraud recoveries under the Act take place in the health care sector; however fraud is also common in defense, education, transportation, and oil and gas, said Taxpayers Against Fraud, which added that the Act returns over $15 to Americans for each dollar invested in health care investigation and prosecutions, with large Medicaid recoveries returning millions in stolen money back to individual states.