The New York Times published the following letter to the editor from Phillips & Cohen partners John R. Phillips and Mary Louise Cohen discussing the path for whistleblowers.
A Better Road For Whistle-Blowers
To the Editor:
Jeffrey L. Seglin was correct in his assessment that anonymous tips about corporate wrongdoing are rarely believed or investigated and that those who speak up publicly, despite the risks, are more likely to effect change (”To Blow the Whistle, Drop the Mask,” The Right Thing, Sept. 19).
But there is a middle path between anonymous and public whistle-blowing when a company is cheating the Federal Government. The False Claims Act allows individuals to file lawsuits against companies that are defrauding the Government in order to recover damages on behalf of the Government. The cases are filed under seal, so the whistle-blowers’ identities are protected by the courts but are known to the Government.
Once the Government completes its investigation of the accusations in the lawsuit, the seal is lifted and the whistle-blowers’ identities usually become public. The False Claims Act provides job protection, as do other whistle-blower laws. But because of the career risks that whistle-blowers take, it also rewards them with 15 to 30 percent of the money the Government recovers.
The threat of whistle-blower lawsuits has unquestionably made companies more responsive to insider complaints of wrongdoing. It has also been a strong impetus for the establishment of effective corporate compliance programs.
Since Congress strengthened the False Claims Act in 1986, the Government has collected more than $2.5 billion from such cases; whistle- blowers’ rewards have totaled about $400 million.
John R. Phillips
Mary Louise Cohen
September 26, 1999