20 September 2012
Slater and Gordon Lawyer on how perhaps pragmatism should trump idealism when it comes to Whistleblowing
My perception generally of the whistleblower is that of an individual who is providing a good public service.
The fact that the whistleblower;
• must make the disclosure in good faith and;
• must reasonably believe that the disclosure is true and;
• does not make the disclosure for personal gain;
surely encourages this perception. However a recent case in the US is particularly interesting in this respect. Bradley Birkenfield enrolled as an IRS whistleblower and his co-operation with federal investigators led to the US Government commencing legal action against the Swiss Bank, UBS, resulting in a penalty of $780 million and UBS disclosing details of more than 4500 American citizens. This disclosure raised more than $5 billion in extra taxes. Birkenfield himself was paid as compensation $104 million dollars for his part. The whistleblower's own unsavoury history of conspiracy to commit tax fraud and a resultant 30 months jail term make the case even more compelling reading.
Unlike in the UK, certain US laws protect whistleblowers through incentives representing a percentage of the money recovered. Some of these date back to 1863. They are perhaps controversial because they do not just afford the whistleblower protection from reprisals but also allow the whistleblower to profit from the wrongdoing of others.
Now, of course, Birkenfield’s case is an exceptional circumstance and an exceptional payment. But many might argue that this significantly shifts the moral and legal compass of the whistleblower from one who risks career, reputation and financial and emotional stability to raise concerns for the common good, to the one who is merely looking to profit by their own and others wrongdoing.Does this matter?Perhaps, from a purely moral standpoint. But one could argue that from a practical perspective there may well be justification for the US approach and there is certainly no doubt that it is effective.
Let’s not forget that the whistleblower risks personal reprisals at the hands of the organisation or group that they have accused, such as Termination, suspension, demotion, deduction of wages and harsh treatment from their colleagues. The whistleblower will also be held to be a "snitch," someone who betrayed their work colleagues and deserving of being ostracised by their co workers, regardless of whether there is any personal reward available to the whistleblower.
Blowing the whistle often involves great risk so there can be little surprise if few people come forward when there is no payback for them? It is perhaps a bit much to expect people to sacrifice themselves for the public good. Although the US approach does somewhat polarise the ideal of the honest, “pure” whistleblower, its effect in this instance to expose these tax avoidance schemes can be in no doubt. Although I would not state that the US approach intends to acknowledge the risks whistleblowers must take, it appears to be effective in exposing these malpractices by creating a financial encouragement and incentive for the whistleblower. This is not a perfect world. An argument that it is better if pragmatism trumps idealism when it comes to whistleblowing can certainly be made.
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